{"document_id": "1962_2_477_495_EN", "year": 1962, "text": "2 S.C.R.\n\nSUPREME COURT REPORTS 477\n\nBY CoURT : In accordance with the opinion of the majority, these petitions are allowed with costs. As tne petitions have bP-en heMd together there will be only one hearing fee.\n\nMUNSHI RAM v\n\nBANWARILAL (M. HIDAYATULLAH and J. c. SHAH JJ.)\n\nArbitration-Award .filed in Court-Application for setting aside award-Oompram1:ae between parties-DecreP in terms of award as moiified by compromiae-Validity of-Arbitration Act 1940 (10 of 1940) ss., 15, 23, 30, 3! and 41-Code of Civil Procedure, 1908 (.5 of 1908), O. 23.\n\nThe dispute between the parties regarding their shares in a firm was referred to arbitration. The arbitrator made his award, inter alia, awarding certain sums of moneys to be paid by certain instalments. There was also a provision in the award that the p; irties shall be liable t\" pay in eq ta! shares theincome-tax to be assessed.\n\nThe award was filed in court by the arbitrator. The appellant made an application for setiug aside the award and the respondents filed their replies to the application. Thereafter, the parties came to ter111'> and askej for a decree to be passd in accorda.nce therewith.\n\nThe court passed a decree on the award as modified by the c )mpromise.\n\nIn execution, the appellant contended that the decree was a nullity as the cr, urt had no jurisdiction to mo.iify the award by compromise.\n\nHeld, that the decree was not a nullity and was e:nce could he the decree-, but not enforceable as a df'crre.\n\nTn th~ prc5ent case the con1promise and the decree di sons. The affairs of the firm fell on evil days.\n\nWe are, however, not concerned with it. Munshi Ram h•d, on the other band, stated another concern by the name of \":\\Iunshi Ram, B.Sc.\", and that concern proshered. It appears that the respondents in thi8 appeal claim?d to be partners in that bllsiness.\n\nWith the merits of their ~!aim we are not again concerned.\n\nOn October 30, l!H6, there was an agre1>ment between the contending parties,. by wh'ch the dispute was referred to the sole arbitration of one Lala Premna.th, Advo(!ate.\n\nLala Premnath gave an award on March 3, 19!7, by which he award:d Rs.50,000/. payable to Faqir Chand as follows:\n\nMuni/ii Rom\n\nBanwori IAI\n\nHid~>-..lullah J.\n\n480 SUPREME OOURT REPOR~ (1962) SUPP.\n\n(a.) Rs.15,000 on April 4, 1947. (b) balance in three equal instalments on August 4, 1947, December 4, 1947 and March 4, 1948. ' Interest on a.ny instalment defaulted e.t,0·8·0 per cent per men8l'ID until pa.ymell{.\n\nHe alao award Rs.45,000 payable to Ranwarila.1\n\nBS follows :\n\nla)\n\n~:'J.5,000 on April 4, 1947. ( b) ha.lance in three equal instalments on the same date& as above with interest in the same way on default.\n\nThere WM also a.n a.ward a.bout the residential house r1'llea haveli, which was given in moieties to Fa.qir Chant! and Banwarila.I, inoluding the portion built I y Munshi Ram.\n\nTho rest of the immovable property was given to Munshi Ram as his self. acquired property, and it was declared that Faqir Chand and Banwaril\"l would have no connection with or claim in the concern, \"Munshi Ra.m, B.Sc.\".\n\nNo action appears to have bren taken for some time. But on April 4, 19-17, Hs.'15, ll(JO were\n\npBid to Ra.nwari!Bl.\n\nOn the request of Faqir Chand made on December 17, lfl47, the arbitrator fileCodeof Civil Pwcedure.\n\nThe main ohjections were that the order making the award into a rule of the Court after modifying it was \"void, without juris\n\ndiction, invalid and against law\" on the following grounds: (I) The original award was not filed and only tht; original could be modified and not a copy.\n\n(2) The award was not properly stamped and without ncovny of the Hamo order was not then heard. The appc•al of Llanwarilal was troated by the 1 .. arned Single Judge as a revision. According to tho lea\"'1ed .Judge, the order did not fall within s. 47 of tho Code of Civil Procedure. The learned Judge ohstn\" 27th of December, l!l4\\J had ended on tho :Jrd of March, IH51 and could not be reopened unlet.\n\nThere was a general ground thllt the decree in question was wholly without jurisdiction, and that the learned \"trial Court\" lacked inherent jurisdiction to pass such a decree.\n\nThis ground obviously had reference not to the point of law now mooted but to the grounds on which the award was attacked. As a result, wo find no mention of the present point in the two orders pas.; ed by Kapur, J. (as he then was). Wben the matter was taken to the Divit!ional Bench by appeals under the Letters Patent, no point bringing out the controversy was raised. The only objection was that the Court had no jurisdiction to order that the copy of the award\n\nshould be stamped, and it was urged that the decree\n\npaesed on the basis of the unstamped award was a nullity, and could nut be executed. The point, now urged, therefore, does not figure in the judgment of the Divisional Bench, against which the pre.tent\n\nr'-\n\n.? S.C.R.\n\nSU)?REME COURT REPORTS 487\n\nappeal has b~' filed.\n\nFurther, even when an application wast :\\de for a certificate, this point was not mentic;>. ed as one of the grounds of appeal.\n\nAll the points tlat were urged then are mentioned in the order rffiµsing certificate. It was only when the petitkn fdr/ special leave was filed in this Court that this point iwas included, and as many as t>ight separate grounds were 11rged, which, as has been shown above, were not taken at an earlier stage. On this ground alone, this Court shoulrl decline to consider this matter, and this appeal should be dismissed.\n\nFurther, the decree was never questioned on this ground, as it could hardly be, since it was passed on consent of the parties. It is now being characterised as a nullity, bhcrause in execution, a decree can only be questioned on the ground that it is a nullity.\n\nWe need not g£J to these objections, since the point was argued before us, and as there appt'ars to be a conflict of view in the High Courts upon the subject df' compromises following awards by arbitrators, we think it proper to decide 1he question whether after\n\nti award is fped . in the o?rt, and parties enter into a com J1rom111e mod1fymg the terms of the ai.vard, the Cqurt can pass a . decree on the award, all modified by the parties. •\n\nLearned, counsel for the appellant relies upon R'abindranath , Ghakrabarti v.\n\nJnwwndra lllohan Bhaditri ( \\ which was approved by the Privy Council in Jnnnerulip_ Mohan Blwduri v. R'tbindra Nath\n\nChnkravarti (''f; y; ooly <)hand Srinwli v . . Mohan Lal 8rimoli i'), B1•indaban Chandra v. Kashi Chandra (•) a.nd 1lfo/; t111las v. IVadhumal (\"), where it has been laid down that afLer n arbitration award has been made, it is notre, held that tho Court had no general juristliction over the matter, and that a decree pas•;, d modifying an award was without jurisdiction and a nullity, which the executing Court coultl refuse to execute. It will easily be seen that the reason of the rule was the absence of jurisdiction to pass a decree on the award, and a decree passed without such jurisdiction must evidently be a nullity.\n\nThe principle, however, was applied also under the present Arbitration Act, even though th~ Court now pronounces a judgment arcording to the awa!'d and upon the judgment so pronounced, a decree follows.\n\nThe principle is now invoked, because of the limitations upon the powers of the Court to modify an award under s.15.\n\nThat section read as follows :\n\n\"15. The Court may by order modify or correct an award-\n\n(a) where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decisimi. on the matter referred ; or\n\n(I\\ (1910) 5 Indian C'..a,.s. 994. (2)\n\n(1921) l.L.R. 2 Lob. 114. (3) A J.R. 1945 Peshawar 41. (41 A [.R. 1922 Oudb. 1119. (5)\n\n(1931) J.L.R. 58 Cal. 1018.\n\n(b) where the award is imperfect in form, or contains any obvious error which can be amendr, d without affecting such decision; or\n\n(c) where the award contains a clerical mistake or an error arising from an accidental slip or omission.\" In view of tho limits of the powers of the Court, it has been held in some cases that the Court cannot go outside the terms of s.15, and make a decision of its own, even though the parties might have compromised the dispute and a;!reed to modify the award. It is not necessary to refer to all the oases relied upon by the learned counsel for the appellant, because the question was elaborately considered in Prafulla Chandra Karrnakar v. Panchanan Karinakar (') by Chakravartti, J. In that case, there was a reference to arbitration during the pendency of a partition suit, and after award, the parties entered into a compromise. Chakravartti, J. held that the C'.Jurt could give leave to the parties to revoke 11 submission under s.5 of the Arbitration Act, and on superseding the arbitration agreement thereafter under s.12(2)(b), pass a decree in terms of the compromise.\n\nHe, however, held that till the submission lasted, the Court's authority was suspended, and the Comt could neither enquire into the factum of the compromise nor pass a decree d'ifferent from the award.\n\nHe pointed out that under ss. 30 and 32, the awrd could be set aside or varied as provided there and in no other way. The learned Judge observed that the precise question raised in the case before him wts not decided in the earlier case of the same Court reported in Dooly Chand Srimli v. Muhan Lal Srimali (2).\n\nHe also observed that what he said in the case applied to an arbitration with the intervention of the Court in a peniing suit, and add€d :\n\n(I) U .. R (1946) I Cal 398\n\n(2) (1924) J.L.R. 51Cal,432.\n\nM,..mRaa\n\n•• .11..w•i IAI\n\nHU41•tu/loA J.\n\nIHJ\n\nMuruhi & 1\n\nB anuari Lal\n\nHidayatuJlalz\n\n, {\n\n1fl0 SUPR.RME COURT ltEPQ~TS [1962] SUJ'P.\n\n\"What the position w01ild :bl' , in a 'case of reference wihou.t the intervqnti\\>n .of the Court, i~ is not qe_oeseyary toconsicller.\"\n\nThe learned .Judge then pointed•1 out that a\n\n'Compromis~ betwl'yll the. parties was.not mentioned in the Arbitration Act as one nf the grounds. on which an award oou\\11 be ~:t asideQr inpdified. He declined to apply ().:!:J: R 1,:l of 'the Code of Civil Procedure 9n the str, ugt It uf s.41 of th~ Arbitrati1m Aot, where it is provided that the' pro'l'isions of 'the\n\nCode of Civil Procedutc lpll apply to .all proceed ings before the Court and to all appeals m.ider the Arbitration A, ct.\n\nH,, gave three reasons for not doing so.\n\nThe first wao that s.4 l was headed \"Subject to the privisiun\" of the Act\" and thus subject to ss.15, 23(:?) and 3: of the Arbitration Act.\n\nHe was also uf opinio11 thtit s.41 only applied the procedural parts of the Code of Civil Procedure, to proceeding,; u11dur the Aruitration Ac:t and -.s O.-~:l, R. 3 applied \"nly to suik it c<>uld not lw made applicible tu pruceedings on awards, which were not suits.\n\nAccordiog tu him, the proceelified in , lfoanda' v.\n\nWadhumal('), where it was held that the proccedinge\n\non an award were not a suit, even though th use. pro ceedings were registered as a suit. It may be pointC'd out that even Chakra,, artti, J. felt that the resulting position led to .an anomn.ly, which he eX'pressed himself with his characteristic vigour thu; :\n\n\" ..... .it would seem strange if the law also were that once a reference has been ma.de\n\nUl A.1.R. 1948 Siad. 74, '\n\n• I\n\nto arbitration, the parties can no longer even settle their dispute or bring the settlement before the Court, but mu9t continue tile strife till a decree on the basis of the award is mde and compromise, if at all, thereafter, A suit is but a dispute ; the function of the Court is but to decide it ; and an arbitration is but an altemative machinery of decision. That a statute should, because a reference has been ruade to arbitration, forbid the p irties to terminate the dispute by mutual agreement and to obtain from the Court au agreed decree, would certainl, v seem axtraordinary.\n\n\"Specially since uo question of public policy can possibly be involved ; but if the Arbitration Act contains provisions to that effect, they must of course be enforced.\" His solution, therefore, was that a compromise between the parties, though not mentioned in the Arbitration Act as one of the grounds ori which a reference could be superseded or award set aside, might b~ regarded a9 a good cause for revoking the submission within s.5 of the Arbitration Act.\n\nAs againRt this. the Lahore High Court has, in more than one rase, held that a compromise is possibl8 after an award, and the Court, can pass a decree under 0.23, H..3 of the Code of Civil Procedure modifying the award according to t.he compromise.\n\nThose casc8 h:1ve already been cited above. No special reasr1ns, however, were given in those cases, and they are all based upon the decision in Behari Lrrl v. Dlwlan Das('). In Du:arka Da& v.\n\nKrishan Kislwi'e('), it was observed at p. 124 :\n\n\"jlr. Tt:kchand contended that the parties had no power to modify the award and that the Court c:ould not havE\\ passed a decree othcr.nse than upon the award as given by the :irbitrator. It appears to me, however, that if the original a ward was valid, so far as (1)\n\n(1910) 5 Indian casesl994,\n\n(2) (1921) I.L.R. 2 Lab. 114.\n\nMunshi lUa\n\n•• Baa.,., iLol\n\nH idayalwllaA J\n\nlHl\n\n492 SUPREME COURT REPORTS [1962) SUPP.\n\nJai Gopal wall concerned, it certainly cannot be considered to be invalid merely bo cause it was somewhat modified in his favour. In the ca.ae of Behari Lal v. Dhdan Dns (1) it was held by Rattigan, J., the late Chief Justico of this Court. that it is compe tent to the parties to compromise the proceedings und<\"r S<\"ction 525, Civil Procedure Code,\n\nby alterin11 anw1 ding or adding to the award.\"\n\nAn additional reason was given in Attar Si'Tl{Jh v.\n\nBishan Si'Tl{Jh{'), and it was that the Act lays down the powers of the Conrt to interfere with awards, but it does not !av do\\\\ n that a party may not withdraw from a claim.\n\nIn that cast•, after the award one party ,, ffered to bf' hound by the special oath of the other !'arty, and the oath having been taken, a decree was passed.\n\nIn our .opinion, cases •md .. r th1> Arbitration Act of 18\\l!l u•ment8, Mad, raa v. Sri Lakahmindm Thirtha Swamiar of Sri ShT1ir Mutt, [1954] S.C.R. Hi05, considered.\n\nTh< Durgah Committee, Ajmer v. Syed Huaaain Ali, [1962] I S.C.R. 383, referred to.\n\nCase-law discussed.\n\nThe Act had for its purpose the fulfilment of individuat liberty of conscience uaranieed by Art 25(1) and sought to implement Art. 17 of the Con\"itution in attempting to save an excommunicated person from virtually becoming an untouchable in his community and its constitutional validity could not, therefore, he questioned.\n\nHeld, further. that the Act in pith and substance fell within Eniries 1 and 2 of List Ill of the Legislative Listi of the Constimtion Act of 1935, and there could be no doubt as to the con1pettn( y of the Lrgislature in rnarting it.\n\nPer Avyangar, J-The right of Dai-ul-Mutlaq to exercise the right of exc0mmuniration against a member of the drnomination as recogni.ed by the Privy Council in lltJMJnali v . .Jfan&00rali, could not be in doubt.\n\nA denomination under Art. 26 and its members under Art. 25 have the right to ensure ill existence by maintaininc discipline and ensu1ing adherence to its tenet& and practices bv such suitable action as excommunicatibn of those who denied the fundamental bases of the religion. The consequence of such action must n\"cessari1y involve the exclusion of an excommunicated person from participation in the religious\n\nlife of the denomination including the use of places of wonhip or burial grounds dedicated for the use of the members and vested in the religious head as trustee for the denomination.\n\nDill v. Wataon, (1836) 3 Jones Rep. (Ir. Ex.) 4S aad Jl'rt• Church o/ Scotlallcl v. Ovcrlou, [I~] A. C. 515, referred to.\n\nIt was not correct to say, in view of the ddinition of the word 'excomm11nication' contained in the Act., that it merely sought to save the civil righu of ·~ e_xcommun~ted penon and had no concern with ~C011111llUl•cat100 .., reh'IOllfi\n\ngrounds entailing~ under the laws of the denomination, deprivation of civil rights.\n\nThe impugned Act by depriving the Dai of the right to excommunicate and making its exercise a penal . offence struck at the very life of the denomination and rendered it impo tent to protect itself against dissidents and schismatics and thereby contravened Art. 25 and 26 of the Constitution, The impugned Act cannot also to sustained as a measure of social welfare and reform under Art. 25 (2) (b) or under Art. l 7 of the Constitution.\n\nVenkatarama Devaru v. State of Mysore, [1958] $.C.R. 895, distinguished.\n\nThe expression \"laws providing: for social welfare and reform\" in Art. 25(2: (b) of the Constitution was not intended to enable the legislature to \"reform\" a religion out of exis .. tence or identity. The activities referred to in Art. 25(2)(a) are obviously not of the essence of the religion nor was Art. 25(2)(b) intended to cover the essentials of a religion which are protected by Art. 25(1).\n\nFaith in the Dai-uJ.Mutlaq being an essenti:.1 part of the creed of the denominatio;; that held it together, the impugned Act clearly contravened Art. 25(1) of the Constitu tion by tnking away his po\\ver of excomunicate by which he kept the denomination together and maintained the purity of its fellowship.\n\nOmGINAL JURISDICTION: Petition No. 128 of 1958.\n\nPetition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights.\n\nK. JI!. Munshi, R.J. Jo.•M, G.K. Jfunshi, T.S.N.\n\nDiwariji, J.B. Dadachanji, S. N. Andtey, Rameshim.r Nath and P. L. Vohra, for the petitioner.\n\nJI .C. Set, alvad, Attorney General o.f India, C.K.\n\nDaphtary, SolicitorGenerol of l\"1dio. H.N .. Sanyal, Additional Solicitor General of lndhi, B. {{en and R.H. Dhehar, for the respondent.\n\nl.N. Shroff, for the intervener.\n\n1962. January 9~Sinha. C.J., delivered his own Judgment. The Judgment of Sarkar, Das Gupta\n\nand Mudholk!t.r, JJ., was delivered by Das Gupta, J.\n\nAyY&ngar J. delivered a separate Judgment.\n\nSardaf' Syulna TalMr Saifudd;•\n\nSaheb\n\n•• 11,, Slatt of s.., q,\n\nsw,,, s_,,4114 'Tlt.t Saifllddin\n\nSah.b\n\n•• 7),, 8'4u of B , m1a_,\n\nSinAa C.J.\n\nSUPREME COURT REPORTS (1962] SUPP.\n\nS1: predecessor. The Shia sect itself l.ecame di\"idPct into two sub-seota, known respectively as bmai/i.- and Ima Asharia. The Dawoodi Bllhras belong to the former sect, and believe that owing to perser.ution Imam Tyeb (the 21st llfam) went into seolu'sion and that an Iman from his line \"'ill appear, it being their belief that an I man always exists although at times he may ho iovi&ihle to his\n\nbelievers, while in seclusion ; that owing to tho impen, ling seolusion of the 2 lst Imam {Imam Tyeb) his predecassor, tho :!0th Imam, clircted hie Hujjat (a. dignitary ranking next to an Imam), on,.\n\nHurra-tul-.Malaka, to appoint a J)ai, a Mazoon (11 dignitary next ton Dai) and a Muhir {a dignitary ranking next to a Mazoon) to carry on the Duua.1 (miBBion) of tho /mJJm S•J long as th\" Imam shoukf remain in seclusion, and to take antl receive from e faithful an oath of allegiance. The Doia are\n\nknown as Dai-ul-Mutlaq.\n\nThe petitioner, as the Head Priest of the community of Dawoodi Bohras, is the vice gerent of Imam on Earth in seclusion.\n\nThe petitioner is a citizen of India. As Dai-ul- Mutlaq and the vicegerent of Imam on Earth in seclusion, the Dai has not only civil powers as head of the sect and as trustee of the property, but also ecclesiastic11l powers as religious leader of the community.\n\nIt is the right and privilege of the petitioner as Dai-ul-Mntlaq to regulate the exercise of religious rights in places where such rights and ceremonies are carried out and in which religious exercises are performed. In his capacity as the Dai-ul-Mutlaq, that is to say, as relie:ious leader as well as trustee of the property of the community, one of his duties is to manage the properties which are all under his directions and control. He has 81so the power of excommunication. This power of excommunication is not an absolute, arbitrary and untrammelled power, but has to be exercised according to the usage and tenets of the community.\n\nSave in exceptional circumstances, expulsion from the community can be effected only at a meetmg of the Jamat, after the person concerned has b•:en given due warning of the fault complained of and an opportunity of mending, and after a public statemeut of the grounds of expulsion.\n\nThe result of excommunication properly and legally effected involves exclusion from the exercise of religious rights in places under the trusteeship of the Dai-ul-Mutlaq.\n\nThe petitioner claims that as the head of the Dawoodi Bohra community and as Dai-ul Mutlaq, he has the right and power, in a proper case and subject to the conditions oflcgal exercise of that power, to excommunicate a member of the Dawoodi Bohra community, and this power of excommunication is an integral part of the religious faith and belief of the Dawoodi Bohra community. The petitioner further affirms that the exercise of the right of\n\n196!\n\nS ardar S.JlldnO Toher Saifudd.in\n\n. alub\n\n•• 1.'he State of Bombay\n\nSinha C.J.\n\nIHI S•d.B•- T•\"\"s:tf-\"itl .. . 1l1 Stou if B.,.b.i>\n\n.... c.J.\n\n502 SUPREllE COURT REPOR'.1'5 [1902] SUPP.\n\nexcommunication is a matter of religion, and tha.t, in any event, the right is an incident of the managtoment of the affairs of the Dawoodi Bohm community in matters of religion. He also aHserts that the Da.woodi Bohra. community constitutes a religious denomination within the. meaning of Art . 26 of thp Constitution ; the said right of the petitioner to excommunicate a member of the community, for reasons of which the petitioner is the sole judge in the exercise of his position as the religious head, is a guaranteed right under Arts. 25 and 26 of the Constitution.\n\nThe Bombay Legislature enacted the Act, which came into force on November l, 1049, The petitioner asserts that the Act violates bis right and pown, ai. Dai-ul-Mutlaq and religioll8 leader of the Dawoodi Bohra community, to excommunicate such members of the community as he may think fit and proper to do; the said right of excommunication and the exercise of that right by the petitioner in the manner aforesaid are matU, rs of religion within the meaning of Art. 26( b) of the Constitution.\n\nIt is submitted by tho pttitioner that the said Act violates or infringes both the Arts. 25 and 26 of the Constitution, and to that extent., after the coming into force of tho Constitution, has become void under Art. 13 of the Constitution.\n\nTho petitioner claims that notwithstanding the provisions of the Act, he, as the religious loader and Dai-ul-MuUaq of the community, is entitled to cxcommicatc any member of the Da.woodi Bohr& community for an offence, which according to his religious sense justifies expulsion; and insofar as tho Act interferes with the said right of the petitioner, it is ultra virea the Legislature.\n\nThe Act is also challenged on the ground of legislative incompetence of the then Legislature of Bombay, inasmuch as it is contended that such a power is not contained in any of tho entries in the Seventh Schedule of the Government of India. Act, 1935.\n\nOne Tayebhai Moosaji Koicha (Mandivala) instituted a suit,. being suit No. 1262 of 1949, in the High Court of Judicature at Bombay, praying inter alia, for a declaration that certain orders of excom munication passed by the petitioner against him prior to tho enactment of the Act were void and illegal and of no effect, and that the plaintiff continued to remain a member of the Dawoodi Bohra community. The said suit was heard by J.C. Shah, J., who. by his judgment dated February 21, 1952, held that the Act was not inconsi11tent with Art. 26 of the Constitution, and was not ultra vires the Legislature of the Province of Bombay. The petitioner, being dissatisfied with the judgment of the learned Judge, preferred an appeal that came up for hearing before the Court of Appeal, composed of Chagla, C. J., and Bhagwati J. By its judgment dated August 26, 1952, the.\n\nCourt of Appeal upheld the judgment of the learned single Judge, though on different grounds. The petitioner obtained leave from the High Court to appeal to this Court, and ultimately filed the appeal, being Civil Appeal No. 99 of 1954. During the pendency of the appeal, the plaintiff.respondent aforesaid died and an application made on behalf of his heirs for being brought on the record was not granted by the High Court of 1.lombay.\n\nThis Court dismissed the said appeal on the ground that the plaintiff having died, the cause of action did not survive.\n\nThe petitioner further alleges that parties inimical to him and to the Dawoodi Community have written scurrilous articles challenging and defying the position, power or authority of the petitioner as the religious head of the oommunity; the challenge to the petitioner's position and his power to excommunicate as the head of the Dawoodi Bohra community is violat.ive of the petitioner's guaranteed rights under Arts. 25 and 26 of the Constitution. It is, therefore, claimed that it\n\nBarda< Sydrul T al&er Salfw/dl1t\n\nSoJieb\n\nv, Tiu Stale of B1111Hr1'\n\nSinha c.J,\n\n8., o S)'Mno\n\nro1in BaifvdJi•\n\nSolwb\n\nv. 11.SW.•fBW.,,\n\nSW. C • .1.\n\n504 SUPREME COURT REPORTS [1962] SUPP.\n\nis inoumbont upon the respondent, in its public cha.raoter, to forbea.r from enforcing the provisions of the Act against the petitioner. By the petitioner's attorney's lettl'r, annexure B to the petition, dated July 18, 1958, the petitioner pointed out to the respondent the unconstitutionality of thf' Act and requested tho latter to desist from enforcing tho provisions of tho Act against the petitioner or against the Dawoodi Bohra community.\n\nIn the premises, a. writ of .Mandamus or a writ in the nature of Mandamus or other appropriate writ, qirection or order under Art. 32 of the Constitution was prayed for against the respondent restraining it, its officers, servants and agents from enforcing the provisionH of the Act.\n\nThe answer of the State of Bombay, the sole respondent, is contained in the affidavit sworn to by Shri V.N. Kalghatgi, Assistant Secretary to the Government of Bombay, Home Department, to the effect that the petitioner not having taken any proceedings to excommunicate any member of the community had no cause of action or right to institute the proceedings under Art. 32 of the Constitution; that it was not admitted that the Dai-ul-Mutlaq, as the bead of the community, has civil powers, including the power to excommunicate\n\nany member of the community; that, alternatively, such power is not in conformity with the policy of tba State, as defined in the Constitution; that the petitioner, as the head of the community may have the right to regulate religious rights at appropriate places and occasions, but those rights do not include tho right to excommunicate any person and to deprive him of his civil rights and privileges; and that, in any event, after the coming into effect of the impugned Act, the petitioner has no such rights of excommunication; that it was denied that the right to excommunir, a.te springs from or has its foundation in religion and religious doctrines, tenets and faith of the Dawoodi Bohra community that, a.t\n\nany rate, it was denied that the right to excommu nicate was an essential part of the religion of the community; that, altcrnati vely, assuming that it was part of a religious practice, it. runs counter to public order, morality and health. It was also asserted that the impugned Act was a valid piece of legislation enacted by a competent legislature and within the limits of Art. 25 and 26 of the Constitution; and that thP right to manage its own affairs vested in a feligious community is not an absolute or untrammelled right but subject to a regulation in the interest of public order, mprality and health. It was denied that the alleged right of the petitioner to excowmunicate a member of the community is guaranteed by Arts. 25 and-26 of the Constitution. In the premises, it was denied that the petitioner had any right to the declaration sought or the relief claimed that the provisions of the Act should not be enforced.\n\nAt a very late stage of the pendency of th1; proceedings in this Court, in April 1961, one Kurbanhusein Sanchawala of Bombay, made an applicatfon either for being added as a party to the Writ Petition or, alternatively, for being granted\n\nleilve to intervene in the proceedings. In hi; i petition for intervention, he stated that he was a citizen of India and was by birth a member of the Dawoodi Bohra commun.ity and as such had been taking an active part in social activities for bettering the conditions of the members of the cummunity. He asserted that mem hers of the community accepted that up to the 46th Dai-ul- 11! utlaq there was no controversy, . that each one of them had been properly nominated and appointed, but that a controversy arose as regards the propriety and validity of the appointment of the 47th Dia-ul-Jfut/, aq, which controversy conti.aued all along until the present time so that opinioa is divided amonzst the members of the Dawoodi Bohra commuuity as to the validity of appointments and\n\nSard11r S,..tna Taht1 Saifuddin\n\nSolr1b\n\n•• Tiu Stal• of Bomb47\n\nSinha C.J.\n\n11111 s.-.s,.a.\n\nTN S•ifud4in 8- •• n. s..u •f \"-\"'\n\n8/Mo C . .J.\n\n506 SUI'REME COURT REPORTS [1962] SUPP.\n\nexistence of Daiul-Mul/aq, from the 47th 'to the 6lst\n\nDai-tJl-Mutlaq, including the present petitioner. The intervener also alleged that but for the impugned Act, the petitioner woulnded that religious reform, if that is the intention of the impmmed Act, is outside the ambit of Art. 25('!) (b) of the Contitution.\n\nThe learned Attorney-General for th<' respondent contended on the other hand, that thu right to excommunicate, whiuh has be0n rendenr! i11 va.lid by the impugned Act, WilS not a matter of religion within the meaning of Art. :!G\\b) of the Con; tibtion; that what the Act really intended was to put a stop to the practice inrlulgcd in by a caste or a denomination to deprive its membJr~ of their cidl rights\n\nas such members, as distinguished from matters of religion, which were withir1 th•.\\ protection of Art. :.!5 and 2G.\n\nAltern 1tively, it WilS al; o argued that even asuming that excommunication was concerned with matters of religion, the Act would not be void becaius it was a matter of reform in thil interest of public welfare. It was also argued that there was no evidence on the record to show that ex:communication was an essential matter of religion. The right to worship at a particular place or the right of burial in a particular burial ground were qllestions of civil natur~. a dispute in respct of which was within the cvgnizance of the Civil ()ourts. rhe legislation in questio:1, in its real aspects, was a matter of social welfare and soci d reform and n'.>t within the prohibitioni of Art. 2.5( I) or Art. 26.\n\nE1:commllnication involving deprivation. of rights of worship or burial and the like wcr•• not matters of religion witliin the meaning of Art. 2G(b), and Ii.tally, Art. 26(b) waa controlled by Art. 25(2) (b) uf th3 Constitution, and, th'.Jrefore, even if excommunication touched oertin religious matters, the Aot, insofar as it had abolisheJ it, was in co111onance with modern notions of human dignity\n\nSardar ')ytdna Taher St1ifuddin\n\nSaheh v.\n\nTnt State of Bomb•7\n\nSinla C. J.\n\ns., .. 8,.,,..\n\nT- SaifutUi•\n\nSo.lib\n\n'v.\n\nT.\\t S 1<14 of Bomb•J\n\nBW..C, J,\n\n510 SUPREME CO~TREPORTS [1962] SUPP.\n\nand individual liberty of action even in matters of religiouR opinion and faith and practice.\n\nShri Shroff, appearing for the intervener, attempted to reopen tho question whether the\n\ntitioner as Dai-ul-Mutlaq, assuming that he had been properly elected as such, had tho power to excommunicate, in spite of the decision of their Lordships of the Judicial Committee of tho Privy Council in HatJan Ali v. Man..'>001\" Ali ( ').\n\nHe also supported the provisions of the impugned Act on the grou11d that they were in furtherance of public order. As we are not here directly concerned with tho question whether or not the petitioner as tho head of the religi0us community had thP power to excommunicate, we did not hear Mr. Shroff at any length with reference to that qu!'stion. We shall proceed to determin the controversy in this c11se on the aseumption that the petitioner bad that power.\n\nWe are only directly concemrd with the questions whether the provisions of the Act, insofar as they have rrndered invalid the practice of excommunica tion, are unconstitutional as infringing Art. 26(b}, and enacted by a legislature which was not competent to do so, as contended on behalf of the petitioner. We will, therefore, confine our attention to those questions. Keeping in view the limited scope of the c0ntroversy, we have first tO' determine the ambit and effect of tho impugned Act. The Bombay Prevention of Excommunication Act (Bombay Act XLII of 1919) is an Act to prohibit excommunication in the province of Bombay. Its preamble, which shortly states the background of the le;; islation, is in these terms :\n\n\"Whereas it has come to the notice of Government that the fractice prevailing in certain communities o excommunicating its members is often followed in a manlier whi<.h result.a in the deprivation of legitimate right. and privileges of it8 members ;\n\n(1) [19f7] L.Jl. 75, J. A. J,\n\nAnd whereas in keeping with the spirit of changing times and in the public interest it is expedient to stop the practice; it is hereby enacted is follows\" Tue definition of \"Community\" as given in s. 2(a) would include the Dawoodi Bohra community, because admittedly its members are knit together by reason of certain common religious doctrines. and admittedly its members belong to the same religion or religious creed of a section of the Shia community of Muslims. The term 'community\" includes a caste or a sub-caste also. \"Excommuni\n\ncation\" has been defined. by s. 2 (b) as meaning \"the expulsion of a person fl'Om any community of which he is member depriving him of rights and privileges which are legally enforceable by a suit of civil nature ......... \", and the explanation to the definition makes it clear that the rights and privileges within the meaning of the definition nclude the right to office or property or to worship in any religious place or a right of burial or cremation, notwithstanding the fact that the determination of such right depends entirely on the decision of the question as to any religious riteH or ceremonies or rule or usage of a community. By s. 3, excommunication of a member of a community has been declared to be invalid and of no effect, notwithstanding any law, custom or usage to the contrary.\n\nAny act of excommunication, or any act in furtherance of excommunication, of any member of a community has been made a penal offence liable to a puni8hment, on conviction, of fine which may extend to one thousand rupees. The explanation has made it clear that any person who has voted in favour of a decision of excommunication at a meeting of a body or an association of a particular denomination is deemed to have committed the offence made punishable by s. 4, as aforesaid.\n\nSections 5 and 6 lay down the procedure for the trial of an offence under the' Act, the limit of time\n\nSartlor SyeJno To.her l!Satfuddi11\n\nSalreb\n\nThi Slal• of BM11\"'1\n\nSinha a. J,\n\n1H3\n\n8•44' B(l!in• r .... s.v..uu.\n\nB.Wt\n\n•• r1u Sl•ll •/ B~\n\n8i•\"4 c. J.\n\n512 SUPREME OOURT REPORTS [1962] SUPP.\n\nwithin which the prosecution must be launched and the necessity of previous sanction of the authority\n\nindicated therein.\n\nThese, in short, are tho provisions of the impugned Act. It will be noticed that the Act is a culmination of tho hietory of social reform which began more than a century ago with the fnactmt'nt of s. 9 of Regulation YJI cf 1832 of the :Bengal Code, which provided, i11ter alia. that the J:rn s of Hindus and M'ijslims shall nl>t be permitted to ope rate to deprive the parties of any property to which, but for the operation of such laws, they would have been entitled. Those provisions were subsequently incorporated in tlio [ndia Act (XXI of 1850)-known as the Caste Disabilities Removal Act-which provided tht a person shall not be dcprivt-d of his rights or property hy reason of his or her renouncing or exclusion from tho communion of any religion or being dPprivcd of \"~&te, and that an:v 011ch forfeiture shall not be enfNral was taken to the Court of Appeal, which waa heard by Chagla C. J. and Bhairwati J.\n\nThe Court of\n\nAppeal upheld the decision of Shah J. The matter was brought up on appeal to this Court in Civil Appeal 99 of 195!. During the pendency of the appeal in this Court, the plaintiff died and it was held, without deo_iding the merits of the controversy, that the suit giving rise to the appeal in this Court had abated by reason of the fact that the plaintiff had died and the cause of action being personal to him was also dead. The Order of this Court dismissing the appeal as not maintainable is dated November 27, 1957.\n\nThis Writ Petition was filed on August 18, 1958 by the petitioner as the 5lst Dai-ul-Mutlaq and head of the Dawoodi Bohra community, for a declaration that the Act was void so far as the petitioner and the Dawoodi Bohra community were concerned, and that a writ of mandamus or a writ ; n the nature of mandamus or other appropriate wrl~. direction or order under Art. 32 of the Constitution be issued restraining the respondent, its officers, servants and agents from enforcing the provisions of the Act, against the petitioner. or the Dawoodi Bohra community, or in any manner interfering with the right of the petitioner, ao the religious leader and\n\n/)ai-ul-Mut/, aq of .the Dawoodi Bohra community, to excommunicate any member of the community for an offence which the petitioner; in the exercise of his religious sense as the religious head of the community may determine as justifying such an expulsion.\n\nIt is not disputed that the petitioner is the head of the Dawoodi Bohra community or that the Dawoodi Bohra community is a religious denomination within the meaning of Art. 26 of the Constitution. It is not even disputed by the State, the only respondent in the case, that the petitioner as the head of the community had the right, as found by the Privy Council in the case of Hasanali\n\nv. Mansoorali (1 ), to excommunicate a particplar member of the community for reasons and in the\n\n(l) (1947) L.R. 75 A. I. I.\n\nSardar Sytdna 1\" aher Saifuddin\n\nSaheh\n\n•• Tiu S•ale of Bombay\n\nSi11ha C. J.\n\nlHI s.-s ......\n\nTws, Jf.M;.\n\n8.W\n\nY. n. SW. .J B.U,\n\n~-.c.1.\n\n518 SUPREME OOURT REPORTS [1962] SUPP.\n\nmanner indicated in th\" judgment of their Lordships of the Privy Council.\n\nBut what is contended is that, as a re8ult of the enactment in question,\n\nexcommuniMtion has been completely banned by the Legislature, which was competent to do so, and that the ba.n in no way infringes ArtR. 25 and\n\nl!6 of the Constitution. I have already indicated my considered opinion that the Bombay Legislature was competent to enact the Act. It now remains to consider the ma.in point in controversy, which was., as a matter of fact, the only point urged in support of the petition, namely, that the Act is void in so far as it is repugnant to the guaranteed rights under Arts. 25 a.nd 26 of the Constitution.\n\nArt. 25 guarantees the right to every person, whether citizen or non-citizen, the freedom of conscience and the right freely to profess, practise and propagate religion. But this guaranteed right is not\n\nan absolute one. It is subject to (1) public order, morality and health, ( 2) the other provisions of\n\nPart III of the Constitution, (3) any existing law regulating or restricting an economic, financial,\n\npolioa.l or other secular activity which may be associated with religious practice, (4) a law providing for social welfare and reform, and (5) any la.w that m11.y be mado by the State regulating or re&- tricting the activities aforesaid or providing for social welfare and reform. I have omitted reference to the provisions of Explanations I and II and other pn.rte of Art. 25 which are not material to our present purpose. It is noteworthy that the right guaranteed by Art. 25 is an individual right as distini;:uished from, the right of an organised body like a religious denomination or any section thereof, dealt with by Art. 26. ffpnce, every member of the community has the right, so long as\n\nhe does not in any way interfere with the corresponding rights of others, to profess, practise\n\nand propagate his religion, and everyone i9 guaranteed his freedoom of conscience.\n\nThe\n\nquestion naturally arises : Can an individuul be compelled to have a particular belief on pain of a penalty, like excommunication? One is entitled to believe or not to believe a particular tenet or to follow or not to follow a particular practice in matters of religion. No one can, therefore, be compelled, against his own judgment and belief, to hold any particular creed or follow a set of religious practices. The Constitution has left every person free in the matter of his relation to his Creator, if he believes in one. It is, thus, dear that il person is left completely free to worohip God according to the dictates of his conscience, and that his right to .worship as he pleased is unfettered so long a.s it does not come into conflict with any restraints, as aforesaid, imposed by the State in the interest of public order, etc. A person is not liable to answer for the verity of his religious views, and he\n\ncannot be questioned as to his religious beliefs, by the State or by anv other. person. Thus, though his religious beliefs itre entirely his own and his freedom to hold those beliefs is. absolute, he ha.a not the absolute right to act in any way he\n\npleased in exercise of his religious beliefs. He ha.a been guaranteod the right to practise and propagate his religion, subject to the limitations aforesaid.\n\nHis right to practise his religion must also be subject to the criminal laws of the country, validly passed with reference to actions which the Legislature has declared to be of a penal character. Laws made by a• competent legislature in the interest of public order and the\n\nlika, restricting religious practices, would come within the rgulating power of the State. For example, there may be religious practices of sacrifice of human beings, or sacrifice of animals in a. way deleterious to the well being of the community at large.\n\nIt is open to the State ;, o intervene, by legislation, to restrict or to regµlate to the extent of completely stopping such deleterious practicel!. lt. must, therefore, be held\n\n195!\n\ns.,._, s~ T ohw ~••/VUitt\n\nSaA 6\n\nTiu Stllll •f ~\n\nSinlro C. J.\n\n19<2\n\n71. Stole of Bombay\n\ns .. ~. c. J.\n\n!i20 SUPREME COURT REPORTS [1962) SUPP.\n\nthat though the freedom of conscience is guaranteed to every individual so that he may hold any\n\nbeliefa he likes, his actions in pursuance of those buliefs may be liable to restrictions in the interest of the community 'Lt large, as may be determined 1iy common consent, that is to say, by a competent\n\nl\"gislature. It wl\\8 on such humanitarian grounds, and for the purpose of social reform, that eo ca.lied\n\nreligious practices like immolating a widow at the pyre of her deceased husband, or of dedicating a virgin girl of tender years to a god to function as a devada8i, or of ostracising a person from all social contact!' and religious communion on account of his having eaten forbidden food or taboo, were stopped by legislation.\n\nBut it has been contended on behali of the petitioner that the right guaranteed, under Art. ~5, to freedom of conscience and the freedom to profeas, practise and propagate religion is available not only to an individual. but !-<> the community at large, acting through its religious head; the petitioner, as such a religious head has, therefore, the right to oxcommunica.te, according to the tenets of his religion, any person who goes against the beliefs and practices connected with those beliefs.\n\nThe right of the petitioner to excommunicate is, therefore, a fundamental right, which cannot be affected by the impugned Act. In this connection, reference was made to the following observations in the leading judgment of this Court, bearing tipon the interpretations of Arts. 25 and 26 (vide The Commissioner, Hindu Religious EndowrMnts, Madras\n\nv. Sri Laksh11tindra Thirtha Swamiar of Sri Shirur Muu) ('):\n\n\" A religion may not only lay down a oode of ethical rules for its followers to accept, it might prescribe rituals and ?been:an oee ceremonies and modes of worship whichar~ regarded as integral parts of religion, and\n\n(I) [1954) S.C. R 1005, at p. ID24.\n\nthese forms and observances might extend even to matters of food and dress.\n\nfhe guarantee under our Constitution not only protects the freedom of religious opinion but it protects also acts done in pursuance of a religion and this is made clear by the use of the expression 'practice of religion' in Article 25.\"\n\nOn the strength of those observations, it kl contended on behalf of the petitioner that this practice of ex-communication is a part of tht' religion of the community with which we are concerned in the present controversy, Art. 26, in no uncertain terms, has guaranteed the right to every religious denomination or a section thereof\" to manage its own affairs in matters of. religion \"\n\n(Art. :!6(b) ).\n\nNow what are matters of religion and what are not is not an easy question to decide. It must vary in each individual case according to the tenets of the religious denomination concerned.\n\nThe expression \" matters of religion\" in Art 26( b) and \"activities assoeiated with religious practice\" do not cover exactly the same ground. What are exactly matters of religion are completely outside State interference, subject of course to public order, morality and health. But activities associated with religious practices may have many ramifications and varieties-economic, financial, political and otheras recoimised by Art. 25(2)(a). Such activities, as are contemplated by the clause aforesaid cover a field much wider than that covered by either Art. 25(1) or Art. 26(b). Those provisions have, therefore, to be so construed as to create no conflict between them. We have, therefore, to classify practices into such as are essentially and purely of a religious character, and those which are not essen tially such. But it has been contended on behalf of the petitioner that it is for the religious denomination itself to determine what are essentially reli-\n\nSardar s_,.ina T alur 8 atfuddin\n\nBalab\n\nThe Stolt oj BombaJ\n\nSinha C. ~'\n\n19~2\n\ns., u,8~ T.,,,. S•iJuiiin\n\nS1/v6\n\nv. n, Bui. of B•rnb•7\n\nSio4a O. J.\n\nSUPREME OOURT REPORTS [1962] SUPP.\n\ngious practices and what a.re not.\n\nTu this connection, reliance is placed on thP. following observations of this Court in the leading case, afornsa.id, of The Commissione1, Hindu Religious Endowmen/8, Madra.~\n\nv. Sri Lakshminrlra Thirlhtt Swamiar of Sri Shirur ltfutt ('):\n\n\"As we have already indicated, freedom of religion in our Constitutio11 is not confinf'd to religious belie fa only; it extends to religious practices a.a well subject to the restrictions which the Constitution itself has laid down.\n\nUnder Art. 26( b ), therefore, a religious denomination or organisation enjoys complete autonomy in the matter of deciding aA to what rites and ceremonies arc cssrntial according to tho tenets of the religion they hold and no outside authority has any jurisdiction to interfere with their decision in such matters.\" It should be noted that the complrt~ autonomy which a religious denomination enjoyA under Art. 2tJ(b) iH in 'matters of religion', which has been interpreted as including rites and ceremonies which are esst'ntia.I according to the tenets of the religion.\n\nNow, Art. 26(b) it8elf would seem to ins am! regulations for the conduct of its mmbcl's and the penalties attached to infringement of those rules, manaing property owned and posse&es in other m'ltkrs which may touch the religious institution' a.t several\n\npoint~, but which are not intimat<'ly l'Onccrned with rites and ceremonies the pcrforman .. c of which is an\n\n(I) (1954] S.CR. 1005. 1028-:?!•\n\nessential part of the religion. In this connection, the following observations of this Court in The Durgah Committee, Ajmer v. Syed Hussain Al'i (') which were made with reference to the earlier decisions of this Court in The Commissioner, Hindu Religious Endou:ments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (')and in Sri Venkataramana Devaru v. The State of Mysore('), that \"matters of religion\" in Art. 26(h} inr.bde evf'n practices which are rega1ded by thEI ommnnity as part of its religion, may be noted :\n\n\"Whilst we are dealing with this point it may not be out of place incidentally to strike a ncte of caution and observe that in order that the practices in qiJestion should be treated as a part of religion they must be regarded by the said religion as its essential and integral part; otherwise even purely secular practices which are not an essential or an integral part of religion are apt to be clothed with a religious form and may make a claim for being treated as religious practices within the meaning of Art. 26. Similarly, even practices though religious may have sprung fro\"'! merely superstitious beliefs and may in that sense be extraneous and unessential accretions to religion itself. Unless such practices are found to constitute an essential and integral part of a religion their claim for the protection under Art. 26 may have to be carefully scrutinised; in other words, the protection must be confined to such religious practices as are an essential and an integral part of it and no other.\" But then it is contended that a religious denomination is a quasi-personality, which has to ensure its continuity and has, therefore, to lay down rules for observance by mPmuers of its community, and, in order to maintain proper and strict\n\n(I) [196211 S.C.R. 383.\n\n12\\ [1954] S.C.R. 1005, 1028-29\n\n(3) l1958J S.C.R. 895.\n\n196'\n\nS ardor Syedn• T aher Saifuddin\n\nSah•6\n\nTh• St•t• of Bornb•.1\n\nSinh1 C. J.\n\n1962 s..u.s.u..\n\nT•lw SOiji; UJio\n\ns.\"'1>\n\n771. Si.ii of &mi><>\n\nS;.lto C. J.\n\n524 SUPREME OOURT REPORTS (1962] SUPP.\n\ndiscipline, .has to lay down sanctions; the right to excommunicate a recusa.nt member is an illustration of that sanction.\n\nIn this connection, it was contended that the Privy Council had laid down in the case of Hasanali v. 1lfan.an not merely temples dedil'ated on the pleadings and on the evidence placed before us that the right of excommunication is a purely religious matter.\n\nAs already pointed out, the indications are all to the contrary, particularly the judgment to the Privy Council in the ca.e of Hnali v. Jfa118QOrali (1) on which great reliance was placed on behalf of the petitioner.\n\nOn the eocial aspect of excommunication, one is inclined to think that the position of an excommunicated person becomes that of an untouchable in his community, and if that is so, the Act in declaring such practices to be void has only carried out the strict injunction of Art. 17 of the Constitu ti on, by w hioh untoucbability has been aboliFhed and its practice in any form forbidden.\n\nThe Article further provides that the enforcement of any disability arising out of untouchability shall be an offence punishable in accordance with law.\n\nThe Act, in this senRe, is it.a logical corollary and must, therefore, be upheld.\n\nIn my opinion, it has not been established that the Act has been p&SSed by a h:izislature which was u0t competent to legislate on the subjPct, or that it infringes any of the provisions of the Constitution. This petition must, therrfore, fa.ii.\n\nr., ,,,,,, ./.\n\nDAS GuPTA, J.-In our opinion this petition should succeed.\n\nThe '(>f'titioner is the head of the Dawoodi Bohras who form one of the several sub-sects of the Shia sect of Musalma.ns. Dawoodi Dohras believe that since the 21st Imam went to\n\n8ecluion the right~ powt'r and authority of the Imam hac been rightfully exercised by.the Daul J[utalq, as the vice-reent of the Jam m. scl~810n.\n\nOne of such rights 18 the exercuw. of d1.so1plmary powers including the right to excommumcate any\n\n(I) [1947] L, R. 75 I. A. I.\n\nmember of the. Dawoodi Bohra community. The existence of such a right in the Dai-ul.Mutlaq who is for the sake of convenience often mentioned as the Dai was questioned before the oourts in a oase which went up to the Privy Council.\n\nBut since the decision of the Privy Council in that case, viz., Hasanali .v. Mansoorali (1) that question may be taken to have been finally settled, and it is no longer open to dispute that the Dai, as the head of the Dawoodi Bohra. community has the right to excommunicate any member of the community.\n\nThe claim of the present petitioner to be the 5Jst Dai-ul-Mutlaq of the community was also upheld in that case and is no long'lr in dispute. The Privy Council bad also to consider in that case the question whether this power to excommunicate could be exercised by the Dai in any manner he liked and held after consideration of the previous oases of excommunication and also a document composed about 1200 A.D. that normally members of the community can be expelled \"only at a meeting of the Jamat after being given due warning of the fault complained of and an opportunity of amendment, and after a public statement of the grounds of expulsion.\" Speaking about the effect of excommunication their Lordships said :-\"Excommunication .................. necessarily involve exclusion from the exercise of religious rights in places under the trusteeship of the head of the community in which religious exercises are performed.\" The present petitioner, it may be mentioned, was a party to that litigation.\n\nThis decision was given on December, 1, 1947; shortly after that, the Bombay Legislature-it may be mentioned that there is a large concentration of Dawoodi Bohras in the State of Bombaystepped in to prevent, as mentioned in the preamble, the practice of excommunication \"which\n\n(I) ( 1947) L.R. 751.A. !.\n\nSardJ.r S7ein4 Talier 'aifudtlirt\n\nSalub\n\nv. 1 he State of Bomb0:,1\n\nJ)as Gupta J.\n\nSar!W 87.d•• Toh.r Sai/uddi• Sud .. no sui. eJ n •• n1.7\n\nD., Gy14 J.\n\n530 SUPREME OOURT REPORTS (1962] St1PP,\n\nresults in the deprivation of legitimate rights and privileges of\" members of certain religious communities and enacted the Bombay Act No. XLII of 194!1 .\n\nIt is a short Act of six sections. Section 3tho mn.in operative section-invalidates all excommunication of members of any religious community.\n\nExcommunication is defined in section 2 to mean \"the expulsion of a person from any community of which he is a member depriving him of rights and privileges which are legally enforceable by a suit of a civil nature by him or on his behalf as such member\". The explanation to the definition to this section makes it clear that a right to office or proptrty or to worship in any religious place or a right to burial or cremation is included as a right legally enforceable by suit even though the determination of such right may depend entirely on the decision of the quest ion as to any religious rites or ceremonies or rule or usage of a community.\n\nSection 4. makes a person who does any act which amounts to excommunication or is in furtherance of the excommunication liable to punishment which may (•xtend to one thousand rupees.\n\nFaced with the position that the legislation wholly destroys his right of excornmuniCllting any member 9f the Dawoodi Bohra. community, the Dai has presented this petition under Art. 32 of the Constitution.\n\nHe contends that the Act violates the fundamental right of the Dawoodi Bohras, including himself, freely to practise religion according to their own faith and praotioea right guaranteed by Art. 25 of the Constitution, and further that it violates the right of the Dawoodi Bohra community to manage its own affairs in matters of religion guaranteed by Art.\n\n26. Therefore, says he, the Act is void and prays for a. declaration that the Act is void and the\n\nissue of an appropriate writ restraining the respondent, the State of Bombay, its officers, servants and agents from enforcing the provisions of the Aot ag11inst the petitioner and/or any other member of the Dawoodi Bohra community.\n\nIt may be mentioned that in the petition the legislative competence of the Bombay legislature to enact the Bombay Prevention of excommunication 1949 was also challenged. Thie, however was not pressed at the time of the hearing.\n\nThe respondent contends that neither the right guaranteed under Art. 25 nor that under Art. 26(b) is contravened by the impugned Aot.\n\nBriefly stated, the respondent's case is that the right and privilege of the petitioner as Dai-ul- Mutlaq to regulate the exercise of religious rights do not include the right to excommunicate any person so as to deprive him of his civil rights and privileges.\n\nIt was denied that the petitioner's power to excommunicate was an essential part of the religion of the Dawoodi Bohra community and that the right has its foundation in religion and religious doctrines, tenets and faith of the Dawoodi Bohra community.\n\nIt was also denied that the right to excommunicate is the religious practice and it was further pleaded that assuming that it was a religious practice, it was certainly not a part of religion of the Dawoodi Bohra community.\n\nThe same points were urged on behalf of the intervener, 0xcept that the learned counsel for the intervener wanted to reopen the question whether the petitioner as the head of the Dawoodi Bohra communityhad the power to excommunicate. As already stated, however, this question is hardly oplm to dispute in the face of the decision of the Privy Council in HaJub\n\nY. 7Ji. SloU \"f Bomb'.1\n\nDdS Gupta J.\n\n532 SUPREME COURT REPORTS [1962] SUPP\n\nin the Commissioner, Hindu &l.igis underlyin!? these provisions have by thcse decisions been placed beyond controversy.\n\nThe first is that the protection of thePe articles is not limited to matters of doctrine or belief they Pxtend also to acts done in pursuance of rP!igion and therefore contain a guarantee for rituals and observances, ceremonies -and modes of worship which are integral parts of religion. The second is that what constitutes an essential part of a religious or rellgious practice has to be decided by the courts with reference to the doctrine of a pi.rtieular religion and include practices which are regarded hy tho community as a part of its religion.\n\nB fore however we can give a proper answer to th\" two questions raised, viz., (i) Has the impugmd Act interfered with a right freely to practise religion and (ii) H~ it interfered with the right of tho Dawoodi Bohra Community to manage its own affairs in matters of religion; it is necessary to examine firt the place of excommunication in the Jifr, of a rflligious community. Much valuablt> information about this is furnished by an article in the Encyclopaedia of the Social Sciences from the pen of Prof. Hazeltine. \"Ettommunication,\" BRYS Prof.\n\nHazeltinl', \"in one or another of the severid different meanings of the term has always and in all civilizations been one of the prinoipa.l means of mi.intaing discipline within religio11s organizations and hence of prcs<'rving and strengthening their solidarit);·\" Druids in old Britain are aid to bavo claimed the power to exclude offenders from sa.orifirc. The early Chiristian Church exerci8C'd\n\n•I i145+JS, C.R. 1001. (3, Ll95A) S.C.R. 895 .\n\n(2) [ 19541 S.C, R 1046 (4)\n\n[1\"6211S.C.R.383.\n\nthis power very largely a.nd expelled and excluded from the Christian association, those members who proved to be unworthy of its aims or infringed its . rules of governance.\n\nDuring the middle ages the Pope used this p_ower frequently to secure the observance of what was considered the proper religious rights and practices of Christianity by excommunicating even the kings of some European countries when they introduced or tried to ir. troduce different forms of di vine worship. The power was often used not perhaps always fairly and justly, as a weapon in the struggle for the principle that the Church was a hove the State.\n\nImpartial historians have recogni8ed, however, that many of the instances of excommunication were for the purpose of securing the adherence to the orthodox creed and doctrine of Chiristianity as pronounced by the Catholic Church. (Vide The Catholic Ency lopaedia, Vol. V, articles on England and Excommunication).\n\nTurning to the Canon law we find that t\"xcomrnunication may be inflicted as a punishment for a number of crimes, the most -serious of these being, heresy, apostasy or schism. Canon 1325, section 2 defines a heretic to be a man who while remaining nominally a Christian, pertinaciously denies or doubts any one of the truths which must be believed de fide divina et catholioo ; if he falls away entirely from the Christian faith, he is an apostate ; finally if he rejects the authority of the Supreme Pontiff or refuses communion with the members of the Church who are subject to him, he is a schismatic. (Vide Canon Law by Bouscaren and Ellis).\n\nAmong the Muslims also the right of excommunication appears to h'Lve been prl\\ctised from the earliest times.\n\nThe Prophet and tho Imam, had this right ; and it is not disputed that the Dais have also in the past exercised it on a number of\n\nSardor yedna Ta'lur Snifutldin\n\nSaiieb\n\n•• Tile State of B•mboJ - Das Gupta J\n\nIHS\n\ns.•s~ Tu.rs~\n\n•• 'l'lll si.1 .. 1 &ooilu\n\nI)., a..;1a J.\n\n534 SUPREME OOURT REPORTS [19e2] SUPP.\n\nocce.sions. There can be little doubt that heresy or aposte.sy was a crime for which excommunication was in force among the Dawoodi Bohre.s also. It may be pointed out in this connection that\n\nexcounication in the ce.se of llaaanali v.\n\nMa1MOOrnli (1) which '\\\\-a.& upheld by the Privy Council) we.s based on the failure to comply with the tenets and traditions of the Da.woodi Bohra community and certain other faults.\n\nAccording to the petitioner it is \"an integral pa.rt of the religion and religious faith and belief of the Dawoodi Bohra community\" that excommunication should be pronounced by him in suitable cases. It was urged that even if this right to excommunicate is considered to be a religioua practice a.s distinct from religious faith such religious practice is also a part of the religion of the Dawoodi Bohra community. It does appear to be a faot that unquestioning faith in the Dai e.s the head of community is part of the creed of the Dawoodi Bohras. It is unnecessary to trace the historical reason for this extraordinary position of the Dai a.a it doe.a not appear to be seriously disputed that the Dai is considered to be the vice-regent of Imam so long a.s the rightful Imam continues in seclusion.\n\nMention must be ma.de in thie connection of the Mi.!Mk which every Dawoodi Bohra takes at the time of his initiation, This includes among other things, an oath of ULquestioning faith in and loyalty to the Dai. It is urged t.herefore that faith in the existence of the discipisnary power of the Da.i including his power to excommunicate forms one of the reiigiOUB tenets of this community. The argu ment that Art. 25 has been contraveneb by the impugned Act is based mainly on this contention and the further contention that in any case excommunication is a religious practice in this community.\n\nAs rega.rda Art. 26(b) the argument is that excommunication among the\n\n(I) 1947) L, 11.. 75 LA. I.\n\nDawoodi Bohras forms suoh an integral part of the management of the community by the religious head that interference with that right cannot but amount to an interference with the right of the community t-o the manage its own affairs in matters of religion.\n\n Let us consider first whether the impugned Act contravenes the provisions of Art. 26 (b). It is unnecessary for the purpose of the present case to enter into the difficult question whether every case of excommunication by the Dai on whatever grounds inflicted is a matter of religion. What appears however to be clear is that where an excommunication is itself based on religious grounds such as lapse from the orthodox religious creed or doctrine (similar to what is considered heresy, apostasy or schism under the Canon Law) or breach of some practice considered. as an essential part of the religion by the Dawoodi Bohras in genaral excommunication cannot but be held to be for th~ purpose of maintaining the strength of the religion.\n\nIt necessarily follows that the exercise of this power of excommunication on religious grounds forms part of the management by the community, through its religious head, \"of its own affairs in matters of religion.\" The impugned Act makes even such excommunications invalid and takes away the power of the Dai as the head of the community to excommunicate even on religious grounds. It therefore, clearly interferes with the right of the Dawoodi Bohra community under cl. (b) of Art. 26 of the Constitution.\n\nThat excommunication of a member of a community will affect many of his civil rights is undoubtedly true. This particular religious deno mination is possessed of properties and the neces sary consequence of excommunication will be that the excommunicated member will lose his rights of enjoyment of such property It might be thought undesirable that the head of a. religious community\n\nIH2\n\nSardar 8.11.W.\n\nT airer Seifud4in\n\nSahtb\n\nv, T/v SWe of B,..6•y\n\nDn Gu/JI• J,\n\nl9i2\n\nSudP .':J'y1tb•• Ta/J,,. SaijudJitJ\n\nSnh.b\n\nThi StGll uf Bombay\n\nDas Gup1a J.\n\n536 SUPREME COURT REPORTS (1962] SUPP.\n\nwould have the power to take a.way in this manner the ci1il rights of any person. The right given under ,\\rt. 26 (b) has not however bef.n made subject lo prPBPrvation of civil rights. The expreSB limitation in Art. 26 itself is that this right under the scYeral clauses of the art iclo will exist subject to public order, morality and health. It has l>Eoen held by this Cou1t in Sri Venkaiaramana Demru v. 'J'lte Siate of Mysore (') that the ri!!ht undor Art.\n\n21i(b) is subject further to cl. 2 of Art. 25 of the Constitution.\n\n'Ve shall prest>ntly consider whether these limitations on the rights of a religious community to manage its own affairs in matters of rcliizion can come ti> the help of the impugned Act. It is clear however that apart from these limitations the Con~· titution has not imposod any limit on tho right of a religious community to manage ill! own affair~ in matters of religion.\n\nThe fact that civil rights of a person aro affected by the 1•xt>rcise of thiH funda ·\n\nmntal right under Art. 26(b) is therefore of no consequence. Nor is it possible to say th:it excommunication is prrjudicial to public order, morality and health.\n\nThough there was a statement in paragraph l 0 of the rospondent's counter affidavit that ''the religious practice, which runs counter to the public order, morality and health must give way before tlle good of th1' people of the 8t>lte\", the learned Attorney-Gtueral did not advance any argument in support of tlii8 plea.\n\nIt, remain• to consider whether the impugned Act comes within the saving provisions embodied in\n\ncl. 2 of Art. :25.\n\nTho clauae is in these words :-\n\n\".l\\' ot hi11g in thiB Article shall affect tho operation of auy c:tiAting law or prevent the State from maki11g any hw--\n\n( l) ~19511J S. C R. ~15\n\n(a) regulating or restrioting any eoonomio, finanoial, political or other secular activity which may bE1 associated with religious practice ;\n\n(b) providing for social welfare and reform or the throwing open of Hindu religicus institutions of a. public character to all\n\nclasses and sections of Hindus.\"\n\nQuite olearly, the impugned Act cannot be regarded as a law regulating or restricting any economic, financial, political or other secular activity. Indeed that was not even suggested on behalf of the respondent State. It was faintly suggested however that the Act should be considered to be a law\n\n\"providing for social welfare and reform.'' The mere fact that certain civil rights which might be lost by members of the Da.woodi Bohra community as a result of excommunication even though made on religious grounds and that the Act prevents such loss, does not offer sufficient basis for a conclusion that it is a law \"providing for social welfare and reform.\" The barring of excommunication on grounds other than religious grounds, say on the breach of some obnoxious social rule or practice might be a measure of social reform and a law which ha.rs such excommunication merely might conceivably come within the saving provisions of cl. 2(b) of Art. 25.\n\nBut barring of excommunication on religious grounds pure and simple, cannot however be considered to promote social welfare and reform and consequently the law in so far as it invalidates excommunication on religious grounds and takes away the Dai's power to impose such excommunication cannot reasonably be considered to be a measure of social welfare and reform. As the Act invalidates excomm11:n!cation on any. ground whatsoever, including religious grounds, 1t must be held to be in clear violation of the right of the Dawoo
  • A.l.R. 1953 Dom •. 183-\n\n. , . , f:\n\n,.,\n\nthe Holy Prophet-and the one God (See Per M!\\rten J. in Advocate General of Bambay v. Y'U, svfalli\n\nEbrahim (').\n\n(2) The position and status of .the petitioner as the Daiul Mutlaq was not contested since the same had been upheld by the Privy Council the decision reported as Hasanali v. Manumali (').\n\n(3) It was not in dispute that subject to cer tain !imitations and to the observance of particular formalities which were pointed out by the Privy Council in the decision just referred to, that the Dai-vLMutlaq has the power of excommunication and indeed, as observed by Lord Porter in that judgment, \"the right of excommunication by a Dai-ul-1liutlaq w\"s not so strenuously contested as were the limits within which it is confined.''\n\n(4) The Dai-ul-Miitlaq was not merely a reli gious leader-the religious head ofthedenomination but was the trustee of the property of the community.\n\n(5) The previous history of the community shows that excommunicated persons WPre deprived of the exercise of religious rights. It was contended before the Privy Council that the effect of an excommunication was ii1 the nature merely of social ostracism but this was reje'cted and it was held to have a larger effect as involving an exclusion from the right to the enjoyment of property/ dedicated for the benefit of the denomination and of worship in places of worship similarly dedicated or set apart.\n\nThe v11-lidity of Bombay Act 42of1949 (which I shall hereafter refer to as the impugned Act) has to be judged in the light of these admitted premises.\n\nArticles 25 and 26, which are urged as violated by the impugned Act run:\n\n(!) 24 Born. L.R. 1060.\n\n(2) [1947] L.R. 75 I.A. I.\n\nSordar Sylfha Taha1 Saijuddin\n\nSalub\n\nTM State of Bomba'\n\nA,, ongar.T.\n\n19'3\n\nSan!Gr s,.a...\n\nTollln this feature wss absent being merely temporary aberrations. Besides, they SC'rve to emphasize the secular nature of Indian Democracy which the founding fathers consider('d •lwuld be the very basis of the Constitution.\n\nI now proceed to the details of the provisions of the impugned Act whkh are stated to infrin11e the rights guaranteed by these two Artiles.\n\nThe preamble to the impugned Act recites :\n\n\"\\Vhereas it has come to the not.ice of Go.-ernment that the practice prevailing in certain communi.tics of excommunicating its members is often followed in a manner which results in the deprivation of legitim1te rights and privileges of its members; And whereas in keeping with the spirit of changing times and in the public interest, it is .expedient to stop the practice; it is hereby enacted as follows :-\" Section 3 is the operative provision which enacts:\n\n\"3. Notwithstanding anything contained in any law, custom or usage for the time being in force to the contrary, no excommunication of a. member of any community shall be valid and shall be of any effed.\"\n\nScrtion 4 pena. lises any person who does \"any\n\na.ct which amounts to or is in furtherance of the excommunication\" and subjects him to criminal\n\nSerda,. Syednc Toher 8 2fuiiin\n\nSahib\n\n' Tt, e State of Bom~•Y\n\nAy>angar J.\n\nSardar Sv1dna T aher B aifttddin\n\nSa/i, b\n\nThi Stau of Bombay\n\nA.yJangar .J.\n\nSUPREME COURT REPORTS [1962] SUPP.\n\nproceeaings as regards which provision fo made in\n\ns~. 5 and 6.\n\nSecti')n 2 contains two definitions : '(1) of the word \"community\" which would include the religious denominatiun of Dawoodi Bohras, and\n\n(2) of \"excommunication\" as mean ing:\n\n\"the expulsion of a person from any coµimunity of which he is a member depriving him of rights and privileges which are legally enforceable by a suit of civil nature by him or on his beha If as such member ; Explanation.-For tho purposes of elause a right legally enforceable by a suit of civil nature shall include the right to office or property or to worship\n\ntn any religious place or a right of burial or cremation, notwithstanrling the fact that the determination of MUC'h right dends entirely on the decision of the 'question as to any religious rite~ or ceremonies or rule or usa.ge of a commu hity.\" The question t0 consider is whether a Jaw which penaliees excommunication by a religious denomination or by its head whether or not the excommunication be for non.eonformity to the bas.ic.essentials of the religion of that clenumination and effects the nullification cf such cxcommunica tion a9 regards.the rights of the person excommunicated would or would nc, t, in fringe the rights guaranteed by , Arts. 25 and 2G.\n\nFirst as to Art. 25, as regards d. ( J) it was not in dispute that the guarantee unn from civil rights of thn excommunicated\n\nperson.\n\nThe learned AttorncyGtneral is therefore not ri;; ht in the submiBBion that the Act is concerurty whioh is dedicated for definite uses and which under Art. 26 (d) the religious\n\n;' I\n\ndenomination has the right to administer. From this it would follow that subject to any law grounded on public order, morality or health the limitations with whieh Art. 26 opens, the denomination has a right to have the property used for the purposes for which it was dedicated. So far as the present case is concerned, the management of the property and the right and the duty to ensure the proper application of that property is admittedly vested in the Dai a3 the religious head of the denomination. Article 26 (d) speaks of the administration of the property being in accordance with law and t.110 learned Attorney-General suggested that a valid law could be enacted which would permit the di version of those funds to purposes which the legislature in its wisdom thought it fit to appropriate. I feel wholly unable to accept this argument. A law which provides for or permits the diversion of the property for the use of persons who have been excluded from the denomination would not be \"a law\" contemplated by Art. 26(d).\n\nLeaving aside for the moment the right of excommunicated persons to the enjoyment of property dedicated for the use of a denomination let me take the case of a person who has renounced that religion, ancl in pasHing it might be observed that even in cases of an apostate according to the principles governing the Dawoodi Bohra denomination there is no ipso f<6cto loss of rights, only apostasy is a ground for excommunication which however eould take place. without service of notice or an enquiry. It could not be contended that an apostate would-lw ntitled to the beneficial use of property, dedif'nted to the Dawoodi Bohra <:ommm1ity lw it th<' mosque where worship goes on or other types of property like consecrated burial grounds ete. It \\rnuld Le obvious that if the Dai permitkd the use of the property by an apostate without excommnnic:iting him he would be committing a dereliction of his dnty as the supreme head\n\nSardar Sytdna T ah.r Saifuddin\n\nSoheb\n\nThe Slate of Bmba/\n\nA.uan1ar r\n\nIff 2\n\nIJ_.,,...\n\nT. a.ijW/ftl\n\n&Ai6\n\n•• Tiu Sl4U •J •..U9\n\n~ .. ,,.\n\n54i SUPREME OOURT REPORTS (1962] SUPP.\n\nof the religion-in fact an a.ct of sa.crilege besides being guilty of a breaoh of trust. I consider that it hardly needs any argument to show that if a law permitted or enjoined the use of the property belonging to the denomination by an apostate it would be a. wholly unauthorised diversion which would be a violation of Art. 26(d) and also of Art. 26(c), not to speak of Art. 25(1). The other postulate is the position of the Dai as the head of the religious denomination and BS the medium through whic.b spiritual grace is brought to the community and that this is the central pa.rt of the religion as well as one of the principal articles of that faith. Any denial of this position is virtually tantamount to a. denial of the very foundation of the faith of the religious denomination.\n\nThe attack on the constitutionality of the Act has to be judged on the basis of these two fundamental points. The practice of excommunication is of ancient origin.\n\nHistory records the existence of that practice from Pagan times and Aeschyles records \"The exclusion from purification with holy water of an offender whose hands were defiled with bloodshed.\" Later the Druids a.re said to have claimed the right of excluding offenders from sacrifice. Such customary exclusions are stated to have obtained in primitirn semitic tribes but it is hardly mcessar y to deal in detail with this point, because so far as the Muslims, a11d particularly among tho religious denomination with which this petition iH concerned, enough material bas been eet out in the judgment of the Privy Council already referred.\n\nPausing here, it might he mentioned that excommunication might bear two aspects : ( l) as a\n\npunishment for crimes which the religious com munity justifies putting one out of its fold.\n\nIn this connection it may be pointed out that in a theo era.tic State the punitive aspect of excommunication\n\n2 S.O.R. SUPREME OOURT REPORTS 549\n\nmight get emphasized and might almost take the form of a gener&l administration by religious dignitaries of ordinary civil law. But there is another aspect which is of real relevance to. the point now under considera.tion. From this point of view excommunication might be defined as the judicial exclusion from the right and privileges of the religious community to whom the offender belongs.\n\nHere it is not so much as a punishment that excommunication is inflicted but is used as a measure of discipline. for the maintenance of the integrity of the community, for in the ultimate an&lysis the binding force which bolds together a religious community and imparts to it a unity which makes it a denomination is a common faith, common belief and a belief in a common creed, doctrines and dogma. A community has a right to insist that those who claim to be within its fold are those who believe in the essentials of its creed and that one who asserts that he is a member of the denomination does not, at least, openly denounce the essen tials of the creed, for if everyone were at liberty to deny these essentials, the community as a group would soon ceae to exist. It is in this sense that it is a matter of the very life of a denomination that it exercises discipline over its members for the purpose of preserving unity of faith, at least so far as the basic creed or doctrines are concerned. The impugned enactment by depriving the head of the power and the right to excommunicate and penalising the exercise of the power, strikes at the very life of the community by rendering it impotent to protect itself against dissidents and schismatics. It is thus a violation of the right to practise religion guaranteed by Art. 25( I). and is also violative of Art. 26 in that it interfers with the rights of the Dai as the trustee of the property of the denominar tion to so administer it as to exclude dissidents and excommunicated persons from the beneficial use of such_ property.\n\nStir.iMS,.....\n\nr.1ur5n\n\ny, Tiu St•u •J Bomioy\n\nA\"\"\"t.,. I.\n\n1162 s ... s ....\n\nT ... sij/Jdi• aau\n\ny, n, si.11qf a-HJ\n\n..,,,...,., J.\n\n550 SUPREME COURT REPORTS [1962] SUPP.\n\nIt is admitted b owever in the present caae th&t the D&i as the bead of the denomination has vested in him the power, subject to the procedur&l requirement. indicated in the judgment of the Privy Counoil, to excommunicate such of the members of the community &s do not adhere to the basic easentials of the faith and in particular those who repudiate him as the bead of the denomination and as a medium through which the community derives spiritual satisfaction or efficiency mediately from the God-head. It might be that if'the enactment had confined itaelf to dealing with excommunication\n\nas a punishment for 11eoular offences merely and not as an instrument for the self preservation of a religious denomination the .position would have been different and in such &n event the question as to whether Arts. 25 and 26 would be sufficient to render such legisl&tion unconstitutional might require serious consideration. That is not the posit.ion here. The Act is not confined in its operation to the eventualities just now mentioned but even excommunication with a view to the preeervation of the identity of the community and to pervent what might be schism in the denomination is also brought within the mischief of the enactment. It is not p088ible, in the definition of excommunioation which the. Aot carries, to read down the Act so as to confine excommunication as & punishment of offences which &re unrelated to the pr&etice of the religion w hicb do not touch and\n\nconcem the very existence of the faith of the denomination as such. Such &n exclusion oannot be achieved except by rewriting the section.\n\n3. The next question is whether the impugned enactment could be sustained as a measure of social welfare and reform under Art. 25 (2) (b).\n\nThe learned Attorney-General is, no doubt, right.in his submission that on the decision of this Court in the\n\n28.C.R.\n\nSUPREME COUR'l' REPORTS 551\n\nll!ulki Temple case-(T'enkat11mmana Devaru v. State of Jfysore( 1), the right guara.nteed under Art. 26(b) is subject to a law protected by Art. 25(:l)(b) The question then before the CoUit related to the validity or a law which threw open all public temples, even those belonging to5 \"a religious denomination\" to \"every community of Hindus including 'untouchables' \" and it was held that, notwithstanding that the exclusion of these communities from worship in such a temple was an {'Sscntial part of the \"practice of religion\" of the denomination, the constitutionality of the lw was saved by the second part of the provision in Art. 25(2)(b) reading : \"the throwing open of Hindu religious institutions of a public character to all classes and section of Hindus\". The learned Attorney-General sought support from this ruling for the proposition that Art. 25(2)(b) could be invoked to protect the validity of a law which was \"a measure of social welfare and reform\" notwithstanding that it involved au abrogation of the whole or part of the essentials of a religious belief or of a religious practice.\n\nI foe! unable to accept the deduction as flow ii; g from the Mulki Temple case.\n\nThat d£cision proceeded on two bases : (l) As regards the position of \"untouchables\", Art. 17 had made express provision stating:\n\n\" 'Untouchability' is abolished and its practice in any form is forbidden. The enforcement of any disability arising out of 'Unt.ouchability' shall be an offence punishable in accordance with law.\"\n\nand that had to be recognised as a limitation on the rights of religious denominations however basic and essential the practice of the exclusion of untoucha bles might be in its tenets or creed. (2) There was a special saving as regards laws providing for ''throwing open of public Hindu Religious Institu-\n\n(lJ (19581 s.c.R. 895.\n\nll02\n\nSartkr Syedna T ahtr Saifuddin\n\nSaheb\n\nThe 1.'itate of BombaJ\n\nAyy4ng'ir J.\n\n552 SRUPEME OOURT REPORTS [1962] SUPP.\n\n1\"2 tions to all cl&lll!es and sections of Hindus\" in Art. ~- s~ 25(2)(b), and effect had to be given to the wide 7tiw ff; fj\"\" language in which this provision waa couched. In \"· the face of the language used, no distinction could n. B,_. •f B.,.~ be drawn betwetJn beliefs that were basic toa religion,\n\n,,,,;;;;; J. or religious practices that were considered to be\n\neesential by a religious sect, on tho one hand, and on the other beliefs and practices that did not form the core of a religion or of the practices of that religion. The phraseology employed cut across and effaced these distinctions.\n\nBut very different consideratious arise when one has to deal with legislation which is claimed to be merely a measure \"providing for social w.Jifare and reform\". To 11ta.rt with, it has to ho admitted that this phrase is, as contrasted with the eecond portion of Art. 25(2)(b), far from precise and is flexible in its content. In this connection it has to be borne in mind that limita.tion11 imposed on religioua practices on the ground of public order, morality or health have already been saved\n\nby the opening words of Art. 25( I) and the saving would ooyer beliefs and practices even though considered e11110ntial or vita.I by those profeasing the religion. I consider that in the context in which the phrase occurs, it is intended to save the validity only of those laws which do not invade the basic and eeeential praotiC011 of religion which &re guaranteed by the operative portion of Art. 25(1) for two reaeone : (I) To read the saving as covering\n\neven the ha.sic l!llllential practices of religion, would in effect nullify and render moaninglesa the entire guarantee of religious freedom-a.freedom not merely to profeu, but to practice religion, for very few pieoes of legislation for abrogating religious practices oould fail to be subsumed under the caption of \"a provision for 110cial welfare or reform\". (2) H the phrase just quoted was intended to have suoh a wide operation as cutting at even the -ntials guaranteed by Art. 26(1), there\n\nwould have been no 1rned for the special provision as to \"throwing open of Hindu religious instituticns\"to all dass''\" a.nd sections of Hindus since the legislation contemplated by this provision would be par excellenc<0 one of social reform.\n\nIn my view by the phrase \"laws providing for social welfare aud reform\" it was not intended to enable the legislature to \"reform\", a religion out of exietence or identity. Article 25 (2)(a) having provided for legislation dealing with \"economic, financial, political or secular activity which may be associated with religious practices\", the succeeding cl; mse proceeds to deal with other activities of religious groups and these also must be those which are associated with religion.\n\nJust as the activities referred to in Art. 25(~}(a) are obviously not of the essence of the religion, similarly the saving in Art. 25(2)(b) is not intended to cover the basic essentials of the creed of a religion which is protected by Art. 25( I).\n\nComing back to the facts of the present petition, the position of the Dai-ul-ltfutlaq, is an essential part of the creed of the Dawoodi Bohra sect. Faith in his spiritual mission and in the efficacy of his ministration is one of the bonds that hold the community together as a unit. The power of excommunication is vested in him for the purpose of enforcing discipline and keep the denomination together as an entity. The purity of the fellowship is secured by the removal of persolljl\n\nwho had rendered themselves unfit and unsuitable for membership of the sect. The power of excommunication for the purpose of ensuring the preservation of the community, has therefore a prime significance in the religious life of every member of the group.\n\nA legislation which penalises this power even when exercised for the purpose above-indicated cannot be sustained as a measure of social welfare or social reform without evillcerating the\n\nI.HZ\n\nS111iar s,.a.\n\nTdlMr SoijvMin\n\n~--,, Tire St\"\" of Bn.H, J\n\n~•.-arJ ..\n\nlN2\n\n!i\"rdar s,.'\"4 T• Soifa\"1i• SdH\n\nT, no, Stai. of Biid.,\n\nJonu\"'JI IJ.\n\n554 SUPREME COURT REPORT8 [I!lti2J SUPP. guarantee under Art. 2.i (I) and rcnderini: thll protection illusory.\n\nJn my view th\" petitio1vr iH entitled to the relief that he seeks and the petition will accordingly be allowed.\n\n}fr Conn : In Aent:ou.9 repre.lienlati()tz--f'rr.~1 nt transferable\n\nint1.ret, tl1ou9h in/act sprs ,'.\"ucce~, inni.t .. S11bRr.quenlacquiaition of title-Ejfect-Rult of \"''\"N>nt:ou.9 repre.lienlati()tz--f'rr.~1 nt transferable\n\nint1.ret, tl1ou9h in/act sprs ,'.\"ucce~, inni.t .. S11bRr.quenlacquiaition of title-Ejfect-Rult of \"''\"N>evi1h\n\nTAt J 11mmo MasjiJ,\n\nMnco..•o\n\n•• KMW.Mi1atb•\n\nDnioh\n\n556 SUPREME OOUR1' REPOR'fS [1962] SU.PP,\n\nSadiq Ali Khan v.Jai Ki•hori, A.LR. 1928 P.C. 152, Gadigeppa\n\nv. Balangauda, (1931) l.L.R. 5i Born. 741, Ajudhia Prasad v. Chandan fol, l.L.R. ( 1937) All. 860 F. B.; Molwm'lth .\\\"aif the rov<'rsioner~. relinquishini: his half-hare in th., properties to the mosque for a cpn.idcration of Rs. 300.\n\nBy an ord<>r dated Sq1tcmlu>r H, l!l3:l, Ex. II, the l'even11e authoritie~ dt, eli1H'd to acePpt the titll' of the appellant and , the transfer was void and conferred no title. The defence of the respondents to the suit was that as\n\nSanthappa had sold the properties to Ganapathi on\n\n& representation that he had become entitled to them as reversioner of Nanjundappa, on the death of Ammakka in 1910, he was estopped from asserting that they were in fact the self-aoquisitions of Basappa, and that he had, in consequence, no title at the dates of Ex. III and Ex. IV. The appellant, it was contended, could, therefore, got no title as against them under the release deed Ex. A, dated March 3, 1933.\n\nThe District Judge of Coorg who heard the action he Id that the alleged gift by Gangamma on September 5, 1932, had not been established, and as this ground of title was abandoned by the appellant in the High Court, no further notice will be taken of it. Dealing next with tho title claimed by the appellant under the release deed, Ex. A. executecl by Santhappa, the District Judge hold that as Ganapathi had purchased the properties under Ex.\n\nIII on tho faith of the representation contained therein that the vendors had become entitled to them on th\" death of Ammakka in HJIO, he acquired a good title under s. 43 of the Transfer of Property Act, and that Ex. A could not prevail as against it. l:Je accordingly dismissed the suit. The plaintiff took the matter in appeal to the High Court, Madras, an1l in view of the conflict of authorities on the question in that Court, the case was refer\n\nIftB: n, J,,,,,.,, llltitJiili\n\nMl'llNv.\n\nK otlimqia-4.1*.\n\nD•iliiiA.\n\n.ii.>t!r I,\n\n\"· rt ''\" Dioid - A{loor J,\n\nIS60\n\nSUPREME OOURT REPORTS [1962] SUPP.\n\nred for the decision of a. Full Bench.\n\nThe lea.med Judges who heard the refer•moe agreed with the court below that the purcha.ser under Ex. III ha.d, in ta.king the sa.le, aeted on the representa.tion a.s to titl!I conta.ined therein, a.nd held tha.t as the sa.le by the vendors was of properties in which they claimed a. preaent interest and not of a. mere right to succeed in future, s. 43 of the Tra.nsfer of Property Act a.pplied, and the sale bees.me opera.tive when the vendors acquired title to the properties on the death of Gangamma on February 17, 1933.\n\nIn the roault, the appeal was dismissed. The appellant then applied for leave to appeal to this Court under Art. l33(l)(e), and the same was granted by the High Court of Mysore to which the matter had become transferred under s. 4 of Act 72 of 1952. That is how the appeal comes before us.\n\nThe sole point for determination in this appeal is, whether a transfer of property for consideration made by a person who rcpre•ents that he ha.s a\n\npresent and transferable int-0rest therein, while he posseBBes, in fact, only a spes .'IUccessionis, is within the protection of s. 43 of the Trnnsfer of Property Act. If it is, then on the facts found by t.hc courts below, the title of the rcspond0nts undntl.v or erroneously represents th'.\\t h\" i 1 nuthorised to transfer eertain irmnovablc property and\n\nprofesses to t.rn.n, fer H11ch property for consideration such tranfrr slrn.11, at. the option of the transferee, op<'rato on any interest which the transferor may n.cquire in such property at any timo during which the contact of trall8fer su heists.\n\nNothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.''\n\nConsidering the scope of the section on its terms, it clearly applies whenever a person transfers property to which he bas no title on a representation that be bas a present and transferable interest therein, and acting on that representation, the transferee takes a transfer for consideration.\n\nWhen these conditions are satisfied, the section enacts that if the transferor subsequently acquires the property, the transferee becomes entitled to it, if the transfer bas not meantime been thrown up or cancelled and is subsisting.\n\nThere is an exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer.\n\nBut apart from that, the section ia absolute and unqualified in its operation.\n\nIt applies to all transfers which fulfil the condit.ions prescribed therein, and it makes 1. 0 difference in its application, whether the defect of title in the transferor arises by reason 1lf bis having no interest whatsoever in the property, or or bis interest therein being that of an expectant heir.\n\nThe contention on behalf of the appellant is that e. 43 must be read subject to s. 6 (a) of the Transfer of Property Act which enacts that \"The\n\nchance of an heir apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman or any other mere possibility of a like nature, cannot be transferred.\" Th~ argument is that if s. 43 is to be interp.reted as having application to cases of what are in fact transfers of spes successiunis, that will have the effect of nullifying s. 6 (a), and that therefore it :wo.uld be proper to construe s. 43 as limited to cases of transfors other than those falling within s. 6(a). In effect, this argument involves importing\n\n196Z\n\nThe iumma lfasjid,\n\n-fercar•\n\nv . . Ko1ima. 1 iJndra\n\nDevi ah\n\nAiyar J.\n\nll!tZ\n\n~ .,·..,,,,,,\" M rujid,\n\nMc•ro\n\nKodilnaimu/, a\n\nIhoi.h\n\nSUPREME OOURT REPORTS [1!162] SUPP. into the section a new oxception to the following cfftict ; \"Nothing in this section shall operate to confer on the transforee any tit!(', if the trans\n\nfuror hally void underti!' lj( a)\" In rejecting this contention, th_e Court observed:-\n\n\"This argument, however, neglects the distinction between purporting to transfer 'the chance of an heir-apparent,' and 'erroneously representing that he (the transferor) is\n\n(ll !1915) 29 M.L, J. 733.\n\nJ962\n\n'lht Jumma Masj•d,\n\n},; ercara\n\nKodima'liandra Dtviah\n\nAi)'a1J,\n\n566 SUPREME OOURT REPORTS (1962) SUPP.\n\nauthorised to transfer certain immoveable\n\nproperty.\" It is the latter course that wa.s followed in the present ca.se. It wa.s represented to the transferee that the transferor\n\nwas in praesenti entitled to and thus authorise to transfer the property.\" (p. 736) On this reasoning. if a transfer is statedly of an interest of the character mentioned in s. 6( a), it would be void, where&i, if it purports to be of an .interest in praesenti, it is within the protection afforded by s. 4.'i.\n\nThen we come to the decision in The Official Assignee, Madras v. Sampath Naidu ('), where a different view was taken. The facts were that one V. Chetti had executed two mortgages over proper\n\nties in respect of which he had only spes succesaionis.\n\nThen he succeeded to those properties as heir and then sold them to one Ananda Mohan. A mort gagee claiming under Ananda Moh1m filed a suit for a declaration that the two mortgages created by Chetty oofore he had become entitled to them 88 heir, were void as offending a. 6(a) of the Transfer of Property Aet. The mortgagee contended that in the events that had happened the mortgages had become enforceable under s. 43 of th0 Act. The Court negatived this contention and held that as the mortgages, when executed, contravened s. 6(a), they could not become v:alid under s. 43. Refer ring to the decision in Alamanaya K unigari N obi Sab\n\nv. Murul.-uti Papiah ('), the Court observed that no distinction could be drawn between a transfer of what\n\nis on the faoe of it apes succesaionis, and what pur porU! to be an interest in i. \"If such a distinction were allowed\", observed Bardewell, J., delivering the Judgment of the Court, \"the elfect would be that by a clever description of the pro perty dealt with in a deed of transfer one would be allowed to conceal ho real nature of the tr8Illl80 tion and evade a olear statutory prohibition.\"\n\n(I) (1933) 65 M.W. 588.\n\n(2) (1915) 29 M. L.J. 733.\n\n-Thia reasoning is open to the criticism that it ignores the principle underlying s. 43. That section embodies, as already stated, a rule of estoppel and enacts that a . peron who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation. It is immateria, J whether the transferor acts lxma fide or fraudulently in making the representation. It is only material to find out whether in fact the transferee has been misled. It is to be noted that when the decision und!'f consideration was given, the relevant words of s. 43 were, \"where a person erroneously represents\", and now, as amended by Act 20 of 1929, they are \"where a person fraudulently or erroneously represents\", and that emph~. sises that for the purpose of the section it matters not whether the transferor act fraudulently or innocently in making the representation, and that what is material is that he did made representation and the transferee has acted on it. Where the transferee knew as a fact that the transferor did not possess the title which he represents he has, then he cannot be 8aid to have acted on it when taking a transfer. Section 43 wot1ld then have no application, and the tr'1.nsfer will fail under s. 6(a). But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodied in s. 43, however fraudulent the act of the transferor might have been.\n\nThe learned Judges were further of the opinion that in view of the decision of the Privy Council in Ananda Mohan Roy v. Gour Mohan Mullick (') and the decision in Sri Jagannada Raju v. Sri Rajah Prasada Rao ('), which was approved therein, the illustration to s. 43 must be rejected as repugnant to it. In Sri Jagannada Raju's case ('), the question was whether a contract entered into by certain\n\n(1) i 1923) L.R. 50 I.A. 239; (1923) l.L.R. 50 Cal. 929.\n\n(2) (1916) I.L.R. 39 Mad. 554\n\n1961 ne Jumma Masji4.\n\nM1rcara\n\nKon now under !'Onsideration, as to the right of a person who for consideration takes a transfer of what is represented to be an interest in prae.senJi.\n\nThe decision in The Official Assignee, Madras v. Sompal/; Naidu (') is, in our view, erroncoll3, and was rightly over\n\nrulecl in tho deciilion now under appeal.\n\nProceeding on to the decisions of the othr High Courts, the point under discussion arose directly for decision in Shyam Narain v. Mangal Prasad ('). The facts were similar to those in 'l'he Ojfici.al Assignee, Madras v. Samp:ith i\\\"aidu (').\n\nOne Ram Karayan, who was the daught<>r's t.on of the last male owner sold the properties in 1910 to tho repondents, while they were vested in the daughtrr Akashi. On her death in 1926, he succeeded to the properties as heir and sold them in\n\n1!127 to tho appellants. The appellants claimed the estate on the ground that the sale in 1910 con forred uo title on the respondents as Ram Narayan had then only a spe, s succes.'lionis.\n\nTho respondents contended that they became entitled to the properties when Ram Narayan acquired them as heir in\n\n1926. The !Parned , Judges, Sir S. M. Sulaiman, C. J., and Rachhpal Singh, J,, held, agreeing with\n\n(ll (192J: L. R. 501. A. 210; (2)\n\n(1~33) GS M. L. J. 588,\n\n[19231 I. L. R. SO Cal. 929.\n\n(3) l 1935] I.L.R. S7 All, ~7i,\n\nthe decision in Alaroonaya Kunigari Nabi Sab v.\n\nMurukuti Papwh ('l, and deffering from The Official Assignee, Madras v. Sampath Naidu (') and Bindeshwari Singh v.Har Narain Singh\\'), thatj s.43 applied and that the respondents had acquired a good title. In corning to this conclusion, they relied on the illustration to s. 43 as indicating its true scop~, an'1 observed: -\n\n\" Section 6 (a) would, therefore, apply to cases where professedly there is a transfer of a mere spes successionis, the parties knowing that the transferor has no more right than that of a mere expectant heir. The result, of course, would be the same where the parties knowing the full facts fraudulently clothe the transaction in the garb of a an out and out sale of the property, and there is no erroneous representat, ion made by the transferor to the transferee as to his ownership.\n\n\" But where an erroneous representation is made by the transferor to the transferee that he is the full owner of the property transferred and is authorized to transfer it and the property trasferred is not a mere chance of succession but immoveable property itself, and the transferee acts upon such erroneous representation, then if the transferor happens later, before the contract of transfer comes to an end, t.o acquire an interest in that property, no matter whether by private purchase, gift, legacy or by inheritance or otherwise, the previous transfer can at the option of the transferee operate on the interest which has been subsequently acquired, although it did not exist at the time of the transfer.\" (pp. 478,479).\n\nThis deciion was followed by the Bombay High Court in Vitluibai v. Jfalhar Shankar (') and by the\n\n(I) [1915] 29 M. L. J. 738.\n\n(3) ( 192 9) l. L. R. f Luck. G22.\n\n(2) [1933] 65 M.L.J. 588.\n\n(4) J. L. R. (1938) Bom.15>.\n\nThe Jumma MaJiid,\n\nM,, cara v.\n\nKodimaniandra_\n\nDevi ah\n\n1/,. J- Jl.V~. \"-· •• Koli-*ir• o..w.\n\nA{, iw J.\n\n570 SUPREME COURT REPORTS (1962] SUPP.\n\nPatna High Court in Ram Japan v. Jage.mra Kuer(1).\n\nA similar view had been taken by the Nagpur High Court in Syed Bi, sinilla v. M anul, al Chabildas (').\n\nTho preponderance of judicial opinion is in favour of the view taken by the Madras High Court in Alamanaya K unigari N ali Sab v. JI urukuti Papiah ('), and approved by the Full Bench in the decision now under appeal. In our judgment, the interpretation placed on s. 43 in those decisions correct and the contrary opinion is erroneous.\n\nWo accordingly hold .that when a person transfers property representing that hG has a presont interest therein, whereas he has, in fact, only a \"pes succe88ianis, tho transferee is entitled to the benefit of s. 43, if he has taken the transfer on the faith of that representation and for consideration. In the\n\npresent case, Santhappa, the vendor in Ex. III, represented that he was entitled to the property in praesenli, and it has been found that the pur chaser entered into the transaction acting on that representation. H .. therefore acquired title to the prop1J1tics under s. H of the Transfer of Property Act, when Santhappa became in titulo on the death of Gangamma on Febrnary 17, 1033, and the subsequent dealing with them by Sa.nthappa by way of release undcor Ex. A did not operate to vest any title in the appellant.\n\nThe Courts ht-low were right in upholding the title of the respoudents, and this appeal must be dismi88e life of Mahajan Deolal was pending with the re11pondent company. Now, in the proposal form (Ex. D-ll) there was a question (question no. 13) to the following effect :\n\nMithoolal Nayak\n\nv, Life lnsuranc1 Corporation of India\n\nDas J.\n\n.v;11Nolal Nay\"\n\nLiJ• 1 ruiua11ee c .. ,,,.,;.,. of llllii•\n\nDas J,\n\n576 St\"PREMECOURT REPORTS [1962) SUPP.\n\n\"Have you within the past five yeal'll consulted an:v medical man for any ailment, not neC<'ssarily confining you to your house7 If so, givn details and state names and dddre.eeea of medical man consulted.\"\n\nThe &nswor given to the question was-\"No\".\n\nThis answer, 'MJCording to the case of the resp on dent, w:i.e false and deliberately false, because, according to the evidence of one Dr. P.N Lakshma nan, Consulting Physician at Jabalpur, Mahajan Deolal was examined and treated by the said doctor between the dates September 7, 1943, and October 6, 1943, when the doctor found that Mahajan Deolal was suffering from anaemia, oedema of the feet, diarrhoea and panting on exertion. Wo shall advert in greater det, ail to the evidence of Dr. Laksbmanan at a later stage. In his personal statement acoompanying the second prop088.I Mahajan Deolal answered in the negative question l 2(b), the queation boing as to when he was last under medical treat. ment and for what ailment and how long.\n\nIn the samo personal st11.tement with regard to questions, for example, question nos. 5(a); 5(b) eto., as to whei.ber he snffored from shortness of breath, anaemia, asthma eto., Mahajan Deolal gave negative answel'll. The contention on behalf of the respon dent oompany was that these answers in the personal statement were alao deliberately false and constituted a fraudulent supprei; eiort of material particulars relating to the health of the insured.\n\nWith regard to' the second proposal and the pel'llonal\n\nstatemnt accompanying it, Dr. Motilal Nayak, brother of the appellant, gave a friend's report, in which he aid that Mahajan Deolal's health lvas good and that he had never heard that Mohajan Deolal suffered from any illness.\n\nIt is worthy of note here that Dr. Motilal Nayak himself took .Mahajan Deolal to Dr. Lakshmanan for trf'atmcnt at Jabalpur in September.October,· 1943. On reocipt\n\nof the second proposal in July, 1944, Mahajan Deolal was examined by Dr. Kapadia, who was the District Medical Officer of the Railways at Jabalpur.\n\nDr. Ka, Padia reported that Mahajan Deolal was a\n\nhelthy man and looked about 52 to 54 years old.\n\nHe recommended that Mahajan Di; olal might be given a policy of fourteen years. In his report Dr.\n\nKapadia noted that Mahajan Deolal had stated that he had suffered from pneumonia four or five years ago, and that he had also cholera some years ago.\n\nNo mention, however, was made of anaemia, asthma, shortness of breath etc. On December 29, 1944, Mahajan Deolal made a further declaration of his good health and so also on February 12, 1945.\n\nOn March 13, 1945, the policy was issued by the respondent company. It contained the usual terms of such life insurance policies, one of which was that in case it would appear that any untrue or incorrect averment had been made in the proposal form or personal statement, the policy would be void. The first premium due on the policy was taken from the amount which was already in deposit with the respondent company in connection with the proposal made in 1942.\n\nThen, on May 22, 1945, Mahajan Deolal wrote a letter to the respondent company in which he said that his financial condition had become suddenly wors9 and that he would not be able to pay the premium for the policy. He requested that the policy be cancelled.\n\nIn the meantime the premium for l 945 not having been paid, the policy lapsed. Then, on October 28, 1945, Mahajan Deolal made a request for revival of . the policy, but a few days before that, namely cm\n\nOctober 18,-1945, the policy was assigned in favour of the appellant, by an endorsement made on the policy itself. This assignment was duly registered by the respondent company by means of its letter dated November 1, 1945 in which the respondent company said that . it accepted the assignment without expressing any opinion as to its validity or\n\nIHI\n\nM ith,./al N 9alo\n\n•• Life I nSVfdfUI CorJ>ottJliota of IUi11\n\nDa1J.\n\nlHI\n\nllu\"-\"'N•Jd\n\n•• Lift lruw-• c .. ;.rolilA o/ IMW.\n\no., J.\n\n578 SUPREME COURT REPORTS [1962) SUPP.\n\neff6Ct.\n\nThe respondent company also made an enquiry from the appeflant as to whether the latter had any insurable interest in the life of the insured and what consideration had passed from him to the\n\ninsured. To this the appellant replied that he had no insurable interest in the life of Mahajan Deolal except that the latter waa a. friend and he (the appellant) had purchased the policy for a sum of Re. 427.12 nP. being the premium paid by him so\n\nfar, because Mahajan Deolal did not wish to continue the policy.\n\nOn his request for a revival of the policy Mahajan Deola.l was again medically examined, this time by one Dr. Belapurkar. Later on February 25, 1946, he was examined by Dr.\n\nClarke. The policy was then revived on payment of all arrears of premium, these arrears having been paid by the present appellant. On receipt of the revival fee, the policy appears to have been revived some time in July, 1946. We have already stated\n\nthat Mahajan Deola.I died in November, 1946. The certificate of Dr. Cla.rke, who was the medical attendant at the time when Mahajan Deolal died, showed that the primacy cause of death of Mahajan Deolal . was malaria. followed by Bt>vere type of diarrhoea. ; the secondary cause was anaemia, chronic bronchitis and enlargement of liver. In the certificate which Dr. Clarke gave there was mention of certain other medical practitioners who had attended Mahajan Deolal at t.lle tiine of his , to arf!ue that the revi\\'al of the poli0y somP time in July, 1946, constituted in law a new contract between the parties and if two yrars were to be counted from July, 1916, then the period of two years had not\n\nexpired from the date of tl1c revival. 'Whether the revival of a lapsed policy constitutes a new contract or not for other purposeB, it is clear from the wording of the operative part of s. 45 thnt the period of two years for the purpooe of the sfction has to be calculated from the date on vhirh the policy was origirndl.v cffeced ; in the present case this can only mean the date on whieh the policy (Ex. P-2) was effected.\n\nFrom that date a period of two years had clearly expired when the respondent company rtpudiated the claim. As we think that s. -t.'i of the Insurance Act. applies in the present case, we aro relieved <; f the tl\\8k of examining the lagal position thll.t Wolal N~\n\nLi/elnsur- Corpor said that during his stay at Jabalpur his fathn frlt weakneBB, though he used to move about freely and was never confined to bt>d.\n\nThe son tried to make it appear in his evidence that his father was suffering from nothing eerious. Dr. Lakshma.nan said in his evidence that his fees for visiting a. patient a.t Jaba.lpur were Rs. 16/· per visit. We agree with the High Court that if Mahajan Deolal was not suffering from any serious ailment, he would not have been ta.ken by his physican, Dr. Motile.I Na.yak from his village to Jabalpur nor would he have consulted Dr. Lakshmanan, a consulting physioian\n\nof repute, for so many days on payment of Rs.16/- per visit. No doubt, Mahajan Deola.l's son now tries to make light of the illness of his father but Dr. Lakshmana.n's ovidcnco shows olearly enough that in September-October, 1943. Mahajan\n\nDeolal was suffering from a serious type of anaemia for which he was treated by Dr., Lakshmanan.\n\nMahajan Deolal could not have forgotten in July, 1944, that he was so treated only a few months earlier and furthermore, Mahajan Deolal must have known that it was material to disclose this fact to the respondAnt company. In his answers to the questions put to him he not only failed to disclose what it was material for him to disclose, but he made a false statement to the effect that he had not been treated.by any doctor for any such serious ailment as anaemia or shortness of breath or ast\n\nhma. In other words, there was a deliberate suppression fraudnlently made by Mahajan Deolal.\n\nFraud, according to s. l 7 of the Indian Contract Act, 1872 (IX of 1872), means and includes Inter ttUa any of the following acts committed by a party to a contract. wit.h intent to deeive another party or to induce him to enter into a contract- (!) the suggestion, as to a fact, of that which is not true by one who does not believe it to be true; and\n\n(2) the active concealqient of a fact by one having knowledge or belief of the fact.\n\nJudged by the standard laid down in s. 17, Mahajan Deolal was clearly guilty of a fraudulent suppression of material facts when he made his\n\nstatements on July 16, 1944, statements which he must have known were delibarately false.\n\nTherefore, we are in agreement with the High Court\n\nin answering the first question against the appellant.\n\nWe may here dispose of the third qu\\)stion.\n\nLearned counsel for the appellant has argued before us that Mahajan Deolal was ex? mined under the direction of the respondent company by as many as four doctors, namely, Dr. Desai, Dr. Kapadia, Dr. Belapurkar and Dr. Clarke. It is further pointed out that Mahajan Deolal had correctly\n\nJ&62\n\nMilhoolal Na; ak\n\nLife IRJUrante Copo1\"1ion o/'f•li•\n\nDad.\n\n1118!\n\nJlillll>OW N9\" v.\n\nLif1.i-_, c.p.,.,;. •f 11\"U.\n\nD.s }.\n\n586 SUPREME OOURT REPORTS [1962] SUPP.\n\ndisclosed that he had suffered previously from malaria, pneumonia. and cholera.\n\nDr. Kapadia, it is pointod out, was specifica.Jly asked t.o oxamine Mahajan Deolal in viow of the conflictiniz reports which Dr. Desai had earlier submitted. On theee facts, the a.rgumE'nt has been that the repondent company had full knowledge of a.II facts relevant to the state of health of llfahajan Deola.I and having knowledge of the full facts, it was not open to the respondent company to call the policy in question on tho basis of the answers given by Mahajan Deolal in the proposal form and the personal statement, even though those answers were inaccurate. Learned counsel for th<' a.ppell1mt has referred us to th~ Explanation to s. 19 of the Indian Contract Act in support of his argument. We are unable to accept this argument ns correct.. It is indeed trne that llfahajan Deolal was examinPd by as many as four doctors. It is also tnri> that the respondent company had before it the eonflfoting reports of Dr. Desai and it specially asked Dr. Kapadia to examine Mahajan Deolal in view of the rl'ports submitted by Dr. Desai.\n\nYet, it muRt be pointed out that the respondent comprmy had no means of knowing that Mahajan Deolal had been treated for the serious ailment of secondarv anaemia followed by dilatation of heart etc. in\"Septcmber- October, 1943 by Dr. Lakshmane.n. Xor e:in it be 11aid that if the respondent company had know ledge of those facts, they would not have made any difference. The principle underlying tho Ex planation to s. 19 of the Contract Act ie that a false representation. whether fraudulent or innocent is irre\n\nlevant if it has not induced the party to whom it is made to act upon it by enteriniz into a contract.\n\nWe do not think that that principle applies in the present ca11C. The terms of the policy make it-clear thai the avermunts maetween the\n\n2 $.C.R.\n\nSUPREME OOURT REPORTS f187\n\nparties, and the circumstance that Mahajan Deolal had taken pains to falsify or. conceal that he had been treated for a serious ailment by Dr. Lakshmanan only a few months before the policy was taken shows that the falsification or concealment had an important bearing in obtaining the other party's consent. A man who has so acted cannot afterwards turn round and say: \"It could have made no difference if you had known the truth.\" In our opinion, no question of waiver arises in the circu mstanoes of this case, nor can the appellant take advantage of the Explanation to s. 19 of the Indian Contract Act.\n\nOur finding on the first question makee it un necessary for us to decide the second question, \"\"\". namely, whether the present appellant merely gambled on the life of Mahajan Deolal when he took the assignment on October 18, 1945. The contention of the respondent company was that appellant had no insurable interest in the life of Mahajan Deolal and when be took the assignment of the policy on October. 18, 1945 he was merely indulging in a gamble on Mahajan Deolal's life; the contract waq therefore, void by reason of s. 30 of the Indian Contract Act. On behalf of the appellant, however, the contention was that s. 38 of the insurance Act provided a complete code for assignment and transfer of insurance policies and the assignment made in favour of the appellant by Mahajan Deolli.l was a valid assignment in accord. ance with the provisions of s. 38 aforesaid. The High Court, it appears, proceeded on the footing that from the very inception the policy was taken for the benefit of the appellant on the basis of a gamble on the life of Mahajan Deolal ; it said that the appellant and his brother, Dr. Motilal Nayak, knew very well that Mahajan Deolal was not likely to live very long aud when the policy was taken out in 1944, it was really for the benefit of the persent appellant, who soon after took an assignment\n\nM it/JNlal ll8'11k\n\n•• Ufa'\"'\"'~ OorfJ\"alW.. of .tndil\n\nDos J,\n\n.llilMolol Jf9olf\n\nLif• 1.,.,,_,\n\nll'f81io1 •/ l1 1lio\n\nDoll.\n\n588 SUPREME OOURT REPORTS [1962] SUPP.\n\non payment of the premium already pa.id by Ma.ha.ja.n Deolal a.nd s11ch arrears of premium aa were then outstanding. It iB unneoesea.ry for us to give our decision on these contentions; becuse if Ma.ha.ja.n Deolal wa.s himelf guilty of a fraudulent supprossion of mterial facts on which the respon dent company w~ vns and the petitioner failed to show how the imposition of this tax was an unreasonable restricti<>n on the right to carry on trade.\n\nORIGINAL Junrsn1CTION Writ Petition No. 184 of 1961.\n\nPetition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights.\n\nC. B. Agancala, R. L. AgaTUXJ/a and P. C.\n\nAgarwala, for the petitioner.\n\nNaunit Lal, for the respondents.\n\n1962. January Hi. The Judgment of tho Court was delivered by\n\nKAPUR J.-This is a petition under Art. 32 of the Constitution challenging the legality of the amendment introduced in s. 15 of the Assam Se.Jes Tax Act, 1947 (Act XVII of 1947), by s. 2 of the ABBam Sales T .. x (Amendment) Act, 1960 (Act XIII of 1960), by which sub-s. (b) of item (i) of sub-cl. (b) of cl. ( l) was deleted and thereby sales of goods to a registered dealer intended for use in production of goods for sale became liable to sales tax.\n\nThe apptllant Company is a limited company carrying on in the 8tate of Assam its busin088 of manufacturing, selling and supplying iron and steel materials. It held a Registration Certificate under the A88am Sa.lee Tax Act, as it was before the amendment of 1960. Under that Act all its purehe.ses for use in manufacture or production of goods taxable\n\nundf'lr the Act were exempt from sales tax but after the amendment of the Act there was a deletion in\n\nthe Registration Cert.ificate of certain goods, e.g., cast iron, iron plates, steel ha.rs and galvanised wire which were used by the petitioner in the manufacture of its finished products which were also taxable in the State. Consequently it has become liable to pay tax on those goods purchased for use in the manufacture of goods and the cost of production has thereby gone up.\n\nThree points were raised by the petitioner :-\n\n(I) that the amendment introduced by Act XIII of 1960 is violative of Art. 14 because it discriminates between manufacturers who supply goods according to orders received and others who manufacture goods on their own account and sell them;\n\n(2) that the restriction imposed by the Amending 4ct is excessive and violative of Art. 19 (I )(f) ; and\n\n(3) that the refusal to a.mend the Registration Certificate by not reinstating the articles mentioned above affects th9 rights of the petitioner Company under Art. 19( I)( f).\n\nFor the purpose of deciding these questions it is necessary to refer to the scheme of the Assam Sales\n\nTax Act, l!J47 (Act XVII of 1917); Bys. 2(2)(a)(b) of that Act 'Contract' is defined as :\n\n\"2. In this Act, unless there is anything repugnant in the subject or context,-\n\n(2) \"contract'' means any agreement for carrying out for cash or deferred payment or other valuable consideration,-\n\n(a) the preparation, contructlon, fitting out, improvement or repair of any moveable property or of any b'uilding, road, bridge or other immoveable property, or\n\n.Ill/,, SlulwM'th\n\nLta.\n\nBiiiie of Ass,,,..\n\nJIU\n\n11/s . • Yt.1-U.\n\nLid.\n\nB•r. q/ ..tss-\n\n-J.\n\n(b) the insta\n\n0 llation or repair of any machinery affixed to a building or other immoveable property.\" . Sec_tion 9 o~ tht Act provides for compulsory regJBtrat1on.\n\nSect1011 1 :l providtlll that a dealer registered under s. 9 shall be ranted a certificate of\n\nregistration which shall specify the class or clasees of goods in which the said dealer carries on business and such other particulars M may be prescribed.\n\nSection 15(1 l( b)(il( b) anl'en ma.de in the present case.\n\nThe petition is wholly without merit and is thcr1Jforc dismiHSed a.nd the rule is discharged. The\n\np••titioncr will pny tho costi! of the respondent.\n\nP1iifi(Jn d1'.'IT11i ... 'll'd.\n\nP. V. RAGHAVA REDDI AND AXOTHER\n\nv. ('0lJUIS810XER OF INCOME-TAX ( ll. P. S1~HA, C .. J., , J. L. KAPt:a, M. HrnAYA1..-1.1 .. w,\n\nJ. C. S11.\\11 nncl .r. R. Mn.>1101.KAH, J.T.)\n\nNou-n ... i1/1111\" f\"IH1i/\"111.1f. ro111111i\"si()11 d1tf' /u-ff1-rr:1•1-1! l1.11 /11rliut, fl1m 11111l 7r-tirl dir1cl/.11 ur tl1rfJu~1/I oll1P.1'-\" \"' th· 11011.-1,,,.;_ ,/1 111 r'''\"J\"\"\"!I --1/ lrtlflf(jr!J fllj,..1i, l-/1t1r1111r, ; J 1'tr.\"i1.'r,/ in t,1.1•111/1' ,,.,.,-itJJry--/111/ian /11rf1111•--fo.r:A.ct, 1922 (ll 11/ JC122),,.,.. 4(1J(t,), I! f)(r), 43.\n\nTheappellant i\\ a firn1 '\"°hich \\\\'as oin~ huincss ~11 mica.\n\nTo negotiate for ordrrs and I•• hancllc lt-s other affar\" th<- appell..ant engaged a company in Japan , vliich 1~ adn111tcdly a \"non .. rtlliil'en ma.de in the present case.\n\nThe petition is wholly without merit and is thcr1Jforc dismiHSed a.nd the rule is discharged. The\n\np••titioncr will pny tho costi! of the respondent.\n\nP1iifi(Jn d1'.'IT11i ... 'll'd.\n\nP. V. RAGHAVA REDDI AND AXOTHER\n\nv. ('0lJUIS810XER OF INCOME-TAX ( ll. P. S1~HA, C .. J., , J. L. KAPt:a, M. HrnAYA1..-1.1 .. w,\n\nJ. C. S11.\\11 nncl .r. R. Mn.>1101.KAH, J.T.)\n\nNou-n ... i1/1111\" f\"IH1i/\"111.1f. ro111111i\"si()11 d1tf' /u-ff1-rr:1•1-1! l1.11 /11rliut, fl1m 11111l 7r-tirl dir1cl/.11 ur tl1rfJu~1/I oll1P.1'-\" \"' th· 11011.-1,,,.;_ ,/1 111 r'''\"J\"\"\"!I --1/ lrtlflf(jr!J fllj,..1i, l-/1t1r1111r, ; J 1'tr.\"i1.'r,/ in t,1.1•111/1' ,,.,.,-itJJry--/111/ian /11rf1111•--fo.r:A.ct, 1922 (ll 11/ JC122),,.,.. 4(1J(t,), I! f)(r), 43.\n\nTheappellant i\\ a firn1 '\"°hich \\\\'as oin~ huincss ~11 mica.\n\nTo negotiate for ordrrs and I•• hancllc lt-s other affar\" th<- appell..ant engaged a company in Japan , vliich 1~ adn111tcdly a \"non .. rtlliio 11 •)-.)_8 ° Tl1c 0 n tive y 1\"8. _h,-..,.,.:· - a11~ \\i\" • • ,-'- -o. .::n. amounts(i.ucluJcJ Ill the prwc of .\\Ilea expurtoJ)wcro\n\nreceived by tho a8sessoe firm iu Imliu, but due to\n\nthe restrictions imposed by the Exchange Control\n\nlaws, they oould not be sent to the Japanese Company. The agreements between the assessee firm and the Japanese Company, therefore, provided for this contingency by the inclusion of the following term:\n\n\"In view of the difficulties in this oountry it is requested that the first party credits all these amounts to the account of the second party with them without remitting the same until definite instructions are received by the\n\nfirst party.\" During the two account years, a total amount of Ra.13,319-12-4 was paid to the Japanese Company either directly or through others, to whom the assessee firm was instructed by the Japanese Company to pay the amount. The Income-tax authorities treated the aasessee firm as the 'statutory agent' of the Japanese Company, and as868sed tax on the two amounts in the respective years of assessment.\n\nThe order of the Income-tax Officer was oonfirmed on appeal; but the Tribunal set aside the order on the ground that the income to the Japanese Company had accrued or arisen in Japan and could not be said to have been received by the Japanese Company in the taxable territories, since a. 4(l)(a) was subordinate to s. 4(l}(c). The Tribunal thus concluded :\n\n\"The referrence in section 4( 1 )(a) to income 'received in India' can, in our opinion, refer only to the situation more specifically provided for in section 4(l)(b) as 11ubsection(a) provides a genera.I cover for both the immediately following eub-l!OOtions (b) and (c).\n\nSection 4( I)( a) cannot therefore by it.self add\n\na new liability to non-residents the extent of which is clearly delimited under section 4(1) ( o) of the Act \"to only incomes that accrue to them within the taxable territories. To read\n\nJ961 -- P. V. Bah•• R.afl\n\nOommiasiunerof\n\nlncomr~\n\nHidtualullalo J.\n\nP. Y. Rqliara R1dJ i\n\nv. c ..... tuio111r of\n\n/~-lo\n\nHid .,.iull ah J.\n\nGoo\n\nSUPREME OOURT REPORTS [1002) SUPP.\n\nany further in section 4(l)(a) will totally nullify the effects of section 4 (I ) ( (·).\n\nIncome that has accrued 011(·!' abroad cannot by any means accrue again in fndia.\n\nIf euch income iB later rl'mitt.-d to In1lia and receiv<'d by or on bclialf of :elled. The CommisRioner of Incomrdax, It •wev•:r, obtained a reference to tho High Court (lf fadra.8 on tho question :\n\n\"Whether tho afuresaid sum of H~. :!(),:!i);°).l).fl and Rs. ll,::!72-0-0 being selling commio sic; n credited to tho aforlsaid 11011-rc:t the aslle88ee firm. The High Court observed tht 1 hl: learned Advocate for the assesseo firm \"conft•sscd his inability to support the decision of the tribunal on the grounds on which it rests\". The High Court further obtrerved that the answer to the qul\"8tio11 did nut \"admit of any doubt or difficulty\". The High Court, however, granted n elrtifirute, uud these appeals have bticn filed.\n\nIn our opinion, the High court was right in the auswer it gave tu the question, for reasons which we sh1ill persently indicate.\n\nUnder s. 42, all income, profits 01 gains accruing or a.rising, whether directly, or indirectly through or from any business connection in the taxable territories are deemed to be income accruing or arising within tho taxable territories, nm! if the person entitled to the income, profit in respect of such income-tax. Tho provisos to the ection enable tho application of s. 18, and t.he tax may be recovered by deduction under tint section and the agent or any person who apprehends that he may be asses8ed as sud1 an agent is also enab!t•d to retain out of the money payable to tho 11011-residont person u. sum equal to his estimated liability. The section thu~ creates\n\na vicarious liability, in so for as th\" rig< 0nt is concerned, for the tax which the non-resident hris to pay : but as a safeguard for him, he is r, 1950, para 3.\n\nThe respondent company was incorporated in the former State of Travancore.\n\nThe dispute was ahout the right of the respondent assessee company to c3rry for\\vard the loss of the years 1946 under the provisions of the Travancore Act read with s. 24 (2) of the Indian Income-tax Act and the Taxation laws (Part B States)(Rcmoval of Difficulties) Order,\n\n19:10, to the assessment year 1951-52 in the assessme\"nt of the company for its year of account. The Income-tax Officer\n\nheld that the loss of the year 1946 could not be carried for- \\vard to that year, since it had lapsed after two years under s. 32 of the Travancore Act ands. 24 (2) was not applicable, in dew 6f para 3 of the order.\n\nHeld, that the Taxation laws (Part B State) (Removal of Difficulties) Order, 1950, passed under s. 12 of the Indian\n\nCommissioner of\n\nlruome-tax\n\nHid ryatuilah J.\n\nJ anum:Y Ili.", "total_entities": 41, "entities": [{"text": "Art. 14", "label": "PROVISION", "start_char": 563, "end_char": 570, "source": "regex", "metadata": {"statute": null}}, {"text": "P. V. RAGHAVA REDDI AND AXOTHER", "label": "PETITIONER", "start_char": 1236, "end_char": 1267, "source": "metadata", "metadata": {"canonical_name": "P. V. RAGHAVA REDDI AND ANOTHER", "offset_not_found": false}}, {"text": "S1", "label": "PROVISION", "start_char": 1310, "end_char": 1312, "source": "regex", "metadata": {"statute": null}}, {"text": "S11", "label": "PROVISION", "start_char": 1372, "end_char": 1375, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4(1)", "label": "PROVISION", "start_char": 3128, "end_char": 3135, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 43", "label": "PROVISION", "start_char": 3444, "end_char": 3449, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 43", "label": "PROVISION", "start_char": 3696, "end_char": 3701, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4(1)", "label": "PROVISION", "start_char": 4236, "end_char": 4243, "source": "regex", "metadata": {"statute": null}}, {"text": "Indian Income Tax Act, 1922", "label": "STATUTE", "start_char": 4255, "end_char": 4282, "source": "regex", "metadata": {}}, {"text": "s. 4(1)", "label": "PROVISION", "start_char": 4325, "end_char": 4332, "source": "regex", "metadata": {"linked_statute_text": "the Indian Income Tax Act, 1922", "statute": "the Indian Income Tax Act, 1922"}}, {"text": "s. 4(l}(c)", "label": "PROVISION", "start_char": 7775, "end_char": 7785, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4( 1 )(a)", "label": "PROVISION", "start_char": 7837, "end_char": 7854, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4(l)(b)", "label": "PROVISION", "start_char": 7968, "end_char": 7983, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4( I)( a)", "label": "PROVISION", "start_char": 8091, "end_char": 8108, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4(1)", "label": "PROVISION", "start_char": 8222, "end_char": 8234, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4(l)(a)", "label": "PROVISION", "start_char": 8527, "end_char": 8542, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4", "label": "PROVISION", "start_char": 8579, "end_char": 8588, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 9274, "end_char": 9278, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 42", "label": "PROVISION", "start_char": 9912, "end_char": 9917, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 18", "label": "PROVISION", "start_char": 10551, "end_char": 10556, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 43", "label": "PROVISION", "start_char": 11133, "end_char": 11143, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 43", "label": "PROVISION", "start_char": 11888, "end_char": 11893, "source": "regex", "metadata": {"statute": null}}, {"text": "ss.40 and 4", "label": "PROVISION", "start_char": 12076, "end_char": 12087, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 42", "label": "PROVISION", "start_char": 12273, "end_char": 12278, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4( I)", "label": "PROVISION", "start_char": 12523, "end_char": 12531, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4(1)", "label": "PROVISION", "start_char": 12563, "end_char": 12575, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4(1)", "label": "PROVISION", "start_char": 14321, "end_char": 14328, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4(1)", "label": "PROVISION", "start_char": 14377, "end_char": 14383, "source": "regex", "metadata": {"statute": null}}, {"text": "s.42", "label": "PROVISION", "start_char": 14512, "end_char": 14516, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4( 1 )(a)", "label": "PROVISION", "start_char": 14953, "end_char": 14970, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4(l)(b)", "label": "PROVISION", "start_char": 14991, "end_char": 15006, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4", "label": "PROVISION", "start_char": 15096, "end_char": 15105, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4(1)", "label": "PROVISION", "start_char": 15372, "end_char": 15384, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4(l)(c)", "label": "PROVISION", "start_char": 15440, "end_char": 15455, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4(1)(a.)", "label": "PROVISION", "start_char": 15908, "end_char": 15924, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4( I)", "label": "PROVISION", "start_char": 15974, "end_char": 15981, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 21", "label": "PROVISION", "start_char": 18760, "end_char": 18765, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 19136, "end_char": 19141, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 19160, "end_char": 19174, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 32", "label": "PROVISION", "start_char": 19491, "end_char": 19496, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 12", "label": "PROVISION", "start_char": 19680, "end_char": 19685, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_605_612_EN", "year": 1962, "text": "2 s.c.R.\n\nSUPREME COURT REPORTS 605\n\nJ9t2 in a Bank to the account of the Company. Thus, the amount mnst he held, on the terms of the aO'reement, to have been received by the Japanese C; mpany, and this attrncts the application of s.(4)(l)(a).\n\nIndeed, the Japanese Company did r, 1950, para 3.\n\nThe respondent company was incorporated in the former State of Travancore.\n\nThe dispute was ahout the right of the respondent assessee company to c3rry for\\vard the loss of the years 1946 under the provisions of the Travancore Act read with s. 24 (2) of the Indian Income-tax Act and the Taxation laws (Part B States)(Rcmoval of Difficulties) Order,\n\n19:10, to the assessment year 1951-52 in the assessme\"nt of the company for its year of account. The Income-tax Officer\n\nheld that the loss of the year 1946 could not be carried for- \\vard to that year, since it had lapsed after two years under s. 32 of the Travancore Act ands. 24 (2) was not applicable, in dew 6f para 3 of the order.\n\nHeld, that the Taxation laws (Part B State) (Removal of Difficulties) Order, 1950, passed under s. 12 of the Indian\n\nCommissioner of\n\nlruome-tax\n\nHid ryatuilah J.\n\nJ anum:Y Ili.\n\n]If~\n\nc.-t•siowr oJ lftell,.,. Tax Kerala\n\nH•U. Rutba J\"\"\"'1riu w.\n\nHid•,10tu/lo/I J,\n\n606 SUPREME COURT REPORTS [1962] SUPP.\n\nF'mance Act, 1950, was not intended to make a dividing line bcccn those pnovious ycan to which the provisions of the earlier law would apply, and those ptcvious years to which the providons of the Income-tax Act would apply. The rights were neither enlarged or curtailed by para 3 of the order.\n\nThat paragraph said that the right was available in the aame 'lnanner, to the same extent and upto the same year of assessment as laid down in the State law. The law to apply was thu• the State law and the carry forward could only be for two years.\n\nIndore Malwa United Mills Ltd. v. Commiaaioner of Income-tax, (1959) 35 I. T. R. 271, approved.\n\nCxv1i, APPELLATE JURISDICTION: Civil Appeal No. 466 of 1960.\n\nAppeal from the judgment and order dad October 31, 1958 of the Kera.la. High Court in I. T. R. No. 2 of 1956 (K).\n\nK. N. Rajag it had lapsed after two years under s. 32 of the Travancore Art, and R. :?-~(:?) was not applicable, in view of paragraph 3 of the Orcler, mentioned above. The onkr of the Incomt1-tax Officer wa~ ronfirm,, d in appeal hy the A ppPllato AHsistant Commi•sioner and the Appellate Trihnnal.\n\nTht' Trih•mal was mov••d for a case, but declirn•rl to state one; but tlrn Hig; h Court c1Lllnd for a statement of the ca•o umle.r s. lifl(2) :mrl the ahovcmentionccl question w:is dMiried in favour of the\n\naseeoSC<' Company.\n\nThe only qn .. stinn argurd in this appeal is wheth1•r the High Court was right in the answer it gii.vc.\n\nTho asscsseo Company W efTcc~ except for the pnrpoos of t)ie levy, ass\"ssmont and collection of income.t:ix ...... in r<'s1wct of any p<'riod not included in tho prcviouH year for the purposcs of a.ssessmPnt unf March, 1040, the 31st day of March, 1941, the 31st day of J\\firch, 19+2, the 31st day of March. l!l43, and the 31st dav of March. 1944 respectively shall be carried forward only for one, two, three, four and five years respectively.\" Since we are concerned with the loss for the year, which does not correspond to the years named in the latter part of the section above-quoted, that part of the section does not apply to the assessee Company'.s case. What was thus claimed was the benefit of the earlier part., where the loss was allowed to be carried forward for six years.\n\nThis position taken by the assessee Company can hardly be considered in view of the provisions of s. 32 of the Travancore Act, read with the Removal of Difficulties Order passed in 1950.\n\nSection 32 uf the Tm van core Act was a reproduction of the Indians. 24(2) except for a change of the\n\nCommis.dont• •f lncometax Ke, aa\n\nHellen Rubbtr Industries Ltd.\n\nHida;•atu/lali J.\n\nIHI\n\nC-..W-o, f t_.ia lfrr\"'4\n\n•• H.ill\"\"brr\n\n1\"\"\"11\"1 LU.\n\nHllqolWlu J.\n\n610 SUPREME COURT REPORTS [19f2) SUPI\n\ndates mentioned therein, due obviouslv to the fact that the Travanoc>ro Act came into\n\n0forcl' 0n the firstda.y of Chingam, 1122 M.E. (August, Ii, 1946).\n\nIt is enough to point out that instead of \"31st\n\nMarch\", whe1evcr th\"Y occurrecl, the wnrcls \"the\n\nlat day of Kv.rkoo.alrom\" (August, 161 were substituted, and instead of the yrars, HJ.to, 1941, 1942, 1943 and l!J44, were substituted th1> llfalnvalnm years, 1122(17·8-1946to16-8-1947), 1123 (17-S-1947 to 16-8-1948), II24 (17-8-1948 to 16-8-1949), 1125 (17-8-1949 to 16-8-1950), and 1126 (17-8-1950 to 16-8-1951).\n\nThese were the only diff'erenres betv.een the two eectionP, 81\"d P. 24(2) of the frdi8n Income-tax Act, so modified, can be read as s. 32 of the Trava.noore Act.\n\nThe existance of these two sections in the two Acts was likely to lead to somP clifficulty, and a question was likely to arise whhh law w11s to prevail. Section 12 of the Indian Fin11nN> Act.\n\nI 95\\J, therefore, enabled the Central GovPmmPnt. to pasa a.n Order removiniz any sueh diffimlty. The\n\nTxation Laws (Part B States) (Removal of Difficulties) Order, rneo was thus passrd. Paragraph 3 of that order provided :\n\n\"3. Carry forward and set off of previous loascs.-wherc in any previous year prior to tho previous year for \"the asesment for the yea.r ending on the 31st d11y of March\n\n19;;0, an assessee bas sustainecl a loss CJf profits or gains in any business, profession or V()('ation carried on by him. and surh lc:ss would, bad tho State law continued to hi' in force, have brt'n set off against the profits and gainP,\n\nif any, from the same business chargeable tu tax in the said yea.r of aasespment or in any yca.r subaequent thereto, such loF.s wcu !cl be\n\nbO set off in the same manner, to the same extent, and up to the same year of assesPment tu1 it would have been set off hud the State law continued to be in foroe.\"\n\nThe critical words are those contained in the 1982 later part. namely, \"in the same manner, to the same Commiss Order, 1950 was meant to enlarge the right• 0f t.l e new assessees lirought within the rearh of the Indian Income-t.Bx law.\n\nThe intention of the law was to make a dividing linJJ between thoRe prrvintrn years to which tho provisions of tho rarlier law would apply, and those nrevious years to which the prov1s1onA of the Indian Income-tax Act woulrl apply. Tho rights were noith<>r <>nlarged nor curtailed. As pointed in chmsrs\n\n(sir) 3 of the I Removal nf Difficulties) Onln,\n\n1950. and that right is that if th\" law of J\\is own State permitti>d him to carry forward th<' los.qes, then that right is preee1 ..-cd under the Indian Income-tax Aet.\" paragraph 3 of the Order clearly said that the right was available in the same manner, to thi> •amc extent and up to tho year of aesessm 0 nt., aA laid 1lown\n\nin the State law (hert>, the Trav1mcnre Act). i'iincP, in this case, the carrvforward of the loss was for only two years, and those years wern he fore the previous yflar from whirh the Inrlia.n Income-tax Act began to apply, thrre is no question of 1h•• application of the Indian Income-tax Act.\n\nThe appeal thus sneccetl8, a.wi is allow<•al in the Hi1rh Court, bot there shall be no ordnr auout costa in this Court.\n\nA ppe.al allowed.\n\n(I) [1959)'51 T. R. 271.", "total_entities": 30, "entities": [{"text": "TELEN RUBBER INDUSTRIES LTD", "label": "RESPONDENT", "start_char": 631, "end_char": 658, "source": "metadata", "metadata": {"canonical_name": "HELEN RUBBER INDUSTRIES LTD", "offset_not_found": false}}, {"text": "C. SHAH", "label": "JUDGE", "start_char": 713, "end_char": 720, "source": "metadata", "metadata": {"canonical_name": "J.C. SHAH", "offset_not_found": false}}, {"text": "s. 21", "label": "PROVISION", "start_char": 1101, "end_char": 1106, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 1477, "end_char": 1482, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 1501, "end_char": 1515, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 32", "label": "PROVISION", "start_char": 1832, "end_char": 1837, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 12", "label": "PROVISION", "start_char": 2021, "end_char": 2026, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 2428, "end_char": 2442, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 3853, "end_char": 3867, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 66(2)", "label": "PROVISION", "start_char": 3975, "end_char": 3983, "source": "regex", "metadata": {"statute": null}}, {"text": "Before the extension of the Indian Income-tax Act", "label": "STATUTE", "start_char": 4760, "end_char": 4809, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "Travancore Income-tax Act, 1121", "label": "STATUTE", "start_char": 4857, "end_char": 4888, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 2", "label": "PROVISION", "start_char": 6146, "end_char": 6150, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 32", "label": "PROVISION", "start_char": 6536, "end_char": 6541, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 7210, "end_char": 7224, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 3", "label": "PROVISION", "start_char": 7263, "end_char": 7267, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 13(1)", "label": "PROVISION", "start_char": 7306, "end_char": 7314, "source": "regex", "metadata": {"statute": null}}, {"text": "s1", "label": "PROVISION", "start_char": 7622, "end_char": 7624, "source": "regex", "metadata": {"statute": null}}, {"text": "Company under the Indian Income-tax Act", "label": "STATUTE", "start_char": 8074, "end_char": 8113, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 24(2)", "label": "PROVISION", "start_char": 8122, "end_char": 8130, "source": "regex", "metadata": {"linked_statute_text": "Company under the Indian Income-tax Act", "statute": "Company under the Indian Income-tax Act"}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 8145, "end_char": 8159, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Finance Act, 1955", "label": "STATUTE", "start_char": 8205, "end_char": 8222, "source": "regex", "metadata": {}}, {"text": "s. 32", "label": "PROVISION", "start_char": 9499, "end_char": 9504, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 32", "label": "PROVISION", "start_char": 9589, "end_char": 9599, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 10547, "end_char": 10561, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 32", "label": "PROVISION", "start_char": 10591, "end_char": 10596, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 12", "label": "PROVISION", "start_char": 10775, "end_char": 10785, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 14396, "end_char": 14410, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 15253, "end_char": 15267, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 15339, "end_char": 15353, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}]} {"document_id": "1962_2_613_622_EN", "year": 1962, "text": "2 S.C.R.\n\nSUPREME COURT REFORTS\n\nTHE INCOME-TAX OFFICER CIRCLE II\n\nMADU!{A, AND ANOTHER\n\nM. R. VIDYASAGAR\n\n(B. P. SINHA, c. J., J.L. KAPUR. M. H!DAYATULLAJI,\n\nJ.C. ~HAH and J. H.. MunHOLKAR, JJ. )\n\nIncome Tax-Payment of advance tax-Assessed income exceeded the estimate-Levy of interest-Power to reduce or waive- -When cc, uld be exercised-- Indian Income-tax Act, 1922 (11 of 1922), s. 18A (6) fifth proviso-Indian Income•tax (Amendment) Act, 1953 (22j of 1953), s. 13-Income-tax Ruks r.48.\n\nThe Income-tax Officer, Madura, issue 1 notice under s. 18A (I) of the Indian Income-Tax Act, 1922, for payment of advance tax. R, the then manager of the Hindu Undivided family availed of the option to submit a l'evised estimate for the years 1946-47 and 1948-49. The assessment ofthese two years were completed respectively in November, 19)0 and February, 1951, as the total incom~ a:; je; sed far exceeded the estimate submitted by R, th: Ino Hll!ti< Officer ordered the respondent, the legal representative of R, ti; l P\"Y the interest under s. IBA (6) of the •Act. On appeal, the Income-tax Appellate Tribunal reduced the income and. the Income-tax Officer in giving effect to the said order reduced the interest and c. Madura Knitting Company was included in the. assessments under s. 23 (5). The Income Tax Officer assessed the total income of the Hindu undivided family for the year 19~6-47 a.t l'l.s. l,01,335/- and for the year 1948-49 at Rs. 3, L0,697 /-. As the total income assessed far exceeded the estimat~ of Rs. 45,000/-, submitted by the manager of the a.ssessee family, the Income 'fax Officer in making the assPssment ordered the respondent to pay Ks. 6,999/12/- and Hs. 36',687/- respectively for the assessment years 1946-47 and 1948-fRS arbitrary and not baed on any judicial exercise <; if discretion vested in the Income, tax Officer,\n\nA/Division Bem; h of .the hJadras High Court held tht the pto, ision imposing liability to pay i.Ilteres.t under_suli-, il.~.(6) of s. 18A was not opposed tQ law and could .be. enforced against the legal re presentative 0f, the'me-tax. .Officer and the Inspecting Assistant Commissioner had failed'to considerwhether in. the oircumstances of the case,. the reduction or waiver of the interest ; was justified,, it be.ordered that the Income-tax Officer to deoide-whethe!:__the petitioner had made out, a case for th\"6' f!Xe'.rcise of the discretion veste.d in .the\n\n2 S.C.R.\n\nSUPREME COURT REPORTS 617 \"i Income-tax t>fficer to waive or reduce the interest under the powers conferred on him by the 5th proviso of cl. \\!of s. lKA. Against that order with certificates, fitneiS these appeals are preferred by the Commi~ foner of Income Tax.\n\nSection 18A which imposes iiability upon the tax payer to make advance payment of tax was incorporatod into the Indian Income-tax Act by Act 11 of 1944. That section enitbles the Inoometax Officer on or after the 1st day of April in any financial year, by order in writing, to require an assessee to pay to the Central Government in specified instalments income-tax and super-tax payable on Ro much of such income as is included in the assessee's total income of the previous year in respect of which he had been assesstd. Undtr sub-s. (2), if the assessee who is required to pay tax by an order under sub-s. ( l) estimates at any time bfore the last instalment is d110 that the part of his' income to which tho sub-section.applies fpr the period which would be the previous year for an assessment for the year next following is less than the income on which he is required to pay tax: and accordingly wishes to pay tax which is less than amount he is required to pay, he may send to the Income Tax Officer an estimate of the tiix payable by him, and pay tax as accords with his statement.\n\nIt ig, however, providacl by sub-s. (6) inter-alia that where in any year the as, iessee had paid tax: under &ub-s. (2) on the basis of his own estimate and the tax: paid is less than 80% of the tax detern1ined on the basis of his\"' r_egular assessment (so far as such tax relates to income to which the' provisions of s. 18 do not apply) simple intere; st at the . rate of 6% per annum from the 1st day of January in the finaa.- cial year in which the tax was paid upto the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said 80%.\n\nAs originally enacted the liability to pay interest upon\n\nThe Income-tax Offictr Ci1cle fl\n\nMadura\n\nM. R. V1dyosaza1\n\nShahJ.\n\n1116J\n\nT/f1 /rtctnfllla Of/iw C frt/1 II\n\nM..iu.a ..\n\nAl. R. yid_, asa,\"'\n\nBJ.Al.\n\n618 SUPREME COURT REPORTS [1962) SUPP.\n\nthe &mount by which the ta.x pa.id fell short of 80% of tax: wa.s a.bdolur.e. The lncometa.x Officer had no d1eoretfon in the ma.tter, and W38 bound to impose\n\nlia.bility for pa) m•mt of interedt, But by s. 13 of the Indian lucome.tax (Ameudmtnt) Act, l95J (25 of\n\nlli53), an additional proviso was tni.cted ... o sub.a.\n\n(6) ill the following form:\n\n\"'Provided further that in such ca.sea and under such circumstances a.s may be prescribed, tho Inoometa.x Offioer may reduce or wa.ive the interest pa.yable by the 8.880ssoo\".\n\nThie proviso was given retrospective effect as from April I, 19.52. Thereafter in exercise of powers con ferred bv s. 59 the Central Board of Revenue a.dded Rule 43.to the following effeot:-\n\n\"48. Tho Iri.cometax Officer ma.y reduce or waive the interest pa.yable under section\n\nISA in the ca.sos and under the circumsta.noes mentioned below, namely:-\n\n( I) Where the relevant a.saessmcnt is completed moro tha.n one yea.r a.fter the submisliion of the return, the dela.y in\n\naasessment not being a.ttributable to the alll!ell866.\n\n(2) Wbero a. pel'80n is under section 43 deemed to be a.n agent of another person and is 8811ell8ed upon tho latter's income.\n\n(3) Where the asse&1ee ha.s income from an unregistered firm to which the provisions of clause (b) of sub-section (5) of section 23 a.re applied.\n\n(4} Where the \"previous yea.r\" is the financial year or a.ny yea.r ending near about the close of the financial year a.nd large profits are ma.de after the llith of Ma.rch in circumsta.noes which could not be foreseen.\n\n-··--ir\n\n2 S.C.R.\n\nSUPREME COliRT REPORTS 619\n\n(5) Anyoase in which the Ixispecting Assistant Commissioner oonsidefs theome-tax Officer has no power under the amenllate ASBista.nt\n\nCommissioner or .the Appt-llate Tribunal. It wa.s urged that the interebt under s. l8A(6l is payable up to the date of the regular asscBRmfnt and if in the contingencies prescribed by s. l 8A(6), as originally enacted liability to pay interest crystallized, the lncometaX Officer could not, in exercise of the power invested by the amending Act reopen the order, because the legislature had given to the a.mending statute only a partial retroactive operation, anJ its retroactivity IJOUld not be enlarged; to do so, would be plainly to defeat the plain intendment of the Legislature. It is unnecessary for the purpose of these appeals to consider whether an assessment whioh has become final before the date on which the fifth proviso came into operation, and whioh is not subject to any pending appeal, can be reopened and tho benefit of the power conferred by the fifth proviso be afforded to an assessee. The question which fallll to be determined is whether in a.n assessment subject to an appeal which is pending. or which may be lawfully filed, the power to reduce or waive the interest can be exercised. ThP.re is, in our judgment, inherent evidenoe in tho rule indicating that such a power can be exercised evt-n if the regular &88e88ment is oompleted by the\n\nIncome-tax Offioer before April l, 1952. The power vested in th&Inoome-tax Officer to reduce or waive interest payable by a.n a.sse88eo is exoroisable \"in such ca.ts that the power to grant relief may be exercised only before the regular asessment iR completed by the Income tax Officer. The terms of clauses (1) and (5) of the Ru le clear Iv support the vie'\" that the order reducing or waiving interest may be passed even after the order of assessment is made, and interest is included. Again, by makin~ Act 25 of 1953 operative retrospectively from April I, 1952, the Legislature ha~ evinced an intention that to regular assessments made between April I. 1952, and the date on which the Act was enacted, the fifth proviso to s. 18A(6) may apply. The arrument tJiat liability to pay interest crystallizes when the Incometax Officer incorporates the direction for payment of interest, because the OJ der is not mAdA nnnPnlable has no force. The order forpa; ymrnt of interest was liable to be modified if the assessment of income was \\'1tried by the Appellate Assistant Commissioner, or by the Tribunal. It is true that interest could be eharged npto to the date ofregular asses8ment bv the Income-tax Officer but that does not support the thcor, Y of cr, Ystallization of liability.\n\nIf therefore the quantum of liability waR capable of\n\nbeing altered even after the date of the regular\n\nassesment, the assumption that the power to give relief against a rigid statutory provision should be restricted to cases which are decided by the Incometax Officer onl_v after April J, 195i is not warranted.\n\nThe power of the Income-tax Officer arose only after April I, 1952, but there is nothing in the act to how that it was to be exercised onl.Y in respect of assessments made by the In0ome-tax Officer after that date. In our judgment, the jurisdiction under the fifth proviso may be exercised by the Incom!ltax Officer in all oases which are pending on April l, 1952, before the Income-tax Officer or any superior authority having under the Income-tax Act power\n\n19 2\n\nThe /ncnm,.tax Offlce1 Circle If Madura •.\n\nM fl.· VidJas , gflr\n\n.h1li J.\n\nTh• /nrorn,-tnx Off1u1 Ciul1 If\n\nA:adt1.1a\n\nId R. V1dyrsaar\n\nShalz .I,\n\n622 SUPREME COVRT REPORTS [1962) SUPP.\n\nto modify tho assessment of income, or are commene<'d after that date.\n\nIn the present case, the original assesments made b~· the Income-t>LX Officer in both the years in question were modified in view of tho or1fors pll.l!sed\n\nby tho A rip,, Jlato Tribunal in the assessment of the i\\fa4 of 1959.\n\nGo'f!Gl Singh, for the appPlla.tes.\n\nRishan Narain and Naunit lal, for the respondrnt No. I.\n\nHlfl2 .. fammrv, 17.-The Judgment of the Court was dPlivered bv\n\nlliJayat•lfoh J.\n\nHmAYA'l'TTT.LAH, J.-Thi~ is nn appral by special loav<' ag:ainat. an orrl<>r of tho High Court of Punj'lb at Cha.nrlhra.rh, rlBt<'d April 7, 1961.\n\nThe apnellant.s a.ro five tenants, who have been evictecl from certain shops and chobaras in the town of Patia.fa, on t hA a11plication of the first rt'sponrlcnt, thti landlord. The application by the landlord was made in , Jnne, 1957, under s. 13 of the P11.ti:da and E'l.st. Punjab StatAs Union Urban R<'nt lfostri1tion Ordinance, 20(}6 BK (No. VIII of :?OOfi BK).\n\nThe grounds urgt•rl by the landlord wcrr (•\\) nen.pavment of rent b.v the tC'nants, (b) non pnym••nt of houeo tax by tho t<>nants and (cl that the shops WC're in a state of g-ri-a.t disrepair iincl W<>re clilapidatcd, and the landlord wished to rebuild tlwrn aftn dismantling the structun•s. The lanrllorrl :l\\orr<'rl that he had obtained sanction of the i\\lnnicipal Committ<'e to a propo; rd plan of con- Rtrnction, awl nc1•um11lat<''istrd the application.\n\nThe Rc>nt C•.mtrollcr framld that he had no means to rebuild the prPmises. The Rent Controller did not feel impressed by. the alleged purcha •c of 40 bags of cement, because a. greater part of the cement was used up already in building two or three latrines, and the quantity left was whrJlly insufficient for the proposed building. He, therefore, decided the issue against the landlord.\n\nJveta Rom v, Jiwan Lal\n\nHidq.vatuituh J.\n\nIM!\n\nOn appeal, these findinp:R w<'ro !'Onfirmed by the appellate aut.hority, who ht•ld that th\" •hop~\n\nand chobaraa were in good condition, and that the landlord was not, in good faith, w.,.ntiug to replace the buildin)!, wh1n ho ha'! 110 mea11s to build it. Again't the order of the \"pp be under s. 15(15) of the E•st Punjab C'rlm11 Rent Restriction Act, 1949 (:l of 1949), was fif,., J in tt.\" High Court.\n\nThie application was 11]J., w, d.\n\nThe learned single J udg<' J'OSed the question thus:\n\n\" The question in the pr<>sent case is whether there is a bona fide desire to rebuild the pro>miseo?\". He referred to an earlier deciRion of a Diviinnal Bench of that Court (<'ivil Re\\•ision No. 22~ of\n\nl!l60), in which GnRain, J., laid down the law in the following worrlR:\n\n\" It iR pMtincnt to note that tho wur consid .. r these matters, went, thoroughly into the question, and discused it from a correct angle.\n\nIf th''Y h>id examined the facts aftei: instructing\n\nthemslves correctly about the law, a Court of revision should be slow to interfere with the decision thus reached, unless it demonstrates by its own decision, the impropriety of the order, which it seeks to revise.\n\nNo attempt of this kind has been mad!l in this case, and in our opinion, the High Court was not justified in reversing the clear fiuding.\n\nIn the result, this appeal must be allowed.\n\nThe order of the High Court is set aside, and that of the appellate authority is restored. The landlord shall py the costs here and in the High Court.\n\nAppeal allowed.\n\nNeta Ram\n\n•• Jiwan Lal\n\nHidoyalul/a!i J.", "total_entities": 22, "entities": [{"text": "623\n\nNETA RAM", "label": "PETITIONER", "start_char": 32, "end_char": 45, "source": "metadata", "metadata": {"canonical_name": "NETA RAM", "offset_not_found": false}}, {"text": "JIWAN LAL", "label": "RESPONDENT", "start_char": 50, "end_char": 59, "source": "metadata", "metadata": {"canonical_name": "JIWAN LAL", "offset_not_found": false}}, {"text": "M. HIDAYATULLAH", "label": "JUDGE", "start_char": 73, "end_char": 88, "source": "metadata", "metadata": {"canonical_name": "M. HIDAYATULLAH", "offset_not_found": false}}, {"text": "C. SHAH, JJ.", "label": "JUDGE", "start_char": 96, "end_char": 108, "source": "metadata", "metadata": {"canonical_name": "J.C. SHAH", "offset_not_found": false}}, {"text": "East Punjab L rban Rent Restriction Act", "label": "STATUTE", "start_char": 187, "end_char": 226, "source": "regex", "metadata": {}}, {"text": "ss. 13, 16(4), 19", "label": "PROVISION", "start_char": 370, "end_char": 387, "source": "regex", "metadata": {"linked_statute_text": "States Union Urban Rent Restrirtion Ordinance, 2006", "statute": "States Union Urban Rent Restrirtion Ordinance, 2006"}}, {"text": "s. 15(5)", "label": "PROVISION", "start_char": 1011, "end_char": 1019, "source": "regex", "metadata": {"linked_statute_text": "States Union Urban Rent Restrirtion Ordinance, 2006", "statute": "States Union Urban Rent Restrirtion Ordinance, 2006"}}, {"text": "Rent Restriction Act", "label": "STATUTE", "start_char": 1703, "end_char": 1723, "source": "regex", "metadata": {}}, {"text": "s 15(5)", "label": "PROVISION", "start_char": 2367, "end_char": 2374, "source": "regex", "metadata": {"linked_statute_text": "Rent Restriction Act", "statute": "Rent Restriction Act"}}, {"text": "s. 13", "label": "PROVISION", "start_char": 3699, "end_char": 3704, "source": "regex", "metadata": {"statute": null}}, {"text": "s111", "label": "PROVISION", "start_char": 4390, "end_char": 4394, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 15(15)", "label": "PROVISION", "start_char": 6859, "end_char": 6868, "source": "regex", "metadata": {"statute": null}}, {"text": "Rent Restriction Act, 1949", "label": "STATUTE", "start_char": 6896, "end_char": 6922, "source": "regex", "metadata": {}}, {"text": "s.10", "label": "PROVISION", "start_char": 9285, "end_char": 9289, "source": "regex", "metadata": {"statute": null}}, {"text": "s.15(5)", "label": "PROVISION", "start_char": 9650, "end_char": 9657, "source": "regex", "metadata": {"statute": null}}, {"text": "Punjab Urban Rent Restriction Act", "label": "STATUTE", "start_char": 9672, "end_char": 9705, "source": "regex", "metadata": {}}, {"text": "s. 13(3)", "label": "PROVISION", "start_char": 9951, "end_char": 9959, "source": "regex", "metadata": {"linked_statute_text": "Punjab Urban Rent Restriction Act", "statute": "Punjab Urban Rent Restriction Act"}}, {"text": "s1", "label": "PROVISION", "start_char": 10671, "end_char": 10673, "source": "regex", "metadata": {"linked_statute_text": "Punjab Urban Rent Restriction Act", "statute": "Punjab Urban Rent Restriction Act"}}, {"text": "Section 13", "label": "PROVISION", "start_char": 10694, "end_char": 10704, "source": "regex", "metadata": {"linked_statute_text": "Punjab Urban Rent Restriction Act", "statute": "Punjab Urban Rent Restriction Act"}}, {"text": "S96", "label": "PROVISION", "start_char": 11727, "end_char": 11730, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 15", "label": "PROVISION", "start_char": 15416, "end_char": 15421, "source": "regex", "metadata": {"statute": null}}, {"text": "s11", "label": "PROVISION", "start_char": 16065, "end_char": 16068, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_632_639_EN", "year": 1962, "text": "632 SUPREME COt.:RT liEfORTS (!~(,~] Stf P.\n\n,!62\n\nKAMALABAI JETHAMAL\n\n]C?t;,.iry 18. v.\n\nTHE STATE u.b' .MAHARASHTRA\n\n(J. L. KAPUR and RAGUUBAR DAYAL, JJ.)\n\nImnwral TralJic-Suppre., ion rf prostitution-Employ- monl of youngmen by the po/ice for JJe1rr1;, n of n!Jence-lf proper-Validity of Ce ul prosti tution, the poJtLC arranged to lay a trap.\n\nWith two ouc hundred rupees mJ.rked cur1c11cy nutcs given Liy tlJe police two per:-.•n1s, M anU L, \\Vent to the prcml!, cs cxcupicd by the appellant ; M was lo a•k for a girl for the purpose of pros\n\ntnution aud L wa\" to Uc a witness ol the fact.\n\nM selected a girl and gave the oue uundrcd rupees uote to the appellant who put u under her l>luus_c. \\\\.hen Mand the irJ were in the roon1, on signal Oe1ug giver1, the pvlicc entered the room and found then1 in a r;1t11cr cumpromrsing po.sition. A v-oman Panch v.: ho had .1ccoH1pan1cJ rhc Police party searched the appelJanr and recovt(cd the one hundred rupees cur1 ency note frorn under tl1e liJousc.\n\nThe appellant was tried tor ottcnces under ss.3(2) and 4(1) of the SuppresSlc>n of Immoral Tratic in Women and\n\nGirl.i Act, l~.(>6, !Jy th~ !\\.Iag1srrat~ who, however, acquitted her.\n\nOu appeal, the High Court ac.; ccpteumoney of L in regard to the J.iaymtllt of the htJnd1t<1 rupce.s currency note to the appcilant a11tl also the evidence 1n the case to show that the amount was ued lor t11c pwpoc of pro:ititution.\n\nThe appellant contended (I) that tt.c convic1ion was bad because it was based only on the evidence o! the police and its agents, and the search was not onductcd in accordance with the provisions of the Code ot Crunmal ProceJure, and ( 2) that, in any case, only the Magi:.trate was given the power of eviction under s. 18 of the Act.\n\nHeld, that on 1he evidence accepted by the High Court, the conviction of the appellant wa:i valid.\n\nThe practice of the Governmental authomy, like the police employing young men, particularly studenlS studying at th~ educational insututions, as in the picacnt caK, m\n\norder to suppress immoral traffic in women and to stop prostitution, cohdemned.\n\nHeld, further, that the High Court having ordered the conviction of the appellant, had the power to evict her under\n\n' 18 of the Act.\n\nCRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. lti74of 1901.\n\nAppeal by special leave from the judgment and order dated September 29, and October 11,\n\nll!61, of the .Bombay ,_High. _Court in Criminal Appeal No. 906 of 1961.\n\nG. Patwardhan, J. B. Dadachanji, O. C.\n\nMathur and Ravinder Narain for the appellant.\n\nH. R. Khanna and P. D. Me'fl(ll'I for the respondent.\n\n1962. January 18.-The Judgment of the Court was delivered by\n\nKAPUR J.-This is an appeal against the judgment and order of the High Court of Bombay set\n\nting a.side the order of acquittal of the appellant and sentencing her to one year's rigorous imprison ment and evicting her from the premises which she\n\nwa.s occupying as a tenant.\n\nThe appellant was tried by the Additional Chief Presidency Magistrate, Esplanade, Bombay, for offences under ss, 3(2) and 4(1) of the Suppression of Immoral Traffic in Women and Girls Aot (Act 104 of 1956) hereinafter called the' Act'. The charge against the appellant was that she supplied a girl to Mall!Ilohan Anandji Mehta who is a witness and she kept or managed a brothel at block No. 6, plot No. 144, Shivaji Park, Bombay;- that she knowingly lived on the earnings of prostitution and that she procured women for the purpose of prostitution.\n\nThe story of the prosecution was that information was received by Police Superin tendent Kanga that the premises were being used as a brothel and that the appellant was supplying\n\nlu6Z\n\nKamalahai J11hamal\n\nThe Slate of Maharrrshlra.\n\nKnpur J.\n\n19tS\n\nEarr.alabrii Jethamal\n\nTh, Stale of M aharalhtra\n\nKapt1r.J.\n\n634 SUPREME COURT REFORTS [1962) SUPP.\n\ngirls for the purpose of prostitution. He thereupon\n\nlaid a trap and sent two persons, Manmohan Anandji Mehta and Prabhak11r K. Loke, the former was to a8k for a. girl for thti purpose of prostitution and the\n\nlattnr was to be a panch i. e. a. witness of that fact.\n\nS11ldnspector Purohit, it is stated, gave two one hundred rupees marked currency notes to Manmohan Ammdji Mehta with the instruction that he was to pay out of th11t to the appellant and thus to obtain a. gil I from her for the purpose of prostitution.\n\nHe a.long with Loke went to the house of the appellant, rang the bell and was admitted by her.\n\nHo then asked the appellant to arrange a girl for him and both Manmohan Ana.ndji Mehta. and Loke are alleged to have said that they wanted two girls for enjoyment.\n\nTwo girls were shown, one Kamal Govind and the other lndu Bapurao Salunke both of whom are witnesses. The amount quoted by the appellant in the case of the former was Rs. 100/· aurl fc,?· the lattc-r Rs. 50/-. Manmohan Anandji Mehtb. selected Kamal and handed over heroine one hu.idred rupees currency note to tho appellant which she put under her blouse. Manmi; han Anandji Mehta and the girl then went into the kitchen a.nd there they undressed and were later found naked on the floor and in a rather compromisinp: position.\n\nOn a signal being given the police i.o. Superintendent Kanga and Sub-Inspector Purobit entered the\n\npremises and were told by Loke that Ma.nmoha.n Ana.ndji Mehta and the girl were in the kitrhen.\n\nThe police officers opened the door of the kitchen and found both Manmohan Anandji Mehta. and Kamal as stated above.\n\nTh<'v then were asked to dre88 and come out. Manmohan Anandji Mehta then returned the other one hundred rupees currency note to .:::iuperintendent Kanga. A woman Panch who had accompanied the police party searched the appellant and recovered the one hundred rupees currency note from under the\n\nblouee. It is stated that the male members of the party were at tha\\ time in a pwage adjoining the\n\n2 S.C.R.\n\nSUPREME COURT R.I<.; PORTS 635\n\nhall where the appellant was searched.\n\nThe appellant was tried for the offences above mentioned but was acquitted by the Additional Chief Presidency Magistrate. On appeal the High Court set aside the order of acquittal and sentenced her to a year's rigorous imprisonment and also ordered her eviction from the premises she was occupying as a tenant.\n\nThe evidence mainly consists of Manrnohan Anandji Mehta and Loke and the two police oilieern. 'fbe testimony of Manmohan .Anandj1 Mehta and Loke by itself may not, in the circumstances of the case, be of much value but their testimony receives corroboration and thus gives credence to the prosecution case. The evidence of Police Superintendent Kanga shows that when the door of the kitchen was pushed open both Kamal and Manmohan Anandji Mehta were naked and were in a compromising position ; their clothes were lying by the side of the mattress. The testimony of Sub-Inspector Purohit is also to the same effect. The other circumstance which is very much against the appellant is that there is evidence to show that when the woman panch accompanied the police party. and searched the appellant a hundred rupees currency note was found from her person under her blouse. The fact is deposed to by Sub-Inspector Purohit and by Police Superintendent Kanga. Loke has also deposed to the same effect.\n\nBut it was submitted on behalf of the appellant that this evidence should not be accepted as, according to law, no woman can be searched except by , another woman and having regard to the emphasis on decency under ss. 52 and 103 of the Criminal Procedure Code that cannot be done in the presence of men. There iS no evirlence to show except that of Manmohan Anandji Mehta that the men were asked to move a.way from the hall or had actually left the hall during the search. But al!Buming they were not in the hall even the}\\.it will not be an extraordinary oircum.;\n\n1JI02\n\nKamalabai Jeth1Jtnal\n\nThe State of\n\nMaha,.i.hlra\n\nKapur J.\n\n; a,11alobai J, thJmal\n\nTli1 SUJ•1 of M ailarorli.tru\n\nIrop.4 J.\n\n636 SUPREME COCRT REPORTS [19E2] SUPP.\n\nstnnce that one or all of them should have seen the handred rupees note being taken out from under tho ulouse of the appellant. The High Court has acceptl'd the te.itimony of Loke and wo find no\n\nre'\\son tu iirl, Kamal Govind, was a8ked to go with jfanmoha.n Anaudji ,\\fohta for the purpose of pro.titution.\n\nCounsel for the appellant emphasised two points : t I) that the woman, who was brought by the police to sea.rob tho appellant and is alleged to have recovered the hundred rupees note from her\n\nporson, he.a not been produced and (2) that considering that the person to be searched was a woman it muot be prcsum~J that in accoruance with the requirements of law and of decency no man could have been prscnt when tho search of the appellant took place. In support of tho first contention reference is made to a judgment of this Court in Puivez Art:Ushir Pooruiu-alla v. The State of Bombay('),\n\nwhere the nectBBity of producing the search witneBB\n\nwas emphasised and it was observed :-\n\n\"This is one of those cases where the rule in rogard to search witnll&leS becomes applicable and impor ta.nee must be attached to the\n\nla.ck of that class of search wituedses which a.re enviHaged by the Criminal Procedurn Code\n\nin s. 103.\" The Privy Couneil also in ltlal.ak Khan v. Emperor(') emphasised the necessity of the presence of search witnesses. Lord Portr there said :\n\n'In their Lordship's opinion the presence of witneBBes at a search is always desirable and their absence will weaken and may sometimes destroy the a.cceptanoe of the evidence as to the fiuding of the articles ............ \" (lj Cr. A. No. 122 of 19;+ decided NI 211-1~-57, (2 (l!lt!i) L, R. 72 l, A. 311.5.\n\nThe observations in Poonawalla' s case e) and Lord Porter in Malikkhan v. Emperor (')are not directly applicable in the present case. As we have said above there is evidence ; n this case which has been accepted by the High Court that a hundred rupees note was given to the appellant by Manmohan Anandji Mehtar There is also evidence that as a consequence of the payment of money Manmohan Anandji Mehta did hire Kamal Govind for prostitution and it is regrettable to say that with the money given to him by the police he acted not merely as a 'bogus customer', as he has been described, but his participation was more active, reprehensible, immodest, indecent and indecorous. If in any case the following observations of Lord Goddard, Chief Justice, in Brannan v. Pe, ek (') are apposite it is this case : \"The court observes with concern and disapproval the fact that the polico au th 1rity\n\nas Derby thought it right to send a police officer into a public house to commit an offence. It cannot be too strongly emphasisPd that, ........ .it is wholly wrong for a police officer or anv other person to be sent to commit an offence in order that an offence by another person may be detected.\" We have only to substitute the words \"aid an act of prostitution\" for \"to commit an offence\" and the analogy is complete. In this case two youngmen were given mJney to go to the house of the appellant and also to use that money in rather an improper manner. Manmohan Anandji Mehta seems to be a person of rather doubtful character and the employment of this class of persons for detection of offences is hardly a credit to any one. What is more reprehensible &nd a matter of greater concern i1 the sending with him a young student who was reading for his Matriculation. To use students in\n\n(11 Cr. A. No. 122of1914 decided on 20-12-1957. (2: (lq};) L. R. 7l I.-\\. 30>. 131 [lqH] 2 AU. E. R. 573·1.\n\n196f\n\nKam'llabai Jerhamal\n\nThe Stale of 11-f aharasluJ\n\nKopur .'.\n\nK-loboijncy note were held not proved, the payment of fhat amount will not th!'rebv become unproved if there is t>videnco which the High Court has accepted.\n\nOn the findings of the High Court we are unable to come to any other conclusion but the one to which the High Court came that the appellant is guilty of the offences of which she was accW1cd.\n\nThe next submission of Counsel for the apve- Jlant was that the High Court in appeal could not order the appellant's eviction because t1'at power only a Magistrate hae unrler s. J 8 of the Act. The argumiint raised was that tht> powers of the appeal court under A. 423, Criminal Procedure Code are to\n\nrl'vere th11 order of acquittal or to order a fresh enquiry or a retrial eto. but not to order eviotion.\n\nBut this argument is untenable in view of the fa.ct that in the Act there is a specifio provision in s. 18\n\nof the Aot authorising the making of such an order by a court convicting a person of offences under s. 3 or s. 7 of the Act. The relevant portion of s. 18 is as follows :-\n\nS. 18 \"Closure of brothels anrl eviction of offenders from the premises.-\n\n(I) ......... , and if after hearing the person concerned, the magistrate is satisfied that the house ...... or portion is being used as a brothel or for carrying on prostitution then the magistrate may pass orders~-\n\n(a) directing eviction of the occupier within seven days of the passing of the order from the house .........\n\n(2) A court convicting a person of any offence under section 3 or section 7 may pass orders under subsection (I) without further notice to such person to show cause as required in that sub-section.\" The High Court ordered the conviction of the appellant under s. 3 of the Act and therefore it had the power to order her eviction. The second contention is also without substance.\n\nThe appeal is therefore dismissed; Appeal dismissed.\n\n.Kaulabai .ldhlm•l\n\nThe State 1\n\nM aharash It\n\nIra/JU' J,", "total_entities": 19, "entities": [{"text": "62\n\nKAMALABAI JETHAMAL", "label": "PETITIONER", "start_char": 47, "end_char": 69, "source": "metadata", "metadata": {"canonical_name": "KAMALABAI JETHAMAL", "offset_not_found": false}}, {"text": "THE STATE u.b' .MAHARASHTRA", "label": "RESPONDENT", "start_char": 90, "end_char": 117, "source": "metadata", "metadata": {"canonical_name": "THE STATE OF MAHARASHTRA", "offset_not_found": false}}, {"text": "L. KAPUR", "label": "JUDGE", "start_char": 123, "end_char": 131, "source": "metadata", "metadata": {"canonical_name": "J.L. KAPUR*", "offset_not_found": false}}, {"text": "RAGUUBAR DAYAL, JJ.", "label": "JUDGE", "start_char": 136, "end_char": 155, "source": "metadata", "metadata": {"canonical_name": "RAGHUBAR DAYAL", "offset_not_found": false}}, {"text": "ss.3(2) and 4(1)", "label": "PROVISION", "start_char": 1297, "end_char": 1313, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 18", "label": "PROVISION", "start_char": 2108, "end_char": 2113, "source": "regex", "metadata": {"statute": null}}, {"text": "S11", "label": "PROVISION", "start_char": 4489, "end_char": 4492, "source": "regex", "metadata": {"statute": null}}, {"text": "ss. 52 and 103", "label": "PROVISION", "start_char": 7847, "end_char": 7861, "source": "regex", "metadata": {"statute": null}}, {"text": "Haged by the Criminal Procedurn Code", "label": "STATUTE", "start_char": 9815, "end_char": 9851, "source": "regex", "metadata": {}}, {"text": "s. 103", "label": "PROVISION", "start_char": 9856, "end_char": 9862, "source": "regex", "metadata": {"linked_statute_text": "Haged by the Criminal Procedurn Code", "statute": "Haged by the Criminal Procedurn Code"}}, {"text": "Criminal Procedure Code", "label": "STATUTE", "start_char": 14067, "end_char": 14090, "source": "regex", "metadata": {}}, {"text": "s. 18", "label": "PROVISION", "start_char": 14306, "end_char": 14311, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s. 3", "label": "PROVISION", "start_char": 14413, "end_char": 14417, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s. 7", "label": "PROVISION", "start_char": 14421, "end_char": 14425, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s. 18", "label": "PROVISION", "start_char": 14462, "end_char": 14467, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "S. 18", "label": "PROVISION", "start_char": 14486, "end_char": 14491, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "section 3", "label": "PROVISION", "start_char": 14943, "end_char": 14952, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "section 7", "label": "PROVISION", "start_char": 14956, "end_char": 14965, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s. 3", "label": "PROVISION", "start_char": 15150, "end_char": 15154, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_640_650_EN", "year": 1962, "text": "January ,9.\n\nI J ,-t f\n\n!140 SW~J!jNE[:OP, R'l;'-RlpPOR~S.f~Q.621 SUPP.\n\nI ? ... _ __. •\n\nTHE COMMISSIONER. OF ~QPME TAXA ,-\n\n. ,.·, '. ,!>fi\\'DR~~, A~R A~O'.If.I; ER\n\n-.rt~ l f (l).. \" l $.'y. ANGIDI CHETTIAR'-\n\n(B:P.:Sf.NkA, c. J., J. L. r(Apm'. 11:r. E:rnlvATef.c.uH,\n\nJ. C: SHAH and J. R .. MunHOLii:AR, J, J.)'\n\n61, • ' ,•] \\l 1 ' I Income #a)j-Penalt11 pn concealed income-'-Power lo itliJ!Ose penally 6'n Aregislerea firm after dissolution-0.qndition , Jo• the xercise 'O.f ,.iufis{Ji'ition b11 Tncci~-tax Officer-Indian\n\nIncp11JeJa:t'Ac~, J92Z.(Jt•cf1.922J. ss. 28,' 44.\n\n/ A registered\n\n1 fim; i' c6ncealed Particulars of incorn! \"\"'bile syb111ittin_g _its, etur.i.l§ fordbb'i v.ars 1947-48, 1949-50 and\n\n/9oq-s~, .. The, .1 Irlpolije-t'!I'. , Offier imposed penalty under s.2\\l. (l) of the Indian Income-tax Act, 19?2. • Tlie High Court was moved for a Wtit of certiofari, subllJ.i; ting that the Incqme-tax Qfficenc; ould hot impose jjehalty under , the said S':, ctioQ, as he ~&9. in(o1mation that ,.the .registered firm was ?issolv!'d an Awjl j3 .• l?~.l. hY. ?l:r~mnt,,; ind in any event on M\"av5, 19S3, by theJl.e~•h, of on.e pf, tl\\e., partners. The Higll Cb'lfrt issued tlit \\\\Ii-ft '!i.nd' qtashecf the order imposing l\n\nIf ( • I' P pena ty. •\n\nHe(d; tthat the.ptin'ciple lfaid llof>t in o. A. Abraha\"if case [196li ~. S.-C. ,&, 7J5,5, 1 i• as'rlluch'app1icable to a registered irl!l a~. o an unrrgistei; ed fjrm., , Thor~ is -.nothing in s.4{ of th 1e 1Act \"or the context jn \\\\1 hich...it..-occurs to jndicate that it does not apply to regi~'tercd firm. \"!\"!\n\nHeld, further'; thit lhe 'pea'iiy provision;' uclr s. ~8 would ij\\ the\"evsn;.of te default cbotemplated br els. (_a)\n\n(b) or (c) be applicable 1n the course of assessment of a reinstered firm.\n\nIf tlie registf'rerl firm is exposed to liability of paying penalty because t ha1t commiltrd any of the defaults contemplated hy els. (a), lb) or \\c) by virtue of s.44 the\n\nassesn1ent proceedings are liable to be continued against the rf'gistered firm evcrn after Ji.-.sulution as if it has r.ot been dissolved ..\n\nThe power to impose pena!ty under. s. ¥8 depends upon the satiifaction of the IncoJie.tax Off1crr in the course nf\n\nproceedigs under the ict.\n\nIt cannot le exercised if he is not sathfied about the existence of CAnditions specified in cl. (a), (b) or (c) Lefore the proccedins arc concluded. The\n\nproccdings f'1r levy of penalty has, , ho\\vever1 not to be con1- 1nenced by the Incorne-tax Offier, befo1c complr.tion of the asseSSII}ent proc:eedings by hini.\n\nSaisfaction before the conl\n\nclusion of the proceeding under the Act and not the issue of notice of intimation of any step for imposing penalty is a condition for the . exercise of the jurisdiction.\n\n0. A. Abraham v. Income-tax Officer, Kottayam, [1961] 2 S. C. R. 765, applied.\n\nMareddevKrishna Reddy v. Income-tax Officer, Tenali [1957] 31 I. T. R. 678 and Khushiram Murarilal v. Commiasioner of Income-tax, Central, Calcutta, [1954] 25 I. T. R. 572, approved.\n\nCIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 6 to 8 of 1961.\n\nAppeals from the judgment and order dated Mav 3, 1957 of the Madras High Court in Writ Petition Nos. 943 to 945 of 1955.\n\nK. N. Rajagopala Sastri and P.D. Menon, for the appellants.\n\nV. S. Venkataram and K. P. Bhat, for responflents.\n\n1962. January 18.-The Judgment of the Court was delivered by\n\nSHAH, J.-These a, re three appeals with certificates of fitness granted by the High Court of Madras against orders passed in Petitions for the issue of writs of certiorari setting aside orders imposing penalty upon the firm of Messrs. S. V. Veerappan Chettiar & Co. passed by the Income-tax Officer under s. 28(l)(c) of the Indian Income-tax Act.\n\nFour persons carried on business in cloth at Virudhunagar in the name and style of S. V.\n\nVeerappan Chettiar & Co.-hereinafter ca.!led the firm. The firm was registered under Art. 26A of the Indian Income.tax Act, 1922, for the assessment years 19!7-48, 1949-50and 1950-51. The firm concealed particulars of its income in submitting its returns, and the Income-tax Officer, Virudhunagar in the course of assessment proceedings directed, by order dated May 20, 1954, payment of penalty of Rs. 20,000/- for the year 1947.48, Rs. 10,000/-for the\n\nJB6Z\n\nT 1u Comntilsio111r of\n\nlncom..tax, M•dr..,\n\nS. V.Antidi\n\nChcttiar\n\nSMA].\n\n1}, c-.;,,;..,,, of\n\nl•eomNax, Madtas\n\nS. V, A111idi\n\nCMu1ot\n\nS/WiJ;\n\n642 SUPREilE COURT REPORTS [Hlu:?] SUPP.\n\nyear 1949-50 :-nd Rs. 5,000(.for the year 1950-51.\n\nAgainst the orders imposing ponalty, one of the partners of the firm moved the Commissioner of Income-tax, Madras in revision but without succeBB.\n\nThereafter, petitions under Art. 226 of the Constitution for issur of writs of certiorari or other appro priate writs oalling for records relating to the orders dated May 20, 1954, passed by the Income-tax Officer, Virudhunagar, in respect of tho three assessment orders and tho record relating to the order of the Commissioner and for quaahing tho penalty orders were filed by two partners of the firm in the High Court at Madras. It was submitted by the petitioners that by agreement between the partners the firm stood firm's total income. But the provision relating to imposition of liability to pay penalty by registered firms was clearly expressed. The assumption that the expression \"any tax\" used ins. 28 ( 1) is intended to indicate that there must be some tax payable by the assessee before penalty could be imposed is wholly unwarranted. The futility of the assumption is exhibited by the terms of cl. (b).\n\nPenalty may be imposed for failure to comply with the notice under sub-s. (4) of s. 22 or sub-s, (2) of s. 23 even if the assessee has no assessable income.\n\nTo the imposition on of a penalty liability to pay tax by the person against whom the penalty is sought to be imposed is therefore not a condition precedent.\n\nThe Calcutta High Court in Khushiram Murarilal v. Commissioner of Income-tax, Central Calcutta(')\n\nwas called upon to deal with the submission made before us in this case. In that case the question which fell to be determined was whether imposition of a penalty on a registered firm under s. 28 (1) (b) of the Income Tax Act was justified in law. It was urged in that case on behalf of tho\n\n(I) [1954]25 I. T. R. 572.\n\nli62\n\nThe Commissioner of\n\nIncametax, Jladras\n\n\\'. s. V. Angidi\n\nChettiar\n\nShah].\n\n1161 n. C.....Usiootr •!\n\nl11C011V-l4X, M °\"\" v. s. v. \"•1iJi\n\nCj, uiu\n\nSA.Ji J,\n\na.sl!eSSCe-a. registered firm -that inasmuch as under s. 28 (I) (b) a. person can be ma.de liable to pay penalty, in addition to the amount of income-tax and eupor-ta.x, if any, pa.ya.hie by him in ca.sea falling under els. (bl and ( c), no order for payment of penalty ca.n be made against a. registered firm, beoau.eo under the Income Ta.x Act no tax is ma.de payable by the firm.\n\nChief Justice Cha.kra.va.rtti, speaking for tho Court, observed,\" ............... even\n\nwhen construed by its own language tho concluding para.graph of section 28 (l) cannot be said to make it a condition precedent that a person must be liable to pa.y some income-tax or it ma.y be also super-tax if ho is to hr made liable for a penalty.\n\nClause (b) of the proviso to my mind emphasizes\n\nthat meaning of the concluding para.graph of Section 28 (I) a.nd rests on an a.ssumption that under that provision a person may be chargeable to penalty although he ma.y not be ohargeablo to tax.\" The learned Chief Justice also obaerved, \" ......... it wa.s not really necessary for ola.u116 (d) ef the pro- . viso to enact 1pecifioally that a. registered firm would be liable to pay a penalty despite the fact that it could not be charged and was not, in fa.ct, charged to income-tax or super-tax. The whole argument of Dr. Sen Gupta was that tho concluding paragraph o! Section 28 (1) had loft a ga.p which had been attempted to be filled up by clause (d) of ilie proviso, but the attempt had not been suoce- Aful. In my view the gap which undoubtedly existed in the concluding paragraph of section 28 (I) was only a.n absenoe of a. provision regarding the quantum of the penalty that .oould be leTied from a.\n\nregi.ltered firm because tho quantum depends upon the amount of income-tax payable\".\n\nIn our view the lea.med Chief Justice was right is so e. nunoiating the law. Under a. 23 (5) of the Indian Income-tax Act, before it was amend- ·.a in 1956, the case of a regiltered firm the tax payable by the firm italf waa not required to be\n\ndetermined but the total income of each partner of the firni including therein the share of its income, profits and gains of the previous year was required to be assessed and the sum p11yable by him on the basis of such assessment was to be determined. But this was merely a method of collection of tax due from the firm.\n\nThe penalty provisions under s. 28 would therefore in tho event of the default contemplated by els. (a}, (b) or ( c) be applicable in the course of assessment of a registered firm. If a registered firm is exposed to liability of paying pcncilty, by committing any of the defaults contemplated by els. (a), (b) or (c) by virtue of s. 44, notwithstanding the dissolution of tlie firm the assessment proceedings are liable to be continued against the registered firm, as if it has not been dissolved.\n\nCounsel contended th'l.t in any event, penalty for the assessment year 1949-50 could not be imposed upon the assessee firm because there was no evidence that the Income-tax Officer was satisfied in the course of any assessment proceedings under the Income-tax Act that the firm had concealed the particulars of its income or had deliberately furnished inaccurate particulars of the income. The power to impose penalty under s.28 depends upon the satisfaction of the Income-tax Officer in the course of proceedings under the Act: it cannot be exercised if he is not satisfied about the existence of conditions specified in els. (a), (b) or (c) before the proceedings are concluded.\n\nThe proceeding to levy penalty has, however, not to be commenced by the Income Tax Officer before the completion of the assessment prpceedings by the Income-tax Officer.\n\nSatisfaction before conclusion of the proceeding under the Act, and not the issue of a notice of initia tion of any step for imposing penalty is a condition for the exercise of the jurisdiction. There is no evidence on the record that the Income-tax Officer\n\nTht Commissiomr of\n\nIncome-lax, Madras\n\nS. V Ant:idi\n\nChettfor\n\nSh, h J,\n\n19' 2\n\n74'C-isfton.rof\n\nlaeotN-to.x, Madror\n\n•• S. I'. A n1idi\n\n0/wtliar\n\nBi..h J.\n\nwas not satisfied in the course of the assessment proceeding that the firm had concealed its income.\n\nThe assessment order is dated November 10, 1951, and there is an endorsement at the foot of the assessment order by the Incomt.-tax Officer that action under s. 28 had been taken for concealment of income indicating clearly that the Income-tax Officer waa satiBfied in the course of the assessment proceeding that the firm had conoealed its income.\n\nIn our view, the High Court was in error in holding that penalty could not be imposed under s. 28 (l) (c) upon the firm Messrs. S. V. Veerappan Chettiar & Co.,.after its disaolution.\n\nThe appeals will therefore be allowed and the orders pB.118Cd by thl\" High Court will be set a.aide and the petitions filed by the respondents dismissed with ooats in this Court and the High Court.\n\nOne hearing fee.\n\nAppeals allowed.\n\nPALAKDHARI SINGH & OTHEHS.\n\n1).\n\nTHE STATE OF UTl'AR PRADE.<::H\n\nA~'TI ANOTHER (J.L. KAPUR and RAGHUBAR DAYAL, JJ.)\n\n/, imitation-Panchayati Adaiat-Fine i111po8fd on con i>iiP.\n\nPenal Code.\n\nTho learned SubDivisional Magis traw by his order da.too February 6, 19158, held the recovery of the fine to be barred under that section.\n\nBut a revision was taken to the District Magistrate who recommended tbe setting aside of the order of the sub-Divisional Magistrate on the ground that thcro was no period of limitation. The High Court by its order dated' September 7, 1959 accepted the recommendation of the District Magistrate and held that there is no limit to the time within which the fines imposed by a Pancha.yati Ada.lat can be realised. It is against this order that the appellants havo brought this appeal by special leave.\n\nThe conviction of the appellants waa under s.379 of the Indian Penal Codo anoomp'ensation\n\n1 ortlllrd to be, P\\tici-in s. 61 by a Kyaya Panr\n\n, cha.yJl.t. .sharH\"be.irec'overable iin the manner\n\nt R\\'PSIJribed.-.But if tho.Nyaya•J'ancliayat finds\n\nnXJ..Jl;\\Ldifljpulty.tin, itsl recovc>aLi ·.Arlalats.:As a matter of facts. 9'1; jnf tho, Ant prQ\\lides.that if there\n\ni~.diffin~).ty-iq h.ii rerov, cry of a fi1•s, , the Sub-Divisri; m; i, l :l.J; i.gis.trntp h&lJ i:ecQ\\'('l' it as.if it wns a dine impost'd\" by himself, whic-h supporfs• .. t.he co1iten .. tion oft.he 'n.ppollahtsih'Lt''t!N pe1'iod of ijmit11.tion as provided in s. 70 of the Indian I'e1:1al Cddc is'lltit 'made irm, pj)lfoaBlo fort .. 1 irv~~:'ri!'\\c.t,'¥g~~C! th.at the, fi11ai .oriki: )vhid,1 is the teimimw •& l q:uo' under s. :.; o,,.of th J Jmli-in Po1}al • C Jcid>i.s t!; i; e orsrers \"o'f the Hi; ill (:'oun i\"''\"'ed.\n\nin fo,\\''i'sio.J'l':bn 'l'tfa:V'J;:f. lrj,95:1. anil 'fro\".1 !l11•c dnte, t!i, t! :Pl:l:l§¢~Jl!ng'~\n\n1fdr t~\\lo, Vetj' iire , vltiiiri' tirbt. ·:i::ut' 1 li ii , '::,,'\n\n~0' I 'b \\ • ~. ' l t e.· 11i:rigµag~ }JJ!, i{!. -' • .prr.srp bs , tn1~ te1wM•'lt,8. ,..y, giig , to bEj the-date ¢.\"passing-or tbe fun.jnl1\n\nGaitndragadlutr .J.\n\n656 SUPREME COURT REPORTS [1962] SUPP.\n\nRachhpal Singh wero armed with guns. According to tho charge farmed against tho accused persons, LR! Singh firoo upon Malook Singh and Darbara Sinizh and thereby killed them, while Raohhpal Singh fired upon Anup Singh and killed him. This firing took plaoe in pursuance of the <'ommon intRntion of All tho accusl\"d per8ons. That is how Lal Singh and Rachhpal Sinizh were charged under s. 302 rPad with s. 34 of the Indian Penal Code.\n\nThe l!'a rnPd trial Judge took the view that the rvidence adducPd against Rachhpal Singh left room for doubt and so, giving Rachhpal Singh the benefit of doubt, he acquitted him. The remaining three accnsed persons wne, however, convicted by him nnder s. 302 read with s. 34 because he held that the prosecution caae had been proved against th Pm bevond a reasonable doubt. The three convicts w<>re ordered by him to suffiPr the sentence of death.\n\nThis ordn waa submitted for <'Onfirmation to the Punjab High Court and it waa also challenged by th<' three convi!'ts b; v their separate appeal. The two mattP!'e were heard t0gether by the Punjab Hiizh Court and in the result, the conviction of the thr1•r appellants was confirmPd; in regard to the scntenc<-, however, the High Court took the view th.'\\t the rods nf justice would be met if the sentence of death impo81\"d on Sunder Singh and Lal Singh\n\nwa.~ c•mrirmed bt1t that imposed on Gurmukh Singh\n\nwas red by the High Court that Sander Singh, L11l Singh and Gurmukh Singh have eome to this f'nurt by 11pecial leave.\n\nBefqre dealing wit~ the pomtR t!'\\s ~~ before us hy Mr. Sethi on bt-hnlf of the appellants, 1t would l1P rnvenient to Ad out broadly the materi&t facts ),.ading to the prosecution. I>nrbra Singh and the\n\ndeceased Ma.look Singh were the sons of one Phula.\n\nIt appears that prior to the partition of India, these brothers lived in a village Butra.n which is no'w a pa.rt of West Pakistan. .The appellants also resided in the same village, Sunder Singh, a brother of Phula Singh ha~ mortgaged 20 kilias of agricultural land with possession for Rs. 2,500/- with the appellant Sunder Singh and his brothers, in about\n\n1943. In lieu of this mortgage, the appellant Sunder Singh and his co-mortgagees, had been allotted 40 killas of land in the village Habri in the District of Karna.I. The mortgagor Sunder Singh later died without leaving an issue or a widow.\n\nPhula Singh, his brother, claimed to be the heir of the said mortgagor a.nu as such, he asked for redemption of the land on payment of Rs. 2,500/-.\n\nThe appellant Sunder Singh did not recognise Phula Singh as the heir of the mortgagor and so, Phula Singh had to make an application in that behalf on November 29, 1959. By this application made to the Assi11tant Collector, Kaithal, Phula Singh claimed to redeem the mortgage. '.!; his claim was strongly resisted by the appellant Sunder Singh and his co-mortgaees. They disputed the title of Phula Singh and in the alternative, they alleged that they eould not be deprived of the possession of the land expect on payment of Rs. 25,000/·. The proceeding continued for some time but it appears that Phu la Singh was not able to place satisfactory evidence about his title before the Assistant Collector. In the result, his application was dismissed for default.\n\nThereafter, the deceased Ma.look Singh applied for a\n\npassport to Pakistan; the prosecution case is that he wanted to go to Pakistan to obtain copies of the original mortgage deed and a pedigree-table from the revenue records kept in Pakistan which would have supported the claim of Phula Singh to the heirship of the mortgagor Sunder Singh. An enquiry was made into the antecedents of the deceased Malook Singh by the authorities concerned\n\n1~62\n\nSuoJ.,. SW, h\n\n•• Till St•t• •f PUl!id\n\n\"• Ti, .: lot1 .,,_, Piinjab\n\n658 SUPREME C'OUR'l' HEPORTS [ 1962) SUPP.\n\nand on January 11, 1000, his application for paBBport was recommended by tho S.D.O., Kaithal, tO the Punjab UovPrmnent. On January 13, 1960, however, tho incident giving rise to tho present\n\nprosecution occurred and Malook Singh along with his brother Darbara Singh and his relation, Anup Singh were murdered. The prosecution case is that the@e murders were committed by the appellants in furtherance of the common intention because they wanted to thwart Malook Singh'~ efforts to bring satisfactory evidence about the heirship of his father, Phula Singh to the mortgagor Sunder Singh. That, in substance, is the motive alleged by tho prosecution for the eommission of the three murders.\n\nThe actual incidents leading to the triple murder lie within a narrow compass. January 13, l!J60, was 'Lohri' day. A couple of days earlier Malook Singh had arranged for an 'Akhandpath' (Non-stop recitation of the holy Granth Sahib). Tho Path came to a close on the forenoon of January 12, 1960, and tho closin~ function was attended by several persons, including Shahbeg Singh who is a relation of Malook Singh. Between IO and 11 A.M. on January 13, l!J60, Malook Singh, accompanied by his wife Amar Kaur, her brother An up Singll and Shahbeg Singh went to the local Gurdwara to pay\n\ntheir homage on the auspicious day. Darbara Singh, Balkar Singh and Mohinder Singh had preceded them. All of them halted in the Gurdwara for a few minutes and then came out. Malook Singh was carrying a spear because he intended to go to his fields after visiting tho Gurdwara.. As the party reached tho 'ba.ithak' of Tara Singh whfoh was a few paces away from the Gurdwara, Malook Singh and his companions saw the three appellants coming towards\n\nthem accompanied by Racbhpal Singh. They also noticed that all of them were armed. The appellant Sunder Singh immcdiat.ely railed a shout at Malook\n\n••,.\n\nSingh and said that he would despatch him to Pakistan where he intended ta go in order to collect proof for the mortgage and heirship of his father to the mortgagor. So saying, he aimed a lathi blow at Malook Singh, but Anup Singh intervened and entreated Sunder Singh not to assault Malook Singh.\n\nAs a result, Anup Singh was hit on the head by the lathi of Sunder Singh. The three companions of the appellant Sunder Singh then rushed forward.\n\nGurmukh Singh gave a lathi blow on one of the\n\nhands of Anup Singh. Malook Singh then stepped forward to save Anup Singh's life and gave a spear below to Sunder Singh. .This blow caused injuries on his chest. Thereupon, Sunder Singh shouted to his companions not to allow Malook Singh and his friends to escape. At that stage, Lal Singh and Rachhpal Singh .used their di:Juble-barrelled guns and fired ; Lal Singh hit Malook Singh and Rachhpal Singh injured one of the knees of Anup Singh Rachhpal Singh then shot at Anup Singh again and Anup Singh fell down. All the companions of Malook Singh, except for his wife Amar Kaur, were frightened and ran for their lives. Lal Ringh then gave a chase to Darbara Singh, overtook him at a short distance and shot him dead. Mohinder Singh and Shahbeg Singh, however, managed to . find the shelter and thus protected themselves. After shooting Darbara Singh dead, Lal Singh returned to the spot and shot at Malook Singh and. Anup Singh again when he found that they were still alive.\n\nHaving thus committed three murders, the assailants ran away with their respective weaptins. That, in brief, is the prosecution case.\n\nAs we have already pointed out, the learned trial Judge gave the benefit of doubt to Rachhpal Singh and convicted the three appellants of the offence of murder. Before the High Court, it was urged on behalf of the appellants that Gurmukh Singh and Rachhpal Singh had been falsely implicated\n\n196%\n\nSu,, J, r S;,, gh\n\nT1ie 8t•ll of I'..; 1b\n\ns...#rSingh\n\n•• '[,,. 81.U •f /'wUal>\n\n660 SUPREME COURT REPORTS [l 962] SUPP.\n\nby the prosecution witnesses and it was argued that the appellant, Sunder Singh himself was a victim of aggression at the hands of the dOOQased Malook Singh and his comp11nioDR ingh were actuat .. d by the common intention as alleged by the\n\nprosl.'1•11tion.\n\nIn its opinion, Sunder 8ingh and his companions were the aggrl'ssurs and Miilook Singh ; end his friends were the victims and so, the learned trial J udgo was right in holdiug the appellants guilty of murder under soction 302 read with section 34, I.P.C. It appears that the High Court\n\nwas in<' lined to take thP. view that the trial Judge wa8 not right in giving the Lenefit of doubt to Raehhpal Singh. In the alternativl', tlw High Court came to the conclusion that even if the meeting between the two parties was in the nature of a chanc<' meeting, the circumstances of the ease clearly indieat1 that the common intention to kill tho throe dceeas1il persons developed in the minds of the appcllnuts and R<\\chhpal Singh on the apot.\n\nTheir conduct leading to the three murders, thought the High Court, irresistibly led to the inft:rence that even if they did not start with the l'ommon intention of killing tho three , idims, that intention developed in t.hcir minds as HOUll :is thPy nut the\n\nopposite party by chance. On these findings, the High Court confirIUed the conviction of the three appellants, upheld the sentence of death aga.inst Sunder Singh and Lal Singh and reduced the eentencil of dath passrd on Gurmukh Singh to one of imprisonment for life. It is the correctness of the findings recorded by the High Court that is challenged before us by Mr. Sethi op behalf of the appellants.\n\nThe first point which Mr. Sethi has strenuously urged l>eforn us is that the High Court was in error in wcurding a finding that Rachhpal Singh was present at the scene of the offence, shared the common intention of the three other appellants and, in fact, fired at Anup Singh as alleged by the prosecution.\n\nMr. Sethi contends that the trial Court had acquitted Rachhpal Singh of the offence charged and thne was no appeal by the State against the said order of acquittal.\n\nUnder s. 423 ( l)(a) of the Code of Criminal Procedure, it is only where an appeal from an order of acquittal bas been preferred that the High Court can reverse the said order ii it is sati8fi<'!l that the acquit:al was not justified on the evidence adduced in the case. He, therefore, contends that the High Court should not have considered the propriety or the validity of the order of acquittal in favour of Rachhpal Singh.\n\nIndeed, according to him, the High Court had no authority or jurisdiction to embark upon that enquiry and since the High Court has, in terms, recorded the conoluRion that Rachhpal Singh had taken part in the offence as alleged by the prosecution, that has introduced a serious infirmity in the judgment of the High Court.\n\nIn support of his argument, Mr. Sethi has placed strong reliance on the decision in The King\n\nv. Plummer('). In that case, three persons were jointly tried with conspiring togethet. One of them\n\n(I)\n\n(i902) 2 K, B.D, 339,\n\ns,,,.h ..\n\nThi 81#14 of l'wJob --- Gojend..-.. J.\n\nIHI a..- B;., A ... '1'111 ,,.. •I IVli•b\n\nG ....... ~~1rJ.\n\n662 SUPREME OOURT REPORTS [1962) SUPP.\n\npleaded guilty and judgment was passed ag\"inst him on his plea. The other two pleaded i1ot guilty.\n\nThey were tried and acquitted. It was held that the judgment passed against the one who had pleaded guilty was bad and could not stand.\n\nIt would he noticed that the indictment in that caso contained five counts charging the obtaining of money by false pretences and also a sixth count alleging a conspiracy betwP.en the three accused tu defraud the prosecutors. The sixth count did not allege that there wore any other or unknown parties to the conspiracy and all the three defendants \\ere included in one arraignment. All of thorn pleaded not guilty to tho five counts. Only one pleaded guilty to the sixth count, the others pleaded not guilty even to that count. It was on these factl! that the conviction of the one who had pleaded guilty to one charge was set aside and the decision setting aside the BA.id conviction was based on two grounds. It appears. that at a later stage bf the trail the defendant who had pleaded guilty to the sixth chargo wanted to withdraw his plea and the Court did not. allow him to withdraw that plea on tho ground that it had no jurisdiction to do so.\n\nTho King's Bench Division for whose opinion the relevant questions were referred held that the trial Court had no doubt a discretion in the matter, but since it had acted upon the erroneous opinion that it had no power to allow the withdrawal of the plea, it had, in fac~, not exercised any discretion. Therefore, if the discretion had been properly exercised and the ploa of guilty had been allmved to bo withdrawn, then clearly the defendant pleading .ason for the order of acquittal passed by the King's Bench Division. The other r<>ason was that whcrn the indictment charges that A, B and C combined, confederated and agreed together to n, it would have examined the said evidence in the light of this infirmity. On the othur hand, after considering the evidence, tho High Court may well have com\" to the conclusion, as it has, in fact, done in the present case, that the evidence against Rachhpal Singh is also good and need not have been discarded. Iu our opinion, there is no doubt that if in appreciating the points made by the appellants before it the High Court hn, d to consider the whole of the evidence, in respect. of the acoused persons, it was freo to come to one conclusion or the other in respect of the said evidence, so far a.s it related to Hachhpal Singh. Thn, t is why we think that the point made by Mr. Sethi that s. 4:'3(l)(a) precluded the High Court from considering the merits of the order of acquittal even incidentally or indirectly cannot be upheld.\n\nMr. Sflthi, however, sought to derive assistance from the decision of this Court in the case of Pritam Singh v. Si, awof Punj11b('). In that case, this Court has observed \"that the pffect of a verdict of acquittal pronounced by a competent Court on a\n\nlawful charge aud after a lawful trial is not completely stated by saying that tho person acquitted cannot be tried again for the same offence.\n\nTo that it must be added that tlie verdict is binding and conclusive in all subsequen¥ proceedings between the parties to t.he adjudication.\n\nThe maxim 'res judiratii pro veritate accipitm' is no less applicable to criminal than to civil proceedings.\" These observations were m'itle wlwn dcspitr the order of acquittal passed against a pcrnon under sections Hl (ft of t.he Amrn Ad in 1rn cmlier proceeding, the same allegation \\\\a~ 1na.n the muzzle of the gun and the bod.v mis not more than nine inchrs, but since the wound8 on the dead\n\n1969 s\"\"\"'r sn., i. . \" Th• s1a1, of r..v•\n\nJ:RSZ hoclies '.plearly showed that , the pellets had n.ot\n\nSanihr Sinth entered the body en masse but had dispersed, .it v. woul_d be obvious that the deceased persons were.\n\nT7rt sr.zr, •/ Pulij•b shot from a: distance of not less than 20 or 25 •feet i\n\nGaJmkrirt..Zkn .-, The High Court was impresse':l: by this argument and so examined Dr. (Mrs.) Shukla and Dr. K.S.\n\nRai who is a Professor of Forensic Medicines.\n\nDr. (Mrs.) Iqbal Shukla adhered to the opinion already given py her but Dr. Rai's evidence completely destroyed the evidence giyen by Dr. (Mrs.) Shukla. Besides, the clothes of, the deceased which were examined by Dr. Rai should that there were no marks of burning on them.\n\nJn the result, the High C9urt\"us infirmity in the prosecution evidence in as such as the eye-witnesAes suppo_rteq the. proAccution case .as priginally. set out al, Joqt the cjistanc!l; t)Jey said that the firing took place from a distance\n\n- of '9•...\n\nTp.e .Ft; igl). Cour.t tliought that this , infirmity was. true only in the C\\le of .;:ihahbeg S, ingh. '.!'.hat,. ho.wever, i.s clearly erron.e'ous. '.l'hat injirm.it.y is presept evep in the easy .of B!i-lkar j3ingh., n.nd .A, ma, r Kaur, th9ugh Amar J(anr put the clistance , at 2 to 4 fee~. ' Tb, e .High Court _d, oes not appear to have\n\nnptied the fact that ev!ln B.\\tlkar Singh like Sh&hbeg_ :Singh dyscribed the clisnce from whi.ch firing. too!f P, lace as' .being 9 inches, t rt , i~ true that Mohinqer ingh d_oes no~ give. (l.nyl SUPREME COUHT REl'OR'.l'S [1962J SUP.I:' .\n\n.IHI and his sons met Malook SiT1gh and his com- ..., .tirfA {!anions, Sunder. Singh must have attempted to .,...,,,, v;, 1\"o#iJoJ dllll&Ult Malook Smgh and in the process, injury was\n\n_ cauaed to Anup Singh . ............ ,.\n\nThe fact that Sunder Singh assaulted Malook Singh does not, however, show a pre-concerted plan in the minds of Sunder Singh and his sons. In our opinion, it was a chance encounter which, iD all probability, led to an exchange of words and Sunder Singh took the aggressive and wanted to aasault Malook Singh. Tho oral evidence given by the four eye-witnesses describes the incident as though Sunder Singh and his companions came armed determined tO attack Malook :Singh ; but that evidence appears to us to be artificial and as we have just indicated, Sunder Sinizh could not have been left\n\n1.lone to tackle Malook Singh and hi11 companions if his 11on and he had decided to attack Malook Singh even before they mat.\n\nIt is, however, urged that Lal Singh who had deposited the gun with the Police when proceedings had been commenced against his father and the members of hi1 party under s. I 07 of the Criminal Procedure Code, took the gun back on January 9,\n\n1960, and the argument is that Lal Singh took the gun back because he and his father had decided toaasaultMalook Singh. The High Court appears to have attached considerable importance to this circum stance. Unfortunately, this circumstance h88 not been put to Lal Singh when he was examined under s. 342 of the Code in the trial Court. If it was thought that the conduct of Lal Singh in taking back his gun on .January 9, 1960, was an incriminating circumetanoo, the trial Judge should have given an opportunity to Lal Singh to explain that ciroumstance. In the absence of any question put to him in that behalf, it would, we think, not be fair w press this circumstance very much against Lal\n\nSingh and in support of the theory of the common\n\nintention of Lal Singh, his father and his brother.\n\nBesides, even the High Court has observed that going about with a gun in that part of the oountry and amongst the class to whom the parties belong is not such an unusual circumstance at a.IL Just as Malook Singh was going about with a spear, so Lal Singh may be going about with a gun for which he had a licence. 'l'herefore, the fact that Lal Singh was armed with a gun which he had taken ha.ck from the Police custody on January 9, would not, in o.ur opinion, support tho theory of a pre-oonoerted plan.\n\nIt is also urged that whatever may be said against the evidence of Shahbeg Singh, Balkar Singh and Amar Kaur, Mohinder. Singh is an independent witness and since he has given evidence in support of the prosecution case of a pre-concerted\n\nplan, there is no reason why that evidence should not be believed. Apart from the fa.ct that the probabilities do not support the prosecution case of a pre-concerted plan, we are not satisfied that Mohinder Singh can claim to be an absolutely independent witness as the High 'Court seems to have thought. Mohinder Singh was •asked in cross-examination whether he was not related to Malook Singh and in order to establish his relationship, it was put to him that Gehna Singh was his grandfather and that Gehna Singh was the cousin of Phula Singh. Mohinder Singh replied that he did not know the name of his grandfaher because he had not seen him and he had not enquired from any relation about the name of his\n\ngrandfa.~er either: The High Court thought that this explanat10n was genuine. We are not satjrdied that.the view taken by the High Court is right. In our . opinion, the trend of the answers given by Mohinder cingh in hiE cross examination clearly suggests that he was evading to give truthful replies in respect of his relationship with Phula Singh\n\nIHI -\n\nv, n. Sttlll of \"\"VU\n\nCojmdr•ga/Ur 1.\n\nJJ/62\n\nS,...r.Sii14l\n\nv. ~..,. •f '\"1ifab\n\n672 Sl:PBEME COl:RT REPORTS [1962) SUPP.\n\nBesides, it appears in evidnnce that proceedings had been taken against whom lllalook Singh and his friends amongst l\\Iohindcr Singh was included, under HS. I 07 and 150 of the Code of Criminal Procedur1\" Hazur Singh was the person who had made the complaint in that behalf. The allegations made hy Hazur Singh clearly point to the fact that disputes were going on between two groups-one led by the appellant Sunder Singh and the other led by Malook Singh. The High Court thought that there was nothing on the record to show. that Sunder Singh or members of his party were witnesses in those proceedings. That, however, is not decisiv<'.\n\nWhat is important is tho fact that disputes were going on between two rival groups to one of which Mohinder Singh belonged and that was the point of the croBB-examination to which Mohindor Singh was s11 hjccted at the trial. Therefore, we are not incline< I to hold that l\\Iohinder Singh\n\nia an absolutely independent witnss. Like the other eye-witnosrs, he also must be characterised as the partisan witness. That is wh.)' the argument based on the unimpcu.chable character of the evidence given by .Mohindcr Singh in support of the theory of the common intention of the appellants cannot be accepted. We must, therefore, hold that the prosecution evidem c fails to establish its CMe that the appellants case on the scene of the offence determined to attack Malook Singh.\n\nOn the other hand, it appear to have been a chance meeting which bP.gan with an exchange of hot words between Sur.der Singh and Malook Singh and the verbal exchange was followed by an attack by Sunder Singh on Malook Singh. That means\n\nSunder Singh was the a.ggreesor and so La.I Singh could claim no right of private defence.\n\nIndeed, in the present appeal, Mr. Sethi's arguments were, in 1111betance, confined to the case ofGurmukh Singh.\n\nSunder Singh who had been ordered to be hanged\n\ndied in jail pending the present appeal, and the case of Lal Singh, as Mr. Sethi himself fairly conceded, is difficult to defend. It is on the case of Gurmukh Singh that Mr. Sethi naturally concentrated, and it is to Gurmukh Singh's case that we must now turn.\n\nIf the prosecution case about the pre-concerted plan does not succeed and if it is held that Sunder Singh began the assault against Malook Singh and was followed by Lal Singh who fired at Malook Singh and his companions, there can be no doubt that Sunder Singh and Lal Singh can be held to have been actuated by the common intention of murdering Malook Singh and his companions.\n\nSunder Singh knew that La.I Singh was armed with a gun and when he deliberately provoked a controversy with Malook Singh and proceeded. to assault him, he musi; have known that Lal Singb was behind him, he would follow up the attack and do the rest of the work. That is why we are inclined to a0cept the conclusion of the High Court that the common intention to murder Malook Singh arid his companions must have developed in the minds of Sunder Singh and Lal Singh soon after they met Malook Singh and his companions and Sunder Singh attacked Malook Singh.\n\nBut can we reasonably hold that Gurmukh Singh also developed the same common intention?\n\nAnd that must take us to the evidence which implicates Gurmukh Singh. As we have already pointed out, Gurmukh Singh is alleged to have caused an injury to Anup Singh on his knee and an injury to Amar Kaur. It is, however, significant that none of the prosecution witnesses has refarrred to Gurmukh Singh attacking Anup Singh until they gave evidence in the Sessions Court. An omission to refer to this part of Gurmukh Singh's conduct, therefore, assumes considerable significance.\n\nThe detailed manner in which the incident has been described suggests that the omission to\n\nSund<• Sin1h\n\nv. .\n\nT/io Stot1 of Po'fid\n\nGaJeridragadl.M J.\n\nIHI\n\n5\"\"\"' Silw.I\n\nY, Ti. Slt1<1/ l'wlj0\n\n the order of conviction and sentence passed against Gurmukh Singh is set aside, and he is ordered to be acquitted and discharged.\n\nApptnl parl.ly allowed.", "total_entities": 24, "entities": [{"text": "Allowed.\n\nONDER SINGH AND OTHERS", "label": "PETITIONER", "start_char": 573, "end_char": 605, "source": "metadata", "metadata": {"canonical_name": "SUNDER SINGH AND OTHERS", "offset_not_found": false}}, {"text": "THE STATE OF PUNJAB (P. B. GAJENDRAGADKAR", "label": "JUDGE", "start_char": 607, "end_char": 648, "source": "metadata", "metadata": {"canonical_name": "P.B. GAJENDRAGADKAR*", "offset_not_found": false}}, {"text": "K. C. DAS GUPTA", "label": "JUDGE", "start_char": 650, "end_char": 665, "source": "metadata", "metadata": {"canonical_name": "K.C. DAS GUPTA", "offset_not_found": false}}, {"text": "RAGHUBAR DAYAL, JJ.", "label": "JUDGE", "start_char": 671, "end_char": 690, "source": "metadata", "metadata": {"canonical_name": "RAGHUBAR DAYAL", "offset_not_found": false}}, {"text": "Code of Criminal Procedure 1898", "label": "STATUTE", "start_char": 881, "end_char": 912, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 423", "label": "PROVISION", "start_char": 931, "end_char": 937, "source": "regex", "metadata": {"linked_statute_text": "Code of Criminal Procedure 1898", "statute": "Code of Criminal Procedure 1898"}}, {"text": "s. 302", "label": "PROVISION", "start_char": 4398, "end_char": 4404, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 34", "label": "PROVISION", "start_char": 4415, "end_char": 4420, "source": "regex", "metadata": {"statute": null}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 4428, "end_char": 4445, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 302", "label": "PROVISION", "start_char": 4700, "end_char": 4706, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 34", "label": "PROVISION", "start_char": 4717, "end_char": 4722, "source": "regex", "metadata": {"statute": null}}, {"text": "section 34", "label": "PROVISION", "start_char": 13264, "end_char": 13274, "source": "regex", "metadata": {"statute": null}}, {"text": "I.P.C", "label": "STATUTE", "start_char": 13276, "end_char": 13281, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 423", "label": "PROVISION", "start_char": 14909, "end_char": 14915, "source": "regex", "metadata": {"statute": null}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 14931, "end_char": 14957, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 20107, "end_char": 20124, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 423(1 )(a)", "label": "PROVISION", "start_char": 20946, "end_char": 20959, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 21199, "end_char": 21203, "source": "regex", "metadata": {"statute": null}}, {"text": "s 11", "label": "PROVISION", "start_char": 21313, "end_char": 21317, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 22940, "end_char": 22944, "source": "regex", "metadata": {"statute": null}}, {"text": "s1", "label": "PROVISION", "start_char": 28181, "end_char": 28183, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 342", "label": "PROVISION", "start_char": 33859, "end_char": 33865, "source": "regex", "metadata": {"statute": null}}, {"text": "s11", "label": "PROVISION", "start_char": 37134, "end_char": 37137, "source": "regex", "metadata": {"statute": null}}, {"text": "section 34", "label": "PROVISION", "start_char": 41438, "end_char": 41448, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_675_686_EN", "year": 1962, "text": "2 S.C.R.\n\nSUPREME COURT REPORTS 675\n\nVIJAY PRATAP SINGH\n\nDUKH HARAN NATH SINGH AND ANOTHER\n\n(And Connected Appeal) (S. K. DAs, M. HIDAYATULLAH and J. C. SHAH, JJ.)\n\nSuit-Application to sue in forma pauperia-Courts jurisdiction-Application for bei\"9 tranaposed as plaintiff-If could be rejected on the ground that the claim made in original petition ia perBOnal-Oodt of Civil Procedure, 1908: (V of 1908) 0. J. rr. 1, JO, 0, SS, r. S(a).\n\nThe Estate of Maharaja Man Singh of Ayodhya Raj devolved on his death successively on his two widows and thereafter, according to V the plaintiff a minor on his grandfather G, who died in 1942. Respondent claimed the estate as adopted son of the junior.widow of the Maharaja. V filed a petition for leave to sue in forma pauperis for declaration of title to the estate making his father R a party. The plaintiff's petition was rtjected by the Subordinate Judge, on the ground that it disclosed no cause of action. R's application to be transposed as petitioner was also rejected. V and R preferred revision applications to the High Court of Allahabad.\n\nThe plaintiff's application was rejected by the High Court holding inter alia that there was nothing in the petition to show that G succeeded to the estate as the nearest male reversioner of the last male holder. R's application was rejected by the High Court on the ground that relief in a11 application to sue in Jorma fl'.lupt, ria is personal to the applicant and nobody else can be made a co-applicant, because I, R. JO of the Code of Civil Procedure does. not apply to a proceeding for permisoion to sue as a pauper.\n\nHt Id, that 0. XXXIII of the Code of Civil Procedure lays down the procedure . for institution of a suit by pauper.\n\nBy cl. 5 (d) the court is required to ascertain whether the allegation made in the petition show a cause of action , but it does not enter upon a trial of the issues affecting the merits of th.e claim made by the petitioner. .By the statute, the jurisdiction of the Court is restricted to ascertaining whether on the allegations a cause of action is shown : the jurisdiction does not extended to trial of issues which must fairly be left for decision at the hearing of the suit.\n\nn application to sue in forma pauperis, is but a method prescribed by the Code for institution of a suit by a pauper\n\nithout payment o~ C'!t fee ; and there is nothing personal m such an application. The suit commences from the\n\nIHI!\n\nYfM1 -P B\"'l\" ••\n\nN.\\H-N1•1' s;,,, r.\n\n6\"\"' J.\n\nmoment an application for permission to sue in forma pauper is as required by 0. 33 of the Code is presented, and 0. I r. 10. of the Code would be aS much applicable in such a suit as in a suit in which Court fee had been duly paid. A person who claims to join a petitioner praying .for leave to sue in forma pauperis must himself be a pauper. Claim to join Ly transposition as an applicant must be investigated ; it is not liable to be rejected on the ground that the claim made by the original applicant is personal to himself.\n\nCrvu, APPELLATE JURISDICTION : Civil Appeals Noe. 253 and 254 of 1961.\n\nAppeals by special leave from the judgment and order dated May 2, 1955, of the Allahabad High Court in Civil Revision Nos. 881 and 882 of 1952.\n\nS. F. Andley, Rd by undue influence, coercion and frauelure prescribcH thtJ procedure for indtitutio11 of •Uitri by paupers. ltule 2 provides that particulal's a petition for permission to sue infvrmc1pauperi-\\ petition for !Pave to sue\n\nin fnr111a 1ifmpcri.•.\n\nThe trne cffect. of thn amrnded section Iii of the Oudh Estat.<'S Aet I of l 869 is a complioatcd question of law which the Court will not proceed to determine in ascertaining whether the petition for leavt' tu sue discloses 11. cause of action.\n\nThe High Court, in our judgment, was in error in observing that t.h<'re WM nothing in the\n\nplaint to show that Oanga Dutt succcec!Nl to the estate bec,'l.use he was th<' nell.rcst malo revnrsioncr under the orged ri{lhte on the ground, inter a&, that the plaintiffs had no ti, le to the subsoil of the land in suit and consequently to the ooal. The oontention really is that the land in suit had been permanently settled with the plaintilra after it had been resumed ae invalid Lakhraj land and that such settlement conferred no better right.II than what they originally pil\n\nof the land granted.\n\nThe Trial Court held that the invalid Lakhraj tenure in the land in suit in favour of the predeoees<>rsininterest of the plaintiffs waa resumed by the Government under the provisions of Regulation II of 1819 and, therea.ftn, was permanently aettled with them at t4e fixed revenue and that therefote the plaintiffs had right to the mineral& under the soil of the land settled with them. It .aooordingly decreed the suit in part and the deoree wa1 confirmed by te High Court.\n\nIt is contended for the appellant that the person with whom reBUmed invalid !Akbraj land bad been settled hu no right.a in the &11b10il.\n\nThe respondents rely on the proviaion1 of the Regulation enacted by overnorGeneral . Council in support of thell' olaun to the eubIOil m such land held by them, The GovemorGenerai in Council pUled a number of Regulation on May 1, 1793. We eball first consider Regulation XIX of 1793, ·\n\n• • . ,\n\nReg11lation XIX of 1793 was made for reenacing with modifbations the Rules p2\n\nThe Lodna r.olliery\n\nCo. Lid.\n\nY, Blwla /\"th R:f\n\nCo. Lu.\n\nBllll/a N•t~ ROJ\n\nBa1Awhr D9•l J.\n\nconfirmed by Government or by a.ny Officer empowered to confirm them.\n\nSection IV is eignifica.nt for our purpose a.nd rea.ds :\n\n\"This Regulation, a.s far as rega.rds lands alienated previous to the 1st December 1790, respects only the question whether thPy are liable to the payment of revenue or othenr'..se.\n\nE \\\"'ery dispute or claim regarding the proprie tary right in lands alienated previous to that date! and which, in conformity to this Reirula t.ion, may become subject to the payment of revenue, i~ to be conaid1>red as a matter of a private nature to be determined by the Courts of Diwa.ni Adala.t in the event of any dispute or cla.im a.rising respecting it between the grantee and the grantor or their respective heirs or successors. The grantel's, or the present\n\npossessors, until dispossessed by a. decree nf the Diwani Adala.t, a.re to be considerl'd a.a the proprietors of the lands with the same right of property therein as is declared to bo vested in proprietors of <'Sta.tee or depen. dent ta.Iuka, (according 1\\8 the la.nd ma.y exceed or be leas than one hundred bighas, specified in sections 6, 7 and 21,) subject to the pa.yme11t\n\nof revenue, and they a.re to execute engag!lments for the revenue, with which their lands may be declared chargeable, eitht•r to Government or to the proprietor or fa.rmer of the estate in which the lands mav Le situated, or to the officer of Government, {according as the revenne. of the estate in which the land mny be situated may Le payable by the proprietor or a farmer, or collected kha.a) under the rules for the decennial aettlPment.\n\nIf bv the decision of the Diwani Ada.lat the pru,:.rietary right in the land shall be transfrrrcd, the person succeeding thereto is in\n\nlike manner to be responsible for the payment of the revenue assessed or chargeable thereon.\" It is clear from this section that the Regulation simply dealt with the question about the liability of certain lands to the payment of revenue and provided that any dispute about proprietary right between the grantees and the grantors would be a matter of a private nature 'to be decided by the Court& of Diwani Ada.lat. It, however, definitel:r provides that the grantees or the then pcssJssors oi land, until dispossessed by a decree of the Diwani\n\nAda.lat, are to be considered as the proprietors of the lands with the same right of property therein as is declared to be vested in proprietors of estates or dependent taluks according as the land may exceed or be less than one hundred bighas subject to the payment of revenue. Such proprii>tors of laud were to execute engagement for reve11ue with whieh their lands may be declared ohargeaHe, either to the Government or to the proprietor or farmer of estates in which the lands be situated.\n\nThe grantees cf invalid La.khraj lands therefore had the same right of property in that land subject to the payment of revenue, as had been declared to be vested in the proprietors of estates. If he zamindars •. the proprietors of estates, have rights not only over the surface of the land but in the subsoil as well, the persons whose grants had been held to be invalid and who were held to be liable to pay land revenue also possessed right in the sub soil of the land settled with them.\n\nNow, Regulation VIII of 1793, also passed on ay I, 1793, re-enacted with modifications and amendents the J; tules for the Decennial Settlement of the public revenue payable from the lands of the zemindars, independent talukdars, and other actual proprietors of land in Bengal, Bihar and\n\nThe Lodna r allitf:\"\n\nCo. Ltd.\n\nBhola Ndl~ Roy\n\n196% n, LxJ .. Colli\"]\n\nCo. LJd.\n\n•• Bltal• N•lla Roy\n\nR\"l4ubor D•) enacted into a Regulation and that those articles related to the limitation of public demand upon the fonds, addreBSed by the Governor-General in Council to the zemindars, independent talukdars and other actual proprietors of land paying revenue to Government in the Provi.uoes of Bengal, Bihar and Orissa.\n\nBy Section IV it wa.s declared to the zemindars, independent ta.lukdars and other actual propietors of land, with or on behalf of whom a settlement had been concluded under the Regulations mentioned earlier, that at the epiration of the term of settlement no alt.!3ration would ho made in the assessment which they had respectively engaged to pay, but that they and their heirs and lawful successors would be allowed to hold their estates at such assessment for ever.\n\nThe preamble to Regulation II of 1793, which abolished the Court£ of Mal Ada.lat or Revenue C(nirtS and transferred the trial of suits cognizable in those Courts to tho Courts of Diwani Ada.lat, stated, in connection with the proposed improvmcnts in agriculture :\n\n\"As being the two fundamental measures essential to the attainment of it, the property in the soil has been declared to be vested in the landholders, and the revenue payable to Government from each estate has been fixed for ever ...••. The property in the soil was never before formally declared to be vested in the landholders, nor were they allowed to transfer such rights as they .did poMsess, or raise money upon the credit of their tenures, without the previous sanction, of Government.\" ', It is thus clear from the above declarations that the zemindars, the proprietors of estates, were recognized to be the proprietor~ of the soil. Such a view was expressed , by the Privy Council also in Ranjit Singh v, KaU Dilsi Debi(').\n\nIt was said at page 122: ', '', \" \"Passing to the settlement of 1793, it appears to their Lordships to be beyond controversy that whatever doubts be entertained as to whether before the British occupation the za.mindars had any proprietary interest in the lands comprised within 'their respective di&- tricts, the settlement itself recognizes and proceeds on the footing that they are the actua.l proprietors of the land for which they undertake to pay the Government revenue. The settlement is expressly made with the 'zemindars, independent talukdars and other actual proprietors of the soil': see Regulation I, s.3, and Regulation VIII., s.4. It is clear that since the settlement the zamindars have had at least a prima facie title to aU la.nds for which they pay revenue, such lands being commonly referred to as malguzari lands.'' The right of the zemindars to the sub-soil minerals under their land follows from their' being\n\n(I) (1917) L. R.44 I, A. 117.\n\nThe Wna Collier.I\n\nOo. Ltd.\n\nBhola Nath R'/)'\n\nRaghubor Dayal J,\n\n1Nt\n\n694 SUPREMr; OOURT REPORTS [1962] Su'PP.\n\nproprietors of the soil and has been recognized in a number of 08803 brL1veen the zemindars and persons holding land undr.r a tenure from them. It has been held in those c&11es that, in the absence of the right to sub-soil minerals being conferred on the tenure holder under the torms of the tenure held by him, he docs not get any right to them.\n\n'!'he first such ()&Ile is Hari Narayan Singh v. 81-iram Ghakrararti(' ). The same view was expressed\n\nin Durga Prasad Singh v. Braja Nath &se (').\n\nIn Sashi Bhuahan Misra v. Jyoti Prashad Singh Dw (•) Lord Buckmaster said at page 53, with regard to the above two cases :\n\n\"These decisions, therefore, have laid clown a principle which applies to and concludes the present dispute. They establish that when a irrant is made by a zamindar of a tenure at a fixed rent, although the tenure may be permanent, heritable and transferable, minerals will not be held to have formed part\n\nof the grant in the absence of express evidence to that efftct.\" The fact that the tenure was rent free, makes no difference to this principle, as held in Raghuna.fh Roy Maru; ari v. Raja of Jheria (').\n\nWe are therefore of opinion that the right of property of the person with whom resumPd invalid Lakhraj land bad been settled, being the same as of the zemindars, extends to the sub-soil minerals of the land held by them.\n\nFurther, the plaintiff~ trace their rights to the documents Exhibits 10, 2 and 6(a).\n\nBefore 8,\n\nnue of lands held free of assessment under illegal or invalid tenures. Its Section III declared that lands specified therein were liable to assessment in the ssme manner as other unsettled mahals and that the revenue assessed on all such lands would belong to Government. It laid down the procedure for enquiry claim of Government to assess such land and for assessment of revenue. Regulation III of 1828 made certain changes in the procedure, but contains nothing particular which would affect the determination of the question before us.\n\nExhibit 10 is the Robakari of the Deputy Collector of Burdwan, dated April 15, 1841, with respect to Touzi No. 2597 .. It is in pursuance of this order that permanent settlement was made with Madhusudan Roy and Sitaram Roy, predecessors-ininterest of the plaintiffs with respect to the land in suit. It appears from this Robakari that in proceedings between the Government as plaintiff and Manik Chandra Roy, Madhusudan Roy, 3itaram Roy and others as defendants, the claim of the Government, in accordance with the provisions of Regulation II of 1819 and Regulation III of 1828, in respect of the invalid revenue free land consisting of llrahmottar land measuring 156 bighas IO cattahs and the Debutter land measuring 18 bighas 20 cattahs, in all 175 bighas, situated in village Pariharpur and other villages within Pergana Shergarh, was decreed in April 1837, with the result that that land was resumed and assessod to land revenue. Madhusudhan Hoy and Sita.ram Roy and other defendants claimed right to get settlement because it was the Lakhraj property obtained by their ancestors. The settlement was huwever made with Manik Chandra Roy on April 19, 1838, as the other defendants did not turn up. Subsequently, Madhusudan Roy applied for settlement jointly with l\\Ianik Chandra Roy and others. As a result of the enquiry made, permanent settlement was separately made with Manik\n\nChandra Roy and others with respect to certain area a:ad with Madhusudhan Roy and Sitaram Roy\n\nThe Lodna Colliery\n\nCo. Ltd. v, Bhola N arh Roy\n\nRaglwlJar D a;>al J.\n\n71' Lt>iM Collw7\n\nC,. Ltd\n\nwith respect to tho rest.\n\nOn April 15, 1841, .A, malnama, Exhil!it 2, was issued by the Deputy Collector, Burdwan, to Mukhyas and others. It directed them tc, pay their respective rents to the persons with whom settlement was made.\n\nExhibit G(a) is certified r.opy of S<'ttlement khatian No. 61 t in respect of village Sripur, relating to Touzi No. 25~7, R.8. No. 2416. It describes the interest in the land in suit to be Bajeapti (resumed) Lakheraj Pariharpur and others.\n\nIt mentions five persons including the son of Madhusudh&n Roy and the sons of Sitanath Roy, to be the proprietors in posaession of that interest. It also shows the King Emperor of India as p081e811ing the entire superior interest. It ia thus clear thas the pOS8688ors of the Bajeapti (resumed) Lakheraj land in suit held it as proprietors under the King Emperor of India. They must consequently have the same rights which other proprietors like zamindars had.\n\nIt is however urged for the appellants that the records prior to the resumption proceedings showed the lands in suit to be the Brahmottar and Debutter Janda of the prodecesaors of the plaintiiis and that therefore, in view of the principle of law laid down by the Privy Council in Hriri Nurayan Singh'a Ca.!e(')and the later decisions, thAy cannot lie\n\nheld to p088ess rights in the sub-soil in the abeence of definite evidence that such rights were conveyed under those grants. We do not agree with this contention. The predecessors-in-interest of the plaintiffd held the land from the Government and not on a subordinate tenure from tho zamindars and therefore the principle of law aa stated in Hari Narayan Singh' s Ciise. (') and later confirmed in aeveral deciaions by the Privy Counoil, doee not apply to the present case.\n\nWe are therefore of opinion 'hat the plaintiffd had rightly been held to own and po88e88 the right.~\n\n(I) (1910\\ L. R. 37 I. A. 136.\n\nthe minerals under the land in suit and that tho decree in their favour is correct. We therefore dismiss the appeal with costs.\n\nAppeal dismissed.\n\nTHE BAGALKOT CEMENT CO. LTD.\n\nR. K. PATHAN & ORS. (P. B. GAJENDRAGADKAR, A. IC SARKAl{ and\n\nK. N. WANCHOO, JJ.)\n\nStanding Orders-Certification of draft aubrnitted by emp loyer-Power of Certifying Officer an_d Appell, ate A_uthority-lf can fix quantum OJ !er of days.\n\nOn appeal the Appellate Authority in substance !'gree with the additions made by the Certifying Officer. The question raised in the appeal was whether the Certifying Officer or the Appellate. Authority had the jurisdiction under the Act to make the additions in the draft Standing Orders. Section 4 of the Act provides, inter alia, that the draft standing orders could be certified if they provided for every matter mentioned in the Schedule to the Act and cl. 5 of the Schedule provided as follows : ''conditions of, procedure in applying for, and the authority which may grant, leave and holidays.\"\n\nHeld, that the Certifying Officer and the Appellate Authority had the jurisdiction in making the addition that they did.\n\nThe word \"conditions\" in cl. 5 should be construed not in a narrow way . but in a broad and liberal sense consistently with the object of the Act and, so construed, there could be no doubt that cl. 5 was not merely procedural but covered the substantive provision for fixing the quantun1 of\n\nHl62\n\nTlie Lod11a Colliery\n\nOo. Lid.\n\nBhola Nath Rn_1.\n\nRoghubar Da;•al J.", "total_entities": 18, "entities": [{"text": "THE LODNA COLLIERY CO. LTD", "label": "PETITIONER", "start_char": 756, "end_char": 782, "source": "metadata", "metadata": {"canonical_name": "THE LODNA COLLIERY CO. LTD", "offset_not_found": false}}, {"text": "BHOLA.NATH ROY", "label": "RESPONDENT", "start_char": 788, "end_char": 802, "source": "metadata", "metadata": {"canonical_name": "BHOLA NATH ROY", "offset_not_found": false}}, {"text": "RAGilUJIAR DAYAL, JJ.", "label": "JUDGE", "start_char": 855, "end_char": 876, "source": "metadata", "metadata": {"canonical_name": "RAGHUBAR DAYAL", "offset_not_found": false}}, {"text": "(1910) L. R. 37 I.A. 136", "label": "CASE_CITATION", "start_char": 1448, "end_char": 1472, "source": "regex", "metadata": {}}, {"text": "(1912) L.R. 39 I.A. 133", "label": "CASE_CITATION", "start_char": 1511, "end_char": 1534, "source": "regex", "metadata": {}}, {"text": "(1919) L.R. 46 I.A. 158", "label": "CASE_CITATION", "start_char": 1644, "end_char": 1667, "source": "regex", "metadata": {}}, {"text": "sections 6, 7 and 21", "label": "PROVISION", "start_char": 8519, "end_char": 8539, "source": "regex", "metadata": {"statute": null}}, {"text": "Section I of this Regulation", "label": "STATUTE", "start_char": 11792, "end_char": 11820, "source": "regex", "metadata": {}}, {"text": "s.3", "label": "PROVISION", "start_char": 14269, "end_char": 14272, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4", "label": "PROVISION", "start_char": 14296, "end_char": 14299, "source": "regex", "metadata": {"statute": null}}, {"text": "L. R. 37 I. A. 136", "label": "CASE_CITATION", "start_char": 20477, "end_char": 20495, "source": "regex", "metadata": {}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 21039, "end_char": 21044, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 3", "label": "PROVISION", "start_char": 21116, "end_char": 21120, "source": "regex", "metadata": {"statute": null}}, {"text": "Industrial Employment (Standing Orders) Act, 1946", "label": "STATUTE", "start_char": 21128, "end_char": 21177, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Section 4", "label": "PROVISION", "start_char": 21707, "end_char": 21716, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 21875, "end_char": 21880, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 22167, "end_char": 22172, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 22336, "end_char": 22341, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_697_711_EN", "year": 1962, "text": "2 s.c.R.\n\nSUPREME COURT REPORTS li97\n\nthe minerals under the land in suit and that tho decree in their favour is correct. We therefore dismiss the appeal with costs.\n\nAppeal dismissed.\n\nTHE BAGALKOT CEMENT CO. LTD.\n\nR. K. PATHAN & ORS. (P. B. GAJENDRAGADKAR, A. IC SARKAl{ and\n\nK. N. WANCHOO, JJ.)\n\nStanding Orders-Certification of draft aubrnitted by emp loyer-Power of Certifying Officer an_d Appell, ate A_uthority-lf can fix quantum OJ !er of days.\n\nOn appeal the Appellate Authority in substance !'gree with the additions made by the Certifying Officer. The question raised in the appeal was whether the Certifying Officer or the Appellate. Authority had the jurisdiction under the Act to make the additions in the draft Standing Orders. Section 4 of the Act provides, inter alia, that the draft standing orders could be certified if they provided for every matter mentioned in the Schedule to the Act and cl. 5 of the Schedule provided as follows : ''conditions of, procedure in applying for, and the authority which may grant, leave and holidays.\"\n\nHeld, that the Certifying Officer and the Appellate Authority had the jurisdiction in making the addition that they did.\n\nThe word \"conditions\" in cl. 5 should be construed not in a narrow way . but in a broad and liberal sense consistently with the object of the Act and, so construed, there could be no doubt that cl. 5 was not merely procedural but covered the substantive provision for fixing the quantun1 of\n\nHl62\n\nTlie Lod11a Colliery\n\nOo. Lid.\n\nBhola Nath Rn_1.\n\nRoghubar Da;•al J.\n\nJ9Gt\n\n1 A1 Botalkol Calillfl c •. tul. ..\n\nR. K. Potll.n\n\n698 SOPRIDIB COURT REPORTS (lll62] SUl'P.\n\nholidays and leave so that the conditions of emplo}ment might be made prrcise and definite and prescribed in the form of Standing Orders having statuto1 y efTccu.\n\nlleld, further, that the Certifying Officer as well a• the Appellate Authority were in substance industrial authority, and having regard to the power given to them under the Schedule there could be no inc.nsistency in holding that they had also the power of fixing the quantum of holidays and leave as well. Anv hardship that might be cau•cd by their orders could be rectified under s. I 0 of the Act.\n\nC1nL APPELLATE Juruso1CTION : Civil Appeal No. 5i7 of 1960.\n\nAppeal by special leave from the judgment and order dated October 15, 1959, of the Appellate Authority (Chief Labour Commissioner, Central, New Delhi), in Appeal under e. 6 of the Industrial Employment (Standing Orders) Act, 1946.\n\nB. Narayanasuamy, 8. N.\n\nAndley and RamA?shu:ar Nath, for the appellant.\n\nJf. K. Ra11wmurthi, for the respondent.\n\n1962. January 2!:..-The Judgment of the Court was delivered by\n\nOojmd,..1ad draft Standing Orders on the 3rcl March, 1!)58, to the Certifying (Jfficer and the Htgional Labour Commissioner (C0ntmll, :\\hi!· a'. in order that they sbC>u Id be e\"rtifi\"d. Tlw C. rt ify ing Offic:cr cunsid\"rrd\n\n2 S.C.R.\n\nSUPREME C0Ult1' REl'OltTS 6\\19\n\nthe draft submitted by the appellant, heard the appellant and its employees, the respondents and passed an order of eertilication on the 16th June, l 959. While considering the draft for the purpose of certificatiou, the Certifying Officer, however, made certain amendments in, and additions to, the said draft. Amongst the additions made, clause\n\n(7) in paragraph 11 was one and it is with this addition made by the Certifying Officer that we are concerned in the presem appeal.\n\nParagraph 11 of the draft Standing Orders submitted by the appellant dealt with the question ofleave. Paragraph 11 (1) of the draft provided that holidays with pay will be allowed as provided for in the l!'actories Act, 1948, and other holidays in accordance with law and contract.\n\nClauses (2) to (6) dealt with allied matters. In the Standing Orders as they were finally certified, clause ( J ) of paragraph 11 was slightly changed and it provided that holidays with pay will be allowed as provided for in the Mines Act.\n\nNo grievance is made of this alteration. Clause (7) has been added to paragraph 11. It reads thus: \"7. The workmen shPll be allowed during the course of a year :- (a) Ten festival holidays with pay for the celebration of important festivals (which will be fixed before the commencement of every cala.ndar year in consultation with the workmen) including the Republic Day (26th January) and the Independence Day (15th August) and/or any other paid holidays as may be declared and notified by the Government from time to time. Those workmen that are required to work on festivals and National Holidays shall be given an equal number of compensatory holidays on day convenient to the company, and\n\nThiBagalkot Ctm111t\n\nOo. Ltd. v.\n\nR. K. Pathan\n\n196•\n\nTM Bagolkot C:..u•I\n\nCo. Ud,\n\nR. K. Patha•\n\nfJoj1ndrog.di:ar J.\n\n700 SUl'REMB UOlTk1' REPORTS [1962] SUFP.\n\n(b) Fifteen days' casual leave with wages.\n\nThis will include all kinds of leave due to sickness or any other cause.\n\n(c) Casual leave \"Ifill not be allowlld for morl,'l -than 3 days at a time except in the case of sickness and emergencies at the discretion of the company.\n\n(d) Wages shall be allowed for thaoe days remaining un-a.va.iled by th: workers at\n\nthe end of the year.\n\n(o) Fourtet-n days annual leave to all classes of workers who have put in 265 attendances in a year as de1ined in the Mines Act.\n\nThis includes statutory leave.\n\nAU leave &hould be applied for only in the preacribed form.\n\nThe workmen after filling the particula.i:s of the leave required by them aha.II hand over the ea.me to the head of the section in which they a.re working.\" The appellant apparently oontended before the Certifying Officer that it was outside his jurisdi<>- tion t-0 deal with the topics oovered by clause (7) which he wanted to add but its objection was over ruled.\n\nAgainst the order pased by the Certifying Officer certifying the Standi'.Jg Orders with the Midi\n\ntione and amendments made by him, the a.ppcl Ian t preferred an appeal under section 6 of the Act to the appellate authority, viz., the Chief Labour Commissioner (Central), New Delhi, on the 5th July\n\n1959. The appellate authority, in substance, agreed with the view taken by tho certifying Officer and retained the addition made by him by the insertion\n\nof clause (7) to paragraph 11. He, however, made slight modification• by directing that in clause (a) there will bo Reven festival holirlayR inRtt>ad of ten festiv1Ll holidays am! in danw (b) there will ho ten days' casua.l lea.ve instead of fifteen days.\n\nClauso\n\n(d) was amended by the appellate authority by substituting a' new claus~ in its place.\n\nThe substituted clause reads thus:\n\n\"Casual leave will not be allowed to be accumulated. Unavailed casual leave shall lapse at the close of the calendar year.\"\n\nThen in regard to cl. ( e), the appellafo authoritv held that the said clause amounted to a repetition of statutor.v provision.\n\nTherefore, the said clause was amended to read thus :\n\n\"Annual leave with wages will be allowed as per provisions of the ilfines Act.\"\n\nThe appellate authority made certain other amendments in the Standing Orders as they were certified by the Certifying Officer and ultimatdv, the StanJing Orders were certified with the modifications and alterations suggested by the order of the appellate authority. The order of the appellate authority was passed on October 15, 1959.\n\nAgainst this order, the appellant applied for special leave to this Court and special leave was granted to it on the lst February, 1!!60. It is with the special leave thus granted that the appelhnt has come to this Court and on its behalf Mr. Narayanaswami has urged that the addition made by cl. (7.) in paragraph 11 of the Standing Orders is outside the jurisdiction of the certifying authority.\n\nHe contends that the jurisdiction conferred on the certifying authority by clause 5 in the Schedule does not empownif'nt to consider broadly the scheme of the Act. 'l'he Act was passed in 1946 because tho Legislature thougbt that it was \"expedient to require employer~ in indiddunl f'Stablishments to definf' with sufficient precision the conditions of employmPnt under thf'm and to make the said con: ditions known to workmen employed by them.\" Prior to the passing of the Act, conditions of employmPnt obtaining in Sf'veral industrial eetablihmcnts werf' governPd Ly contracts between the employer and tbl'ir employees. Sometimes the said oonditions were reduced to writinl! and in many\n\ncues they were not reduced to writing but were p:overnents.\n\nInevitably, in many cases, the conditirns nf crvice were not well-defined and thero was ambiguity or doubt in regard to their nature and soope. That is why the Lep:iehture took the view that in regard to indutrial etablish m<'ntJ! to which the Act applied, the conditions of employment subjert to whirh indutrial labour was employes to every industrial establishment wh<'rcin r>ne hundred 01 more workmen are employed nr were cmploytd on any Jay of the preceding twdvr months. It can be 1:xtended e, en to estab- JiRhments whose complement of labour is less thun\n\n2 S.C.R.\n\nSUPREME OOURT REPORTS 703\n\none hundred and it does not appl.Y to any industry to which Chapter VII of the Bombay Industrial Relations Act, I 940, applies or to any industrial establishment to which the provisions of the Madhya Pradesh Industrial Workmen (Standing Orders) Act,\n\n1959, apply. In other wordP, normally, Standing Orders have to be drafted by the employer and their certification obtained under the Act wherever the employer employs more than one hundred indus trial workmen: R. 113).\n\nThe certifying authority under the Act means a Labour Commissioner or a Regional Lahour Commissioner and includes any officer appointed . by the appropriate Government by notification in the Official Gazette to perform all or any of the functions of a Certifying Officer under the Act: s. 2(c\\. The Act provides for an appeal Rgainst the order passed by the Certifying Officer and the \"appellate authority\" means an Industrial Court, wherevn it exists or in i1 s absence an authority appointed by the appropriate Government uy notification in the Official Gazette to exercise in such arm as may be specified in the notification tht1 functions of an appellate authority under the Act : sec. 2( a). \"Standing Orders\" are defined to mean rules relating to matters set out in the Schedule : s. 2(gl.\n\nThus, the matters which have to be covend by the Standing Orders an provides for the proeeduro which has to be followed by the Ce1tifying Officer befo:e certifying the Standing Orders. The procedure is intended to give an oppor tunity to both thP, parties tn be heard before the final order is passeJ. eetion 6 provides for an appeal and s. i lays down that the Standing Orders shall come into operation on the expiry of 30 days from the da~~ on which authenticated copies thereof\n\n:ue sent a~ rpquirPd by s. 5. sub-s. (3), or where a.n appeal i> pre fern d, on the expiry of seven days frt•m the date on whicb the copies of the applla.te order are sent under s. 6 (2).\n\nSection 8 requires the Certifying Officer to keep a register of standing c rdcre and under s. 9, the ea.id Standing Orders have to be prominently posted by the employer in Enizlish and in the language understood by the majority of the workmen on special boards. Section 10 cleals wiih the duration and modification of of standinf.( orders.\n\nIt provides that except by agreem1nt, the sta11ding orders, after they are certified, shall not be liable to modification until the expiry of six months from the date on which they came into operation.\n\nSection 10 (2) empowers both the omplJycr or.the workman to ap(Jly for a modification in tho said standing orders. It would thus be\n\nclear that after they are certified, tht> standing orders h;>ve t-0 remain in force for six months un!Pss,\n\nof cour~P, they are modified in the meanwhile by, consent. After six months a.re over, an application\n\n2 S.C.R: t:lUPREME COURT REPOR1S 705\n\nfor modification in the standing orders can be made either by t.he employer or the emplo• yees and the problem would be considered after following the procedure prescribed by the Act for certifying the original standing orders. Section 11 confers the necessary powers of a Civil Court on the Certifying Officer and the appellate authority and s. 12 prohibits the admission of oral evidence which has the effect of adding or otherwise varying or contradicting standing orders as finally certified under the Act, in any Court. Section 13 provides for penalties and the procedure to enforce them.\n\nSection 13A deals with the problem of interpretation of the standing orders and s. 13B provides for exemption of industrial establishments therein specified.\n\nSection 14 confers on the appropriate Government power to exempt, conditionally or unconditionally, any industrial establishment, and s. 15 confers on the appropriate Government the power to make rules to carry out the purposes of the Act, and, in particular, to provide for the matters covered by cls.(a) to (e) of sub-cl. (2).\n\nSection 15(3) contains the salutary provision that every rule made by the Central Government under s.15 has to be placed before the House in the manner prescribed by it. The Schedule t.o the Act contains 11 clauses, clauses l to\n\n10 deal with the several topics in res11ect of which ntanding orders have to make a provision and cl. 11 refers to any other matter which may be prescribed.\n\nThis last clause shows that an addition may be mii, de\n\nby the appropriate Government if it is thought necessary to do so. That, in brief, is the scheme of the Act.\n\nMr. Narayanaswami contends that having regard the nature and scope of the several clauses Ill the Schedule, it would be appropriate to construe cl.5 as not including a provision for the quantum and extent of leave and holidays. His argument is \\hat cl, 5 is really intended to provide merely for\n\nIHI\n\nThe ll11allwt c.,,,.uJ c •. Lttl.\n\n\"· R. K. P11rit'6n\n\nIHI\n\n1\"'- B.,.U.. C-\n\nC., LU.\n\n11. K.I'.-\n\nSUPREME OOURT REPORTS (1962] SUPP.\n\nthe oonditions and the procedure to be adopted in applying for leave and holidays, Clause 5 reads thus:\n\n\"Conditions of, procedure in applying for, and the authority whloh may grant, leave and holidays.\" How many holidays the employee will have and how much leave, either caaual or on medical grounds, he would be entitled to get, are matters outside the scope of the Schedule ; they would be governedby the relevant provisiolll! of any other law or by contract between the parties; they cannot be the sub ject-matter of standing orders. The standing orders wonld provide for the conditions subject to whioh leave and holidays can be applied for, for the procedure in applying for the same and for the authority which may grant the same. That being so, the Certi fying Offioer and the appellate authority exceeded their jurisdiction in making substantive provisions in that behalf by paragraph11(7). That is the C8.8e for the appellant aa presented by Mr. Narayanaawami.\n\nIn support of this contention, relian0t1 has been pl&ced on cl.3 in the Schedule which refers to shift\n\nworking. It is urged that since the clause refers to shift working, the u betantive provision in reepeot of shift working as well as the oondi tiona subject to which it should be allowed wonld legitimately fa.II within its purview. If the Legislature had intended that the eubeta.ntive provision as to leave and holidays should be the .11ubject-matter of standing orders, it may well have referred to leave and holidays only in\n\ncl. 5 without :.ny further addition. The additional words introduced in cl. 5 are words of limitation and they show that e sutantive pro:vision IUI to leave and holidays 18 out.111de the purview of that olauae. It may be conceded that there is some loroe in this contention.\n\nThere are, however, other considerations which have to be borne in mind in construing cl. 5.\n\nThe l'xt of holidays may mean conditions as to holidays with pay, or without pay or with half pay B!ld that iB what is contemplated by the first clause in relation to holidayH.\n\nTheoretically, it may be conceivable that the word \"conditions\" may have that meaning in respect of holidays; but it seems to us that it would serve no useful purpose merely to provide lor such conditions and to prescribe the procedure to be adopted in applying for leave and holidays unless the quantum of leave and the quantum of holidays are also intended to be pree cribed by the standing orders. Ou the broad construction of cl. 5, it becomes a eelfsuffici ent and reasonable provision. The sta.nrling orderB will provide for the leave to which the employeea are entitled and will prescribe the number of holi day8 which thtly will be ablo to enjoy. Having provided for the quantum of leave and holidays, the standing orders will also provide for the condi\n\ntions in respeot of them, for the prooodure in appl ying for them and for the authority which may grant them. It is true that it is not easy to under stand why an application has to be made for holidays, but it may be that if there are sectional holi days, employees belonging to a particular section entitled to them may have to apply for them. Therefore, in our opinion, it cannot he said that the authorities \\x>low have adopted an unreasonable construction of cl. 5 in the Soht>dule when they held that they wt>ro entitled to make the additional provisions in respect of leave and holidays whioh they have purported to make by adding cl. 7 in\n\nparagraph 11 of the standing orders.\n\nIn this oonnection reference, may be made to the Model Standing Orders framed by the Central Government in 1946. Clause 9 of tho Model Orders provides that holidays with pay will be allowed as\n\n. .\n\nprovided for in Chapter VI of the Factories Act, 1948, and other holidays in acaorda.noe with law contract, custom and usage. In fact, it is significant that paragraph 11 (l) of the draft-submitted by the appellant has also provided that holidays with pay will be allowed as provided for in the Faatories Act and other holidays in accordance with law and con, tract. If this provision is legitimately included in the Standing Orders and that too under clause 5 of the Schedule, it is difficult to understand why a more specific provision cannot be made under the said c1ausc by clearly stating the number of holidays to which the employees would be entitled and that is preci8ely what paragraph ll (7) purports to do.\n\nThen cl. 10 of the Model Standini:; Orders provides for casual leave. It lays down that a workman may be granted casual leave of absence with or without pay not exceeding 10 days in the aggregate in a calend:u year. 'fhen it lays down further conditions in respect of the grant of the said casual leave. lt would be noticed that the quantum of casual leave to which the employee is entitled is thus specifically provided by. cl. 10 of the Model Standing Orders. It is perfectly true that if clause Ii of the Schedule is read in tho narrow sense for which Mr. Narayanaswamy contends, cl.\n\n10 of the Model Standing Orders would be invalid and from that point of view the existence of clause 10 in the Model Standing Orders cannot be of any assistance in interpreting cl. 5 of the Schedule.\n\nBut if clause 5 is construed in the broad sense for which Mr. Ramamurtbi contends, it would follow that clause 10 of the Model Standing Orders is consistent with the aim and object of the Scht>dule and that, incidentally, may support the agreement for the broad construction.\n\nThat is about all.\n\nIn regard to the argument based on the scope of the 10 clauses in the Schedule, it is certainly\n\n1g62\n\nTh1c.n.in Cd.UL\n\nR.ll'. , ...\n\nGl1}1714r•ga41'of J.\n\ntHJ - - ~\"· .. ,.\n\n710 SUPREME OOUHT REPORTS [1962) SUPP.\n\nnot correct to say that the scope of the Schedule is intended to be verv narrow. Take for instance, clause 8 which deafa with the termination of employment or clause 9 which deals with the suspension or dismissal for misconduct, and acts or omissions which constitute misconduct. TheAe are mattem of general importance and it is conceded that all relevant and material provisions in respect of these matters have to be included in the Stand\n\ning Orders. Therefore, it would not he inconsis tant with the scheme of the Schedule if we were to hold that the subst'lntive provisions for the grant\n\ning of leave and holidays along with the conditions in respect of them have to be made by the Standing Orders under cl. 5 of the schrdule.\n\nIt would be recalled that s. I 0 of the Act provides for the duration of the standing orders and if any l!tanding orders are found by experi\n\nence to be unrnasonable or inconvenient either by the employer, or the employees, 'l.n application can\n\nbe mado for the modification of the said standing orders after tho \">xpiration of six months from the tlate on which they came into operation. Therefor!'. there would lw no hardship in requiring the stand\n\ning orders to inclucli> a proviion as to leave and holidays. The provisions made in that behalf can\n\nbA modified after followinp; the procedure pres cribed by R. IO It is not disputed that the claim for lea.ve and holidays can become the subject\n\nmatter of an industrial dispute and if such a dispute is referred for adjudic11.tion to an Industri.'.l Tribunal, the Tribunal can fix the qu&n\n\ntum of holidays and leave. What the Tribunal can do on such reference is now intended to be achieved by the Standing Orders themselves in r<'B\n\npect of Industrial establishments to which the. Act\n\nappli~. We have noticed th:i.tthe Certifying Offioor\n\nas woll as tho appellate authority are, in subs tance, industrial authorities and if they arc given power to make provision for leave and holidays 1'11\n\nthey undoubtedly are given power to provide for termination of employment and suspension or dis missal for misconduct, there is nothing inconsistent with the spirit of the Schedule or with the object of the Act. Therefore, we are not satisfied that the authorities below were in error in holding that it was competent to them to make the additional provision in the Standing Orders as prescribed by paragraph 11 (7).\n\nIn the result, the appenl fails and is dismissed.\n\nNo order as to costs.\n\nAppeal dismisseJl.\n\nSTATE OF BOMBAY\n\nUMARSAHEB BURANSAHEB INAMDA\n\n(S. K. DAS, K. SUBBA RAo and RAGHUBAR\n\nDAYAL, JJ.)\n\nCriminal Procedure Code-Offences commitl.ed in purBttance of Criminal conspiracy-One trial, if ptrmislible-Defecl in framing the charge, if curable-Code f Criminal Prowlurt\n\n1898 (Act V of 1898), ss.222 (2), 235, 537, The respondents were charged and tried at the same trial with the offences of Criminal conspiracy and breach of trust committed in pursuance thereof during a period of more than one year.\n\nThe question arising for decision was whether, in the framing of the charge, contravention or the provisions of sub-s.(2) of s.222 which allowed a combined charge with respect to the amount embezzled within a period of one year, vitiated the triaJ.\n\nHeld, that the defect in the charge did not lead to any prrjudice t> the accused and therefore did not vitiate the trial in view of the provisions of s. 537 of the Code of Criminal Procedure.\n\nWhen ail the offences committed in pursuance of a conspiracy are committed in course of the same transaction this can be tried together at one trial in view of s. 235(1) of 1he Code of CrimiI1al Procedure which provides 1h11t if hi one\n\ntHI - f'lw B_.,, C_t\n\nc. .. 1,1'.\n\nB. K. P\"\"\"'\n\nG 4i\"\"'°\"\"\"4r J.", "total_entities": 69, "entities": [{"text": "THE BAGALKOT CEMENT CO. LTD", "label": "PETITIONER", "start_char": 186, "end_char": 213, "source": "metadata", "metadata": {"canonical_name": "THE BAGALKOT CEMENT CO. LTD", "offset_not_found": false}}, {"text": "ORS. (P. B. GAJENDRAGADKAR", "label": "JUDGE", "start_char": 231, "end_char": 257, "source": "metadata", "metadata": {"canonical_name": "P.B. GAJENDRAGADKAR*", "offset_not_found": false}}, {"text": "K. N. WANCHOO, JJ.", "label": "JUDGE", "start_char": 278, "end_char": 296, "source": "metadata", "metadata": {"canonical_name": "K.N. WANCHOO", "offset_not_found": false}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 579, "end_char": 584, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 3", "label": "PROVISION", "start_char": 656, "end_char": 660, "source": "regex", "metadata": {"statute": null}}, {"text": "Industrial Employment (Standing Orders) Act, 1946", "label": "STATUTE", "start_char": 668, "end_char": 717, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Section 4", "label": "PROVISION", "start_char": 1247, "end_char": 1256, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 1415, "end_char": 1420, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 1707, "end_char": 1712, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 1876, "end_char": 1881, "source": "regex", "metadata": 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"source": "regex", "metadata": {"statute": null}}, {"text": "clause 5", "label": "PROVISION", "start_char": 8944, "end_char": 8952, "source": "regex", "metadata": {"statute": null}}, {"text": "Schedule\n\n19", "label": "PROVISION", "start_char": 9413, "end_char": 9425, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 9776, "end_char": 9781, "source": "regex", "metadata": {"statute": null}}, {"text": "Chapter VII of the Bombay Industrial Relations Act", "label": "STATUTE", "start_char": 11540, "end_char": 11590, "source": "regex", "metadata": {}}, {"text": "Standing Orders have to be drafted by the employer and their certification obtained under the Act", "label": "STATUTE", "start_char": 11770, "end_char": 11867, "source": "regex", "metadata": {}}, {"text": "s. 5", "label": "PROVISION", "start_char": 14649, "end_char": 14653, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 6", "label": "PROVISION", "start_char": 14803, "end_char": 14807, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 8", "label": "PROVISION", "start_char": 14814, "end_char": 14823, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 9", "label": "PROVISION", "start_char": 14905, "end_char": 14909, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 10", "label": "PROVISION", "start_char": 15076, "end_char": 15086, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 10", "label": "PROVISION", "start_char": 15358, "end_char": 15368, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 11", "label": "PROVISION", "start_char": 15968, "end_char": 15978, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 12", "label": "PROVISION", "start_char": 16083, "end_char": 16088, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 13", "label": "PROVISION", "start_char": 16265, "end_char": 16275, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 13A", "label": "PROVISION", "start_char": 16335, "end_char": 16346, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 13B", "label": "PROVISION", "start_char": 16415, "end_char": 16421, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 14", "label": "PROVISION", "start_char": 16494, "end_char": 16504, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 15", "label": "PROVISION", "start_char": 16628, "end_char": 16633, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 15(3)", "label": "PROVISION", "start_char": 16824, "end_char": 16837, "source": "regex", "metadata": {"statute": null}}, {"text": "s.15", "label": "PROVISION", "start_char": 16923, "end_char": 16927, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 11", "label": "PROVISION", "start_char": 17152, "end_char": 17158, "source": "regex", "metadata": {"statute": null}}, {"text": "cl.5", "label": "PROVISION", "start_char": 17522, "end_char": 17526, "source": "regex", "metadata": {"statute": null}}, {"text": "Clause 5", "label": "PROVISION", "start_char": 17897, "end_char": 17905, "source": "regex", "metadata": {"statute": null}}, {"text": "cl.3", "label": "PROVISION", "start_char": 18846, "end_char": 18850, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 19319, "end_char": 19324, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 19391, "end_char": 19396, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 19681, "end_char": 19686, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 20317, "end_char": 20322, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 20892, "end_char": 20897, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 20931, "end_char": 20936, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 21296, "end_char": 21301, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 22403, "end_char": 22408, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 23200, "end_char": 23205, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 7", "label": "PROVISION", "start_char": 23374, "end_char": 23379, "source": "regex", "metadata": {"statute": null}}, {"text": "Clause 9", "label": "PROVISION", "start_char": 23535, "end_char": 23543, "source": "regex", "metadata": {"statute": null}}, {"text": "Chapter VI of the Factories Act, 1948", "label": "STATUTE", "start_char": 23637, "end_char": 23674, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "clause 5", "label": "PROVISION", "start_char": 24073, "end_char": 24081, "source": "regex", "metadata": {"linked_statute_text": "Chapter VI of the Factories Act, 1948", "statute": "Chapter VI of the Factories Act, 1948"}}, {"text": "cl. 10", "label": "PROVISION", "start_char": 24345, "end_char": 24351, "source": "regex", "metadata": {"linked_statute_text": "Chapter VI of the Factories Act, 1948", "statute": "Chapter VI of the Factories Act, 1948"}}, {"text": "cl. 10", "label": "PROVISION", "start_char": 24765, "end_char": 24771, "source": "regex", "metadata": {"statute": null}}, {"text": "cl.\n\n10", "label": "PROVISION", "start_char": 24923, "end_char": 24930, "source": "regex", "metadata": {"statute": null}}, {"text": "clause 10", "label": "PROVISION", "start_char": 25022, "end_char": 25031, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 25105, "end_char": 25110, "source": "regex", "metadata": {"statute": null}}, {"text": "clause 5", "label": "PROVISION", "start_char": 25136, "end_char": 25144, "source": "regex", "metadata": {"statute": null}}, {"text": "clause 10", "label": "PROVISION", "start_char": 25233, "end_char": 25242, "source": "regex", "metadata": {"statute": null}}, {"text": "clause 8", "label": "PROVISION", "start_char": 25741, "end_char": 25749, "source": "regex", "metadata": {"statute": null}}, {"text": "clause 9", "label": "PROVISION", "start_char": 25800, "end_char": 25808, "source": "regex", "metadata": {"statute": null}}, {"text": "cl. 5", "label": "PROVISION", "start_char": 26351, "end_char": 26356, "source": "regex", "metadata": {"statute": null}}, {"text": "Criminal Procedure Code", "label": "STATUTE", "start_char": 28233, "end_char": 28256, "source": "regex", "metadata": {}}, {"text": "ss.222", "label": "PROVISION", "start_char": 28429, "end_char": 28435, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s.222", "label": "PROVISION", "start_char": 28765, "end_char": 28770, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s. 537", "label": "PROVISION", "start_char": 29040, "end_char": 29046, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 29054, "end_char": 29080, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 235(1)", "label": "PROVISION", "start_char": 29243, "end_char": 29252, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}]} {"document_id": "1962_2_711_715_EN", "year": 1962, "text": "2 S.O.R.\n\nSUPREME COURT REPORTS 711\n\nthey undoubtedly are given power to provide for termination of employment and suspension or dis missal for misconduct, there is nothing inconsistent with the spirit of the Schedule or with the object of the Act. Therefore, we are not satisfied that the authorities below were in error in holding that it was competent to them to make the additional provision in the Standing Orders as prescribed by paragraph 11 (7).\n\nIn the result, the appenl fails and is dismissed.\n\nNo order as to costs.\n\nAppeal dismisseJl.\n\nSTATE OF BOMBAY\n\nUMARSAHEB BURANSAHEB INAMDA\n\n(S. K. DAS, K. SUBBA RAo and RAGHUBAR\n\nDAYAL, JJ.)\n\nCriminal Procedure Code-Offences commitl.ed in purBttance of Criminal conspiracy-One trial, if ptrmislible-Defecl in framing the charge, if curable-Code f Criminal Prowlurt\n\n1898 (Act V of 1898), ss.222 (2), 235, 537, The respondents were charged and tried at the same trial with the offences of Criminal conspiracy and breach of trust committed in pursuance thereof during a period of more than one year.\n\nThe question arising for decision was whether, in the framing of the charge, contravention or the provisions of sub-s.(2) of s.222 which allowed a combined charge with respect to the amount embezzled within a period of one year, vitiated the triaJ.\n\nHeld, that the defect in the charge did not lead to any prrjudice t> the accused and therefore did not vitiate the trial in view of the provisions of s. 537 of the Code of Criminal Procedure.\n\nWhen ail the offences committed in pursuance of a conspiracy are committed in course of the same transaction this can be tried together at one trial in view of s. 235(1) of 1he Code of CrimiI1al Procedure which provides 1h11t if hi one\n\ntHI - f'lw B_.,, C_t\n\nc. .. 1,1'.\n\nB. K. P\"\"\"'\n\nG 4i\"\"'°\"\"\"4r J.\n\n.i•• 81.,. •1 a.w._, ..\n\n,, • .,,.JW ..... .-..1--\n\n••Wu l!lll)al J.\n\n712 Stn'REME COURT REPORTS (1962] SUPP.\n\nseries of ar.!S so connected togethrr a1 to form the same transaction, more offences than one 4fC co1nmittcd Uy the same person, he may be charged with and tried at one trial for evtry such offence.\n\nKadiri Kanhahammad '- The Stat• of Madl'tll, A. I. It.. 1960 S. C. 661, followod.\n\nCRIMINAL ArPELLATE JURISDICTION : Crimi nal Appeal No. 237 of 1959.\n\nAppeal from the judgment and order datwl February 10 and 11 of 1959, of the Bombay Hig':l Court in Criminal Appeal No. 1023/59 with Crinal Appeals Nos. 1048 and 1049 of 1958.\n\nH. R. Khanna and P. D. Me1um, for the appellant.\n\nS. 0. Patwardhan. J.B. Dadachanji, O.C. Mathur and Rauinder Narain, for the respondent No. 1.\n\n1962. January 23. 'fhe Judgment of the Court was delivered by\n\nRAOHVBAR DAYAL, J.-This appeal, on a ccrtifirate grantfd by the High Court of Bombay, rai;;; is the question whether the contravention of the provisions of eub-s. (2) ofs. 222 of the Code of Criminal Procedure, hereinafter called the Code, in the framing of the charge against an aecu.sed, vitiates the trial.\n\nThe facts leading to the appeal, in brief', are aa follows.\n\nThe respondents were charged and tried at tho tiamo trial of the offences under 1. 120B read with s. 406, I.P.C., and of an offence under s. 406 I. P. C., committed in pursuance of the criminal conspirncy t.hey had entered into. They were also tried, but acquitted of other offenciis oharged with.\n\nThey appealed against their conviction of the offence under s. 120-B read withs. 406, I.P.C., and of the offence under s. 406, I.P.C. The charge under\n\nB. 406, I.P.C., was with respect to the commission of\n\nLreaoh of trust of a sum of Ra. 2,18,369/- between the period March 6, 1949, and June 30, 1950.\n\nIt was contended before the High Court that the charge framed contravened the provisions of sub-\n\n2 S.C.R.\n\nSUPREME COURT REPORTS 713\n\ns. (2) of s. 222 of the Code which allowed a combined charge with respect to the amount embezzled within a period of a year. The High Court agreed with this contention and, holding the trial void, set aside the conviction of the respondents and acquitted them of those offences.\n\nThe High Court, however, maintained the order of acquittal 1s respect of the other offences.\n\nThe State of Bombay (now Maharashtra) has filed thi8 appeal against the order setting aside the conviction of the respondents.\n\nIt is not necessary for us to determine in this appeal the general question whether the contravention of the provisions of sub-s. (2) of s. 222 of thA Code, in the frnming of the chlirge, will always make the trial void, as, in this particular case, the offence under s. 406, I.P.C., charged against the respondents was said to have been committed in pursuance of a criminal conspiracy entered into by them. It will therefore suffice, for the purpose of this case, to consider whether such a defect in the charge vitiates the present trial.\n\nSection 222 of the Code is one of the sections in Chapter XIX which deals with Form of Charges.\n\nSections 221, 222 and 223 deal with what should be mentioned in thP charge. The whole object of the charge is to inform both the prosecution, and the accused particularly, of the accusation the prosecution has to establis'ii and the accused has to meet.\n\nSo long as the accused knows fully what accusation he has to meet, any error in the narrat.ive of the rharge Ut!ed not be fatal to the trial. Sections 225, 23:?, 535 and 537 save the trial from being vitiated unless of course the accused has been prejudiced and failurtJ of justice has taken place.\n\nSections 233 to 239 deal with the joinder of charges, and t.bey speak not only of an aocnsed\n\n'1ein~ charged with offences, but of such charges\n\nState of Bor:nbay\n\n•• Umarsalub Bt1ratuaheb lnamda\n\nJl.agJubar Doyal 1,,\n\n81•'4 •f Bo.U41\n\n•• u-1-.b .... ....,,,.1-d.\n\nSUPREME OOURT REPORTS (1962] SUPP.\n\nhcini; r tried separately or jointly. Section 233 states that for nvery distinct offence of which any person is accused, there sha.11 be a. separate cha.rge a.nci every such charge sha.11 be tried sepa.rately, except in the cases mflntioned in 88. 234, 235, 236 and 239.\n\nIt is clear tha.t the genera.I rule is that there should be a separate trial for eh distinct offence or which a person is accused.\n\nIt follows that each item of property of which an accused is alleged to havc committed breach of trust, constitutell one distinct offence and that, in general, it would be necessary to have as many trials as there be distinct\n\noffencs of criminal breach of trust committ.ed by the accused. Buts. 222(2) provides that when the aooused is charged with criminal breach of trust, the charge may be with respect to the grOBB sum embezzled within a period of one year and that the charged Ro framed shall be doemed to be a charge of one offonoo within the meaning of s. ;/:14.\n\nThe charge framed in the prosent case was with reRpect to the groBB sum cm hczzled within a period of more than twelve months, the pPriod bl>ing between March fi, 1949 and June :10, 1950.\n\nThe charge therefore was in contravention of the provisions of\n\nA. 222(2).\n\nThis defect in the charge, however, did not lead to 1my prejudice to the accusen heard on merits and therefore we remand the case to the High Court for further hearing aocordinll' to law.\n\n(1) A.I.R. 1960 S.C. 661 .\n\nState of Bombay\n\nUmarsaheb Buran.saheb Inamda\n\nRaghuhar Dayal J.", "total_entities": 32, "entities": [{"text": "STATE OF BOMBAY", "label": "PETITIONER", "start_char": 549, "end_char": 564, "source": "metadata", "metadata": {"canonical_name": "STATE OF BOMBAY", "offset_not_found": false}}, {"text": "UMARSAHEB BURANSAHEB INAMDA", "label": "RESPONDENT", "start_char": 566, "end_char": 593, "source": "metadata", "metadata": {"canonical_name": "UMARSAHEB BURANSAHEB INAMDA", "offset_not_found": false}}, {"text": "S. K. DAS", "label": "JUDGE", "start_char": 596, "end_char": 605, "source": "metadata", "metadata": {"canonical_name": "S.K. DAS*", "offset_not_found": false}}, {"text": "K. SUBBA RAo", "label": "JUDGE", "start_char": 607, "end_char": 619, "source": "metadata", "metadata": {"canonical_name": "K. SUBBA RAO", "offset_not_found": false}}, {"text": "DAYAL, JJ.", "label": "JUDGE", "start_char": 634, "end_char": 644, "source": "metadata", "metadata": {"canonical_name": "RAGHUBAR DAYAL", "offset_not_found": false}}, {"text": "Criminal Procedure Code", "label": "STATUTE", "start_char": 647, "end_char": 670, "source": "regex", "metadata": {}}, {"text": "ss.222", "label": "PROVISION", "start_char": 843, "end_char": 849, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s.222", "label": "PROVISION", "start_char": 1179, "end_char": 1184, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s. 537", "label": "PROVISION", "start_char": 1454, "end_char": 1460, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 1468, "end_char": 1494, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 235(1)", "label": "PROVISION", "start_char": 1657, "end_char": 1666, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "S. 0", "label": "PROVISION", "start_char": 2489, "end_char": 2493, "source": "regex", "metadata": {"statute": null}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 2830, "end_char": 2856, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 406", "label": "PROVISION", "start_char": 3117, "end_char": 3123, "source": "regex", "metadata": {"statute": null}}, {"text": "I.P.C", "label": "STATUTE", "start_char": 3125, "end_char": 3130, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 406", "label": "PROVISION", "start_char": 3157, "end_char": 3163, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "s. 120", "label": "PROVISION", "start_char": 3378, "end_char": 3384, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "I.P.C", "label": "STATUTE", "start_char": 3404, "end_char": 3409, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 406", "label": "PROVISION", "start_char": 3437, "end_char": 3443, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "I.P.C", "label": "STATUTE", "start_char": 3445, "end_char": 3450, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "I.P.C", "label": "STATUTE", "start_char": 3478, "end_char": 3483, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 222", "label": "PROVISION", "start_char": 3767, "end_char": 3773, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "s. 222", "label": "PROVISION", "start_char": 4396, "end_char": 4402, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "s. 406", "label": "PROVISION", "start_char": 4527, "end_char": 4533, "source": "regex", "metadata": {"statute": null}}, {"text": "I.P.C", "label": "STATUTE", "start_char": 4535, "end_char": 4540, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "Section 222", "label": "PROVISION", "start_char": 4801, "end_char": 4812, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "Sections 221, 222 and 223", "label": "PROVISION", "start_char": 4898, "end_char": 4923, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "Sections 225, 23", "label": "PROVISION", "start_char": 5295, "end_char": 5311, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "Sections 233 to 239", "label": "PROVISION", "start_char": 5453, "end_char": 5472, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "Section 233", "label": "PROVISION", "start_char": 5792, "end_char": 5803, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 235", "label": "PROVISION", "start_char": 7935, "end_char": 7941, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 222", "label": "PROVISION", "start_char": 8729, "end_char": 8735, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_716_726_EN", "year": 1962, "text": "SUPREME COURT REPORTS [1962] SUPP.\n\nTHE IN'CO!IIE TAX OI<'l<'ICER. MADRAS\n\nS. K. HABIBULLAH, MADRAS\n\n(S. K. DAs, M. HmAYATULT, AH a.nd J.C. SuAH, JJ.)\n\nIncome Tax-Aaaeument of firm complered prior to April 1, 1952 -Pme Tax for the years 1916-47 and 47-18 with regard to both the firms showing losses. The assessment of one of the firm for the year 1946-47 antl 47·48 was completed on 31. 10.50\n\nand of the other for the year 1947 48 on :lO 6.51 whcrtby the los>e1 calcul•ted were less tha1 claimed by M before the Income Titx Officrr. On receipt of intimation of the orden passed in the asetrnents of the t No finru the Jnl.01nc Tax Officor issued on May +, 1953, notice to M to show cause why the assessment for the year 1946-47 and 47 .. 13 should not be rectified under s. 35 of the Act. M replied that he had no oh_jectinn if the ao:sessmcnt was cornplr:td according to law. On 27.3 .. i4 the Income-tax Offtcer revised the a1scssmt-nt in rtsper.t of the t\\\\'O yearo; after taking into account the share:: of the loses as comput<'d in the assessmrnt of the two firms. r.r rlieil on 17.4. j4 and his son H applied to the Con1n1issi':'.n('r of Income Tax for rt'vi1iutt of the orders. 'fhe Co1nn1hsinner held that s. 3'.i was properly invoked fer rectification of the as..o; essment. \"fhe }Jigh Co-Jrt of Madras on a petition 1noved hy 11 ordered that a writ of certiorari to is!ne quash in!{ the ordtr. 'fhr Conunissio 1cr of Inco1nel tX came up in appc•I.\n\nf/r/d, thats. 35 (1) of the Income T•< Acl empower< the lnc•>n1e Tax Authorities to rectify mi!t:t1'e:; apparent fro1n the record of crrtain ordcn pasd hy the1n.\n\nBut if the la\\\\' docs not authnri!\\C the lnco1ne Tax Officer to rtctify the\n\nassessn1~11t, assent could not validate what \\\\'as uuauthori..ed\n\nlff/,[, f11rther. that for the purpose of assessment an individua1 and a firn1 art' distinct eutitits; and even if an indhi disco\\'crcd because of somethingcontainrd in the assessment of tht: fi.r111 i~ no.t !1 mistake apparrnt fron1 the record of assess1ncnt ol the 1nd1v1 dual partner.\n\nHeld, also, that the Legislature has given to cl. (5) of s. 35 which was incon:iorated with effect from April I, 1952, a partial retrospective operation .. The provision.enacted by\n\ncl. (5) is not procedural in characer, it affects veP.\n\nOctober 31, 1950 by tbe Income-tax Officer II Circle,\n\nMadra.s and the proportionate share of the aSBessee\n\nfor the loBBcs was computed for the two years at Rs. 15,839/- a.nd Rs. 1,046/- respectively. Asseesmcnt of Messrs. Pa.lania.ppa. Chettiar & Co. for 1947-48 was completed by the Income-t.&x Officer, Special Circle on June 30, 1951 a.nd the share of the a.BBessce in the 1068 suffered by that firm wa.s computed at Rs. 2,009/-. On receipt of intimation.. of the orders p8!11ffld in the a.sseBBment of the two firms, the Income-tax Officer, V Circle, Madras\n\nissued on May 4, .1953 notices to show ca.use why the assessments of the a.sse8800, for the years 1946- 4 7 a.nd 194 7 -48 ehould not be rectified under s. 35 of the Income-tax Act. On March 24, 1954, the a.sseSBee wrote to the Income-tax Officer stating : \"This is to inform you that I have no objection in completing the assessments of the previous years in accordance with law\". On March 27, 1954, the Income-tax Officflr rovisd tho aB8088ment of the al!&e88Ce in rcspett of the two yea.re after ta.king into account the aha.re of the losses as computed in the 8.8808Sments of the two firms.\n\nThe a.saessee died on April 17, 1954 a.nd hia son S. K. Ha.bibullah-hcreinafter referred to as the respondent-applied to the Commissioner of Income-tax, Madrae praying for revision of the ordol'IJ.\n\nThe CommiBBioner held that s. 35 was properly invoked for rectification of the assessments a.nd rejected the applications. But the High Court of Judicature at Madras in petitions under Art. 226 of the Constitution filed by the respondent ordered that writs of cerliorari do iBBue quaehing the ordere of the Income-tax Officer, V Circle. The Commissioner of Incomflt.&X, Madre.a appeals to tbie Coart with oertifioate of fitnllBB granted by the High Court.\n\nThe plea 01 the CommiBBioner that the 8886 BSee having assented to the rectification, it was not\n\n2 S.C.R.\n\nSUPREME OOURT REPORTS 719\n\nopen to the respondent to challenge the authority of the Income-tax Officer, has no force.\n\nBy his letter dated March 24, 1954 the assessee merely informed the Income-tax Officer that he had no objection to rectification according to law.\n\nBut if the la.w did not authorise the Income-tax Officer to rectify the assessment, assent could not validate what was unauthorised.\n\nSection 35( I) empowers the income-tax authorities to rectify mistakes ii, pparent from the record of certain orders passed by them. The clause (omitting parts not material) provides that the Incometax Officer may at any time within four years from the date of any assessment order passed by him, on his own motion rectify any mistake apparent from the record of the aAsessment.\n\nThe power of rectification may be exercised subject to two conditions : (I) that there is a mistake apparent from the record of the assessment, and (2) that the order of rectification is made within four years from the date of the assessment sought to be rectified. The mistake which may be rectified need not be in the order itself : it may be in any part of the record or proceeding of assessment of the assessee. But for the purpose of assessment an individual and a firm are distinct entities and even if an individual is a partner of the firm, a mistake discovered because of something contained in the assessment of the firm is not a mistake apparent from the record of assessment of the individual partner. In Kanumarlapaudi Lakshminarayana Chetty v. First Additional\n\nIncorne-tax Officer, Nellore{') in dealing with the question whether the record of the assessment of the firm may be regarded as the record of the assessment of the individual partner, Subba Rao, C.J. speaking for the Court observed, and, in our Judgment, correctly :\n\n\"But it is said that section 35 of the Act even without the amendment would have\n\n(I) [ 1956] 29 I. T. R. •19.\n\nI96Z\n\nThe Income-tax OJfictr, Modros v.\n\nS. K. Habibullah,\n\nlJ.tathas\n\nShahJ,\n\nJ'81\n\nT1t1 /ncorrtta Offictr, .. \\J ctiras\n\nv. . S. K. HabibulkJh,\n\nModra1\n\nShdJ.\n\n720 SUPREME COURT REPORTS [1002] SUPP.\n\nenabled the Income Tax authorities to reopen the assessment on the ground that there was a mistake apparent from tho record. Bat from t.hc record of final asseBBment, it is impol!llihle to say that there was a mistake apparent from the record, for tho a.ssossing authority accepted a certain figure as representing the share of the assessees in the firm and made u final assessment. The mistake is not in the record but by & sµbsequent &1seRBment of the firm it was discovered that the earlier assessment was wrong to the extent of tho assessees' share in the firm. It is not a mistake apparent from the record bnt a mistake discovered from the disposal of another oase\". ·\n\nSection 35(1) of the Income-Tax Act could not therefore be resorted to by the Income-tax authori ties for rectifioation of the assessments of the assessee, for there was no error apparent from the record of those assessments.\n\nThe Income.tax Officer, however, sought to rely upon s. 35(5) whih was incorporated bys. 19 of the Indian Income-tax (Amendment) Act, 1953 (25 of l!l53) with effect from April l, 1952. The clause which was incorporated i1 in the following terms:-\n\n\"(5) Where in respect of any completed aBSessment of a partner in a firm it is found on tho MSessment or reassessment of the firm or any reduction or enhancement made in the income of the firm under section 31, Section 33, Section 33A, Section 33B, Section 66 or Section 66A that the share of the partner in the profit or loss of the firm has not been inoludcd in tho assessem<'nt of the partner or, if inducli>d, is not corre<\"t, tho inclusion of the share in the assessment or the c0rreotion thcreuf, a11 the case may lw, shall he de<\"med to be a rectification of a. miat.a.ke apparent from the record within the\n\nmeaning of this Section, and the provisions of sub-section (I) shall apply thereto accordingly, the period of four years referred to in that sub-section being computed from the date of the final order passed in the case of the firm,\"\n\nClause (5) was one of a group of clauses, added by Act 25 of 1953, dealing with .rectification of assessments. Clause (5) dealt with inclusion of income or correction of the income of a partner in a firm consequent upon assessment or reassessment of the firm of which he was a partner. Clause (6) dealt with recomputation of total income of an assessee in consequence of modifications made in the Excess Profits Tax or the Business Profits Tax payable by an assessee subsequent to an assessment made under the Indian Income-tax Act.\n\nClause (7) dealt with rectification consequent upon modification of orders under s. 23A of the Income-tax Act cl.(8), which was enacted (in the form in which it now exists) by the Indian Finance Act, 1956, dealt with the rectifiaation consequent upon proceedings in reassessment under s. 34 (1) (al. or s. 31 (IA).\n\nThe Legislature by a fiction in all these classes of cases regarded the inclusion, correction, computation or reoomputation as rectification of a mistake apparent from the record and prescribed special terminii recokoning for the period of four years within which the rectification must be made, Under. cl. ( 5) with which alone we are directly concerned in these appeals, the inclusion of the share in the assessment of the partners or the correction thereof is deemed to be a mistake apparent from the record within the meaning of the section, and sub-s. (1) applies thereto accordingly-the period of four years being computed from the date of the final order passed in the case of the firm.\n\nThe discrepancy diiiclosd as a result of assessment. or reassessment of a firm between the share of a partner included in the individual assessment nf that par.tner and his share disclosed in tho\n\nThe lnconirtax Officer, }J.adrus\n\nv, S. K. Hal:iibultah,\n\nMadrcs\n\nTlw lomttox Offkt.r, Madras\n\nS. K. H JbibuUah,\n\nMa./rar\n\nBJuJi J.\n\n722 SUPREME COURT REPORTS rl9621 St.:PP.\n\naRsessment of the firm was not an nror npparPnt from the record within the meaning of~. 3511) and the Legislature t-nacted a fiction making t}1p inclusion of thP share in the aRs•ssment or ccrnc tion thly enacted a fiction of the nature set out in\n\ncl. (5), e are unable to agr<'e with the contention raised hv counsel for the Revenue that the enactment o(thP. fiction was r:r-aburuktnti r, aute!n. R{lcti. fication 1.f the nature contemplated by cl. (/i) could not ha v\" been effected under cl. (I), and to remove\n\ntho lacuna the legislature declared that what waH not a mistake i-hould for the purpose of rectifica. tion of ase\"Rill<'llt bo regarded a8 a mistake apparent from tlw record and provided a terminus for t.be C<'mputation of tho period of four years.\n\nTh~ ,1Hsessments nf tho two firms Wl're com. pleted u long time b•fore April I, l!Jii::!. It is also commo11 ground that the indhidual assessments of the asscssce were not prO\\isional but final aAAeRsments under s. :!3 (:{) of the Inm•me-tax Act.\n\nThe question whi\"h falls to be considered is whether r<'lying upon cl. (5) of H. :15 an Incomotax Officer may rectify tho aso; essment of a person who is a partner of a firm when the assessment of the firm is C 1st of April, I!Jii2.\n\nThe Legislature has given to cl. (;)) a partial r••trosptctivo operation.\n\nThe µrovision .. nacted by cl. (5) is not procedural in charactcr : it affects vested rihts of the Rllsessee. Therefore in the ahscmec of compelling reasons the court would not be ju-itilhd in giving a greater retros1l!'clivity to the prnvi\"ion than is warranted by the plm words us<'cl by the Legislature.\n\nAs observed by\n\nthe Judicial Committee of the Privy Council in Income-tax Commissioner v. Khemchand Ramdas(') :\n\n\" x x x when once a final assessment is arrived at, it cannot, in their Lordships' opinion, be reopened except in the circumtances detailed in sections 34 and 35 of the Act x x x and within the time limited by those section.\" The orders of assessment are, eubject to the provisions relating to appeals, revisions, reassessment and rectification, finitl : it is not open to the Income-tax Officer to reClpen the assessment because he thinks fit to do so.\n\nThe provisions relating to assessments and rectification or reopening thereof are exhaustive, and may not be extended by analogies. The right to rectify an assessment may therefore be exercised in strict compliance with conditions prescribed by tbe statute in that behalf.\n\nBefore April I, 1952, rectification of assessment of an individual ori the disclosure of errors consequent upon assessment of the firm of which be is a partner was not for reasons already stated permissible under cl. ( 1) of s. 35. This power was conferred for the first time by cl. (5) as from April 1, 1952, and by the express words of the clause arose from the assessment of the firm. If by the law prevailing at the time when the assessment of the firm was mad.e, no such result as is contemplated by the new clause (5) arose, to givi> a larger retrospective operation than is dirccted, is to ascribe to the Legislature an intention dift'erent from the one expressed, and to make a larg<'r inroad upon the finality of that assessment than is permitted by the Legislature. Section 35(5) does not purport to amend cl. ( 1) ; that clause is left untouched by the amending statute.\n\nIt~ application, by fiction, is extended to other clauses of cases by declaring what in truth are not mistakes, as mistakes.\n\nClause (5), therefore, confers an\n\n(I) (1938) L. R. 65 I. A. 236, 248.\n\nTile Income-tax Offu:ef', Mcdt-u\n\nS. K. Habibullah,\n\nMadru\n\n&ah J.\n\nlf62\n\nTiu lncolfl#-T ax 0 ffio.r, MaJ•as\n\n8. K. Habilnd/1111,\n\nJ1 ttd, as\n\nShalo J.\n\n724 SUPllEME COURT REPORTS (1962] SUPP.\n\nadditional power of rectification upon the Income tax authorities and \"in the absence of compelling reasonR we will not bt1 justified in upholding the exercise of the power to assessments of firms which have been completed before the date on which the power was invested.\n\nSome assistanco may be derived from the phraseolt>gy used by the legislature in cl. (fil whi<>h was enacted simultaneously with. cl. (5). That chuso provides, omitting parts which ar<' not material :\n\n''Where the exoe@S profits t&x or the busi ness profits tax payable by an asst>BBce has bocn modified x x x x or where any excess profits tax or busineBB profit tall\" has been assessed aft1>r the comple tion of the corresponding 888essmt>nt for incomo-tax (whether before or after the commenC('ment of th11 Indian Income-tax (Amendment) Aet, 1953), and in consequence thereof it is neceasary to recompute the total income of the assesSl'e chargeable to income-tax, such rccomputation shall be deemed to be a recti fication of a mistake apparent from the r1>cord within the meaning of this sectinn, x x x\".\n\nManifestly, by the expreBB provisions contained in\n\ncl. (6) tho fiction applies whether the assessment is completed before or after the commencement of the Indian Income-tax (Amendment) Act, 1953. Even though cl. (6) ia alo made retrospectively operative as from April l, 1952, the legislature has authorised the revenue authorities after April I, H!'i2 to pass\n\nan order recomputing the total income of the assessee whether or not the asseasm,•nt was completod before the commencement of the Indian\n\nInco•oe tax (Amendmcnti Act, 1953. It is true that by the Explanation to that olaue. for the purpo8ed of this sub-soction, where the assessee is\n\na firm, the provisions of sub-s. (5) shall also apply as they apply to the rectification of the assessment of the partners of the firm, but thereby an intention to give a larger retrospective operation to cl. ( 5 ), in so far as it deals with rectification of assessments of partners consequential upon the completion of the assessment of the firm in which thay are partners, is not indicated. When the Legislature under\n\ncl. (6) of~. 35 expressly authorised rectification in the circumstances mentioned therein even if the\n\nassssment has been completed before the Indian Income-tax (Amendment) Act, 1953, and it made no such provision in cl. ( 5), it woald be reasonable to infer that the Legislature did not intend to grant to the revenue authorities a power to rectify assessments falling within cl. (5) where the firm's assessment was completed before April 1, 1952.\n\nIn our view, it was rightly held in Kandan Lal\n\nv. Income-tax Officer(') following Kanumarlapudi Lakshminarayana Ghetty v. First Additional Income-\n\nTax Officer, Nellore (2) that cl.\n\n(5) of s. 35 of the Indian Income-tax Act, which was enacted by the Income Tax (Amendment) Act, 1953, was not declaratory of pre-existing law, and as it clearly affected vested rights which had accrued to the assessee, must be deemed to have come into force from April 1, 1952. It had no greater retrospective effect than was expressly granted to it. The power to rectify assessment of a partner consequent upon the assessment of the firm of which he is a partner by including or\n\n\"orrecting his share of profit or los c0n therefore be exercised only in case of assessment of the firm made on or after April I, 1952. The Income-tax Officer has no jurisdiction under cl. (5) of s. 35 of the Act to rectify tho assessment of a partner of a firm consequent upon the assessment or\n\n(I) ll95'l] 37 I.T.R. 3:li.\n\n(2) li956] 291. T. R. 419.\n\n191!\n\nTire lru:ome•tax Officer, Mat!ias\n\nS. K. Habibultah,\n\nMadras\n\nShah J.\n\n19112 n. r ...... i.x Ofiur, JIHros\n\n. ' S. Ir. Huihll.V., Jlw.,\n\nSWJ.\n\n726 SUPREME COU!t'f REPOI~T~ [ l ·• 2j SU Pf.\n\nreaseessment of tho firm disclosing an error made before April I, 19.5~.\n\nThe appeals therefore fail and a.re dismissed with costs. One hearing fee.\n\nAppeals dismissed.\n\nKANBI KARSAN JADAV v.\n\nSTATE OF GUJARAT\n\n(J. L. KAPUR and R.to.GIIUBAR DAYAL, , JJ.) Criminal Trial-Et-idenct of anrot'-r-Corroioration on mat.rial partiou/ara-Other circum•tanct• to be con•Utrtd- CMniical !Czaminer'• evidenct, if can bt taken into Conoi both of the appellant as well as the deceased.\n\nThe apprll.mt contended that the evidence of the approver, even 1h.Jugh it had been accepted as true, was not corrohorated in 1naterial particulan connecting the appellant with the ofJCncc.\n\nNone of the recoveries arc corroborative of the statement of the approver to the extent of connecting the appcllanl with the offence committed ; on the other hand they are somewhat contradictory of the statement. fhc evidence of the CheJnical Examiner was not sufficient to prove that hairs on the scraf were of the appellant or of the deceased because the Chemical Examiner was no expert on this matter and his evidence WM not admissible under s. 45 of the Evidence ,\\ct and, at the most, according to the Chemical Examiner the hairs resembled those of the appellant.\n\nHeld, that where the evidence of the approver is held not to be very helpful to the prosecution other circumstance>", "total_entities": 39, "entities": [{"text": "S. K. HABIBULLAH, MADRAS", "label": "RESPONDENT", "start_char": 75, "end_char": 99, "source": "metadata", "metadata": {"canonical_name": "S. K. HABIBULLAH, MADRAS", "offset_not_found": false}}, {"text": "S. K. DAs", "label": "JUDGE", "start_char": 102, "end_char": 111, "source": "metadata", "metadata": {"canonical_name": "S.K. DAS*", "offset_not_found": false}}, {"text": "s. 35", "label": "PROVISION", "start_char": 1102, "end_char": 1107, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 3", "label": "PROVISION", "start_char": 1545, "end_char": 1549, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 35", "label": "PROVISION", "start_char": 2482, "end_char": 2487, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 35", "label": "PROVISION", "start_char": 2897, "end_char": 2902, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 35", "label": "PROVISION", "start_char": 5253, "end_char": 5258, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 5266, "end_char": 5280, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 35", "label": "PROVISION", "start_char": 5922, "end_char": 5927, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 6080, "end_char": 6088, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 35( I)", "label": "PROVISION", "start_char": 6861, "end_char": 6875, "source": "regex", "metadata": {"statute": null}}, {"text": "section 35", "label": "PROVISION", "start_char": 8307, "end_char": 8317, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 35(1)", "label": "PROVISION", "start_char": 9275, "end_char": 9288, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-Tax Act", "label": "STATUTE", "start_char": 9296, "end_char": 9310, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 35(5)", "label": "PROVISION", "start_char": 9555, "end_char": 9563, "source": "regex", "metadata": {"statute": null}}, {"text": "section 31", "label": "PROVISION", "start_char": 9949, "end_char": 9959, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 33", "label": "PROVISION", "start_char": 9961, "end_char": 9971, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 33A", "label": "PROVISION", "start_char": 9973, "end_char": 9984, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 33B", "label": "PROVISION", "start_char": 9986, "end_char": 9997, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 66", "label": "PROVISION", "start_char": 9999, "end_char": 10009, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 66A", "label": "PROVISION", "start_char": 10013, "end_char": 10024, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 11118, "end_char": 11132, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 23A", "label": "PROVISION", "start_char": 11216, "end_char": 11222, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 11230, "end_char": 11244, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Indian Finance Act, 1956", "label": "STATUTE", "start_char": 11315, "end_char": 11339, "source": "regex", "metadata": {}}, {"text": "s. 34", "label": "PROVISION", "start_char": 11420, "end_char": 11425, "source": "regex", "metadata": {"linked_statute_text": "the Indian Finance Act, 1956", "statute": "the Indian Finance Act, 1956"}}, {"text": "s. 31", "label": "PROVISION", "start_char": 11438, "end_char": 11443, "source": "regex", "metadata": {"linked_statute_text": "the Indian Finance Act, 1956", "statute": "the Indian Finance Act, 1956"}}, {"text": "sections 34 and 35", "label": "PROVISION", "start_char": 14680, "end_char": 14698, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 35", "label": "PROVISION", "start_char": 15491, "end_char": 15496, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 35(5)", "label": "PROVISION", "start_char": 16042, "end_char": 16055, "source": "regex", "metadata": {"statute": null}}, {"text": "(1938) L. R. 65 I. A. 236", "label": "CASE_CITATION", "start_char": 16314, "end_char": 16339, "source": "regex", "metadata": {}}, {"text": "Amendmcnti Act, 1953", "label": "STATUTE", "start_char": 18136, "end_char": 18156, "source": "regex", "metadata": {}}, {"text": "s. 35", "label": "PROVISION", "start_char": 19332, "end_char": 19337, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 19352, "end_char": 19366, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 35", "label": "PROVISION", "start_char": 20002, "end_char": 20007, "source": "regex", "metadata": {"statute": null}}, {"text": "Penal Code, 1860", "label": "STATUTE", "start_char": 20823, "end_char": 20839, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "IAdia EWknct Act, 1872", "label": "STATUTE", "start_char": 20863, "end_char": 20885, "source": "regex", "metadata": {}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 20987, "end_char": 21004, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 45", "label": "PROVISION", "start_char": 22075, "end_char": 22080, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_726_733_EN", "year": 1962, "text": "19112 n. r ...... i.x Ofiur, JIHros\n\n. ' S. Ir. Huihll.V., Jlw.,\n\nSWJ.\n\n726 SUPREME COU!t'f REPOI~T~ [ l ·• 2j SU Pf.\n\nreaseessment of tho firm disclosing an error made before April I, 19.5~.\n\nThe appeals therefore fail and a.re dismissed with costs. One hearing fee.\n\nAppeals dismissed.\n\nKANBI KARSAN JADAV v.\n\nSTATE OF GUJARAT\n\n(J. L. KAPUR and R.to.GIIUBAR DAYAL, , JJ.) Criminal Trial-Et-idenct of anrot'-r-Corroioration on mat.rial partiou/ara-Other circum•tanct• to be con•Utrtd- CMniical !Czaminer'• evidenct, if can bt taken into Conoi both of the appellant as well as the deceased.\n\nThe apprll.mt contended that the evidence of the approver, even 1h.Jugh it had been accepted as true, was not corrohorated in 1naterial particulan connecting the appellant with the ofJCncc.\n\nNone of the recoveries arc corroborative of the statement of the approver to the extent of connecting the appcllanl with the offence committed ; on the other hand they are somewhat contradictory of the statement. fhc evidence of the CheJnical Examiner was not sufficient to prove that hairs on the scraf were of the appellant or of the deceased because the Chemical Examiner was no expert on this matter and his evidence WM not admissible under s. 45 of the Evidence ,\\ct and, at the most, according to the Chemical Examiner the hairs resembled those of the appellant.\n\nHeld, that where the evidence of the approver is held not to be very helpful to the prosecution other circumstance>\n\nbesides the evidence of tbe approver has to be considered.\n\nThe mere fact that the dead body was pointed out by the appellant or was discovered as a result of a statement made by him would not necessarily lead to the conclusion of the offence of m\"Jrder.\n\nIn the present case beside the evidence of the approver, the appellant's pointing out of the dead body, his pointing out the silver buttons of the deceased which were stained with human blood and the presence of his hairs on a pania (scraf) on which there were the hairs of the deceased also, are important facts which are sufficient evidence to connect the a.ppellant with the commission of the offence.\n\nHeld, further, that writers of medical jurisprudence have stated that from microscopic cxa1nination of the hairs it is possible to say whether they are of the same or of different colours or sizes and from the examination it lnay help in deciding where the hairs come from.\n\nVemireddy Satyanarayan Reddy v. State of Hyderabad, [1956] S.C.R. 247 and Wasim Khan v. State of Uttar Pradesh, [I ~56] S.C.R. 19 l, relied on.\n\nCRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 223 of 1959.\n\nAppeal by special leave from the judgment and ordered dated April 14, 1959, of the former Bombay High Court (Rajkot Bench) at Rajkot in Criminal Appeal No. 84 of 1958.\n\nNur-ud-din Ahmed and K. L. Hatki for appel lant.\n\nH. R. Khanna and R.H. Dkebar, for respondent.\n\n1962. January 24. The Judgment of the Court was delivered by\n\nKAPUR, J.-The appellant and two others were convicted by the Additional Sessions Judge, Gohihvad, under ss. 302 and 21)1 of the Indian Penal Codu for the murdPr of Kanji aud they were sentenced to imprisonment for life under the former section and to seven years' rigorous imprisonment under the latter. The sentenc\" were eoncur-r\"nt.\n\nOn appeal the High Court set aside the conviction\n\nKonbi liarsan\n\nJadao\n\nv. litale of Gujar•I\n\nKap\"' J.\n\n'962\n\nKwiKu- Jq .. v.\n\nSW. of GujOT•I\n\nK-J.\n\n728 SUPREME COCltT REPORTS [1962] SUPP.\n\nof Nanji Ravji but upheld the convictions and l!t'n tenccs of the appollant and Karamshi Bhawan. The appellant has come in appeal to this Court by Special leave.\n\nThe deceased Kanji was rather an unsavoury character in villag evidence produced it had not been shown to belong to the appellant but to hiR father and th(' evidencc of the Chemic'.\\! Examiner was not sufiicieut, to prove that the hairs on the scarf were of the appellant or of the deceased because the Chemical Examiner was certainly no expert on this matter ancl his evidence was not admiBBible under s. 4i) of the Evidence Act, and at the most, according to tho Chemical Examiuer's report the hairs resembled those of the appeilant. And secondly according to the approver the dead body of the deceased was wrapped in his own pania (scarf). lt was further submitteci that the statement in regard to tho recovery of the trunk and the head will only show that tho appellant knew where tho trunk and the head were, which at the most would lead to an inference of an offence under s. :10 l and not of s. 302.\n\nWhat the law requires in the case of an accomplice's evidence is that there should be such corroboration of the material Parts of the story connecting the accused with the crime as will satisfy reasonable minds that the approver can be regarded\n\nas a truthful witness. The corroboration need not be direct evidence of the commission of the offence by the accused.\n\nIf it is merely circumstantial evidence of his connection with the crime it will be sufficient and the nature of the corroboration wiil depend on and vary with the circumstances of each case.\n\nVemireddy Satyanarayan Reddy v. The State of Hyderabad(').\n\nThe confessional statement mad(• by the approver on March 31, 1958 gave the following facts connecting the appellant with the murder. ( l) The appdlant gave dharia blow to the decl'Jased.\n\nThe dharia bad li!ready been discovered and it has been disregarded from the evidence by the High Court as being of no importance. The next thing stated by the approver was that the deceased's body was tied in a pania (scarf).\n\nHe did not state that the scad in which it was bound belonged to the appellant. The next fact stated by him was that the appellant carried the body of the deceased and then it was buried in a pit and lastly he stated that the appellant h11d told him that the head of the deceased had been thrown into a well.\n\nNone of these recoveries in the circumstances of this case are corroborative of the statement of the approver to the extent of connecting the appellant with the offence commited. On the other hand, they are somewhat contradictory of the statement because the pania (scarf) which was found in the pit has now been stated to belong to the appellant.\n\nThe dead body was not found in tile pit, the head had already been discovered and the trnuk had also been taken out of the well. In these circ•umstances it was submitted that the approver's statement cannot be said to have been corroborated in material particulars.\n\nBut there are other circumstances which have to be considered even if the evidence of the approver is held uot to be very helpful to the prosecution. Firstly, thern is the pointing out of\n\n(I) [1956] S. C.R. 247. 252.\n\nKaribi Karsan\n\nJridov\n\nState ,, JG1ljara(\n\nKap•1r J.\n\n1\\anbi K ed a8 well as of the t•ppellant were found on tl:.at scarf.\n\nIt was argm•d that the finding of the hairs was of no conHequence and at least the Chemical Examinrr \"'as wit the proper 1xpert who could depose a& to the similnrity or\n\notherwise of thl' hair~. Tho writers on mt>dical jurisprudence, however, ha, e stated that from the microscopic examination of th•· hairs it i:; posible to.say whether thoy 11r0 (If th0 same or of 1lifferi; nt colours or Ri1,.-~ and from 1.hA <•Xnmination it ma:v help in deciding where the hairs come from.\n\n\\I) [19:.0J S. C.R. 191.\n\nTaylor's Medical Jurisprudence (1956 Edn.) Voi. 1, at page 122, some cases ar~ given showing that hairs were identified as belonging to particular persons.\n\nThus, we have besib 'Court in Civil Writ Petition No. 30 of 1956. ,.. .\n\nR. 8. Nnru.la, for tho appellants.\n\nB. J(. Khanna and I'. D. 11! enon, for the res pondents .\n\n.'::. 1,. Prmdhi, for the intcrvenNs. l962. .J 11nuarv 24.\n\nTho .Tudgrnf\\nt of the Conrt was dn\\jvC'rod hy\n\n\\VAis<'HOO, J.-This is !tn app<'al by special knve against fhe nrdnr <'f .1]1P P11nj11h High Conrt\n\nsummarily rejecting a petition filed by the appellants under Art. 226 of the Constitution. The bfr:f facts neceEsary for present purposes are these, The appellants migrated in 1947 from what is now West Pakistan and settled in two villages, viz., Sheikhapintl anr'I Kot.la. They were given temporary allotment of agricultural land in the two villages under the East Punjab Evacuees' (Administration of Property) Act, (No.XIV of 1947) then in force.\n\nThereafter a scheme was formulated in 1948 for q11asi-perm&nent allotment of agricultural land to ownerR of land in West Pakistan after the East Punjab Refugees (Registration of Claims) Act, (No. VIII of 1948) was enacted.\n\nIn July 1949, a notification was issued stating the condition under which allotment of awicultural land would be made to displaced persons from West Pakistan. This allotment was quasi permanent in the smse that it was to remain in force so long as the land was t.o remain vested in the Custodian of Evacuee Property. In pursuance of this notification, land was allotted in the two villages to the appellants on quasi-permanent basis in I \\.149 and the appellants have remained in posseRsion thereof eversince. Originally Jann was classified into two kindR, namely, (i) urban m; d\n\n(ii) agricultural land. Later in 1949, how<\"ver, a third classification, namely sub-urhan was also introd11ceCl in practice with respPC't tv agricultural land in the neighbourhood of Cl3rtain towns and a notification seems to have been issued with reRpect to that specifying the villages land in which was considered to be a sub-urban (vide Chap. V of Land Settlement Manual by Tarlok\n\nSingh). But the two village~ in which land was allotted to the appellants were not included in the notification with respect to sub-urban land.\n\nIn August 1950 after tho quasi-permanent allotmPnt in favour of the appellants had hnen\n\nBasont lln to the allottl'.es therein. The . appellants objected before the Director General of Rehabilitation to the villages being graded ns suburb&n.\n\nThe Director General called for a report from the Revenue Assistant (Rehabilitation) and eventually passed an order on January 12, 1951 that it was not desirable at that stage to cause any disturbance to the allotments made in theae two villages by declaring them .sub.urban and that the atatm quo should continue. This however did not end the matter and in February, 1952 the Director of Rehabilitation passed en order in effect declaring these vilhges 11.8 sub-urran with the result that the allotment ma.do to the appe1Iants would havo to be reduced. It also appears thi.t some order was p&11scd in April, 1952 on paper alloting the extra land which would be rele&llt'd from the allotment of the appellants to other persons who have a11pearl'd as intervcners in this appeals. But thi~ ordi>r rPmained merely on pa.per and has not been carried mlt so far.\n\nWhen the appellants came to know of the order of February ~!). 11152, they filed a revision before the Custodian Guneral for setting aside that order. The revision , rame up before the Dl'put y Custodian General for hearing in January l 9fi6. By then however certain changes in the law and the Rules had been made.\n\nFirstly, there was an amendment in r. 14 (6) of die Ari ministration of Evarme prope1 ty (Central)Ruks\n\nfr'lmed under the Administration of Evacuue prop<'rty Act, (Centrn.l Act XXXI of 1950).\n\nFurther, the Displacrd persons (Compensation and Rrhabilitation) Act, Centrnl Act XLIV of 1954, (hereinaftt'r nferrd to as the Act) had b!'en pnssed.\n\nUndl'r tho amenrlmrnt tn r. 14(n) power\n\nmt~ gil't'll for canc<'llatinn or variatio11 of any\n\nallotment of rural evauee property on a quasipermanent basis, where the allotment was to be cancelled or varied in accordance with the general or special order of the Central Government. It appears that in the meantime correspondence passed between the Punjab Government and the Central Government and an order under the amended r. 14 (6) (iii) (d) was obtained on October 11,1955.\n\nTherefore, when the revision came up before the Deput1 Custodian General he held that in view of r. 14 (6) (iii) (d) of the Rules it was open to the Central Government by special order to direct cancellation or variation of the allotment made in thjs case in favour of the appellants and that the Central Government had on the representation of the Punjab Government agreed to declare thes.e two villages as suburban by its order dated October ll, 1955; therefore he held that whatever was being done after October 11, 1955 was in pursuance of the order of the Central Government.\n\nHe therefore held that the impugned order of February 29, 1952, even if it was revisable, no longer held the field and action was to be taken in future under the order of the Central Government passed on October 11, 1955. Therefore, the revisions had become infructuous and he dismissed them.\n\nThen followed the writ petition by the appellants in the Punjab High Court, which was dismissed summarily. As leave was refused by the High Court, the appellants applied for special leave to this Court, which was granted; and that is how the matter has come up before us.\n\nThe main contention on behal£ of the appellants before us is that after the coming into force of the Act and the notification made thereunder on March 24, 1955 under s. 12, the land allotted to the appellants in the two villages. ceased to be evacu'le property and became part of the compensation pool created thereunder a.nd therefore the Central\n\nBasani Rom\n\ny, Union •/Jr.di•\n\nWancMo J.\n\n1115!\n\nB.-&...\n\nv. u,.;.,, of btdi•\n\nWacAooJ.\n\nGovernment had no. power left to act under the Central Act XXXI of 1950 and tho Rules framed thereunder.\n\nIn consequence the order pa.sscd, by the Central Government on October II, 1955 on the basis of which the Deputy Custodian General rejected the revision petitions filed on behalf of the appellants was not within the competence of the Central Government and no action could bo taken by virtue of that order declaring the two villages as sub-urban. Therefore it was not open to the authorities under the Central ActXXXI of 1950 to take any action under that order with the object of varying the allotment made in favour of the appellants by reducing the area allotted to thorn. It is further urged that whatever further action has to be taken after the notification dated March 24, 1955 can only be taken under the Act and that no such action has in fact boon taken.\n\nWe are of opinion that there is force in this contention of the appellants and it must prevail.\n\nSection 12( I) of the Act provides that \"if the Central Government is of opinion that it is necessary to acquire any evacuoo property for a pubJic pur\n\npose, being a purpose oonneoted with the rei'ief and rehabilitation of displaced persons, including payment of compensation to euch persons, the Central Government may at any time acquire such evacuee property by publishing in the Official Gazette a notification to the effect that the Central Govern\n\nment bas decided to acquire such evacuee property in pursuance of this section\". Sub-section (2) then provides that \"'on the publication of a notification under sub-section (l), the right, title and interest of any evacuee in the evacuee property specified in the notification shall ......... be extinguished and the evaonee property shall vest absolutely in the Central Government free from all encumbrances.\" Sub section ( 4) provides that all evacuee property acquired under this section shall form part of the\n\ncompensation pool.\n\nSection 14 provides for the constitution of a compensation pool.\n\nSection 16 gives powers to the Central Government for the management of the compensation pool, including the appointment of such officers as it may deem fit (referred to as managing officers) or constitution of such authority or corporation, as it may deem fit (re, ferred to as managing corporations). Section 17 provides for functions of managing officers and managing corporations. Section 19, which is important, provides that \"notwithstanding anything contained in any contract or any other law for the time being in force but subject to any rules that may be made under this Act, the managing offlcer or managing corporation may cancel any allotment or termina1e any lease or amend the terms of any lease or allotment under which any evacuee property acquired under this Act is held of occupied by a person, whether such allotment or lease was granted before or after the commencement of this Act.\" Rules have been framed under the Act specifying the circumstances under which a managing officer or a managing corporation may cancel an allotment or terminate a lease or vary the terms of any such lease or allotment (see r. 102). It is not in dispute that the evacuee property in these two villages was notified under s.12(1) of the Act on March 24, 1955. The cone!lquence of that notification is that all rights, title and intE•rest of the evacuee in the property\n\ncease~ with the result that the property no longer remamed evacuee property. Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act No. XXXI of 1950 or the Rules frameAYATULLAH and J.C. SHAH, JJ.)\n\nCentral Exci.e-Control oj tobacco-System of auction8- Licence for storage-Repeal qf state law-Cochin and Travancore enactments, if lau• c.orrespond1\"ng to Central E.xcises Act-'' Excise duty\", meaning of-Cochin Tobacco Act, 1084 (Cochin 7 of 1084 M. E.)-1'ravancore Tobacco Regulation, 1087 (Travancore 1of1087 M.E.) -Finance Act, 1950 (25 of 1950), 88. 11(1), 13 (2).\n\nIn 1909 the Ruler of the erstwhile State of Cochin enacted the Cochin Tobacco Act of 1084 (M.E.) with the object of controHing the cultivation, production, manufacture, storage and sale of tobacco.\n\nRules were framed under the Act for regulating the cultivation, possession, transportation and sale of tobacco and a system of licensing was introduced for that purpose.\n\nLicences for storage \\Vere to be annual and to be issued on payment of licence fee. The authorities administering the provisions of the Act and the Rules framed thereunder were the Commissioner of Excise and his subordi\" natcs, The system in force for the collection of tobacco revenue was to auction what were called A class and B class shops.\n\nA law similar to that prevailing in Cochin was promulgated in 1911 by the Ruler ofTravancore as the Travancore Tobacco Regulation of 1087 (M.E.). The two States merged themselves in 1919 as the State ofTravancore Co<\"Mn but the two Acts continued to remain in force in the respective territories. On April I, 1950, after the Constitution of India pad come into force and Travancore Cochin had become a\n\nB .. antB.,.\n\n•• U•U..of l•'i• --", "total_entities": 29, "entities": [{"text": "d. ---\n\nBASANTRAM", "label": "PETITIONER", "start_char": 762, "end_char": 779, "source": "metadata", "metadata": {"canonical_name": "BASANT RAM", "offset_not_found": false}}, {"text": "UNION OF INDIA (P. B. GAJENDRAGADKAR", "label": "JUDGE", "start_char": 785, "end_char": 821, "source": "metadata", "metadata": {"canonical_name": "P.B. GAJENDRAGADKAR*", "offset_not_found": false}}, {"text": "ss. 12, 14, 16 and 19", "label": "PROVISION", "start_char": 1122, "end_char": 1143, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 12", "label": "PROVISION", "start_char": 2738, "end_char": 2743, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 19", "label": "PROVISION", "start_char": 3111, "end_char": 3116, "source": "regex", "metadata": {"statute": null}}, {"text": "was no power left in the Central Government to act under Rule", "label": "STATUTE", "start_char": 3139, "end_char": 3200, "source": "regex", "metadata": {}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 4096, "end_char": 4104, "source": "regex", "metadata": {"linked_statute_text": "There was no power left in the Central Government to act under Rule", "statute": "There was no power left in the Central Government to act under Rule"}}, {"text": "Cl3", "label": "PROVISION", "start_char": 5473, "end_char": 5476, "source": "regex", "metadata": {"statute": null}}, {"text": "Centrnl Act XLIV of 1954", "label": "STATUTE", "start_char": 7835, "end_char": 7859, "source": "regex", "metadata": {}}, {"text": "s. 12", "label": "PROVISION", "start_char": 9708, "end_char": 9713, "source": "regex", "metadata": {"statute": null}}, {"text": "Central Act XXXI of 1950", "label": "STATUTE", "start_char": 10027, "end_char": 10051, "source": "regex", "metadata": {}}, {"text": "Therefore it was not open to the authorities under the Central Act", "label": "STATUTE", "start_char": 10433, "end_char": 10499, "source": "regex", "metadata": {}}, {"text": "Section 12( I)", "label": "PROVISION", "start_char": 10949, "end_char": 10963, "source": "regex", "metadata": {"linked_statute_text": "Therefore it was not open to the authorities under the Central Act", "statute": "Therefore it was not open to the authorities under the Central Act"}}, {"text": "Section 14", "label": "PROVISION", "start_char": 11938, "end_char": 11948, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 16", "label": "PROVISION", "start_char": 12004, "end_char": 12014, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 17", "label": "PROVISION", "start_char": 12307, "end_char": 12317, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 19", "label": "PROVISION", "start_char": 12389, "end_char": 12399, "source": "regex", "metadata": {"statute": null}}, {"text": "s.12(1)", "label": "PROVISION", "start_char": 13228, "end_char": 13235, "source": "regex", "metadata": {"statute": null}}, {"text": "s.19", "label": "PROVISION", "start_char": 13873, "end_char": 13877, "source": "regex", "metadata": {"linked_statute_text": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act", "statute": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act"}}, {"text": "sections 12, 14, 16", "label": "PROVISION", "start_char": 14072, "end_char": 14091, "source": "regex", "metadata": {"linked_statute_text": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act", "statute": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act"}}, {"text": "s. 12( I)", "label": "PROVISION", "start_char": 14140, "end_char": 14149, "source": "regex", "metadata": {"linked_statute_text": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act", "statute": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act"}}, {"text": "s. 12", "label": "PROVISION", "start_char": 14508, "end_char": 14513, "source": "regex", "metadata": {"linked_statute_text": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act", "statute": "Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act"}}, {"text": "s. 19", "label": "PROVISION", "start_char": 15064, "end_char": 15069, "source": "regex", "metadata": {"statute": null}}, {"text": "Central Act XXXI of 1950", "label": "STATUTE", "start_char": 15195, "end_char": 15219, "source": "regex", "metadata": {}}, {"text": "Central Act XXXI of 1950", "label": "STATUTE", "start_char": 15632, "end_char": 15656, "source": "regex", "metadata": {}}, {"text": "Cochin Tobacco Act, 1084", "label": "STATUTE", "start_char": 16595, "end_char": 16619, "source": "regex", "metadata": {}}, {"text": "Tobacco Regulation, 1087", "label": "STATUTE", "start_char": 16657, "end_char": 16681, "source": "regex", "metadata": {}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 16709, "end_char": 16726, "source": "regex", "metadata": {}}, {"text": "Constitution of India", "label": "STATUTE", "start_char": 17802, "end_char": 17823, "source": "regex", "metadata": {}}]} {"document_id": "1962_2_741_769_EN", "year": 1962, "text": "2 S.C.R.\n\nSUPREME OOURT REPORTS 741\n\nWe should however like to make it clear that we express no opinion on the controversy bet; ween the appellants and the interveners who are left to such remedies as may be avriilable to them under the law. --\n\nA.B. ABDULKADIR AND OTHERS\n\nTHE STATE OF KERALA AND ANOTHER\n\n(AND CONNECTED APPEALS) (B. P; SINHA, c. J., P. B. GAJENDRAGADKAR, K. N.\n\nWANOHoo, M. HU>AYATULLAH and J.C. SHAH, JJ.)\n\nCentral Exci.e-Control oj tobacco-System of auction8- Licence for storage-Repeal qf state law-Cochin and Travancore enactments, if lau• c.orrespond1\"ng to Central E.xcises Act-'' Excise duty\", meaning of-Cochin Tobacco Act, 1084 (Cochin 7 of 1084 M. E.)-1'ravancore Tobacco Regulation, 1087 (Travancore 1of1087 M.E.) -Finance Act, 1950 (25 of 1950), 88. 11(1), 13 (2).\n\nIn 1909 the Ruler of the erstwhile State of Cochin enacted the Cochin Tobacco Act of 1084 (M.E.) with the object of controHing the cultivation, production, manufacture, storage and sale of tobacco.\n\nRules were framed under the Act for regulating the cultivation, possession, transportation and sale of tobacco and a system of licensing was introduced for that purpose.\n\nLicences for storage \\Vere to be annual and to be issued on payment of licence fee. The authorities administering the provisions of the Act and the Rules framed thereunder were the Commissioner of Excise and his subordi\" natcs, The system in force for the collection of tobacco revenue was to auction what were called A class and B class shops.\n\nA law similar to that prevailing in Cochin was promulgated in 1911 by the Ruler ofTravancore as the Travancore Tobacco Regulation of 1087 (M.E.). The two States merged themselves in 1919 as the State ofTravancore Co<\"Mn but the two Acts continued to remain in force in the respective territories. On April I, 1950, after the Constitution of India pad come into force and Travancore Cochin had become a\n\nB .. antB.,.\n\n•• U•U..of l•'i• --\n\nA. B. Al>iulkoiir\n\ny, n. ,..,. oJ lf\".i.\n\nSUPREME COURT REPORTS [1962) SUPP.\n\nPart B State thereunder bys. 11 of the Finance Act, 1950, the 0:ntral, Excises and Salt.Act, 19#, was extended to that State.\n\nSection 13(2) of the Finance Act, 1950, provided that \"if immediately before the !st day of April, !9j0, there is in force in any State other than Jammu and Kashmir a law corresponding {o, but other than, 8'n Act referred to in subs. (I) or (2) of r. 11, such Jaw is repealed with effect from the said date., .. . . \" After thi• provision in the Finance Act, 1950, the Rules which we1c in force on April I, 1950, were changed in the Cochin area by a notification dated August 3, l9j0, and the system of auction sales of A Class and B Cla!S shops was done away with and instearl graded licence fees were introduced for various classes of licensees. Similar change was made for the Travancore area by notification dated January 25, 1951.\n\nThe appellants who were carrying on busines.s in tobacco within the territoriCJ of Travancore and Cochin challenged the legality of the notifications of August 3, 1950, and January 25, 1951, on the ground that the Cochin Tobacco Act and the Travancore Tobacco Regulation under which the notifications were purported to be issued, were law corresponding to the Central Excises and Salt Act, 1944, and so they stood repealed from April I, 1950, by virtue of the operation of ss. 11 and 13(2) of the Finance Act.\n\nIt was contended for the State of Kcrala that the main feature of the Central Excises and Salt Act, 1944, was the impo>ition of a duty of excise on goods produced or manufactured in India and that there was no provision for charging duty in the Cochin Act or the similar Travancore Act and therefore all these provisions in the Rules for the control of tobacco from the time of cultivation to the time of the final stage of sale to the consumer, evm though they were similar to the Rules und.\n\n1962. January 24. The Judp:ment of B. P.\n\nSinha., C. J., P. B.\n\nGajendragadkar,\n\nK. N .\n\nWanohoo and M. Hidayatullah, JJ., was delivered by Wanchoo, J., J. C.\n\nShah, , J., delivered a separate judgment.\n\nWANCHOO, J.-These five appeals on certificates granted by the High Court of Kerala raise a common question of law and will be dealt with together. Two of them (appeals 89 and 90) are from what was formerly the Cochin area and the other three are from what was the Travancore area.\n\nThey relate to a tax on tobacco in these areas. As\n\nthe facts, laws and rules in the two areas are similar we propoiie to deal in detail with the\n\nappeals from the Cochin area.\n\nIn 1909, Act VII of 1084 was pa811ed by the Maharaja of Cochin to consolidate and amend the law relating to tobacco and was called the Cochin Tobacco Act, VII of I 084 (hereinafter called the Cochin Act). Section 4 of the Cochin Aot prohibited tho p081!ession for sale, transport, import or export, sale and cultivation of tobacco exoept as permitted under the Act or the Rules framed thereunder. l'ection 5 of the Act gave power to the Diwan to make niles from time to time consistent with the Act to permit absolutely or subject to any conditions, and also to regulate the possession for ea.le, transport, import or export, ea.le and cultivation of tobacco as well as the form of duty leviable on the sale of tobacco by retail. The remaining provisions of the Aot deal with offences, prosecutions, punishment, confiscation and other ancillary matters\n\nuch as arrest and eiezure, with which we are not concerned in the present appeals. Rcferenoe may however be made toe. 18 which provided that \"no\n\naction shall lie against the Sirkar or against any officer of tho Excise department for damages in any civil court for any act booa fid, e, done or ordered to be done in pursuance of this Act, or of any law for\n\n2 S.C.:i.:t.\n\nSUPREME COURT REPORTS 745\n\nthe time being in force relating to tobacco revenue.\n\nRules were framed under the Cochin Act called the Tobacco Cultivation Rules, which, by the first rule pMvided that \"the cultivation of tobacco plant is prohibited except under a licence and shall be restricted to such parts or localities of\n\nthe State, as may, from time to time, be fixed by the.Diwan ........................ \" Rule 3 provided for drying, curing, manufacturing and storing of the tobacco, cultivated in the State, to be done under the supervision of an officer of the Excise Depar~ ment in licened manufacturing yards and storehouses. Rule 4 provided for licences for manufacturing yards and store-houses. Rule 5 laid down that the licences would be in force for one official year and were to be issued on payment of a fee of H.s. 50/- for each liccnce, Under r. 6, the tobacco crop could only be harvested after permission obtained from the Inspector of Exdse and nder r. 7 the harvesting was to be done by the licensed cultivator under the general superintendence of the Sub-Inspector of the locality in which the area cultivated lay and the harvested crop was to be transported only under permits granted by him from such area to the manufacturing yard where alone manuf ... cture was to be undertaken. Rule 8 provided for the maintenance of a stock book by a licensee of a storehouse or a manufacturing yard.\n\nRule 13 provided that the licensed manufacturer and the storehouse keeper would sell or otherwise dispose of his stock only to licensed dealers and there was pr0hibition against the disposal or sale of tobacco to any person who had not the required license to possess the same. Rule 15 made it an off, nce for any one to cultivate, dry, cure, manufacture, store, transport, S<' II or otherwise dispose of tobacco in contravention of the Rules.\n\nIn addition to these Rules, there were further Rules also framed under the Cochin Act with\n\nA. B. Ab&lkadir ,,\n\nThe Siok of K0, there will be no law in operation which wou Id justify the framing of the new Ru !es either in August 1950 or in January l!l; H and it would then be unneePssary to consider whether a law contain ing provisions similar to those contaii!cd in the notification would be within the oompetence of the State lgislature under item 62 of List IC of the Seventh Schedule. That question would only arise if the Cochin Act or tho similar Tra.vancorc Act survived the repeal effected by s. 13(2) of the Finance Act.\n\nWe have therefore to see what the provisions of the Finance Act are in this connection. As already indicated, s. 11( 1) of the Finance Act extends the Central Act and the Rules and Orders made thereunder which were in force immediately after the commencement of the Finance Act to all Part B States, except the State of Jammu and Kashmir. Consequently, the Central Act as well as the Rules and Orders made thereunder bcamo applicable to the Part B State of Travancore-Cuehin from April 1, 1950. Further s. 13(2) of the Finance Act specifically provides that from April 1, 1050, any law corresponding to the Central Act, will be repealed from that date. The contention on behalf\n\nof the appellants is that the Coehin Aet as well as thto similar Travancore Act was a law correponding to the Central Act and therefore stood repealed. as from April l, 1950, under s. 13(2) of the Act and it\n\nis this contention that we have to examine.\n\nIt was pointed out b) this Court in The CUBtodia, n of Evacuee Property v. Khan Saheb Abdul Shakoor, etc. (' ). that whete the Act repealed provides substantially for all matters contained in the Act effecting the repeal there is correspondence between the two Acts and the earlier Act would thus stand repealed; it is not necessary that there should be complete identity between the repealing Act and the Act repealed in every respect, Therefore, when s. 13 (2) of the Finance Act provides that on the extension of the Central Act from April I, 1950, to the Pa.rt B State of Travancore- Cochin, any law corresponding to the Central Act is repealed with effect from that date, all that we have to see is whether the law repealed substantially provided for the same matters as the Central Act, even though it may not be identical in all respects.\n\nLet us therefore turn to the Cochin Act and the rules framed thereunder to see if it substantially\n\n(I) A.J.R. 1961S.C.1087.\n\n1!Jt.i2\n\nA. B. Abdulkadir\n\nTM Slalt of KeY.tila\n\nWanchoo J.\n\nIlla\n\n.4. II. AWolioiir\n\nTit Bi.i, •I K11.I.\n\nw ...... .r.\n\n750 SUPRmf:E OOURT REPOR'rS [1962] SUPP.\n\nprovides for the same matters with which the Cen t.ral Act and the Rules and Orders ma.de thereunder deal. The main contention on behalf of the respondent in this connection is that the Central Act is an Act imposing u duty of excise on tobacco under item 4f> of List I of the Seventh Schedule to the Governmont of India Act, 1935 (now corresponding to ik•m 84 of List I of the Seventh Schedule to the Constitution), and l!IJ{)h duty of excise is a duty on goods manufactured or produced in India. Thus according to tho respondent, the main feature of the Central Act is the impORition of a tax on goods produced or manufactured in India and unless the Cochin Act or the similar Travanooro .Act also\n\nimposes a tax on goods produced or manufactured in what was formerly Cochin or Travanoore State there would be no question of correspondence between the Cenh'al Act and the Cochin Act or the similar Travancore Act. Reference was alao made to In Re the Central Province.8 and Berar Sale.s of Motm Spirit and Lubricants Taxation Act. 1938 (Central Promnces and Berar Act XIV of 1938)('), Tht,\n\nPromnce of Madras v. Meaar~. Boddu Paidanna and Bon('), and Governor-General in Oauncil v. Promnce of MadraB(•). where the nature of a duty of excise was oonsidered. In the first case it was held that the primary meaning l1f' \"e:tcise duty\" was of a tax on articles produced or manufactured in the taxing\n\ncount7 (see p. 40). It was also observed in that case that it could not be denied that laws were to be found which impose a duty of excise at eta.gee subsequent to the manufacture or production.\n\nIn the second caee it was held that duties of exoille were duties levied on the manufacture or producer of the commodity taxed. In the the third ce.ee, the Privy Counoil approved pf the view of the Federal Court as to the nature of the duty of excise. It may therefore be acoopted that a duty of exciee is a\n\n(I l [1939) F.C.R. IS\n\n(2) [ 1!142) F.C.R. 90.\n\n(3) [1945) L.R. 72 I.A. 91.\n\ntax on goods produced or manufactured in the taxing country.\n\nIt may also be accepted that generally speaking the tax is on the manufacturer or the producer, though it cannot be denied that laws are to be found whioh impoHe a duty of excise at stages subsequent to the manufacture or production. We cannot however forget that the Cochin Act or the similar Travaucore Act was passed by States in which there were no such constitutional provisions as are to be found in the Government of India Act and its legislative Lists and this aspect will have to be borne in mind when judging the question of correspondence between the Central Act and the Cochin Act or the similar Travancore Act.\n\nNow the Central Act provides by s. 3 for the levy and: collection of duties of .excise on all excisable goods other than salt which are produced or manufactured in India and also a duty on salt manufactured in or imported by land into any part of India. Further s. 6 of the Central Act gives power to the Central Government to issue licences and prohibits any person from engaging in the wholesale purchase or sale whether on his own account or as a broker or commission agent or the storage of any excisable goods except under the authority and in accordance wi*, h the terms and conditions of a licence granted under the Central Act. In Chaturbhai M. Patd v. The Union of India (1) where the various provisions of the Central Act (including s. 6) and the Rules framed thereunder were attacked on the ground that they had nothing to do with the levy and collection of duties of excise, this Court held that the various provisions of the Central Act and the Rules made thereunder were essentially connected with levying and collection of excise duty and in its true nature and character the Central Act remained one under item 45 of List r and that the incidental trenching upon the provincial field would not affect its constitutionality. The nature of the Rules there\n\n(I) [ 1960) 2 S. C.R. 362.\n\nA. B. AU .. ll; air\n\nv. 7'lu Stall ef ,.,,..,.\n\nWonc,,._J,\n\nA. B. d6dal.l:a\\ooJ.\n\n752 SUPREME OOURT REPORTS [1962] SUPP.\n\nconsidorcd will appear from the following observations at p. 371 :-\n\n\"It (the Central Act) is a fiscal measure to levy and realise duty on tobacco. The method of reali.sirig duty must be left to the wisdom of the legilature taking each individual tradA and its peculiarities and difficulties which ariEe in that matter. Various provisions\n\nof th11 .Act and the Rules show that the authorities are on the track of the movement of tobacco from the time it is grown to the time it is manufactured and sold in the market and the various provisions of the Act and the Rules made thereunder have been considered necessary for effectuating the\n\npurp08e of the Act.\" It is true that the Central Act provides for the levy of excise duty under s. 3 but in order to carry out that purpose it has provided for licences under s. 6.\n\nThe Rules also provide in Chap. III for levy and refund of duty, in Chap. V for manufactured goods other than satt, in Chap. VII for warehousing, in Chap. VIII for licensing. Thus in order to levy excise duty under the Central Act, there are provisions in the Rules which start in the case of tobacco from the stage of cultivation and continue right up to the time the finished product reaches the hand of the retailer and thus becomes a part of the common stock for purp080B\n\nof sale to the consumers. We have also seen that the Cochin Act similarly providas for control on tobacco from the stage at which it is grown to the stage till it reaches C class lioen8008 who sell it in retail to the oonsumers. The Cochin Rules may not be so detailed as the Rules under the Central Act but their main object and purpose is the same, namely, to koep a check on tobacco from the time it is grown to the time it reaches the C class licensee who eventually sells it to the coil8Uiller.\n\nFurther if one looka at the Rules\n\nunder the similar Travancore Act in vol. II of the 1962 Travancore Excise Manual which were in force on A. B. Alxfulhiir April 1, 1950, in relation to tobacco it will be fonnd •· that there are elaborate rules in Part III from TlieBtat .. JKerted by the Ruler of Travancore in 1911. Bys. 3 of the Act, \"Tobacco\" was defined as including \"snuff, cigars, cigarettes, beedies, toba.coo powder and other prepru-ations or admi::::tures of tobacco\".\n\nSection 4 of the Act imposed, except as permitted by the Act or by any other enactment relating to tobaooo, for the time being in force by the Rules published under the Act or any other such emctment prohibitions against\n\ncultivation, manufacture, possessions, transport, importation, exportation or sale of tobacoo. By Chapter III of the Act power was conferred upon the officers of the Excise Depactment to search houses suspected to contain tobacco and to seize tobacco and provision was made for incidrntal matters.\n\nChapter IV dealt with offences and\n\npunihmeut and by s. 31 the Diwan of the State was authorised, with the sanctirln of the Ruler, from time to time, by Notification in the Gazette, to make rules consist.mt with the Act amongst other subjects permitting ablolutely or subject to the payment of any duty or fee or to any other conditions, and regulating within the whole or any speoified part of the State of Travancore, oultiva. tion, manufacture, posseesion, tramportation,\n\nimport and sale of tobacco; authorising the establishment of warehouses or bank8haUs for storing tobacco legally cultivated or imported into the territory fixing the mode, time and place of levy of duty, regulating the apecial custody of tobacco warehoused and the levy of fees for warehousing and transport, and generally to carry out the\n\np10visions of the Act. Rules 'were framed in 1913 in exercise of the powers under s. 31 of the Tobacco Act whereby restrictions were imposed upon the import and export of tobacco and provision was made for bonding tobacco in warehouses and for the issue of licences for bonding tobacco. Provision was also made for licensing retail sitle for tobacco and for transport and possession thereof.\n\nCertain other rules regulating cultivation, curing and warehousing tobacco and for the issue of licences for those purposes were promulgated in 1937.\n\nRules were also framed regulating the manufacture of cigars, cigarettes and cheroots in bonds under licences. It is unnecessary to set out these rules in detail, it may suffice to observe that cultivation, curing, manufacture, possession, transport, importation and exportation and sale of tobacco was controlled by a system of lie{lnsing.\n\nCertain licences were issued free of charge and in respect of certain other licences, especially storage and sale, fee had to bf' paid to the State.\n\nSimilarly, in the State of Cochin there was enacted by the Ruler of Cochin the Cochin Tobacco Act of 1084 (M.E.) on May 3, 1909. By s. 3(dJ of that Act, tobacco was defined as inclusive of \"snuff, cigars and preparations of which tobacco forms a part.\" By s. 4, except as permitted by the Act or by the Rules made thereunder, possession for the purposes of sale, transport, import, export, sale and cultivation of tobacco were prohibited.\n\nBy s. 5, the Diwan of the State was authorised from time to time after previous publication, to make rules consistent with the Act to permit abso-\n\nA. B. Abdulkadff\n\nv, Till SIGll qf Ke alo\n\nShah J,\n\nlHt\n\nA. B • ~U, Jbj;,\n\nTAt 8i.11 •f X'tt•l•\n\nShM J,\n\n760 SUPREME OOURT REPORTS (1962] SUPP.\n\nlutely or su bjcct to any conditions regulating the pOBSession, transportation, importation or exporta. tion and sale and cultivation of tobacco. Contravention ,, f the Ar.t and the Rules or orders made under thP Act wert pl'nalised bys. 6.\n\nRules were framed in 1923 under the Cochin Tobacco Act providing for a system of licensing for cultivation, manufacture and storage of tobacco and for in cidental matters. Control was maintained over harvesting, weighment, storage, stock taking and transport of tobacco, and also on the export and import of tobacco. The authorities administering the provisions of the Tobacco Act and the Rules framed thereunder were the Commissioner of Excise and officers Rnbordinate to him in the Excise Dc•parlm1nt.\n\nLicences for storage were to be annual licencfS and to be issued on payment of liccnC'c fer.\n\nUnder the Cochin Act and the Rules framed thereunder control was maintained on toha<\"co at all the Rtages of its production, manufacture and difipoeal.\n\nFrom a resume', of the provisions of these two Acts and rules and notifications issued thereunder, it is m; mifest that on the production, manufacture storage anfTrav'\\ncore and 0ochin was formed, and bv Art. :n2 of tho Constitution the provisions of the two Acts remained in opera tion in the repective area of the former States even after the Part Il State of TravancoreCochin ea.me\n\ninto being on January 26, 1950.\n\nBy s. ll of Finance Act 25 of 1950 certain Acts including the Central Excises & Salt Act, I of 1944, and all Rules and orderu made thereunder in force from time to time before the commencement of the\n\n28.C.R.\n\nSuPREME COURT REPORTS 761\n\nFinance Act were extended with effect from April I,\n\nl!J50, to the part B States (except the State of Jammu & Kashmir), It was provided by s. 13(2)\n\n\"that if immediately before the lst of April, 1950, there was in force in any State other than J ammu & Kashmir a law corresponding to but other than the Act referred to in subs. (I) s. 11 such law\" shall stand repealed with effect from the said date. Presumably, on account of thi> application of the Central Excises & Salt Act, I of\n\n11144, by s. 11 of the Finance Act, 1950, the Part B State of Travancore-Cochin published fresh sets of Tobacco Rules.\n\nThese Rules were issued on January 25, 1951, in purported exercise of the powers conferred by the Travancore Regulation I of 1087 (M.E.l and the Cochin Tobacco Act of 1084 (l\\LE.). Rule 14 (which is common to both the sets of Hules) provides that \"the vend of tobacco of all kinds is prohibited throughout the state, except undi; r a licence\".\n\nRule 15 prcivides that the \"licence for the vend of tobacco shall be of the following descriptions :-\n\n(i) Stockist or 'A' Class licence;\n\n(ii) Wholesale or 'B' Class lit>enoe ; and\n\n(iii) Retail or 'C' Class licence.\" Rule 16(i) and (ii) provides:\n\n\"(i) Holders of Stockist or 'A' Class licences shall be entitled to purchase tobacco from any dealer within or without the\n\nState without any qnantitative restriction.\n\nThis class of licensees 3hall sell only to other 'A' Class licensees or to 'B' Class licensees,\n\n(ii) The annual fees for these licences shall be as follow~ : -\n\n(Then follows a table which sets out minimum fee prescribed for varieties of tobacco stocked upto the maximum\n\nIfltlZ\n\nA. B. dbdlllialit'\n\nv. n.. 81\"11 of Irerai.\n\nSholl J.\n\nJIU ..... \"\"\"\"\"*'b\n\n\"· 7lt St• •/ Xdel.•\n\nBWJ,\n\n762 SUPitEME OOURT REPORTS [19tl:.!] SUPP.\n\nprescribed quantity and the y claimed that they were not liable to pay licenco fee under the Rules framed in 1951 bece.uso there Willi absolute delegation of legislative power by the Rules, that the levy infringed their fundamental rights under Arts. 14 and 19(l)(g) of the Constitution, that the duty levied was in any event an excise duty, and becaube the fee represented a tax on trade, calling or employment and on that account was subject to the constitutional restriction imposed by Art. 2\";1l(2l of the Constitution. They also contended that the Tobacco Acts of the Travancore State and the Cochin State, which had been kept alive by Act 6 of ll25 (M.E.) and by Art. 372 of the Constitution were superseded by the application of the Central Excises and Salt Act, 1944, bys. 11 of the Finance Act, 1950.\n\nThe High Cont of TravancoreCoohin in the petitions for writs of mandam'll8 and other writs negatived the contentions raised by the appellants that the Acts and tho Rules amounted absoluto delegation of legislative power or that the fundamental rights under Arts. 14 and l9(ll(g) and the rel!trictions imposed by Art. 276(2) of the Constitution were infringed thereby. The High Court also held that tho duty levied was not an excise duty and presumably on that account declined to consider the question whether the Tobacco Acts of the States of Travancore and Cochin had been aupel'l!('ded either wholly or partially by the application of the Central Excises and Salt Act of 1944.\n\nThe Travancore and the Cochin Acts do not directly levy any duty on production or manufacture of tobacco, Restrictions, it is true, are imposed on\n\nthe growing, curing, manufacture, storage, import and export by . requiring that licences shall be obtained for those purposes and prescribing penl ties for violating the provisions of the Acts anrl the Rules. It also appears that the trade in tobacco was regulated before the formation of the B State of Travancore-Cochin, by holding auctions for the rights to sell tobacoo. These auctions were held by Excise Commissioners and the highest bidder in the auction got the right to deal in toLacco, and the two Acts were enacted for ngulating and controlling the sale of tobacco, but the State did not levy any duty on 1 he mannfacturr, 01 production of tobacco. '.!'he licenc:e foe for the i8sue of a licence for g1owing, curing, manufacturing, ('Xporting, importing or storing is not in itself an excise duty on the manufacture or production.\n\nThe Federal Court Tn the matter o.f the Central Provinces and Berar Sale.s o.f Motor Spirit and Uubricants 'l'axat-ion Act, 1938 (1) observed :\n\n\" ...... at the date of the Constitution Act (Government of In•lia Act 1!)35) though it seems that the word excise' was uot infrequently for tho administrat.ion of a particular indirect tax (as salt excise or opium excise), \\he only kinrf'\n\n{I) [1939] F.C.R. 18, 51-55\n\nd. B. Aba.lk•\"1\n\n•• The Stale of'\"\"\"\"\n\nShah J,\n\nlHI\n\nA.B.Au.u.tir\n\nv. 7l. SW. •f Km/•\n\nBWJ.\n\n764 SUPREME OOURT REPORTS (1962] SUPP.\n\nindoed excise duties of any other kind were unknown.\n\nNor indeed are excie dutios properly so-called often to be found at the present day which a.re not collected at the stage oi production or manufacture, whatever\n\nmay have been the case in Blackstone's time a.ncl whatever may havl' been tho reasons for Johnson's definition of 'Excise' in the first edition of his Dictionary ( 1755)., .... \" (Per Gwyr C.J.) This view was approved by the Judicial Committee in The Governor-Ge:neral in Oourwil v.\n\nTM, Prom'.nce, of Madra.9 (1).\n\nAn excise duty is according to the Indian Statute, a duty on tho manufacture or production of goods and the duty which was levied in the States of Travaucore and Cochin on the storage of tobacco cannot be regarded as a duty of excise.\n\nBut that conclusion is not decisive of the problem under consideration. The question has 8till to be consi dered whether tho Travancoro and Cochin Acta and the Rules framed thereunder were law \"corresponding\" to tho Central Excises and Sa.It Act, 1944, extended under tho Finance Act, I 950. The expree sion \"corresponding\" does not postulate identity of the Rtate Law and the statute extended by s. I I of the Fina.nee Act : if there was in foree at the material time law in the Pa.rt B State dealing with a particular subject mattl'r and tho law extended by s. I I of tho Finance Act, 1950, dealt with the same subject matter and the two laws though not identical still were such that if they stood together there would have been legislative duplication or overlapping, the law in force in Pnrt B State would be rogarded as corresponding to the law extended by the Indian Fina.nee Act and hence repealed by the operation of s. 13(2).\n\nLet us examine the eoheme of the Central Excises and Salt Act of 1944 for the purpose of\n\n(I) [19H J L.R. 72 I.A. 91.\n\n2 S.C.R.\n\nSUPREME\" OOURT REPORTS 765\n\nascertaining whether the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944, wholly or partially. The Central Excises and Salt Act,, 1944, was enacted to consolidate and amend the law r€lating to Central duties of excise on goods manufactured or produced in certain parts of India and to salt.\n\nThe expression \"excisable goods\" is defined in s. 2(d) as meaning \"goods specified in the First Schedule as being subject to a duty of excise and includes salt\". By s. 2(f) the expression \"manufacture\" is defined as inclusive of \"any process incidental or ancillary to the completion of a manufactured product, and (i) in relation to toba ; co includes the preparation of cigarettes, cigars, cheroots, biris, cigarette or pipe or hookah tobacco, chewing tobacco, or snuff x x x\".\n\nBy s. 3 it is provided that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India x x x and at the rates set forth in the First Schedule. By s. 6, certain incidental operations are made subject to licence and it is provided : The Central Government may, by notification in Official Gazette, provide that, from such date as may be specified in the notification, no pPrson shall, except under the authority and in accordanec with the tcrnis and conditions of a licence granted under this Act, engage in (a) the production or manufacture of any specified goods included iu the First Schedule or of saltpetre or of any specified component parts or ingredients of such gooJs or of specified containers of any spceificd excisable goods, or (b) the wholesale purchase or sal(' (whether on his own account or as a broker or eommission agent or the storage of auy ex('isable gootl\" specified in this behalf in Part A of the Second Rd1ct in view, diverse provisions an enacted. Tobacco is under the Act an exciHa.ble commodity, and duty at rates specifier! in the Schululo is leviable in respect df different forms of tvhacco. lly s. 6( h) wholesale purchase or sale, or storage of excisablr articles is prohibited.\n\nBy Rule 7 of tlw Central Exoiso Rules, I 944, duty is ma.de payable hy every person, who produces, cures, mantifactures or who stores in any warehouse any cxri,; able goo Acts and the Rules framed thereunder on January 25, 1951.\n\nIt is true that under the Central Excises and Salt Act, 1944, the provision for obtaining licences for storage is a provision ancillary to tb e recovery of\n\nexcise duty, whereas under the Travancore and the Cochin Acts, the levy of licence fee was imposed in\n\npursuance of a schemo for maintaining control on the sale of tobacco without expressly levying any excise duty.\n\nBut on that account, it cannot be said that the provisions relating to tho requirement of licenoes and tho payment of licence fees for storage of tobacco for sale under the Travancore and the Cochin Acts wore not provision corroeponding to the provisions of s. 6(b) under the Central Excises and Salt Act, 1944 and the rules framed under the Act requiring that licences shall be taken\n\nout for storage of tobacco for sale and fee shall be paid in respect thereof. In my judgment the relevant rules made 1111der the Travancore and the Cochin Tobacoo Acts requiring licenCf's to be taken for storage of tobacco and in force on April, I, 1950, were law corresponding to the provisions of the Central Excise and Sa.It Act, 1944, and the rules\n\nframed thereunder which required licences to be taken out for storage of tobacco and for payment of licence fee in respect thereof and to that extent the provisions imposing an obligation to take out licences and to pay licence fees under the Tobacco Acts of Travancore and the Cochin States were superseded and the State of Travancore-Cochin had no authority to promulgate rules 14, 15 and 16 under the Notification issued in the Travancore-\n\nCochin Government Gazett.e dated January 25, 1951, and to levy licence fee for storage of tobacco.\n\nIt is unnecessary to consider whether the remaining provisions of the Travancore and the Cochin Tobacco Acts and th~ Rules framed thereunder were law correspondirrg with the Central Excises and Salt Act, 1944.\n\nFor these reasons I agree that the appeals be allowed, and the order passed by the High Court be set aside. In each petition a writ will issue declaring that the levy of licence fee undPr the Notification dated January 25, 1951, is without authority of law, and that the State of Travanc.1re-Cochin do forbear from levying and collecting the licence fee.\n\nAppeals allowed.\n\nKEDAR NATH SINGH\n\nSTATE OF BIHAR (B. P. SINHA, C, J., s. K. DAS, A. K. SARKAR, N. RAJAGOPALA AYYANGARand J.R. MunHOLKAR, JJ.)\n\nSedition-Content of-Siatute pa11aliai11g lfeditian and statement• e-0nduci11g to public mischief-Constitutio11alit11 of- Whetkerinfringesfreedom cf apeech--lndian l'e•al Code, 1860 (Act XLV of 1860), ss. 12!A, 50j-Constitution of India,\n\nArt6. (19)(l}(a}, 19(2).\n\nSecdon 124:\\ of the Indian Penal Code which makes sedition an offence is constitutionally valid. Though the section imposes restrictions on the fundam, ntal freedom of\n\nI96t\n\nA. lie , j/)tfuJhdlr\n\nTiu 8tat1 of Kerola\n\nBlah J.", "total_entities": 126, "entities": [{"text": "B. ABDULKADIR AND OTHERS\n", "label": "PETITIONER", "start_char": 248, "end_char": 273, "source": "metadata", "metadata": {"canonical_name": "A.B. ABDULKADIR AND OTHERS", "offset_not_found": false}}, {"text": "THE STATE OF KERALA AND ANOTHER\n\n(AND CONNECTED APPEALS", "label": "RESPONDENT", "start_char": 274, "end_char": 329, "source": "metadata", "metadata": {"canonical_name": "THE STATE OF KERALA AND ANOTHER (AND CONNECTED APPEALS)", "offset_not_found": false}}, {"text": "SINHA", "label": "JUDGE", "start_char": 338, "end_char": 343, "source": "metadata", "metadata": {"canonical_name": "BHUVNESHWAR PRASAD SINHA*", "offset_not_found": false}}, {"text": "P. B. GAJENDRAGADKAR", "label": "JUDGE", "start_char": 352, "end_char": 372, "source": "metadata", "metadata": {"canonical_name": "P.B. GAJENDRAGADKAR", "offset_not_found": false}}, {"text": "C. SHAH, JJ.", "label": "JUDGE", "start_char": 412, "end_char": 424, "source": "metadata", "metadata": {"canonical_name": "J.C. SHAH", "offset_not_found": false}}, {"text": "Cochin Tobacco Act, 1084", "label": "STATUTE", "start_char": 631, "end_char": 655, "source": "regex", "metadata": {}}, {"text": "Tobacco Regulation, 1087", "label": "STATUTE", "start_char": 693, "end_char": 717, "source": "regex", "metadata": {}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 745, "end_char": 762, "source": "regex", "metadata": {}}, {"text": "Constitution of India", "label": "STATUTE", "start_char": 1838, "end_char": 1859, "source": "regex", "metadata": {}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 2068, "end_char": 2085, "source": "regex", "metadata": {}}, {"text": "Section 13(2)", "label": "PROVISION", "start_char": 2156, "end_char": 2169, "source": "regex", "metadata": {"linked_statute_text": "the Finance Act, 1950", "statute": "the Finance Act, 1950"}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 2177, "end_char": 2194, "source": "regex", "metadata": {}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 2502, "end_char": 2519, "source": "regex", "metadata": {}}, {"text": "Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 3253, "end_char": 3287, "source": "regex", "metadata": {}}, {"text": "ss. 11 and 13(2)", "label": "PROVISION", "start_char": 3366, "end_char": 3382, "source": "regex", "metadata": {"linked_statute_text": "the Central Excises and Salt Act, 1944", "statute": "the Central Excises and Salt Act, 1944"}}, {"text": "Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 4306, "end_char": 4340, "source": "regex", "metadata": {}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 4419, "end_char": 4436, "source": "regex", "metadata": {}}, {"text": "Cochin Tobacco Act, 1084", "label": "STATUTE", "start_char": 4769, "end_char": 4793, "source": "regex", "metadata": {}}, {"text": "Travancore Tobacco Regulation, 1087", "label": "STATUTE", "start_char": 4818, "end_char": 4853, "source": "regex", "metadata": {}}, {"text": "Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 4905, "end_char": 4939, "source": "regex", "metadata": {}}, {"text": "s. 3", "label": "PROVISION", "start_char": 5278, "end_char": 5282, "source": "regex", "metadata": {"linked_statute_text": "the Central Excises and Salt Act, 1944", "statute": "the Central Excises and Salt Act, 1944"}}, {"text": "Central Exciss and Salt Act, 1944", "label": "STATUTE", "start_char": 5290, "end_char": 5323, "source": "regex", "metadata": {}}, {"text": "re The Oentral ProvinceB and Berar Sales of Mowr Spirit and Lubricants Taxaiion Act, 1938", "label": "STATUTE", "start_char": 5697, "end_char": 5786, "source": "regex", "metadata": {}}, {"text": "[1939]\n\nF.C.R. 18", "label": "CASE_CITATION", "start_char": 5788, "end_char": 5805, "source": "regex", "metadata": {}}, {"text": "[1942] F.C.R. 90", "label": "CASE_CITATION", "start_char": 5866, "end_char": 5882, "source": "regex", "metadata": {}}, {"text": "(1945) L.R. 72 I.A. 91", "label": "CASE_CITATION", "start_char": 5934, "end_char": 5956, "source": "regex", "metadata": {}}, {"text": "[1960] 2 S.C.R. 362", "label": "CASE_CITATION", "start_char": 6005, "end_char": 6024, "source": "regex", "metadata": {}}, {"text": "Section 4", "label": "PROVISION", "start_char": 7724, "end_char": 7733, "source": "regex", "metadata": {"statute": null}}, {"text": "Rules were framed under the Cochin Act called the Tobacco Cultivation Rules", "label": "STATUTE", "start_char": 8826, "end_char": 8901, "source": "regex", "metadata": {}}, {"text": "s. 50", "label": "PROVISION", "start_char": 9572, "end_char": 9577, "source": "regex", "metadata": {"linked_statute_text": "Rules were framed under the Cochin Act called the Tobacco Cultivation Rules", "statute": "Rules were framed under the Cochin Act called the Tobacco Cultivation Rules"}}, {"text": "Rules also framed under the Cochin Act", "label": "STATUTE", "start_char": 10650, "end_char": 10688, "source": "regex", "metadata": {}}, {"text": "s. 11", "label": "PROVISION", "start_char": 12161, "end_char": 12166, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 13", "label": "PROVISION", "start_char": 12176, "end_char": 12186, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 11", "label": "PROVISION", "start_char": 12428, "end_char": 12433, "source": "regex", "metadata": {"statute": null}}, {"text": "Rules which it did wider the Cochin Act", "label": "STATUTE", "start_char": 15156, "end_char": 15195, "source": "regex", "metadata": {}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 15394, "end_char": 15410, "source": "regex", "metadata": {"linked_statute_text": "Rules which it did wider the Cochin Act", "statute": "Rules which it did wider the Cochin Act"}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 15599, "end_char": 15615, "source": "regex", "metadata": {"linked_statute_text": "Rules which it did wider the Cochin Act", "statute": "Rules which it did wider the Cochin Act"}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 15796, "end_char": 15813, "source": "regex", "metadata": {}}, {"text": "Act as well as the similar Travancore Act", "label": "STATUTE", "start_char": 15827, "end_char": 15868, "source": "regex", "metadata": {}}, {"text": "s.13(2)", "label": "PROVISION", "start_char": 16034, "end_char": 16041, "source": "regex", "metadata": {"linked_statute_text": "Cochin\n\nAct as well as the similar Travancore Act", "statute": "Cochin\n\nAct as well as the similar Travancore Act"}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 16194, "end_char": 16211, "source": "regex", "metadata": {}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 16649, "end_char": 16665, "source": "regex", "metadata": {"linked_statute_text": "the Finance Act, 1950", "statute": "the Finance Act, 1950"}}, {"text": "s. 13(2)", "label": "PROVISION", "start_char": 16779, "end_char": 16787, "source": "regex", "metadata": {"linked_statute_text": "the Finance Act, 1950", "statute": "the Finance Act, 1950"}}, {"text": "have therefore to see what the provisions of the Finance Act", "label": "STATUTE", "start_char": 16812, "end_char": 16872, "source": "regex", "metadata": {}}, {"text": "s. 11( 1)", "label": "PROVISION", "start_char": 16919, "end_char": 16928, "source": "regex", "metadata": {"linked_statute_text": "We have therefore to see what the provisions of the Finance Act", "statute": "We have therefore to see what the provisions of the Finance Act"}}, {"text": "s. 13(2)", "label": "PROVISION", "start_char": 17312, "end_char": 17320, "source": "regex", "metadata": {"linked_statute_text": "We have therefore to see what the provisions of the Finance Act", "statute": "We have therefore to see what the provisions of the Finance Act"}}, {"text": "s. 13(2)", "label": "PROVISION", "start_char": 17669, "end_char": 17677, "source": "regex", "metadata": {"linked_statute_text": "We have therefore to see what the provisions of the Finance Act", "statute": "We have therefore to see what the provisions of the Finance Act"}}, {"text": "s. 13", "label": "PROVISION", "start_char": 18195, "end_char": 18200, "source": "regex", "metadata": {"statute": null}}, {"text": "Let us therefore turn to the Cochin Act", "label": "STATUTE", "start_char": 18589, "end_char": 18628, "source": "regex", "metadata": {}}, {"text": "List I of the Seventh Schedule to the Governmont of India Act, 1935", "label": "STATUTE", "start_char": 19141, "end_char": 19208, "source": "regex", "metadata": {}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 19256, "end_char": 19272, "source": "regex", "metadata": {"linked_statute_text": "List I of the Seventh Schedule to the Governmont of India Act, 1935", "statute": "List I of the Seventh Schedule to the Governmont of India Act, 1935"}}, {"text": "Act and the Cochin Act or the similar Travancore Act", "label": "STATUTE", "start_char": 19740, "end_char": 19792, "source": "regex", "metadata": {}}, {"text": "Motm Spirit and Lubricants Taxation Act", "label": "STATUTE", "start_char": 19870, "end_char": 19909, "source": "regex", "metadata": {}}, {"text": "Central Promnces and Berar Act", "label": "STATUTE", "start_char": 19917, "end_char": 19947, "source": "regex", "metadata": {}}, {"text": "L.R. 72 I.A. 91", "label": "CASE_CITATION", "start_char": 20841, "end_char": 20856, "source": "regex", "metadata": {}}, {"text": "Now the Central Act", "label": "STATUTE", "start_char": 21546, "end_char": 21565, "source": "regex", "metadata": {}}, {"text": "s. 3", "label": "PROVISION", "start_char": 21578, "end_char": 21582, "source": "regex", "metadata": {"linked_statute_text": "Now the Central Act", "statute": "Now the Central Act"}}, {"text": "s. 6", "label": "PROVISION", "start_char": 21808, "end_char": 21812, "source": "regex", "metadata": {"linked_statute_text": "Now the Central Act", "statute": "Now the Central Act"}}, {"text": "s. 6", "label": "PROVISION", "start_char": 22289, "end_char": 22293, "source": "regex", "metadata": {"linked_statute_text": "Now the Central Act", "statute": "Now the Central Act"}}, {"text": "1960) 2 S. C.R. 362", "label": "CASE_CITATION", "start_char": 22823, "end_char": 22842, "source": "regex", "metadata": {}}, {"text": "s. 3", "label": "PROVISION", "start_char": 23733, "end_char": 23737, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 6", "label": "PROVISION", "start_char": 23812, "end_char": 23816, "source": "regex", "metadata": {"statute": null}}, {"text": "Thus in order to levy excise duty under the Central Act", "label": "STATUTE", "start_char": 23994, "end_char": 24049, "source": "regex", "metadata": {}}, {"text": "have also seen that the Cochin Act", "label": "STATUTE", "start_char": 24325, "end_char": 24359, "source": "regex", "metadata": {}}, {"text": "Further if one looka at the Rules", "label": "STATUTE", "start_char": 24797, "end_char": 24830, "source": "regex", "metadata": {}}, {"text": "Act a corresponding Act to the Central", "label": "STATUTE", "start_char": 26377, "end_char": 26415, "source": "regex", "metadata": {}}, {"text": "s. 3", "label": "PROVISION", "start_char": 26485, "end_char": 26489, "source": "regex", "metadata": {"linked_statute_text": "Act a corresponding Act to the Central\n\nAct", "statute": "Act a corresponding Act to the Central\n\nAct"}}, {"text": "s. 5", "label": "PROVISION", "start_char": 26654, "end_char": 26658, "source": "regex", "metadata": {"linked_statute_text": "Act a corresponding Act to the Central\n\nAct", "statute": "Act a corresponding Act to the Central\n\nAct"}}, {"text": "s. 31", "label": "PROVISION", "start_char": 26755, "end_char": 26760, "source": "regex", "metadata": {"linked_statute_text": "Act a corresponding Act to the Central\n\nAct", "statute": "Act a corresponding Act to the Central\n\nAct"}}, {"text": "Bnt we must not forget that the Cochin Act", "label": "STATUTE", "start_char": 27576, "end_char": 27618, "source": "regex", "metadata": {}}, {"text": "s. 3", "label": "PROVISION", "start_char": 27973, "end_char": 27977, "source": "regex", "metadata": {"linked_statute_text": "Travanoore Act was passed by a Ruler who was not trammelled by a Constitution like the Government of India Act, 1935", "statute": "Travanoore Act was passed by a Ruler who was not trammelled by a Constitution like the Government of India Act, 1935"}}, {"text": "s. 6", "label": "PROVISION", "start_char": 28019, "end_char": 28023, "source": "regex", "metadata": {"linked_statute_text": "Travanoore Act was passed by a Ruler who was not trammelled by a Constitution like the Government of India Act, 1935", "statute": "Travanoore Act was passed by a Ruler who was not trammelled by a Constitution like the Government of India Act, 1935"}}, {"text": "s. 3", "label": "PROVISION", "start_char": 29748, "end_char": 29752, "source": "regex", "metadata": {"statute": null}}, {"text": "Therefore when the Central Act", "label": "STATUTE", "start_char": 31209, "end_char": 31239, "source": "regex", "metadata": {}}, {"text": "s. 11", "label": "PROVISION", "start_char": 31298, "end_char": 31303, "source": "regex", "metadata": {"linked_statute_text": "Therefore when the Central Act", "statute": "Therefore when the Central Act"}}, {"text": "would be no power in the State Government thereafter to frame new Rules", "label": "STATUTE", "start_char": 31515, "end_char": 31586, "source": "regex", "metadata": {}}, {"text": "Art. 265", "label": "PROVISION", "start_char": 31767, "end_char": 31775, "source": "regex", "metadata": {"linked_statute_text": "There would be no power in the State Government thereafter to frame new Rules", "statute": "There would be no power in the State Government thereafter to frame new Rules"}}, {"text": "Further as soon as the Cochin Act", "label": "STATUTE", "start_char": 31797, "end_char": 31830, "source": "regex", "metadata": {}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 32028, "end_char": 32044, "source": "regex", "metadata": {"linked_statute_text": "Further as soon as the Cochin Act", "statute": "Further as soon as the Cochin Act"}}, {"text": "s.13(2 )", "label": "PROVISION", "start_char": 32123, "end_char": 32131, "source": "regex", "metadata": {"linked_statute_text": "Further as soon as the Cochin Act", "statute": "Further as soon as the Cochin Act"}}, {"text": "Further the Travancore Act", "label": "STATUTE", "start_char": 32424, "end_char": 32450, "source": "regex", "metadata": {}}, {"text": "What applies therefore to tho Cochin Act and the Rules", "label": "STATUTE", "start_char": 32638, "end_char": 32692, "source": "regex", "metadata": {}}, {"text": "Act and the Rules framed thereunder and there is no doubt that the Travan core Act and tho Rule", "label": "STATUTE", "start_char": 32747, "end_char": 32842, "source": "regex", "metadata": {}}, {"text": "s. 13(2)", "label": "PROVISION", "start_char": 34459, "end_char": 34467, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 11", "label": "PROVISION", "start_char": 34504, "end_char": 34509, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4", "label": "PROVISION", "start_char": 36018, "end_char": 36027, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 31", "label": "PROVISION", "start_char": 36592, "end_char": 36597, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 31", "label": "PROVISION", "start_char": 37438, "end_char": 37443, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 13(2)", "label": "PROVISION", "start_char": 41225, "end_char": 41233, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 11", "label": "PROVISION", "start_char": 41418, "end_char": 41423, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 11", "label": "PROVISION", "start_char": 41581, "end_char": 41586, "source": "regex", "metadata": {"statute": null}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 41594, "end_char": 41611, "source": "regex", "metadata": {}}, {"text": "Arts. 14 and 19(l)(g)", "label": "PROVISION", "start_char": 43326, "end_char": 43347, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "Art. 2", "label": "PROVISION", "start_char": 43570, "end_char": 43576, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "They also contended that the Tobacco Act", "label": "STATUTE", "start_char": 43605, "end_char": 43645, "source": "regex", "metadata": {}}, {"text": "Art. 372", "label": "PROVISION", "start_char": 43750, "end_char": 43758, "source": "regex", "metadata": {"linked_statute_text": "They also contended that the Tobacco Act", "statute": "They also contended that the Tobacco Act"}}, {"text": "Constitution were superseded by the application of the Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 43766, "end_char": 43855, "source": "regex", "metadata": {}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 43872, "end_char": 43889, "source": "regex", "metadata": {}}, {"text": "Arts. 14", "label": "PROVISION", "start_char": 44149, "end_char": 44157, "source": "regex", "metadata": {"linked_statute_text": "the Finance Act, 1950", "statute": "the Finance Act, 1950"}}, {"text": "Art. 276(2)", "label": "PROVISION", "start_char": 44204, "end_char": 44215, "source": "regex", "metadata": {"linked_statute_text": "the Finance Act, 1950", "statute": "the Finance Act, 1950"}}, {"text": "S8", "label": "PROVISION", "start_char": 46310, "end_char": 46312, "source": "regex", "metadata": {"statute": null}}, {"text": "[1939] F.C.R. 18", "label": "CASE_CITATION", "start_char": 46485, "end_char": 46501, "source": "regex", "metadata": {}}, {"text": "Travancoro and Cochin Acta and the Rules", "label": "STATUTE", "start_char": 47536, "end_char": 47576, "source": "regex", "metadata": {}}, {"text": "Act, 1944", "label": "STATUTE", "start_char": 47653, "end_char": 47662, "source": "regex", "metadata": {}}, {"text": "Finance Act, 1950", "label": "STATUTE", "start_char": 47985, "end_char": 48002, "source": "regex", "metadata": {}}, {"text": "s. 13(2)", "label": "PROVISION", "start_char": 48337, "end_char": 48345, "source": "regex", "metadata": {"linked_statute_text": "Finance Act, 1950", "statute": "Finance Act, 1950"}}, {"text": "Let us examine the eoheme of the Central Excises and Salt Act", "label": "STATUTE", "start_char": 48348, "end_char": 48409, "source": "regex", "metadata": {}}, {"text": "L.R. 72 I.A. 91", "label": "CASE_CITATION", "start_char": 48449, "end_char": 48464, "source": "regex", "metadata": {}}, {"text": "s. 2(d)", "label": "PROVISION", "start_char": 48926, "end_char": 48933, "source": "regex", "metadata": {"linked_statute_text": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944", "statute": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944"}}, {"text": "First Schedule", "label": "PROVISION", "start_char": 48969, "end_char": 48983, "source": "regex", "metadata": {"linked_statute_text": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944", "statute": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944"}}, {"text": "s. 2(f)", "label": "PROVISION", "start_char": 49044, "end_char": 49051, "source": "regex", "metadata": {"linked_statute_text": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944", "statute": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944"}}, {"text": "s. 3", "label": "PROVISION", "start_char": 49363, "end_char": 49367, "source": "regex", "metadata": {"linked_statute_text": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944", "statute": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944"}}, {"text": "First Schedule", "label": "PROVISION", "start_char": 49600, "end_char": 49614, "source": "regex", "metadata": {"linked_statute_text": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944", "statute": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944"}}, {"text": "s. 6", "label": "PROVISION", "start_char": 49619, "end_char": 49623, "source": "regex", "metadata": {"linked_statute_text": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944", "statute": "the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944"}}, {"text": "First Schedule", "label": "PROVISION", "start_char": 50052, "end_char": 50066, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 6( h)", "label": "PROVISION", "start_char": 52001, "end_char": 52009, "source": "regex", "metadata": {"statute": null}}, {"text": "Central Exoiso Rules", "label": "STATUTE", "start_char": 52104, "end_char": 52124, "source": "regex", "metadata": {}}, {"text": "is true that under the Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 55199, "end_char": 55256, "source": "regex", "metadata": {}}, {"text": "s. 6(b)", "label": "PROVISION", "start_char": 55827, "end_char": 55834, "source": "regex", "metadata": {"linked_statute_text": "It is true that under the Central Excises and Salt Act, 1944", "statute": "It is true that under the Central Excises and Salt Act, 1944"}}, {"text": "Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 55845, "end_char": 55879, "source": "regex", "metadata": {}}, {"text": "Act, 1944", "label": "STATUTE", "start_char": 56283, "end_char": 56292, "source": "regex", "metadata": {}}, {"text": "Rules framed thereunder were law correspondirrg with the Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 56970, "end_char": 57061, "source": "regex", "metadata": {}}, {"text": "ss. 12", "label": "PROVISION", "start_char": 57765, "end_char": 57771, "source": "regex", "metadata": {"linked_statute_text": "Rules framed thereunder were law correspondirrg with the Central Excises and Salt Act, 1944", "statute": "Rules framed thereunder were law correspondirrg with the Central Excises and Salt Act, 1944"}}, {"text": "Constitution of India", "label": "STATUTE", "start_char": 57779, "end_char": 57800, "source": "regex", "metadata": {}}, {"text": "Art6", "label": "PROVISION", "start_char": 57803, "end_char": 57807, "source": "regex", "metadata": {"linked_statute_text": "Constitution of India", "statute": "Constitution of India"}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 57849, "end_char": 57866, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}]} {"document_id": "1962_2_769_812_EN", "year": 1962, "text": "~ S.C.R.\n\nSUPREME COURT REPORTS 769\n\nframed thereunder which required licences to be taken out for storage of tobacco and for payment of licence fee in respect thereof and to that extent the provisions imposing an obligation to take out licences and to pay licence fees under the Tobacco Acts of Travancore and the Cochin States were superseded and the State of Travancore-Cochin had no authority to promulgate rules 14, 15 and 16 under the Notification issued in the Travancore-\n\nCochin Government Gazett.e dated January 25, 1951, and to levy licence fee for storage of tobacco.\n\nIt is unnecessary to consider whether the remaining provisions of the Travancore and the Cochin Tobacco Acts and th~ Rules framed thereunder were law correspondirrg with the Central Excises and Salt Act, 1944.\n\nFor these reasons I agree that the appeals be allowed, and the order passed by the High Court be set aside. In each petition a writ will issue declaring that the levy of licence fee undPr the Notification dated January 25, 1951, is without authority of law, and that the State of Travanc.1re-Cochin do forbear from levying and collecting the licence fee.\n\nAppeals allowed.\n\nKEDAR NATH SINGH\n\nSTATE OF BIHAR (B. P. SINHA, C, J., s. K. DAS, A. K. SARKAR, N. RAJAGOPALA AYYANGARand J.R. MunHOLKAR, JJ.)\n\nSedition-Content of-Siatute pa11aliai11g lfeditian and statement• e-0nduci11g to public mischief-Constitutio11alit11 of- Whetkerinfringesfreedom cf apeech--lndian l'e•al Code, 1860 (Act XLV of 1860), ss. 12!A, 50j-Constitution of India,\n\nArt6. (19)(l}(a}, 19(2).\n\nSecdon 124:\\ of the Indian Penal Code which makes sedition an offence is constitutionally valid. Though the section imposes restrictions on the fundam, ntal freedom of\n\nI96t\n\nA. lie , j/)tfuJhdlr\n\nTiu 8tat1 of Kerola\n\nBlah J.\n\n1~1\n\nli•ti•r N•tA Sin1h ..\n\nSlldl •f BWir\n\nSUPREME COURT REPORTS (1962) SUPP.\n\nspeech and expression, the restrictions are in the interest of public order and are within the ambit of permissiblr. legislati\\'e intrrferrnce with the fundamental right. Th strength of the organisation and unity of Kisans and mazdoors the Forward Communists Party will expose the black deeds of the Congress goondas, who are just like the Britishers. Only tho colour of the body has changed. They have tod,_y established a rule of la.this and bullets in the country, The Britishers had to go away from this land. They had aeroplanes, guns, bombs and other weapons with them.\n\n(c) The Forward Communist Party does not believe in the doctrine of vote itself. The party had always beon believing in revolution and does so evon at present. We believe in that revolution, which will come and in the flames of which the capitalists, za.mindars and tho Congreas leaders of India, who have ma.de it their profession to loot the country, will be rnduced to ashes and on their a.shes '\\\\'ill be established a Government of the poor and tho downtrodden people of India.\n\n(d) It will boa mhltake to o:i:pect any thing from the Congrell8 rclers. They (Cullgress rulers) have set up V. Bhavc in tho midst of the people by causing him w .. ~· a laugoti iu order to divert the people's att<>ntion from their mistakts. Tu-day Vmova is\n\nplaying a • :rama on the stage uf Indian politics. Cvnfw.ion is being crt>ated among the peopk. I \\fant to tell Vinova and advice his agents, \"you should understand it that the people cannot be deceived by this Y ojna, illusion and fraud of Vi nova\". l shall advise Vinova not to become a puppet in tho hands of the CongrBBll men. These persons, who understand the Yojna of Vinova, realise that Vinovy had aeroplanes, guns, bombs, a.nd othor reasons with them.\n\n(c) The Forward Communist party docs not believe in the doctrine of voteA itself.\n\nThe party had always been bl•lieving in revolution a.nd does eo even at present.\n\nWe believe in that revolution, which will come a.nd in the flames of which the capitalists, zamindars and the CongreBB leaders of India, who have made it their profession to loot the country, will be reduced to ashes, and on their aahes will be established a Government of the poor and the downtrodden people of India.\n\n(d) It will be a mistake to expect anything frem the Congress rulers.\n\nThey (Congress rulers) ha, e set up V. Bhav11 in the mid8t of the people by causing him wear a. langoti in order to divert the attention of the people from their mistakes. To-day Vinoba is playing a drama on the stage of Indian politics. Confusi011 is being created among the people.\n\nI want to tell Vinova and advise his agents, \"You should understand it that the people cannot be deceived by this Yojna, illusion and fraud of Vinova.\n\nI shall advise Vinova not to become a puppet in the hande of the Congress men. Those persons who understand the Y ojna of Vin ova, realise that Vinova is an agent of Congress Government.\n\n2 S.C.R.\n\nSUPREME COURT REPORTS 779\n\n(e) I tell you that no good will be done to you by this Congress Government. ( f) I want to teJI the last word even to Congress tyrants \"you play with tho people and ruin them by entangling them in the mesh of bribery, black-marketing and corruption.\n\nTo-day the children of the poor are hankering for food and you {Congress men) are assuming the attitude of Nawabs sitting on the chairs\" ....... with intent to cause or which was likely to cause fear or alarm to the public whereby any persons might be induce to commit an offence against the State of Bihar and against the public tranquility, and thereby committed an offence punishable under section 505(b) of the Indian Penal Code and within my cognizance.'' After recording a substantial volume of oral evidence, the learned Trial Magistrate convicted the accused person both under ss. l24A and 505(b) of the Indian Penal Code, and sentenced him to undergo rigorous imprisonment for one year. No separate sentence was passed in respect of the conviction under the latter section.\n\nThe convicted person preferred an appeal to the High Court of Judicature at Patna, which was heard by the late Mr. Justice Naqui lm'.ctm, sitting singly.\n\nBy his judgment and order dated April 9, 1956, he upheld the convictions and the sentence and dismissed the appeal. In the course of his Judgment, the learned Judge observed that the subject matter of the charge against the appellant was nothing but a vilification of the Government ; that it was full of incitements to revolution and that the speech taken as a whole was certainly seditious. It is not a speech\n\ncriticising any particular policy of the Government or criticising any of its measures. He held that the offences both under ss. l24A and 505(b) of the Indian Penal Code had been made out.\n\nJ96B\n\nKedar N •IA Singh\n\nSlala of Bihar\n\nSinlra C J,\n\n1H2\n\nIrr/or N •lh Hn&h\n\nStMt e/ Bihar\n\nSiaAa c. J.\n\n780 SUPREME COURT P.EFORTS [I 9f.2] SUPP.\n\nThe convicted person moved this Court and obtained special leave to appeal. It will be noticed that the constitutionality of tho provisions of the aections under which tho appellant was convicted had not bet•n oonvassed before the High Court. But in the petition for Rpecial leav11, to this Court, the ground was ta.ken that ss. 124A and 505 of the Indian Penal Code \"are inconsistent with Art .. 19(1)\n\n(a) of tho Constitution\". The appeal was heard in this Court, in tho first instance, by a Division Bench on fay 5, l!l59. The Banch, finding that the learned coun8el for the appellant had raised the consti\n\ntutional issue as to the validity of S&. I 24A and 505 of the Indian Penal Code, directed that the appeal be plaeed for hearing by a Constitution Bench. The case was then placed before a Constitution Bench, on November 4, 1960, when that Bench directed notice to issue to the Attorney General of India under r. I, 0.41 of the Supreme Court Rules. Tho matter was once again placed before a constitution Bench on February 9, 1961, when it waii adjourned for two months in order to enable the State Govern ments concerned with this appeal, as also with the connected Criminal Appeals Nos. 124-126 of 1958 (in which the Government of Uttar Pradesh is the appellant) to make up their minds in respect of the prosecutions, as also in view of the report that the Law Commission was considering the quf.'stion of amending the law of sedition in view of the new set-up. As tho States concerned have instructed their counsel to press the appeals, the matter has finally come before us.\n\nIn Criminal Appeals 124·126 of 1958, the State of Uttar Pradesh is the appellant, though the reapondents are diff'erent. In Criminal Appeal 124\n\nof 1958, the accused person is one Mohd. Ishaq Ilmi.\n\nHe was prosecuted for having delivered a speech at Aligarh as Chairman of the Reception Committee of the All India Muslim Convention on October 30,\n\n2$.C.R.\n\nSUPREME COudT REPORTS 781\n\n-\\95:l. His speech on that occasion, was thought to be seditious. Aft ir the necessary sanction, the l\\fagistrate held an enquiry, and finding a prima fucie case m \"'de out against the accused, commi_tted him to the Court of Session. The learned St'ssions Ju Ige, by his Judgment dated January R, 1955, acq11itted him of the charge under s. 153A, but convicted him of the other charge under s. 124A, of the Indian Penal CJde, and sentenced him to rig.>rous imprisonment for one year. The c0nvicted purson preferred an appeal to the High Court.. In the Hiuh Court the constitutionality of s. l:HA of the Indian Penal Code was challenged.\n\nIn Criminal Appeal No. 125 of 1958, the facts are that on M'l.y 29, l9:i4, a meeting of the Bolshovik Party was organised in village Hanumangnj, in the District of Basti, in Uttar Pradesh. On that occasion, the respondent Hama Nand was found to have delivered an objectionable speech in so far as he advoc&ted the use of violence for overthrowing the Government est, iblished by law.\n\nAfter the sanction of the Governnient to the prosecution had been obtained, the learned Magistrate held an enquiry and ultimately committed him to take his trial b9fore the Court of Sessinn•.\n\nIn dne course, the learned Sessions , Judge c 11wi.-ted the accused person under s. 124A of t ht Indian Penal Code and sentenced him to ri'.orc111• imprisonment for three years.\n\nHe hel1l tl1.it the accused person had committed the 1 r.·nce by inciting the audience to an open violent rebellion against the Government established by law, b.v the use of arms.\n\nAgainst the aforesaid order of conviction and sentence, .the ac0used person preferred an appeal to the High Court of Allahabad.\n\nIn Criminal Appeal I ~6 of 1958, the respondent is one Pa.rasnath Tripathi.\n\nHfl is alleged to have delivered a speech in villag~ l\\fansapur, P.S. Akbarpur, in the district of Faizabad, on September 26, 1955, in which he is said to have\n\nKedar Natll Sintli\n\n•• si.11 of Bi,,.,\n\nSinh• C. J,\n\nJ ...\n\nX• N-11 BU., h\n\nv. si.i. •I /liMI\n\nSio\"4 C. J.\n\n782 SUPREME OOURT REPOR'l'!I! [19Cl2] SUPP.\n\nexhortrd the audience to organise a volunteer army and re, ist the Governmeut and its servants by violent means. He is also sa.id to have excited the 1mdicnoe with intent to create feelings of hatred and enmity against the Government.\n\nWhen he was placed on trial for an offence under s. 124A of the Indian Penal Code, the accused\n\nperson applied for a writ of Habeas r'orpus in the High Court of Judicature at Allahabad on the ground that his de!l'ntion was illegal inasmuch a.s the provisions s. 124A of tho India11 Penal Crde were void as being in contranntion of his fundamental 1 ights of free specl'h aud <'Xpression under Art.\n\nI !li l )(a) of the C1rnstitution.\n\nThis matter, along with the appeals which havt givPn rise to appeals Xos. 1:!4 and 125, as afon•said, were ultimately placc>d before a Full Bench, consisting of\n\nDtsai, Gurtu and Beg, JJ. The learned judges, iii separate but concurring judgmcnls, tut k the view that s. I 24A of the Iurlian Penal Code was ultra tires Art. Hl(l)(a) of the Constitution. In that view of the matltr, they acquittocl the accussed persons, eonvictL>d as aforsa.id in the two appea.11 Xos. 124 and I 2:\"i, and granted the writ petition of the accu8ed in Criminal Appeal No. J 20. In a.II these cases the High Court gr.rnted the necessary ccrtifi<\":ctc that the ease involved important questions of law relating tn the intrpretation of the Constitution. That is how these appeals aro before us on a ccrtificatt' uf fitne.>8 granted by the High Court.\n\nf'hri C.B. Ag.1rwala, wh'> apJ><'; IJ'f'P\n\nto the explanation to s. 124A because that explanation has now yielded place to three separate explanations in view of judicial opinions expre11Seemin:tte such fo3Jings of disloyalty as have the tendency to lead to the disruption of the\n\nState or to public disorder. In England, the crime has thus been described by Stephen in his Commen taries on the Laws of England, :21st Edition, volume IV, at pages 141-142, in these words.\n\n\"Section IX. Sedition and Inciting to Disaffection-We are now concerned with l'Onduet which, on the one hand, fall short of treason, ancf on the other does not involve the use of force or violence. 'l'he, law h.i, s here to reconcile the right of private britici:; m with t.he necessity of securing thn safety an epecific heads of sedition may be enumerated ncconling to the object of the accused.\n\nThis may be either 1. to excite disaffection against the King, Government, or Constitution, or against Parliament or the administration of justice ;\n\n2. to promote, by nnlawfol means, any alteration in Chureh or State ; 3. to incite a distnrbimce of the p('ace ; 4. to raise diseonknt among the King's subjects ; 5. to excite class hatred.\n\nIt must. be ohser\\'ecl that criticism on political matters is not, of itsulf scditiorrn. The\n\ntest is the manm'l' in whit>h it is marlc.\n\nCandid and honest discussion is permitted. The law\n\nKtdo1 Nath Si111h\n\nState of Bi/uir\n\nSiriha C. J.\n\n\" 2 1'\"\"' Nella Si•tlt\n\nBlalao/BiAM\n\nSW.. C . ./'.\n\n794 SUPREME COURT REPORTS [1962] SUPP.\n\nonly interferes when the discussion passes tJie\n\nbounds of fair critioiam.\n\nMore especially will this be tho CMtl when the natural consequence of the prisoner's cowluct is to promok public disorder.\" This atatemnnt of the law is derived mainly from tho address to the Jury by Fitzerald, J., in the case of Re.g \\\"'. Alexander Martin Sullivan{l).\n\nIn the course of his address to the Jury the learned Judge observed as follows:\n\n\"Sedition is a crime against society, near: ly allied to that of treason, and it frequently precedes treason by a short interval. Sedition in iteelf is a comprehonsive term, and it embraces all those practices, whether by word, deed or writing, whioh are calculated to disturb the tranquility of the State, and lead ignorant persons to endeavour to au bvert the Go\"ernment and the laws of the empir<'. The\n\nobjcte of se law has not changed during the course of the centuries is also apparent from the following statement of the law by Coleridge, , J., in the course of hie summing up to the Jury in the oaRC\n\nof Rex. v. Aldred(') :\n\n(I! (181i8! ll Cox's Criminal Law Cases, H. 45. (2 (1909 22 Cox's Crimioal Law Cues, I, 3.\n\n------------------------------------- !\n\nI r\n\n2 S C,..J; t.\n\nSUPREME COURT REPOP.TS 795\n\n\"Nothing is clearer than the !'aw on this head\n\n- namely, that whoever by language, either written or spoken incites or epcourages other to use physical force or violence in some public matter connected with the State, is guilty of pnbli8hing a seditious libel.\n\nThe word \"sedition\" in its ordinary natural si;; nification denotes a tum1ilt, an insurrection, a popular co.rnmotion, or an uproar; it implies violence or lawlessness in sorrie form ...... \" . , I In that case, the learned Jucle was charging the Jury in respect of the inrlictment. whinh contained the charge .of seditious libel hy a pnblica.tion by the defendant.\n\nWhile de .. Jing with a case arising under Rule 34(6) ( e) of the Defence of India Rules under the Defence of India Act (XXXV of 1939) bir Maurice Gwyer, C.J., speaking for the Federal Cuurt, made the following obsrn:rntions in the case of Nilwrendu Dutt Mujumdg v. '!'he King Emperor(');\n\nand hasp Jinted 011t that the bngurie of s. 124A of the Indian Penal Code, which wr, s in paii mrtteria with that of the Rule in question, had been adopted from the English Law, and referred with appioval to the ob3ervations of Fitr.orald, , J., in the case quoted above ; and m'l.do the following observations which are quite apposit.e :\n\n\"'.generally speaking, we think that the passage accura,1e)y states t.he law as it is to be gathered from an examination of a great number of judicial pronou11cements.\n\nThe first and most fundamental duty of e'very Go, vrnm.\n\nThis dnt, y has no doubt been somc, Lim<'•' Jl\"rformerl i11 such\n\n(I) (1942) F. C. R< 38.\n\n196Z\n\nKedar Nath Singh\n\nState Of Bihar\n\nSinha C. i.\n\nIIMS\n\nlrtdu N•lh S i•i• ... si.I. of Bilvr\n\nSW.o C.J.\n\n796 SUPREME COURT REPORTS [1962] SUPP.\n\na way as t-0 make the remedy worse than the disease ; but it does not cease to be a matter of obligation because some on whom tho duty rests have performed it ill.\n\nIt is to this aspect of the func•tions of government tbat in our opinion the offence of sedition stands related. It is the answer of the Stat~ to those who, for the purpose of attacking or subverting it, seek (to borrow from the passage cited a.bov<>) to disturb its tranquillity, to create public disturbance and to promote disorder, or who incite others to do so.\n\nWord~, deeds or writings constitute sedition, if they haTe this intention or this tendency; and it is easy to see why they ma.y also constitute sedition, if they seek, as the phrase is, to bring Government into contempt. This is not made an offence in orler to minister to the wounded vanity of Government, but because where Governr.uent and tho law cease to be obeyed because no respect is felt any longer for them, only anarchy can\n\nfollow.\n\nPublic disorder, or the reasonable anticipation or likelihood of public disorder, is thus the gist of the offence. The acts or words complained of must either incite to disorder or must be such as to satisfy reasonable men that that is their intention or tendency.\"\n\nThis statement of the law was not approved by their Lordships of the Judicial Committee of the Privy Council in the case of JI. ing-Emperor v.\n\nSada.shiv Narayan Bhalers not f1;1 mcd the mbjcct m!ltter of decision previously. But certain observations made by this Court in some raB<'s, to LC' presently noticed, with reft.rcncc to the interrelation between freedom of speech and seditious writing or speaking have been made ii: the Ycry tirbt year of the coming into for.:>e of the Constitution. Two case~ involving consideration of the fundamental right of freedom of speech anportl'd in Romes!, Tl11tpp1r v. Tlte State of Madraa(1) and Bn) Bhuslim ,-, Tlw St'llc of DPlhi (') were heard b.v l\\.'1nia C .. J , Paz! Ali, Patanja.li ShllBtri, Mehr Chand :\\fahajan, llfokherjea and Das, JJ, and judgments were deliver< , J on th'l same day (May 26, 1930) In Rumeslt 'l'l1appar's case('), the majority of the, Court ceclared s. 0( 1-A) of the Madras Maintenance of Public Order Act (Mad. XXXIII of\n\n1940), which had authorised imposition of restrictions on th(> fundamental right of freedom of speech, to be in excess of cl. (2) of Art. 19 of the Constitution authorising such restrictions, and, therefore, void and unconstitutional.\n\nIn Brij lihuB!u:su '.• case ('), the same majority struck down s. 7( l )(c) of the Ea.st Punjab Public Safety Act,\n\n194!1, as extended to the Province of Delhi, authorising the imposition of restrictions on the freedom of speech and expression for preventing or combating any activity prejudicial to the public lla.fety or\n\nIll (lq5()] S.c.R. 5'1·1.\n\n(2) 11950] S.C'.R. G05.\n\nthe maintenance of public order. The Court held those provisions to be in excess of the powers conferred on the Legislature by cl. (2) of Art. 19 of the Constitution.\n\nMr. Justice Patanjali Sastri, speaking for the majority of the Comt in Rome,.sh Thappar's case (')made the following observations with reference to the decisions of the .Federal Court and the Judicial Committee of the Privy Council as to what the law of Sedition in India wae\n\n\"It is also worthy of note that the word \"sedition\" which occurred in article 13(2) of the Draft Constitution prepared \\_Jy the Drafting Committee was deleted before the article was finally passed as article l!l(2). In this ronnection it may be recalled that the Federal Court had, in defining sedition in N iharendu Dutt Majumdar v. The King /!Jmperor (2 ) held that\n\n\"the acts or words complained of must either incite to disorder or must be such as to satisfy reasonable men that that is their intention or tendency\", but the Privy Council overruled that decision and emphatically reaffirmed the view expressed in Tilak's case to the effect that \"the offence consisted in exciting or attempting to excite in others certain bad feelings towards the Government and not in exciting or attempting to excite mutiny or rebellion, or any sort of actual disturbance; great or small\" --King Emperor v. Sadashiv Narayan Bhalerao.\n\nDeletion of the word \"sedition\" from the draft article 13(2), therefore, shows that criticism of Government exciting disaffection or bad feelings towards it is not to be regarded as a justifying ground for restricting the freedom of expression and of the press, unless it is such as to undermine the security of or tend to overthrow the State.\n\nIt is also significant that the corresponding (I) [1950] s.c.R 594. (2)\n\n(1912) F. c. R. 38.\n\nJ96B\n\nK, darNatA Siagl\n\ny, S1<1111:oJ Bi/tor\n\nSinha C, J,\n\n196!\n\nKld.r fta111 S1tcglt.\n\nSlat. 9f Biliar\n\nSW..C.J.\n\n800. SUPREME COURT REPORTS [1962) SUPP.\n\nIrish formula of \"undermining the public order or the authority of the State\" (article 40( Constitution of Fire, I!l3'i) did 11ot app1mntly find favour with the framers of the Jndia11 c.institution.\n\nThus, very narrow and stringent limits have been set to\n\npermitl!lible legislative abridgement of the right of free speech and expression, and 11his was doubth:ss due to the realisation that freedom of speech and of the press lay at the foundation of all democratic organisations, for without fnc political discussion no public education, so esential for the proper functioning of the processes of popular government, is poHSible, fre..,'C!om of such amplitude might involve risks of abuse.\n\nBut the framers of the Constitution may well have reflected, with Madison who was \"the leading spirit in the preparation of the First Amendment of the Federal Constitution\" that \"it is better to leave a few pf its noxious branches to their luxuria1?t growth, than, by prunning them away to injnrP the vigour of those yielding the prop<'r fruits\" : (quoted in Ne.d the words quoted within inverted commas from the prcamhle of th11 Act which shows its scope and necessity and the que1ition raised before us attacking the validity, of the Act must be formulated in the manner I have suggested. If the answer to the question is in the affirmati rn, as I think it must be, then the impugned law which prohibits entry into the State of Madras of \"any document or class of documents\" for securing public safety and maintenance of public order should satisfy the requirementR laid down in article 19(2) of the Constitution. From the trend of the arguments addreesed to us, it would appear that if a document is seditious, its entry could be validly prohibited, because sedition is a matter which undermine3 the Security of the State ; but if on the other hand, the document is calculated to disturb public tranquillity and affect public safety, its entry cannot be prohibited, because public disorder and disturbance of public tranquillity are not matters which undermine the secmitv of the State. Speaking for myself, I cannot understand this argument.\n\nIn Brij Bhushan v. The State. I have quoted good authority to show that sedition owes itsgrnvity to its tendency to crea.te disorders and an authority on Criminal Law like Sir James Stephen has classed sedition as an offence against public tranquillity.\"\n\nIn Brij Bhushan case('), Faz! Ali, J,, who was ag!l.in the dissenting judge, gave his reasons to greater detail. He refrrred to the judgment of tlw Federal Court in Niharendu Dutt Majumdar's Cnce of tho Government established by law is an eRsential condition of the stability of the State.\n\nThat is why 'sedition', as the offence in s.\n\n124A has been characterised, comes under Chapter VI relating to offences against the State. Hence any acts within the meaning of s. l24A which have the effect of subverting the Government by bringing that Government into contempt -0r hatred, or creating disaffection against it, would be within the penal statute because the feeling of disloyalty to the Government established by law or enmity to it imports the idea of tendency to public disorder by the use of actual violence or incitement to violence.\n\nIn other words, any written or spoken words, eto. \"hi ch have implicit in them the idea of subverting Government by violent means, which are compendwusly included in the term 'revolution', have been made penal by the section in question. But the section has taken care to indicate clearly that strong words used to express disapprobation of the meamres of Government with a view to their improvement or alteration by lawful means would not come within the section. Similarly, comments,\n\n19/JB\n\n1\"1/ar Noli'tlta; i\n\nv, Si.u of Bi/tar\n\nSin/r4 C. J.\n\nlf1i• No/J. SU.g~\n\n•• S..,, o/Bik.r\n\nBW.C.J,\n\n806 SUPREME COURT REPORTS [1962] SUPP,\n\nhowever strongly worded, expressing disapprobation of actions of the Government, without exciting those feelings which generate the inclination to cause public disorder by acts of violence, would not be penal. In other words, disloyalty to Govern ment established by law is not the same thing aa\n\ncomment.in~ in strong terms upon the measures or acts of Government, or its agencies, so as to ameliorate the condition of the people or to secure the cancellation or alteration of those acts or measures by lawful means, that is to say, without exciting thoso feelings of enmity and disloyalty which imply excitement to public disorder or the use of violence.\n\nIt haa not been contended before us that if a speech or a writing excites people to violence or have the tendency to create public disorder, it would not come within the definition of 'sedition'.\n\nWhat has been contended is that a person who makes a very strong speech or uses very vigorous words in a writin~ direcWd to a very strong criticism of measures of Government or acts of public officials, might also come within the ambit of the penal section. But, in our opinion, surh words written or spoken would be outside the scope of the section. In this connection, it is pertinent to observe that the security of the State, which depends upon the maintenance of law and order i• the very basic consideration upon which legislation, with a view to punishing offences against the State, is undertaken. Such a legislation has, on the one hand, fully to protect and guarantee tho freedom of speech and expression, which is the sine qoo nan of a democratic form of Government that our Constitution has established. This Court, as the custodian and guarantor of the fundamental rights of the citizens,\n\nhas the duty cast upon it of striking down any law which unduly restricts the freedom of speech and expression with which we are concerned in this case. But the freedom has to be guarded againp'\n\nbecoming a licence for vilification and condemnation of the Government established by law, in words which incite violence or have the tendency to create public disorder. A citizen has a right to say or write whatever he likes about the Government, or ita measures, by way of criticism or comment, so long as he does not incite people to violence against the Government established by law or with the intention of creating public disorder. The Court, has, therefore, the duty cast upon it of drawing a clear line of demarcation between the ambit of a citizen's fundamental right guaranteed under Art. 19(l)(a) of the Constitution and the power of the legislature to impose reasonable restrictions on that guaranteed right in the interest of, inter aUa, security of the State and public order.\n\nWe have, therefore, to determine how far the ss. 124A and 505 of the Indian Penal Code could be said to be within the justifiable limits oflegislation.\n\nIf it is held, in consonance with the views expressed by the Federal Court in the case of Niharendu Dutt Majumdar v. Tlw Kiny Emperor(') that the gist of the offence of 'sedition' is incitement to violence or the tendency or the intention to create public disorder by words spoken or written, which have the tendency or the effect of bringing the Government established by law into hatred or contempt or creating disaffection in the sense of disloyalty to the State in other words bringing the law into line with the law of sedition in England, as was the intention of the legislators when they introduced s. 124A into the Indian Penal Code in J 870 as aforesaid, the law will be within the permissible limits. laid down in\n\ncl. (2) of Art. 19 of the Constitution, if on the other hand we give a literal meaning to the words of the section, divorced from all the antecedent background in which the law of sedition has prown, as laid down in the several decisions of the Judicial Committee of the Privy Council, it will be true to\n\n(I) ( 19t2) P. C. R. SS.\n\n1968 K• Nalh Binlh\n\ny, Bu.'6 of Bi/urr\n\nSinha C. J,\n\nJHZ\n\nK,, U, Nath Sinth\n\nSt.aofBiMr\n\nSOS SUPREME COURT REPORTS [1962] SUPP.\n\nsay that. the section is not only within b•1t also very much Leyond tho limits laid down in cl. (:!) aforesaid.\n\nIn view of tho conflicting decisions of the Federal Court and of the Privy Council, referred to above, we have to detnmino whether and how far tho provisions of 88. I 24A nnd 5U5 of the Indian Penal Code have to be struck down as unconstitutional.\n\nIf we accopt tho interpretation of the Federal Court as to th1: gist of criminality in an alleged crime of sedition, namely, incitement to disorder or tendency or likolihood of public disorder or reasona.blo appr .. hension thereof, the section may lie within the ambit of permissible legislative restrictions on tho fundamental right of froodom of speech and expreBBion.\n\nThero can be no doubt that apart from the provisions of ol. (2) of Art. 19, BB. l24A and 505 are clearly violative of A1t. l9(l)(a) of the Constitution. But then we have to see how far the saving clause, namely, ol. (2) of Art. 19.protccts the sections aforesaid.\n\nNow, M already pointed out, in terms of the amended\n\ncl. (2), quoted above, the expres; ion \"in the interest of ... puhlic order\" are words of great amplitude and are much more comprehensive than the expression\n\n\"for the maintenance of\", !\\S observed by this Court in the cl\\Be of Virendra v. The State of Punjab (1 ).\n\nAny law which is enacted in the interost of publio order may be saved from the vice of constitutional invalidity. If, on the other hand, we were to hold that even without any tendency to disorder or intention to croate di8turbance of law and order, by the use of words written or spoken which merely create disaffoction or feolings of enmity against the Government, the offonco of sedition is complete, thon such an interpretation of the sections would make them unconstitutional in view of Art. 19(l}(a) read with cl. (2). It is well settled that if certain\n\nproviions of law construed in one way would make\n\n(I) [19S8] S.C.R. 508, 317.\n\nthem consistent with the Constitution, and another interpretation would rnnder them unconstitutional, the Court would lean in favour of the former construction. The provisions of the sections read as a whole, long with the explanations, make it reasonably clear that the sections aim at rendering pllnal only such activities as would be intended, or have a tendency, to create disorder or disturbance of public peace by resort to violence.\n\nAs already pointed out, the explanations a.ppended to the main body of the section make it clear that criticism of public measures or comment on Government action, however strongly worded, would be within reason\n\nable limits and would be consistent with the fundamental right of freedom of speech and ex pres. sion. It is only when the words, written or spoken, etc. which have the pernicious tendency or futention\n\nof creating public disorder or disturbance of law and order that the law steps in to prevent such activities in the interest of public order. So construed, the section, in our opinion, strikes the correct balance betwPen individual fundamental rights and the interest of public order. It is also well settled . that in interpreting an enactment the Court should have regard not merely to the liter~! meaning of the words used, but also take into conoderation the antecedent history of the legislation, its purpose and the mischief it seeks to suppress (vide (1)). The\n\nBengal Immunity Company Limited v. The State of Bihar (1) and {l) R.M.D. Chamarbaugwalla v. The Union of India ('). Viewed in that light, we have no hesitation in so construingthe provisions of the sections impugned in these cases as to limit their application to acts involving intention or tendency to create disorder, or disturbance of law and order, or incitement to violence.\n\nWe may also consider the legal position, as it should emerge, assuming that the main s. I24A is\n\n(I) [1955] 2 S.C R. 603.\n\n(2) [1957] S.C.R, 93(1,\n\n1P6t\n\nlirdtir H•lh /JlP, rli\n\nv, Stole '4f Bibar\n\nSiwl;, J.\n\nJHll K• N .i. S¥\n\n•· 81111 fl/ Bilw\n\nSinluC.J.\n\n810 SUPREME COURT REPORTS [1962] SUPP.\n\ncapable of being construed in tho literal sense in which the Jurlicial Committee of tho Privv Council has construed it in tho oases referred to above. On that assumption, it is not open to this Court to construe the section in such a way as to avoid the alleged unconstitutionality by limiting the application of the section in the way in which the Federal Court intenrled to apply it ? In our opinion, there are decisions of this Court which amply justify our taking that view of the l<'gal position. This Court, in the case of R.Jf.D. Chamarbaugu-alla v. The Union of lridia (I) has rxamincd in detail the several docisions of this Court, as also of the Courts in America and Australia.\n\nAfter examining those decisions, this Court came to the conclubion that if tho impugnrd provisions of a Jaw come within the constitutional powers of the legislature by adopting one view of the words of the impugned Hection or Act, thr Court will take that vi1w of the matter aod limit its application accor rlingly, in preference to tho view whil\"h would make it unconstitutional on another view of the interpretation of the words in question. In that case, tho Court had to choose between a definition of the expression \"Prize Competitions\" as limited to those competitions which wore of a gfmbling character and those which wore not. The Court chose the forml\"r interpretation which mado tho rest of the provisions of the Act, Prize Competitions Act (XLII of 1955), with pnrti cular reference to ss. 4 and 5 of the Act and Rules 11 and 12 framed thereunder, valid.\n\nThe Court held that the penalty attached only to those\n\ncompetition~ which involved the element of gambling a.nd those oompP.titions in :vhioh success depended to a substantial degree on kill were held to be out of the purview of the Act. The ratio decidendi\n\nin that ca.Ile, in our opinion, applied to the case in hand in so far as we propose to limit its operation only to such activities as come within the ambit of\n\n(I)\n\n(19~7) S.C.R. 930.\n\n• '\n\nthe observations of the Federal Court, that is to say, activities involving incitement to violence or intention or tendency to create public disorder or caus':l disturbance of public peace.\n\nWe do not think it necessary to discuss or to refer in detail to the authorities cited and discussed in the reported case R.M .D. Cha, marbaugwalla v. The Union of India 11) at pages 940 to 952. We may add that the provisions of the impugned sections, impose restrictions on tho fundamental freedom of speech and expression, but those restrictions cannot but be said to be in the interest of public order and within the ambit of permissible legislative interference with that fundamental right.\n\nIt is only necessary to add a few observations with respect to the constitutionality of s. 505 of the Indian Penal Code. With reference to each of the three clauses of the section, it will be found that the gravamen of the offpnee is making, publishing or circulating any statement, rumour or report (a) with intent to cause or which is likely to cause any member of the Army, Navy or Air Force to mutiny or otherwise disregard or fail in his duty as such ; or (b) to cause fear or alarm to the public or a section of the public which may induce the commission of an offence against the State or against public tranquillity ; or ( o) to incite or which is likely to incite one class or community of persons to commit an offence against any other class or community.\n\nIt is manifest thateach one of the constituent elements of the offence under s. 50ti has reference to, and a direct effect on, the securitv of the State or public order. Hence, these provisions would not exceed the bounds of reasonable restrictions on the right of freedom of speech and expression. It is clear,\n\n(I) (1957] S.C.R. 930.\n\nKedor N otli B ... h\n\nState ef BiMrr\n\nSinllo C.11,\n\nZfU\n\nKtiltlr ~.,~ s;.1~\n\nv. llwl of Billar\n\nsw..c. J.\n\n11/Gt\n\nJnuary 16.\n\n812 SUPREME OOURT REPORTS [1962) SUPP.\n\ntherefore, that cl. (2) of Art. I 9 olearly eaves thA section from the vice of unconstitutionality.\n\nIt has not ben contended hefore us on behalf of the appellant in C.A. 169 of 1957 or on behalf of the respondents in tho other appeals (No. 124·126 of 1958) that the words used by them did not come within the purview of the definition of sedition as interpreted by us. No arguments were advanced before us to show that even on the interpreta.tiop given by us their cases did not come within tho mischit>f of the one or the other section, as the CiUlll may be. It follows, therefore, that the Criminal Appeal Hi!J of 195i has to be dismissed. Criminal Appeals 124-126 of 1958 will be remanded to the High Court to pa.ss such order as it thinks fit awl proper in the light of the interpretation given by us.\n\nAppeal No. 169 of 1957 dismissed.\n\nAppeal~ Nos. 124 lo 126 of 19ii8 all, owed.\n\nDAULATRAM v.\n\nSTATE OP PUNJAB\n\n(J. L. KAPUR, 111. HIDAYATULLAH and RAGllUDAR\n\nDAYAL, JJ.)\n\nPro-ecution-Cognizance-Comp!aint in writing liy thf Public Sen'f of the one or the other section, as the CiUlll may be. It follows, therefore, that the Criminal Appeal Hi!J of 195i has to be dismissed. Criminal Appeals 124-126 of 1958 will be remanded to the High Court to pa.ss such order as it thinks fit awl proper in the light of the interpretation given by us.\n\nAppeal No. 169 of 1957 dismissed.\n\nAppeal~ Nos. 124 lo 126 of 19ii8 all, owed.\n\nDAULATRAM v.\n\nSTATE OP PUNJAB\n\n(J. L. KAPUR, 111. HIDAYATULLAH and RAGllUDAR\n\nDAYAL, JJ.)\n\nPro-ecution-Cognizance-Comp!aint in writing liy thf Public Sen'ault Ram who was prosecuted under s. 182 of the Indian Penal Code and sentenced to imprisonment for three months. His revision application in the High Court of Punjab a.t Chandigarh\n\nwas dismissed in limini; but he obtained special\n\nle:ive from this court and has filed this appeal.\n\nThe appellant was working as a Patwari and on August 19, 1958, he wrote a letter to the Tehsildar of Pathankot that on the previous day he had been set upon by two persons Hans Raj and Kans .Haj who beat him severely and robbed him of oertai.n of his official papers and some money, which was with him, partly belonging to\n\nJ3dl\n\nD...UI Ram v.\n\nSIW of l'unjoi\n\nHi'9<1ullali J.\n\n814 SUPREME COURT REl>ORTS [1962] SUPP.\n\nhi~ and partly to the Government. At the end of the letter whirh he wrote to the Tehsildar, he stated that the lct.tc-r was written for his information. The TehRildar, however, forwarded the letter to the i3ub-Divisional Offietr v. ho in his turn sent it on to the police. The police enquired into the facts and reported that the allegations in letter were false. :Meanwhile, it appears that th~ appellant entered into some sort of compromise with Hans Raj and Kans Raj and wrote another letter saying_ that as they were his relatives and he had found the papers and mc, ney, the proceedings if any be dropped and the papers be consigned to the record room.\n\nThe matter however was pursued further and when the report of the police came that the allegations in the original letter were false, the Tehsildar asked the police that a \"calendar\" be drawn up. The police however launched a prosecution against the appellant under s. 182 of tho Indian Penal Code, and after due trial, the appellant was found guilty of that off••noe and was sentenced to three months' rigorous imprisonment.\n\nHis appeal and revision failed and we have been informed that the appellant has served out his entire sentence.\n\nThe only question in this caRe is whether a complaint in writing as required by s. 195 had been preRented by the public servant concerned.\n\nThe public servant who was moved by the appellant was undoubtedly the Tehsildar. Whether the appellant wanted the Tehsildar to take action or not, tLe fact remains that he moved the Tehsildar on what is stated to be a false averment of facts.\n\nHe had charged Hans Raj and Kans Raj with offenoee under the Penal Code and he had moved his superior officer for action oven though he might havo stated in the letter that it was only for his information.\n\nWe are prepared to assume that ho expected that\n\nsome action would be taken. In fact his second letter that he had compromised the matter and the proceedings might be dropped clearly shows that he anticipated some action on the part of his superior officer. The question is therefore whether under the provisions of s. 195, it was not incumbent on the Tehsildar to present a complaint in writing against the appellant and not leave the court to be moved by the police by putting in a charge sheet. The words of s. 195 of the Criminal Procedure Code are explicit. The section reads as .follows:\n\n\" (1) No Court shall take cognizance- ( a) of ariy offence punishable under sections 172 to 188 of the Indian Penal Code, except on the complaint in writing of the public servant concerned, or of some other public servant to whom he is subordinate;\n\nThe words of the section, nam1>ly, that the complaint has to be in writing by the public servant concerned and that no court shall take cognizance except on such a complaint clearly show that in every instance the court mulilt be moved by the appropriate public servant. We have to decide therefore whether the Tehsildar can be said to be the public servant concerned and if he had not filed the complaint in writing, whether the police officers in filing the charge sheet had satisfied the requirements of s. 195.\n\nThe words \"no court shall take cognizance\" have been interpreted on more than one occasion and they show that there is an absolute bar against the court taking seisin of the case except in the manner provided by the section.\n\nNow the offence under s. 182 of the Penal Code, if any, was undoubtedly complete when the appel- .\n\nJant had moved the Tehsildar for action. Section 182 does not require that action must always be\n\nJfft\n\nDau/al Ra111\n\n•• Stal< of PtlnjU\n\nH idayatullale J.\n\n19H D..,., a.,.\n\nS*' q/ Punjo/J\n\nHidlo.J01tllloh J.\n\n816 S\"CPREME COURT REPORTS [1962] SUPP.\n\ntaken if the peron who moves the publio servant knows or believes that action would be taken. In making hiR report to the Tehsildar therefore, if the appdl1tnt believed that some action would be\n\ntak<\"n ( ; UHi IH' lwl no rc1so11 to doubt that it woulJ not) the offence under that section was compld<-.\n\nIt was therefore incumbent, if the pro- 80Cution waH to !.o launched, that tho complaint in writing , hould be made by the Tehsildar as the public ~\"rvant concerned in this case. On the othn hand what we find is that a complaint by the Teh, ildar was nut filed at all, but a charge sheet was put in br the Station House Officer. The lcarnc State Government tries to support the actior1 by submitting thats. 1!!5 had been complied with inasmuch as when tho allegations hail l1e11n disproved, the letter of the Superintend order passed by it, according to law.\n\nThe appellants were convicted by the Magistrate, I Class, Gyanpur, of offences under ss. 452 and 323 read with s.34, I.P.C. Kharpattu, one of the appellants, was also convicted of an offenco under s. 324, J.P.C. They appealed against thrir Ponviction.\n\nThe appPal was fixed for hearing on XoYemher 30, 1956. On that ir getting\n\ninjurit•s. This application was allowed, on July 2, I !l5i, hy the lcarneember 30, 1956, dismissing the appeal, when neither t.he appellants nor their counsel appeared and could order the re-hearing of the appeal. We are of opinion that he could not do so and that therefore the view taken by the High Court is correct.\n\nSankatha Singh\n\nv. ,)tare of U. P.\n\nRagl.ubar Dayal J.\n\nBal11Aa Bm16\n\nv. 8..U of U. P.\n\nBogMbor D41'1 J.\n\n820 SUPREME OOURT REPORTS [1962) SUPP.\n\nA criminal appeal cannot be dismiBBed for the default of the appellants or their counsel. The Court has either to adjourn the hearing of the appeal to enable them to appear, or should consider the appeal on merits and p&SS the final order. Sri Tej Pal Singh was a.ware of this as his order itself indicates.\n\nHe did not dismiss the appeal for default. He himself perused the judgment of the Magistrate and the record and did consider the merits, as he says in his order : 'I find no ground for any interference'. The mere fact that he ha.d not expreBSed his reasons for coming to that opinion does not mean that he ha.d not considered the material on record before coming to the conclusion that there was no case for interference. His omission to write a detailed judgment in the circumstances may be not in eomplianci> with he\n\nprovisions of s. 367 of the Code and may be liable to be set as.ide by a superior Court, but will not give him any power to set it aside himself, and\n\nrehear the appeal. Section 369, rea.d withs. 424, of the Code, makes it clear that the appellate Court is not to alter or review the judgment once signed, except for the purpose of correcting a clerical error.\n\nSri Tej Pal Singh was in error when he thought that s. 423 of the Code enjoined the appellate Court to dispose of the appeal after hea.ring the appellant or his pleader and the Public Pro- Becutor.\n\nHe omitted to notice tho words 'if he appears' aftP-r tho expros.ion 'and hearing the appellant or his pleader'. If none of these appears at the hearing, the appellate Court can proceed with the disposal of the appeal on merits. Of <'ourse, a notice to t, he appellant or his counsel of the date of hearing is an rssential precedent for the hearing of the appeal, in view of s. 422 of the Corle, Sri Tej Pal Singh states, in his order dated .\"tu]_,. 2. I p,;7 :\n\n2 S.C.R.\n\nSUPREME COURT RE FORTS 821\n\n\"It will also appear that the conditions of s.422, Cr. P. C. were also not fulfilled, as no notice was ewir issued to the appellant.\" Ho again missed noticing that a notice of the hearing of the appeal has to be given either to the appellant or to his pleader and need not be given to both. He does not say in his order_ that no notice of the date of hearing had been given to the appellants' counsel. The practice, usually, is to gi've notice of the date of hearing of the appeal to the counsel who informs the appellant, and not to the appellant personally. The application for restoration indicates that the appellant knew of the date of hearing.\n\nIt has been urged for the appellants that Sri Tej Pal Singh could order the re-hearing of the appeal in the exeroise of the inherent powers which every Court possesses in order to further the ends of justice and that Sri Tripathi was not justified in any case to sit in judgment over the order of Sri Tej Pal Singh, an order passed within jurisdiction, even though it be erroneous. Assuming that Sri Tej Pal Singh, as Sessions Judge, could exercise inherent powers, we a.re of opinion that he could not pass the order of the re-hearing of the appeal ii:J. the exercise of such powers when s. 369, read with s. 424, of the Code, specifically prohibits the altering or reviewing of its order by a Court. Inherent powers cannot be exercised to do what the Code specifically prohibits the Court from doing. Sri Tripa.thi was competent to consider when the other party raised the objection whether the appeal was validly up for re-hearing before hiru. He considered the question and decided it rightly.\n\nIt i~ also urged for the appellants that Sri Tej Pal Singh, had the jurisdiction to pass orders on the application presented by the appellants on December 17, 1956, praying for the re-hearing of the appeal and that therefore his order could not\n\nSankalha Sin1h\n\nStahoj U.P.\n\nStot.ofU. P.\n\nRogllubar DaJol J,\n\nIHJ\n\n822 SUPREME COURT REPORTS [l9o2] SUPP.\n\nb.e said to have been absolutely without jurisdict10n. We do not agree.\n\nHe certainly had jurisdiction to dispose of the applimtion presented to him, but when s. :l69, of the Code Plits to indUdtrial emplcyeu.\n\nS, employed by the appellant as a cross cutter in the saw mill was asked to show cause why his services should not be terminated on account of grave indiscipline and misconduct and he denied the allegations of fact.\n\nHe was thereafter informed about a department enquiry to be held against him and was suspended pcding enquiry. Purporting to act under r. 18(a) of the Standing Orders, the appellant terminated the services of S, without holding any departmental enquiry. The industrial tribunal to which the dispute was referred held, that action taken, after dropping the proposed departmental pro ceedings was not bonafid< and was a colourable cx.rcisc of the power conferred under r. 18(a) of the Standing Order and aince no attempt was made before it to defend such action by proving the alleged misconduct, it passed an order for reinstatement of S. The appellant contended that as the termination was strictly in accordance \\Vith the terms of contract under r. 18(a) of the Standing Ordcn, it was entitled to dispense", "total_entities": 25, "entities": [{"text": "SANKATHA SINGH", "label": "PETITIONER", "start_char": 33, "end_char": 47, "source": "metadata", "metadata": {"canonical_name": "SANKATHA SINGH", "offset_not_found": false}}, {"text": "STATE OF U.P. (S. K. DAs", "label": "JUDGE", "start_char": 49, "end_char": 73, "source": "metadata", "metadata": {"canonical_name": "STATE OF U.P. (S. K. DAs", "offset_not_found": false}}, {"text": "K. SUBBA RAo", "label": "JUDGE", "start_char": 75, "end_char": 87, "source": "metadata", "metadata": {"canonical_name": "K. SUBBA RAO", "offset_not_found": false}}, {"text": "DAYAL, JJ.", "label": "JUDGE", "start_char": 102, "end_char": 112, "source": "metadata", "metadata": {"canonical_name": "RAGHUBAR DAYAL", "offset_not_found": false}}, {"text": "s.367", "label": "PROVISION", "start_char": 792, "end_char": 797, "source": "regex", "metadata": {"statute": null}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 804, "end_char": 830, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Section 369", "label": "PROVISION", "start_char": 1174, "end_char": 1185, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 424", "label": "PROVISION", "start_char": 1196, "end_char": 1202, "source": "regex", "metadata": {"statute": null}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 1210, "end_char": 1236, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "S1", "label": "PROVISION", "start_char": 1842, "end_char": 1844, "source": "regex", "metadata": {"statute": null}}, {"text": "ss. 452 and 323", "label": "PROVISION", "start_char": 2450, "end_char": 2465, "source": "regex", "metadata": {"statute": null}}, {"text": "s.34", "label": "PROVISION", "start_char": 2476, "end_char": 2480, "source": "regex", "metadata": {"statute": null}}, {"text": "I.P.C", "label": "STATUTE", "start_char": 2482, "end_char": 2487, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 324", "label": "PROVISION", "start_char": 2562, "end_char": 2568, "source": "regex", "metadata": {"linked_statute_text": "I.P.C", "statute": "Indian Penal Code"}}, {"text": "S.0", "label": "PROVISION", "start_char": 3745, "end_char": 3748, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 423", "label": "PROVISION", "start_char": 3973, "end_char": 3979, "source": "regex", "metadata": {"statute": null}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 3987, "end_char": 4013, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 367", "label": "PROVISION", "start_char": 4266, "end_char": 4272, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 367", "label": "PROVISION", "start_char": 6557, "end_char": 6563, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 369", "label": "PROVISION", "start_char": 6713, "end_char": 6724, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 423", "label": "PROVISION", "start_char": 6957, "end_char": 6963, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 422", "label": "PROVISION", "start_char": 7479, "end_char": 7485, "source": "regex", "metadata": {"statute": null}}, {"text": "s.422", "label": "PROVISION", "start_char": 7649, "end_char": 7654, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 369", "label": "PROVISION", "start_char": 8845, "end_char": 8851, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 424", "label": "PROVISION", "start_char": 8863, "end_char": 8869, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_822_830_EN", "year": 1962, "text": "Stot.ofU. P.\n\nRogllubar DaJol J,\n\nIHJ\n\n822 SUPREME COURT REPORTS [l9o2] SUPP.\n\nb.e said to have been absolutely without jurisdict10n. We do not agree.\n\nHe certainly had jurisdiction to dispose of the applimtion presented to him, but when s. :l69, of the Code Plits to indUdtrial emplcyeu.\n\nS, employed by the appellant as a cross cutter in the saw mill was asked to show cause why his services should not be terminated on account of grave indiscipline and misconduct and he denied the allegations of fact.\n\nHe was thereafter informed about a department enquiry to be held against him and was suspended pcding enquiry. Purporting to act under r. 18(a) of the Standing Orders, the appellant terminated the services of S, without holding any departmental enquiry. The industrial tribunal to which the dispute was referred held, that action taken, after dropping the proposed departmental pro ceedings was not bonafid< and was a colourable cx.rcisc of the power conferred under r. 18(a) of the Standing Order and aince no attempt was made before it to defend such action by proving the alleged misconduct, it passed an order for reinstatement of S. The appellant contended that as the termination was strictly in accordance \\Vith the terms of contract under r. 18(a) of the Standing Ordcn, it was entitled to dispense\n\n2 S.C.R.\n\nSUPREME COURT BEPORTS\n\nwith the service of an employee at any 1in1e Uy tirst giviug 14 days notice or, paying 12 days \\vagc.s.\n\nHel1l, that the en1ployer's decision tu discharge the ernployce under r. l8(a) of the Stle relating to termination ofGovernnient service stands on au entirely difl\"ercut footing as cun1pared to industrial en1ployec.'i anutl c{: C,.\n\nWorkmt11 of U. B. J..1..1u d: C?.\n\nWonchoo J,\n\n8:::6 Sl.'PREME COURT REPORTS [1962] SUPP .\n\nreceiving I:! a.i. or more as daily wagos, otherwi;; c, than undn rule 21. ho shall be given l4 days notice• c, r be paid 12 days wages.\" ft may Le mention<'d that r. :! I dPals with cases of miscond11ct and providPs for dismissu.! or suspension for misconduct and in sud1 a C'Mle the workman eo s11spc11d1d is nut entitled to any wages during the\n\nperiod of MUspensiou.\n\nThe claim thus put forward on behalf of the aµpellant iR tbat it is entitl\"; d\n\nundt.>r r. IS(a) of tho tanding Orders which is a turm of contmct between the appellant and its employees to dispense with the service of any employee at any time by just giving 14 days notice or paying 12 days wages.\n\nwe are of opinion that thi8 claim of the appellant cannot b1o1 accepted, and it iH too late in the day for an employer to raise such a ch\\im for it amounts to a claim \"to hire am! firo\" an Prnployee a.s tho employer plcascg and thus <'flmpl!'tdy mgative~ scrnritv of SN\\'ic which has been seemed to ir.dustrial enipl0yccs t Ii rough industrial adjudication for over a long pc>riutl of tinw now.\n\nAs far back as 195~, the Labc.ur Appellutt• Tribunal had occasion to consider this matter relating to discharge by notice or in lieu thereof by paymcnt of wages for a certain period without assigning any reRHon: (.1ee Buckingham and Carnaiic Co. Ltd. EU;. v. W orkeis of the Company. de.) ('). It was of opinion that even in a\n\ncase of this kind the nquiremont of bona /ides is essential and if the termination of service is a colourable exercise of the powcr or as a result of victimisation or unfair labour practice the iadustrial tribunal would hav\" the jurisdiction to intervtne\n\nRncl set a.ide such termination.\n\nFurthc•r it held that where the termination of senico is capricious, arbitrary or unmecssarily harsh on the part of the\n\nC'lllployer juclgccl by n01mal standards uf a reasonable man that may be cogent evidence of victimisation or unfair labour practice.\n\nThese observations I. ( 195l) L.A.C. 490.\n\nof the Labour Appellate Tribunal were approved by this Court in 'l'he Chartered Banlc, Bombay v. The Chartered Bank Employees' Union('). and Assam Oil Company v.\n\nIt~ Workmen('). Therefore if as in this case the employer wanted to take action for misconduct and then suddenly dropped the departmental proceedings which were intended to be held and decided to discharge the employee under r. 18 (a) of the Standing Orders, it was clearly a colourable exercise of the power under that rule in as much as that rule was used to get rid of an employee instead of following the course of holding an inquiry for misconduct, notice for which had been given to t.he employee and for which a departmental inquiry was intended to be held. The reason given by the appellant in tho order terminating the services of Sankaran of July 8, 1958, namely, thah-the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank a11d file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if Sankaran were retained in service, cannot he accepted at its face v11lue; so that the necessity for an inquiry intended to he held for misconduct actually charged might he done away with.\n\nIn any case oven if the inquiry was not held by the appellant and action was taken under r. 18 (a) it is now well-settled, in view of the decisions cited above, that the employer could defend the action under r. 18(a) by leading evidence before the tribunal to show that there was in faet misconduct and therefore the action taken under r. 18(a) was bona fide and was not colourable exercise of the power under that rule. But the tribunal has pointed out that the employer did not attempt to do so before it. It satisfied it.self by producing two witnesses but withholding the important witnesses on this question. In the circumstances, if the tribunal did not accept the evidence of the two witnesses\n\n(1) [1960] 3 $.C.R. 441.\n\n(2) [1960] 3 $.C.R. 457.\n\nThe M a11ugement of\n\nU. B. Dutt &> Co. v, Workwtn of U. B Dutt & Co.\n\nWtmchoo J.\n\n1 lw Manag11111nl of lJ. B. Dutt &:- Co.\n\nWorhnfn of U. B,\n\nDull 4' Co.\n\nWachooJ,\n\nwho were produced it cannot be said to have gone wrong.\n\nLarned counsel for the appellant however urges that the employer was empowered to take action under r. 18 (a) of the Standing Orders and having taken action under that rule, there was nothing for it to justify before the tribunal. We have already said that this position cannot be accepted in industrial adjudication relating to termination of service of an employee and has not been accepted by industrial tribunals over a long course of years now and the view taken by industrial tribunals has been upheld by this Court in the two cases referred to above. Learned counsel for the appellant, however, relies on the decision of this Court in Par8holam Lal Dhingru v. Union of India.(') That was however a ease of a. public servant and the considerations thai a1, ply to such a case are in our opinion entirely different. Stress was laid by the learned counsel on the obsNvations at p. 862 where it was ob:; erved as follows :-\n\n\"It is true that the misconduct, negligence inefficiency or other disqualification may be the motive or inducing factor which influences the Government to take action under the terms of the contract of employment or the specific service rule, nevertheless, if a right exists, under the contract or the rules, to terminate the service, the motive operating on the mind of the Government is, as Ohagla C. J. has said in Srinivas Ganesh v. Union of India l') (supra), wholly irrelevant.\n\nIt is urged that the same principle should be applied to industrial adjudication. It is enough to say that the position of government servants sds on entirely different footing as compared to mdust~1al employees.\n\nArticles 310 and 311 of the Constitution apply to government servants and it is in the\n\n(I) [1958) S.C.R. 828.\n\n(2) A.J.R. (19~) Bom. 455.\n\nlight of those Articles read with the Rules framed under Art. 309 that questions relating to termination of service of government servants have to be considered. No euch constitutional provisions have to be considered when one is dealing with industrial employees. Further an employer cannot nowpress his right purely on contract and say that under the contract he has unfettered right \"to hire and fire\" his employees. That right is now subject to industrial adjudication and even a power like that granted by r. 18 (a) of the Standing Orders in thie case, is subject to the scrutiny of industrial courts in the manner indicated above. The appellant therefore cannot rest its case merely on r. rs\n\n(a) and say that having acted under that rule there is nothing more to be said and that the industrial court cannot inquire into the causes that led to the termination of service under r. 18 (a). The industrial court in our opinion has the right to inquire into the causes that might have led to termination of service even under a rule like 18(a) and if it is satisfied that the action taken under such a rule was a colourable exercise of power and was not bona fide or was a result of victimisation or unfair labour practice it would have jurisdiction to intervene and set aside such termination. In this case the tl'ibunal held that the exercise of power was colourable and it cannot be said that that view is incorrect, The appellant failed to rntisfy the tribunal when the matter came before it for adjudication that the exercise of the power in this case was bona fide and was not colourable. It could have easily done so by producing satisfactory evidence ; but it seems to have reated upon its right that no such justification was required and therefore having failed to justify its action must suffer the consequences.\n\nLearned counsel for the appellant also drew our attention to another decision of this Court in\n\nThe Managem Co.\n\nW-.OJ.\n\nThe Pat1U1 El.utrk Supply Co.\n\nLtd. Patna v.\n\nBali Rai ('). That Ctl8e in our opinion has no applicu.tion to the facts of this case because that oaee dealt with an application under 8. 33 of the Industrial Diputes Act while the present proceedings are under s. IO of thfl Act and the considerations which apply under s. 33 are different in many respects from those which apply to an adjudication under\n\n8. IO.\n\nThe appeal therefore fails and is hereby dismissed with costs.\n\nAppeal dismissed.\n\n\"CDAI BHAN\n\nTHE STATE OF UTTAR PRADESH\n\n(J. L. KAPL'R and RAGHUBAR DAYAL, JJ.) c,-; m i11al J.a1\"-Evirmation reuit'ed fron, accu- Co.\n\nW-.OJ.\n\n830 SUPREME COURT REPORTS [1962] SUPP.\n\nThe Pat1U1 El.utrk Supply Co.\n\nLtd. Patna v.\n\nBali Rai ('). That Ctl8e in our opinion has no applicu.tion to the facts of this case because that oaee dealt with an application under 8. 33 of the Industrial Diputes Act while the present proceedings are under s. IO of thfl Act and the considerations which apply under s. 33 are different in many respects from those which apply to an adjudication under\n\n8. IO.\n\nThe appeal therefore fails and is hereby dismissed with costs.\n\nAppeal dismissed.\n\n\"CDAI BHAN\n\nTHE STATE OF UTTAR PRADESH\n\n(J. L. KAPL'R and RAGHUBAR DAYAL, JJ.) c,-; m i11al J.a1\"-Evirmation reuit'ed fron, accu-urse of judicial proceedin~ It cannot amount to contempt of Court.\n\nWhether the depart mental action would tempt the respondent to withdraw the suit or deter other Government servants from filing similar suin would be considerations outside the scope of a contempt proceeding and, therefore, irretevant.\n\nIn re tlie South ShielM (Thames Street) Ckaranc. Order, 1931, ( 1932) 172 L.TJ. 76, referred to.\n\nIn re William 1'homaa Shipping Co. ll.W. Dillon & Sons ltd. v. The Company, In re Sir Robert Tlwmaa, ( 1930) 2 Ch.\n\nD. 368, distinguished.\n\nIn the instant case the departmental enquiry against the respondent did not constitute a pa1allel enquiry and tend to interfere with the course of the litigation pending in Court and therefore, no contempt of court had been committed.\n\nSaib'nior Subordinate Judge, Amritsar, a court subordinate to the High Court. Thll High Court issued notice to the appellants and after hearing the parties came to the conclu. sion that though the appellants were elea.rly guilty of an olfc11ce punishable under s. 3 of the Coutempt of Courts Act, 1952, they were merely endeavouring to comply with the instructions of the Government, the legality or propriety of which they had no reason to doubt. In that view of the matter, the High Court t>xpresscd the view that the ends of ju,; tico would be amply met if the two appellants wtre directed to ab1ndon tho depiirtmcntal proceed. ingd \"hich had been taken against the respondent and furthermore, if they were warned against complying with the instructions contained in tho circular letter id8ued by tho State Government.\n\nOn behalf of the appellants three points have been urged iu support of the contntion that they were nut guilty of the offence of contempt of court.\n\nFirstly, it has been argued that the petition da.te [1962] SUPP.\n\nwhich gave rise to case no. 20 of 1957, a grievance wa.e made of interference with the coul'tle of justioe in the High Court in respect of the writ petition which waa dismissed by the High Court on May 20,\n\n1957. But in the second petition filed on the same day, which gave rise to case no. 27 of 1957, the respondent clearly stated as follows in para. 9 of hie petition :\n\n\"Previously the petitioner filed a petition under Section 3 of the Contempt of Courts Act in this Hon'ble Court in respect of this very charge-sheet on the ground that this chargesheet related to the writ petition that had bet>n filed by the petitioner (Civil Writ no. 528 of 1956).\n\nNow. however, the respondents are taking up the plea that the ehargesheet ( annexure 'A') is not in respect of the writ petition filed in the High Court but concerns the suit which has been filed by the petitioner and which is awaiting decision in the Court of the Subordinate Judge at Amritsar.\" It is clear, therefore, that the High Court had before it two petitions against the appellants, in one of which a grievance 'll as made of interference with the course of justice in resvect of the writ petition and in the other a grievance was made of interference with the course of justice in respect of the snit which waa awaiting decision in the court of the Senior Subordinete Judge, Amritsar. The respondent further stated that \"by forcing and coercing him to withdraw hie snit or otherwise not to pl'l!B8 it\" the appellants were obstructing the course of justice ann had, therefore, committed contempt of court punishable under e. 3 of the Contempt of Courts Act, 1952.\n\nIn view of heee allegations in the eecond petition filed on September 14, 1957, the first point urged on behalf oft.lie appellants must be overruled.\n\nWe now come to the second point which is of a more substantial nature. We have already quoted\n\nthe terms of the circular letter dated January 25,\n\n1953. There was some argument before us as to whether the said circular letter contained executive instructions only or laid down a rule as to a condition of service. Our attention was dra'm to some institutions or departments of Government, where a rule in similar terms la\\d down as one of the conditions of service that it is improper for a Government servant to take recourse to a court of law before he has exhausted the normal official channels of redress. Learned Advocates for the parties were, however, agreed that no rule laying down the couditions of service of Government servants serving in the department to which the respondent belonged imposed an obligation similar to that imposed by the circular letter. We have, therefore, proceeded in this case on the footing that the circular letter contained executive instructions only and did not embody a rule governing the conditions of service. Therefore we have not thought it necessary to consider what the position would be if such a rule were made a condition of employment for certain Government servants. Other considerations would then arise such as, the authority of the rule-making power to make such & rule, and we must make it clear that we are expressing no opinion on thoae other con.- siderations.\n\nAssuming that the circular letter contained certain exeautive instructions what then ls the position? It should perhaps be made clear at the very outset that the question before us is not so m\"Qch the validity of the circular letter in the abstract, but the propriety of the action taken against the respondent on the basis of the circular letter at a time when his suit was awaiting decision in the court of the Senior Subordinate Judge at Amritsar.\n\nIt must not, however, be assumed that we are holding the circular letter to be valid in the sense that compliance with it will, in no circumstances, amount to contempt of court. We do n.:>t come to any such\n\nPralap Singh\n\nGurbaksh Sing\\\n\nDasJ.\n\nPratop Singh\n\nG11tba/c1h Sing%\n\nDasJ.\n\n848 SUPREME OOURT REPORTS [1962] SUPP.\n\nconclusion. The a.rgument before us is that the circula.r letter did not impose a.n a.bsolutc ba.n on a.\n\nGovernment serva.nt seeking rcdrese of his grieva.nccs a.rising out of his employment or service conditions in a. court of law ; it is au bmitted that all that it did was to ask Government serva.nts to exhaust first the normal Official channels of redress before vroceeding t0 a court of law. The emphasis, it is stated, is on propriety and discipline in the conduct of a Government servant ; and it has been submitted that judged from that point of view the circular letter cannot be said to constitute an interference with the course of justice in a.ny court of law. Theo retica.lly and in the abstract, this ma.y be true; and if the circular letter merely 111oys down that Ordinarily\n\na Government servant should exhaust his dcpa.rtmental remedies before going to a court of law, no objection can be taken to it. Speaking generally, a Government servant does not ordinarily go to court unless a\"ld until he fails to get what he considers to be justice from the departmental authoritifJ8.\n\nBut we have to considllr in this ca.sea somewhat diffc. rent problem, namely, the action taken against the respondent during a pending litigation, as though going to a court of law before exhausting depart. mental remedies rn'USt in all cases be visited with punishment.\n\nWhat, after all, is contempt of court? \"To speak generally, contempt of court may be said to be constituted by any conduct that tends to bring the authority and adruinistra.tion of the law into dis respect or disregard, or to interfere with or prejudice pa.rtiee litiga.nt or their witnessea during the litigation.\" (Oswald's Contempt of Court, 3rd Edition, page 6.) We are concemcrl in the pref!{lnt case with the scond part, namely, \"to interfere with or prej11dice pa.rties litigant during the litigation\". In the case under our consideration the respondent had instituted a suit in the court of the Senior Subordinate Judge, Amritsar,\n\nin respect of his grievance that a certain sum of money was being illegally deducted from his salary.\n\nOn behalf of the respondent it was alleged that he had no further departmental remedies to exhaust, inasmuch as the order by which a part of his sal&ry was being deducted was a final order made by the Punjab Government after considering the respondent's explanation. On behalf of the appellants it has been contended that the respondent had still a further remedy by way of an appe&l to the Governor. That is a matter with which we are not really concerned, as it relates to the question whether the respondent had or had not violated the terms of the circular letter. We are concerned with the action that was taken against the respondent on the footing, right or wrong, that he had violated the instructions of the circular letter. His suit was pending in the court of thfl Senior Subordinate Judge, Amritsar. When the summons in the suit was served on the Government, the Under Secretary to Government, drew the attention of one of the appellants to the circular letter and asked the latter to intimate to Government what action he proposed to take against the reepondent. Appellant Prat&p Singh then forwarded the memor&ndum of the Under Secretary to the Conservator of Forests, South Circle, &lid in hill forwarding endorsement Prat&p Singh directed. that the respondent Should he proceeded with in accordance with the instructions in the cironl&r letter and that a oopy of the proceedings recorded and orders passed should be forwarded . to him. It appears, there- :t:ore, that appellant Part&p Singh w.as 11ot merely content with forwarding the memorandum of the Under Secretarv. He directed his 8Ubordinate\n\nofficer to take ation airainst the respondent. In accordance with that direction a proceeding was drawn up against the respondent and the appellant Bachan Singh was asked to enquire into it.\n\nThe appellant Bachan Singh then drew up a\n\n196$\n\ni'Nt.; Sinth\n\nv. a.,.,., .. sin th\n\nDoJ.\n\nPru.pSU.fh\n\nGurW.Ji Sinth\n\nDo1J.\n\n850 SUPREME COURT REPORTS [1962] SUPP.\n\ncharge-ehi>et and in that charge-sheet it was stated that the respondent had gone to a court of law before exhausting all his departmental remedies. What would be the effect of these proceedings on the suit which wa.s pending in the court of the Senior Subordinate Judge, Amrit sar ? From the practical point of view, the insti tution of the proceedings at a. timo when the suit in the court of the Senior Subordinate Judge, Amrit:aar, was pending could only be to put pre88Ure on the respondent to withdraw his suit, or faoe the consequenoeR of disciplinary action. This, in our opinion, undoubtedly amounted to contempt of court. There are many ways of obstructing the Court and \"any conduct by which the course of justice is perverted, either by a party or a atranger, is a contempt; thus the use of threats, by letter or otherwise, to a party while his suit is pending; or abusing a party in letters to persons likely to be witnesRes in the cause, have been held to be con tempts\". (Oawald'a Contempt of Court, 3rd Edition, page 87). The question is not whether the action in fact interfered, but whether it had a tendency to interfere with the due course of justioe. The action taken in 'this e&11e against the respondent by way of a proceeding againat him ean, in our opinion, have only one tendency, namely, the tendency to coerce the respondent and force him to withdraw his suit or otherwise not press it. If that be the clear and unmistakable tendency of the prooeedings taken against the respondent, then there can be no doubt that in law the appellants have been guilty of contempt of court, even though they were merely carrying out th1> instruetions contained in the circular letter.\n\nWe have been referred to a large number of decisions dealing with various aspects of contempt of court. We consider it unneoell8&1\"y to refer to them all, because it is clear to us that any conduct which interferes with or prejudices partiea litigant\n\n2S.C.R.\n\nSUPltEME COURT REPORTS\n\nduring the litigation is undoubtedly contempt of court. There is, however, one decision which is very much in point and to whir.h we must refer.\n\nIn Shanlcar Lal Sharma v. M. S. Bisht (1) in very similar circumstances it was held by the Allahabad High Court that if any kind of threat or any action which may amount to a threat is held out to a person who approached the Civil Courts for a redress of his grievances, with a view to induce him to forego the assistance of the Civil Courts, the action amounts to a contempt of eourt. In that case also an employee of the Public Works Department of Uttar Pradesh moved the High Court for the grant of a writ. While the writ petition was pending in the High Court the Chief Engineer, P.W.D., U. P., purporting to act in accordance with certain directions contained in a circular letter asked for an explanation from the emp\n\nloyee as to why he has submitted a writ application to the High Court. The learned Judges c•xpressed the view that there was no doubt that the action taken by the Chief Engineer in accordance with the instructions contained in the circular letter amounted to a threat with a view to induce the employee to forego the assistance of the Civil Courts. An unqualified apology having been tendered in the case, no further action was taken. On behalf of the appellants reliance was placed on the decision of this Court in S. 8. Roy v. State of Orissa(').\n\nThat was a case iri which a First Class Magistrate misconceiving his powers and exercising a jurisdiction not vested in him by law and without any justifying circumstances made an order under s. 144, Code of Criminal Procedure, by hich a Civil Court peon was restrained from executing a warrant of arrest issued by an Additional Munsif in connection with the execution of a money decree; the Magistrate was not influenced by any extraneous consideration or dishonest motive in making the\n\n(I) A.f.R. 1956 All. 160.\n\n(2) A.J.R. 1960 S.C. 190.\n\nPratap SiaJh\n\nGurbash Sir.gh\n\nVas J.\n\n1~2\n\nPr~ Si\"\"h\n\nGwb.Wh Singh\n\nDasJ.\n\n852 SL\"PREME COURT REPORTS [1962] SUPP.\n\norder and it was held tha.t the Magistrate was not iruilty of contempt of the Court of the Additional Munsif, because there wa.s nothing to suggest a.ny wilful culpability on his part. We are unable t-0 agree with the learned Advocate for the Appel lants that the principle of that decision shonld apply to the present case. The appellants in the instant case were not judicial officers who mis conceiTed their powers. They were no doubt carrying out executive instructions given by their employer, but they carried out those instructions at a time when a. ci\\'il suit was pending and they carried out the instructions in such a manner as to exert pressure on the reRpondent to withdraw the mit. That is the finding at which the High Court arrived and on that finding the appellants were clearly guilty of contempt of court.\n\nThe deciaion in W eb.ter v. Bakewell Rural Ditrid Cryuncil ( 1) on which also learned Advocate for the appellants relied is not in point. That was a case in which the yearly tenant of a cottage and land, adjoining a highway and farming part of a settled eRtate issued a writ against the local authority for an injunction to restrain an alleged trespass on his land ; the solicitor of the tenant for life wrote to the local authority with a view t-0 arrange the matter and at the Mme time wrote to the tenant that the tenant for life required him to withdraw the writ, and that, if he did not comply, his tenancy would be determined. It was held that the solicitor had not committed a. contempt of court. The decisitln proceeded on the footing that the tenant for life had the rig; ht to turn out the yearly tenant and there was nothing to prevent the tenant or life, who was the landlord, from exercising his legal rights if he did so honestly to protect the rights he had in the property.\n\n\"We have, therefore, come to the conclusion that the appellants were guilty of contempt of the\n\n(I) (1916) I Cb. 300.\n\nCourt of the Senior Subordinate Judgo, Amritsar and in awarding the sentence the High Court correctly took into consideration the circumstance that the appt'llants were merely carrying out the instructions contained in tho circular letter. Thongh that circumstance does not afford a defence to the charge, it is undoubtedly a consideration relevant to the sentence.\n\nAs to the third point that appellant Pratap Singh took no action beyond endorsing the memorandum of the Under Secretary, we have already dealt with it and pointed out that he not merely endorsed the memorandum of the Under Secretary\n\nbut directed the Conservator of Forests, South Circle, to institute a proceeding against the respondent for having contravened the instructions contained in the circular letter.\n\nThis disposes of all the points urged on behalf of the appellants. In our opinion, there are no grounds for interference with the judgment and order of the High Court dated November 5, 1958.\n\nTlie appeals are accordingly dismissed.\n\nRAGHUBAR DAYAL, J.-Ihave held the advantage of perusing the judgment of my learned brother, ::;. K. Das, J., but regret my inability to agree tha.t the appellants are guilty of contempt of\n\nCourt.\n\nThe facts leading to the conviction of the appellants in the two appeals, hu.ve been fully mentioned in the majority judgment and I need not repeat them here. For the purpose of these cases, I assume the validity of the 8ircular issued by the Government in 1953.\n\nThat has nut been challenged by the opposite p'l.rty. If an employee acts against the directions contained in the Circular, it is just and proper that ation be taken. If action is taken and that be considered per se to amount to the commission of contempt of Court, the directions in the Circular oan be disobeyed with impugnity and\n\n/'Map SiJr&1'\n\nGUtbaksh Singh\n\nDasJ,\n\nPraJap S i•11'\n\nC111b•dated May 1/14, 1957, of the Income Tax A ppella•c Tribunal of India (Delhi Bench) in I.T.A.\n\no. 2070 of 1956-57.\n\nK.S. Ra, ia.gopal Saslri and D. Gupta, for the appellant.\n\nRodhey J, al Aaarwal and P.C. Aaanml. for the respourleuts.\n\n2 s.c.R.\n\nSUPREME COURT REPOHTS 867\n\n1962. January 29. The Judgment of the Court was delivered by\n\nHrnAYATULLAH. J.-This is an appeal against the order of the Income-tax Appellate Tribunal, Delhi Bench, dated May I/ 14, 1957, by which the tribunal, reversing the order of the A pvellate Assistant Commissioner, held that a loss arising from the sale of certain shares by the respondent Company was a capital loss. Subsequent to the order of the Tribunal impugned here, the Commissioner of Income-tax, New Delhi, who is the appellant before us, had moved the Tribunal for a reference to the High Court on certain questions of law said to arise out of the order of the Appellate Tribunal.\n\nThat application was found to be barred by one day, and since, under the law, the Tribunal had no jurisdiction to extend the time, the application was dismissed. Against the decision of the Tribunal, an application was filed in the High Court under s. 66(3) of the Income. tax Act; but the High Court dismissed the application, agreeing with the Tribunal that the application to the Tribunal for a reference was barred bv time. The Commissioner of Income-tax then applied for special leave against the order passed by the Tribunal in he appeal\n\nbefore it, and the present appeal, with special leave, has been filed.\n\nBefore we examine the merits of the case, we shall deal with a preliminary objection raised on behalf of the respondent that the appeal is income\n\npetent, in view of the decision of this Court in Ohandi Prasad Chokhani v. State of Bihar (') where it was held that this Court would not entertain an appeal directly from an order of the Tribunal bypassing the decision of the High Court, except in very exceptional circumstances. The appellant relies upon th~ decision of this Court in Baldev Singh v. Commissiunrrof Inrome tax (2 ', and contends (I) [1962] 2 S.C.R. 2iG.\n\n(2) [1960] 40 l.T.R. 605.\n\nThe Co111mi.uianer of\n\nJmome-tlx, Dtlhi\n\nand RcjOJth!ln\n\n•• Mfr. Notional\n\nFinance :.td.\n\nHida-vatttUah J.\n\nTAIO-UriMdof r--.IHllli \"\"' a.;.,,,_\n\nJIA~:.tt\n\nBilo!lo\"\"\"'\"\"' J.\n\n868 SUPREME COURT REPORTS [1962] SUPP.\n\nthat the exooptional circumstances existing in the latter case and adverted to in the former, govern the present oaae.\n\nThe fsoti:i relating to the filing of the a.pplioa.tion for reference together with the relevant dates are these: The Tribunal's order was pa.seed by two learned Members, who signed their respective orders on different dates. The Aooountant Member signed his order on May 1, 1957, and the\n\nJudioia.I Member, on May 14,1957. The notice of the order was sent to the CommiBBioner of Incometax, Now Delhi, and reached his office by registered post on July '15, 1957. It was received by one Motilal Pathak, a clerk in the office of the Commissioner. Motilal's affidavit shows that he suddenly fell ill, and had to take casual ieave for the day.\n\nHe returned to the offioe the next day, and dealt with tho notice received from the Tribunal. By a mischanoe, which is easy to appreciate, the date\n\nstamp of the receipt of the papers was affixed on the 16th, and bore that date instead of the real\n\ndate, viz., the 15th, on which the papers had actually been received. Relying upon the date stamp, everybody took it for granted that limitation would expire on the 60th day, counting time from July 16, 1957. The application was filed on the last day of limitation on that supposition. Actually. the application was barred by a day. The Inoometax Tribunal, therefore, dismissed the application on Deoomber 4, 1957. The decision of the Tribunal waa unsuooessfully challenged before the High Court. It is evident that the decision of the Tribunal was quite correct, and the Tribunal had no option but to diamiss the application, since the law gives no jurisdiction to the Tribunal to extend limitation, as is done under s. 5 of the Indian Limitation Act.\n\nThis Court then granted special leave against the order of the Tribunal passed in the appeal\n\nbefore it, and the question is whether the appeal should be heard or the leave revoked, in view of the decision in Clwkhani's case (1). In Chokha.ni's case (I), the attempt was to bypass the decision of the High Court on a question referred to the High Court for decision and also another decision of the High Court that no other point of law arose from the order of the Tribunal. It was held that this Court would not allow the High Court to be bypassed, and that an appeal from the decision of the Tribunal in the circumstances was incompetent. A similar view was again expressed in two other cases, viz., ln®an Aluminium Co. Ltd. v.\n\nCommissioner of Income-tn.x ('}and Kanhaiyalal Lohia\n\nv. The Commissioner of Income-W.x (').\n\nIn all the three cases, reliance was placed by the appellants therein upon the decisions of this Court in Dha.kes wari Cotton Mills, Ltd. v, Commissioner of Incometn.x (4) and BaUlev Singh v. Commissioner of Incometax (') It was pointed out in the judgments of this Court that the two cases relied upon were decided on t.he special circumstances existing there. In the first, there was a question of breach of the principles of natural justice, which could not be raised otherwise than by an appeal with the special leave of this Court. In the second case, it was pointed out that limitation was lost by the party hrough no fault of his, inasmuch as a letter was unduly de'.J.yed in post. In our opinion, in the present case also, special circumstances which justified the grant of special leave in Balde'V Singh's case ('), exist.\n\nThere was a combination of cireumsances which Jed to the filing of the application a day late, but in circumstances showing that the default was not due to any negligence on the part of the Commissioner of Income-tax. The receipt of the notice on July 15 is admitted; but the affixing of the date stamp on the 16th was due to the failure of the\n\n\n(2) C.A. No. 176of1959, decided on April 24, 1961.\n\n\n(5) (1960] 4-0 l.T.R. 605.\n\n1116S\n\nTM C....issiolur •/ 1neo..,.tax, D.W\n\nand Rajtu'h°\"\n\nMJs. NatNruil\n\nFinone1 Ltd •.\n\nHidoyotulloh J.\n\n1!132 n. c....,;,,;.,.., of 1 M11111-l4c, D1l.Ai ai Rajoslh .. v.\n\nM/1. Notidcl i'u-u LJd,\n\nHrJ.IJll J.\n\n870 SUPREME OOURT REPORTS [1962) SUPP.\n\nclerk to dea.I with the notice on the 15th because be fell ill and ba.d to lea.ve the office. It is com\n\nmon knowledge tba.t da.te stamps a.re altered every da.y in the offrne, and this is done mostly by a very junior employee. The affixing of the date stamp\n\non Ute Jtith a.nd tho notice consequently bearing tha.t dte went uunoticed, a.nd relying upon the date starnp, the appeal was filed, though on the\n\nla.st day of limitation but within time. In these circumstances, it is difficult to say that the Commi ssioaer of Income-tax was negligent. and the negl!- gence, 1f any, on the part of the clerk in affixing a wrong date st11.mp is oxousa.ble, if one considers his illness and bis absence from the office on the 15th. In our opinion, this ca.se comes within the rule of llaldev Singh's case (1) and an appeal direct to this Court from the Tribunal's order is justified by the special circumta.nces. By this appeal, no decision of the High Court can be said to be bypa.ssed, because the decision of the High Court rela.ted to the correctnesa of the decision of the Tribunal on the question of limitation, which is not a question which is sought to be raised in an indirect\n\nway by the pre&lnt appeal. We, therefore, overrule the preliminary objection.\n\nThe tMllleesee Company is the National Finance Ltd., New Delhi. It is a public limited Company\n\nwhich was incorporated in 1943. It deals in shares and securities and also u financiers. The preaent oase a.rises from a. deal in 3,000 aha.res of the Ma.dhusuda.n Mills Ltd., Bombay, by the 8.88essee Company. In the year of a.ooount, May I, 1949, to April 30, 1950, corresponding to the a.ssessmen•year,\n\n1951-52 the 8.88eBBee Company sold these shares uffering a 1088 of Rs. 5,48, 712 8-0, whioh it claimed as one on the ea.le of it.I stock'intrade. The Inoometax OffitJer and the Appellate Allllistant Commissioner held it to be a capital losa. The\n\n(I} [l!HiOJ 40 l.T.R. 605.\n\nAppellate Tribunal, Delhi Dench, reversed the decision, and held iu favour of the a.ssessee Company.\n\nThe only question in this appeal is whether the decision of the Tri buna.l is right.\n\nThe assessee Company belongR to a group of Companies controlled by m, e Lala Y odh Raj Bhalla. and certain perso11s associated with him. It is convenient to describe these persons as the 'Yodh Raj Bhalla group'. These Companies are (I) Jaswant Sugar Mills Ltd., (2) Jaswant Straw Boards Ltd., (3) National Finance .i., td., ( 4) National Con struction and Development Corporation Ltd., ( 5) G.>nesh Finance Corporation Ltd., and\n\n(6) Raghunath Investment Trust Ltd. The interrelation .of these Companies is very intimate, and they are practically owned by the 'Yodh Raj Bhalla group ' To understand this, the following analysis of the shareholdings of these Companie!; must be sufficient :\n\n(1) Jaswant Sugar Mills Ltd.\n\n2,00,000 shares\n\n(i) Jaswant Straw Board Ltd.\n\n(ii) NationalFinance Ltd.\n\n(iii) National Construction and Development Corporation Ltd.\n\n44,845\n\n67,390\n\n47,800\n\nl,60,035\n\n(i.e. over 80 per cent)\n\n(2) Jaswant Straw Board Ltd.\n\n 6,176 shares;\n\n( i) National Finance Ltd. 4, 783\n\n(ii) Na.tional Construction and\n\nDevelopment.Corporation Ltd. iiOO\n\n5,:!00 odd (or nearly 84 per cent)\n\nTltt CommissioMr of\n\nIncome .. tax, Dtlln\n\nand Rajasthan\n\nMis . .Na1icmal\n\nFinance Ltd.\n\nHia.atrdl . .n J,\n\n.1161\n\nn.r-o/ 1-T•, DtlAt\n\n.WR,,.,,,._\n\n•• Jl/1. Nttlw-l\n\n,-., JM,\n\nH~IMJ.\n\n872 SUPREllIE COURT REPORTS [1962) SUPP.\n\n(3) National Finance Ltd. (aeaeesee\n\nCompany) 50,000 sha.res.\n\nGanesh Finance Corporation Ltd. 48,000 (or over 96 per oent)\n\n(4) National Construction and Development Corporation Ltd. 1,30,504 shares.\n\nGanesh Finance Corporation Ltd. 1,30.l>OO (abn011t all) ( 5) Ganesh Finance Corporation Ltd. 00,000 shares.\n\nRaghunath Investment Tl'Wlt Ltd. 49,795 (99.6 per cent of the capital)\n\n(6) Raghunath Investment Trust Ltd.\n\n10,000 shares.\n\n(i) Mr. Yodh Raj Bhalla 1,500\n\n(ii) Mrs. Bhalla 1,000\n\n(iii) Mr. N. C. Malhotra (brotherin-Ja.w) 1,000\n\n(iv) Mr. Ra.m Prasad (father-in-law) 1,000\n\n(v) Mr. Dina.Nath (Secretary) 1,000\n\n(vi) National Finanoe Ltd. 3,499\n\n(vii) Mr. Piyare Lal Saha l --- 9,000 (90 per cent).\n\nThe resulting pOBition may be etated thus : Ganesh Finace Corporation Ltd. pr&etioally owne the we•ee\n\nCompany and National Uonatruotion and Development Corporation Ltd., Raghunath Investment\n\nTrust Lt\\rds the purchase pric{> and the balance was paid. On the same day, the remaining 11,000 shares were sold by Jaswa.nt Sugar Mills Ltd. to National Construction and Development Corporation Ltd., at Rs. 400 per share. Thus, on that date Jaswant Sugar Mills Ltd. ceased to have any connection with the present matter. It may be pointed out that on the date on which the two transactions took place, the price ruling in the market was about Rs. 217-8-0. Before Jaswant Sugar Mills Ltd. parted with the shares, they had appointed a new Board of Directors of tho Madhusudan Mills Ltd., and these new Directors also belonged to the same group. The managing agency of Messrs. Bha.dani Brothers Ltd. was terminated, and on the same day on which the aha.res were purchased from these managing agents, the asseBBee Company was appointed as the purchasing and selling agent of the Mills.\n\nTho a.sseBBce Company ma.de enormous profit from the acquisition of thesP shares by way of dividend and commiBBion as the purchasing and selling a.gent.\n\nJn October and November, 1948 they, however, sold 6,525 shares to Da.lmia Cement and Marketing Company Ltd. at Rs. 400 per share. These shares subsequently oame back to the same group ; but\n\nthat is not a matter with which we are immediately concerned.\n\nOn April 7, 1949, 4,500 shares were sold by the assessee Company to the National Investment Trust Ltd. at Rs. 181 per share resulting in a loss of Rs. 8,80,000, and on June 1, 1949, another block of 3,000 shares was sold to the National Investment Trust Ltd., at Rs. 180 per share, resulting in a loss of Rs. 5,86,312. We are not concerned with the loss arising from the first sale which was considered in the assessment year, 1950-51, and in respect of which a reference is pending in the High Court of Punjab. We are concerned with the loss in thesecond year relating to the assessment year, 1951-52.\n\nIn that year, the loss on the sale of the shares was sought to be set off against the profits made, and the loss practically cancelled the profits. The shares which were sold by the assessee Company on the two occasions were sold to one Ail).rit Bhushan (a relative of Mr. Yodh Raj Bhalla) who sold then the same day to Messrs. National Investment Trust Ltd., at tjie slender profits of 8 aunas per share, which was brokerage. Thus, at the beginning and at the end, though numerous transactions had taken place, the shares continued to be the property of the 'Yodh Raj Bhalla group'. The question is whether the loss on the sale of the shares be set off' against the profits in the year in which the sales and profits were respectively made.\n\nThe assessee Company was assessed for the assessment year, 1950-51, by the Income-tax Officer, Meerut.\n\nIn that year, the loss of Rs. 8, 78,062-8-0 arising from the sale of Rs. 4,520 shares of Madhusuda1i Mills Ltd.\n\nwas set off against the profits of the assessee Company. .The case of the assessee Company for the a.ssessment year, 1951-52, was considered by the Income-tax Officer, Central Circle V, New Delhi, to whom the cases of the other Companies abovenamed were also transferred. By looking into the\n\nrne Cornmission1r of\n\nIncome-tax, Dtlhi\n\nand Rajasthan\n\n•' M /s. National\n\nFinaru1 Ltd.\n\nHidayotullah J;\n\n196Z\n\nn1 C1m11ttJlio1llr of\n\nlnc011ttl4x, Ddlli\n\nad Raja.Iilwl\n\nM {s. Notional\n\n1'1-Lld.\n\n876 SUPREME COl:RT REPORTS [1962] St:PP.\n\naffairs of these Companies, he ca.me to learn, that the share11 of the M!idhusuda.n Mills Ltd. were purchased at a price, which was almost double the current market price, by the 'Yodh Raj Bhalla group,' and were transferred at the same price to the &BSe ssce Company. He found that this was done with a view to removing Jlessrs.\n\nBhadani Brothers, Ltd. from their managing agency and to securing for the a.88e88Ce Company the purchasing and selling agency of the Mills. On the date of the purchase from Me88rs.\n\nBhadani Brothers, Ltd., Ja.swant Sugar Mills Ltd. achieved this purpose in view of their controlling interest. Bhadani Brothers, Ltd. ceased to be the managing agents from that date, and the purchasing and selling agency of tho Ma.dhusudan Mills, Ltd. was given to the asscBSee Company, though it had, on that day, done no more than give a loan to Jaswant Sugar Mills Ltd. In the &88easment year, 1951-52, the loss of Rs.5,86,312-8-0 on the sale of 3,000 shares was, then.fore, disallowed holding it to be a capital 1088.\n\nThe order of tho Income-tax Officer, Central Circle V, New Delhi was confirmed on appeal by the Appellate Assistant CommiRSioner. On further appeal by tho &88essee Company, the Inoome-tax Appellate Tribunal, Delhi, reversed the order of the Appellate Assistant Co=i88ioner, and h11ld that the 1088 wo.s\n\na trading loss.\n\nWhether a particular loss is a trading loss or a loss on the capita.I side undoubtedly depends upon the fa.ots of ea.ch case. But it has been held, over and over again, that the question is not one of pure fa.ct, and _that a mixed question of fa.ct and law is always mvolved. The cases to which we shall make a reference presently, have la.id down this proposition, and those oa.808 have also indicated how the matter is to be viewed in the context of facts.\n\nIn Gomrnissioner of lncome-f, ax v. Ramnarain Sons Ltd. (1), the Company was a dealer in shares\n\n(1)\n\n[1957J 31, !.T.R. 17.\n\nand also carried on the business of acquiring managing agencies of other Companies.\n\nThe Company acquired the managing agency of a. Textile Mill from Messrs. Sassoon J. David and Co. Ltd., and also agreed as part of the same transaction to buy 2,507 shares of the Mills. 1.507 shares were purchased at Rs. 2,321-8-0 per share, and the remam1ng 1,000 shares were purchased at Rs. 1,500 per share. These shares were quoted on the market at Rs. 1,610. Later,4,000 shares were sold at a loss of Rs. 1, 78,000. This was shown in the books of the Company as a business loss, but was disallowed, as the shares were not held to be the stock-in-trade of the business of the Company as share dealers. On a reference to the High Court\n\nof Bombay, a. Divisional Bench upheld the view of the Tribuna]; Chagla, C. J., in delivering the judgment of the Court, observed that a managing agency being an asset of an enduring nature, the way to look at the matter was to enquire what wa• the primary intention in acquiring the Hhares. The learned Chief Justice then referred to a judgment of this Court\n\nreported in KishanPrasad & Co. Ltd. v. Cmnmissioner of Income-tax (1), where it was observed:\n\n\"It seems that the object of the assessee Company in buying shares was purely to obtain the managing agency of the third mill which no doubt would have been an asset of an enduring nature and would have brought them profits but there was from the inception no intention whatever on the pa.rt of the a.ssessee Company to re-sell the shares either at a profit or otherwise deal in them.\" The learned Chief Justice then considered the argument that a block of shares might have to be bought, if at all, t a higher price, and observed as\n\nfollows:\n\n\"A dealer in shares may succeed in getting a large number of shares at a prim~ less than 'l) (1955] 27 I.T.R. 49.53.\n\nTht Commisdorier of\n\nlnt0me Tax, D1lhi\n\nand Rajasthan v.\n\nM/s. National\n\nFinance Ltd.\n\nHidayatulloh J.\n\nThi Commi.J•iontr of\n\nl11&omt Tax, Delhi\n\n1nd Rajusthun\n\nAlts. JVatnal\n\nF1ltd.\n\nHidayaJullah J,\n\n8i8 SUPREME COURT REPORTS [1962] StJPP.\n\nthe market price if the seller is in diffioultiee and wants to jl'et rid of his shares and to get liquid assets, Ent we have not heard of a. dealt>r in shares purchSBing a. large num her of shares at a hi1Zher value than the market value.\n\nThe other circumstance which is equally strong in this caile is that the she.res were purchased for the acquisition of the managing agency. Therefore the real object of thE' asseBSee company W88 not to do business in these shares, not to make profit out of these shares, but to acquire a capita.I asset out of which it would earn managing agency commission and make profit.\"\n\nME'BBre. Ramnarain and Sons. Ltd. then appealed to this Court, and the decision of the Bombay High Court was upheld. The , Judgment of this Court is rP-portPd in Ramnarain Smis (Pr.) Ltd. v. Commi.ssiomr\n\nof lncomela.T ('). It waR laid down by this Court that in considering whether a transaction .was or was\n\nnot an adventure in the nature of trade, the problem must be app1ochcd in the light of the intention of the assessee, ha vine regard to the \"legal requirements which a.re. a11soci11ted with the concept of trade or business\"· Dealing with the price a.hove the market price which was pa.id in that case, it was observed:\n\n\"Even assuming that the appellants acquired the entire block of 2,507 shares from M/e. SB.1t a single or an undivided one with a slump p:wment,,\n\nbecause for the managing \"gency, RH. 12;.50,000 were paid separately and for the sh:i, re~, .:. mm of Rs. 83,98,000 was paid. The two acquisitions being different, the profit 011 the sale of SOllit3 of the shares was considered to be a gain on the revenue side.\n\nThere is no doubt, whatever, that the shares of the Madhusudan Mills Ltd. were acquired at a price considerably higher than the market price. In fact, that the price paid was almost double. Such a deal, from the business point of view, was not prudent, unless the purchaser stood t.o gain in some\n\n(I) [li w Rajasth ..\n\nv, M /s. Jv•tional Finame Lld.\n\nHidayaJul/ah J.\n\n880 SUPREME COURT REPORTS [1962] SUPP.\n\nother wa.y. It was contended before us that this was a speculative deal in the hope that the price of the Rharcs would firm up, when the textile indua tries would revive. rr thi1 was the intention, then it might possibly be argued that the purchasers miscarried in their calculations, and euffered a 1088 in a business transaction. But, was this the inten tion of the Directors of Jaswant Sugar Mills Ltd. T Those who sold the shares were not only in posaes sion of the shares but also of the managing agency of the Madhusudan Mills Ltd., and the intention of the Directors of Jaswant Sugar Mille Ltd. was to removo tho eellors from their po1ition as managing a.gents and to get the entire benefit of euoh or other agencies for themselves. The assessee Company has urged that that might have been the intention of tho , Jaswa.nt Snga.r Mills Ltd. but not of the aseesseo Co, npany which had, on that day, merely given a loan to Ja.swa.nt Sugar Mills Ltd. Curiously enough, however, the immediate benefit of the deal was the acquisition of the selling and purchasing agency of tho Mills, and that was obtained not in favour of Jaswant Su11:ar Mille Ltd. but of the aeaeseoo Company, even though on July 15, 1948 (the date of purchaoi the aeeeseee Company had obta.inod registration of ; 0 , mo shares by way of security in its own name. Why the &118eSsee Company was favoured in this way ia not far to seek.\n\nIt mattered not whether Ja.swa.nt Sugar Mills Ltd. acquired ti.tat agency or the assePsee Company; the benefit thereof went to the same group of persone.\n\nThe transaction of sale of the shares was also made within three months of their purchase, and the assessee Company not only bought the 10,500 sharN1 which stood in its name but 15,547 shares, whioh gave the a'!llessee Company a controlling voioe in the affairs of the Mills. The a.sseBBCe Company continued to retain the selling and purchasing agency, whioh was very profitable. Indeed, on its investment in the first year of Rs. 14 lakhe odd, it\n\nma.de a profit of about Rs. 7 lakhs. The question, therefore, would be whether the a.ssessee Company in purchasing the shares merely wished to deal in shares as stock-in-trade, or was acquiring a capital asset of an enduring nature. This question is not one of fact, pure and simple, but one of an inference in law from the proved circumstances of the case.\n\nThe Income-tax Officer, in deciding this question against the assessee Company, pointed out numerous circumstances, which showed clearly that thia was not a mere purchase of shares as shares by a speculator, who, buying a big block, 11omet, imes\n\npays slightly more than the market rate. Bhadani Brothers Ltd., owned not only the shares but also the managing agency, apd it is obvious that they would not part with the shares without charging for the managing agency. The price of Rs. 400 per iihare was eo out of proportion to the market price that it indicated, by itself, the acquisition of something more than the mere shares. According to the Income-tax Officer, the real intention was to acquire lucrative agencies of the Mills, and this intention, whether it was held by Ja.swant Sugar Mills Ltd. or the a.sse11ed Company or both, was of the same body of persons. The Appellate Assistant Commissioner endorsed the view of the Income-tax Officer; but the Tribunal made a distinction between one Colllpany and another, and that distinction has been pressed upon us by the assessee Company. Relying upon the well-known case of Salo.man v. Salomon & Co. Ltd. (1), it was argued before us that each company 111ust be viewed as a separate entity, and that the intention of one company could not be attributed to another company, even though the proprietorship of the companies might be same. As a propoeition affecting com p<\\nies, it cannot be gainsaid; but we are not con oerned with a theoretical qut>stion as to the assessee Company being a separate legal entity, but with the\n\n(I) [1897JA.C.22.\n\n19•1\n\nTlit Commis1ionl\" o j\n\nInc0me-ta'C, Udhi\n\narid Rajaatlrt111\n\n\"· M/s. Nation•I\n\nFina~: Ltd.\n\nH id'!Yatulld J.\n\n1962 n. o...,,,;..;- of\n\n/neortU-14Jf, ll1lhi\n\noflll Rajasrllan\n\nJI /s. N.i; o .. 1\n\nF;..-. Lid.\n\nHi41willolt .J.\n\n882 SUPREME COURT REPORTS [1962] SUPP.\n\nquestion whether a particular loss made by the\n\nassessee Company is a capital or a revenue loss.\n\nThe two Companies, i. e., Jaswant Sugar Mills Ltd. and the e88e88ee Company, were directed by the same set of persons, and tho facts show that even though Jaswant Sugar Mills Ltd. temporarily acquire tho shares, they conferred all the benefits of the acquisition upon the assessoo Company from the very first day. The assesscA Company also ultimately ca.me into posseSBion of all the shares a.long with another Company, which was also directed hy the 8ame persons, and Jaswant Sugar\n\nMills Ltd. went out of the picture within three months. In these circumstances, it is easy to see that the interposition of Jaswant Sugar Mills Ltd. was merely a device to secure the benefit of the English caae, to which we have referred. It was never intended that Ja.swant Sugar Mills Ltd. would hold the shares or the benefits arising from the acquisition of a block of shares, givmg to the holder a decisive voice in tho affairs of Madhusudan Mills Ltd. That controlling interest was acquired by the 'Yodh Raj Bhalla group' for the benefit of the ll.SSP.SSco Company, and it was an !!. quisition of an interest of an enduring nature.\n\nRe(erence was made, in this connection, to the transactions with thP- Dalmia Cement and Marketing Co. Ltd. in which the latter paid the same price namely. Rs. 400 per share. Perhaps, the Da.lmia\n\nCompany was after the controlling interest in its own way, and it. is significant to note that within a short time, those shares again found their way in the hands of the same P.'roup .. Similarly, the shares changed hands even within this group through th:i agency of Amrit Bhushan, no doubt a broker but also a relative of :\\fr. Yodh Raj Bhalla, who profited only to the extent of 8 annas per share, and bought and sold the shares from one Company to another on the same day. All this show that the affairs of these Companies were centrally arranged, and the\n\nintention was to benefit the assessee Company by the acquisition of a large blook of shares at a very much larger price than obtaining in the m'l.rket, to acquire certain agencies of a profitable character.\n\nIn our opinion, this transaction must be regarded as one on the capital side. Shares were never treated as part of the stock-in-trade. Tb.ey were not sold in the market, but were sold at a loss to another Company belonging to the same group, with the obviouR intention of setting off the losses against the profits, thus cancelling the profits, and saving them from taxation.\n\nIn the result, the appeal is allowed with costs on the respondent.\n\nAppeal all(JWed.\n\nEMPLOYERS IN RELATCON TO THE\n\nBHOWRA COLLIERY\n\nTHEIR WORKMEN (P. B. GAJENDRAGADKAR, A. K. SARKAR and\n\nK. N. WANCHOO, JJ.)\n\nIndualrial Di1pute-Bonua-Mali1 Working in fficers bungalowa_:Whether entiUe~Ooal Mines Provident Fund and Bonus 8cheme1 Act, 1948 (46 of 1948) •· 5.\n\nIn exercise of the power conferred by s. 5 of the Coal Mines Provident Fund and Bonus Schemes Act, 1948, the Central Government frame.d a Bonus Scheme for the payment of bonus to employees of coal mines. Paragraph 3 of the scheme made every employee in a coal mine eligible for a bonus except, inlPELLATE JURISDICTION: Civil Appeal No. 96 of 1961.\n\nAppeal by special leave from the a.ward dated December 7, 1959, of the Central Governmnt Industrial Tribunal Dhanbad in reference No. 42 of 1959.\n\nS. 0. Banerjee and P. K. Chatterjee, for the appellant.\n\nJanardan Sharma, for the respondent.\n\n1962. January 30. The Judgment of the Court was delivered by\n\nSARKAR, J.-The appellants, the Bhowra Kankanee Coal Co. Ltd., own the Bhowra and other collieries.\n\nOn the Bhowra Colliery there are a. num her of residential bungalows belonging to the appellants oocupied by their officers employed in the colliery. The appellants employ certain malis for working as such in these bungalows and their duty is to look aft.Ar and maintain the gardens there.\n\nA dispute a.rose between the a.ppella.nts and their workmen as to whether these malis, who were fourteen in number, were entitled to bonus. By an order made on June 23, 1959, under the Industrial Disputes Act, 1947, the Government of India referred this dilpute a.long with another with which we a.re not concerned in thil case, for adjudication to the Industrial Tribunal, Dhanba.d. The Points referred concerning the diute abovementioned were in these terms :\n\n(1) Whether the withdrawal of the benefit of bonus provided in the Coal Minee Bonus\n\nScheme by the management of the Bhowra Colliery from the following garden mazdoors/ malis is justified.\n\nIf not, to what relief are they entitled and from what date?\n\n(2) Whether the garden maztloors/malis referred to above are employed on domestic and personal work within the meaning of paragraph 3 (b) of the Coal Mines Bonus Scheme, 1948 and if not, to what relief are they entitled and from what date?\n\nThe points so referred were decided by the Tribunal against the appellants by an award made on December 7, 1959, and the present appeal is against that award.\n\nTill January 1, 1955, the Bhowra and certain other collieries managed as a group, were owned by the Eastern Coal Company Ltd., and on that date these collieries were sold to the appellants. At the time when this sale was being arranged, the work men in these collieries raised a dispute that their services should be treated as continuous inspite of the transfer of the collieries from one owner to another by the sale and that the conditions of their service and the facilities which they were enjoying under the previous owners should be guaranteed and continued by the succeeding owners, that is the appellants, after tbe latter took over the collieries.\n\nAt the instance of the Conciliation Officer appointed under the Act this dispute was settled by an agreement made on January 14, 1955, to which the Conciliation Officer the workmen the previous owners and the appellants were parties. Paragraph 3 of this agreement provided as follows :\n\n\"Agreed that the existing service conditions and the facilities will be continued, excepting pension.\"\n\nNow in 1948 an Act called the Coal Mines Provident Fund and Bonus Schemes Act had been passed by s. 5 of which the Central Government was\n\nEmplfl1\"'S in &lolion lo tM Blwwro Collifry\n\nTheir Worknun\n\nSarllor J,\n\ng~,,.\n\nR#olin to tJw B•-• c.llU.J\n\nTlr.ir \"\"*-\n\nempowered to frame a bonus scheme for the pay ment of bonus to the employees of coal mines, The Central Government had framed a. Bonus Scheme\n\nunder this provision in 1948 and sinoe then the previous owners had been paying the ma.lie employ ed for the bungalow gardens belonging to the Bhowra.\n\nColliery, bonus in terms of it. In 1951 they once stopped the bonus but that caused an industrial dispute and they thereupon restored the bonus.\n\nUpto the acquisition of the Bhowra Colliery by the appellants the position thus waa that these ma.lie had been receiving bonus since 1948 excepting for a. short period during which it had been stopped as earlier mentioned. After they became the owners\n\nof the Bhowra Colliery, the appellants however stopped the payment of bonus to these ma.Us. This\n\nraised the industfri.I dispute which had led to tliis appeal.\n\nParagraph 3 of the Bonus Scheme framed under the Act, so far as relevant for this case, is in the11e terms :\n\nParagraph 3. Except a.a hereinafter provided every employee in a coal mine to which this Scheme applies shall be eligible to qualify for a. bonus,\n\nExoeptionB :- .An empleyee in a. coal mine shall not be entitled to a bonus under the Scheme for the period during which-\n\n(a.} .................................................. . (b} he is employed as a ma.Ii, sweeper or demestio servant on demestic and persona.I work; ( c) e • o o o o o o o o o o O Oo • • O O O • O 0 O o O' O O oO o 0 o' O O O O o o o o I' 0 o o o o 0 One of the questions raised in this appeal is whether the bungs.low ma.lie were entitled to bonus under thill\n\npara.graph. The appellants oontended oofore the Tribunal that ma.lie a.s a. class were excepted from the benefit of the Bonus Scheme by the provision\n\nin exception lb) in this paragraph. They further contended in the alt<'rnati ve that thee malis were excepted in any event because they were malis employed on domestic and personal work within the meaning of the exception. The Tribunal rejected these contentions of the appellants and held (a) that these malis were entitlPd to bonus under paragraph 3 of the agreement of January 14, 1955 and (b) that they were not employed on dome.stic and personal work and were therefore not within the exception.\n\nFor these reasons the Tribunal held that the withdrawal of the bonus by the appellants was not justified.\n\nIt is not clear on what ground the Tribunal held that the malis were entitled to bonus under paragraph 3 of the. agreement of January 14, 1955.\n\nIt may be that the Tribunal thought that the Bonus Scheme framed by the Central Government formed a condition of service of the malis or a facility to which they were entitled and which the appellants undertook by the agreement of January 14, HJ55, to continue. If this was the point of view, then of course the further question still remains whether the malis were on domestic and personal work for if they were, then they would not be entitled to the bonus as a facility or a condition of their service under the Scheme.\n\nIt was however contended on behalf of the respondent workmen in this Court that the right to bonus was a condition of the service of t.he Malis and a facility to which they were entitled independently of the Bonus Scheme and that this is what the Tribunal had held. The record however is not very clear on thi8 question. The appellants dispute the contention of the workmen and further say that in any event the Tribunal had no jurisdiction to decide that question for the question referred to it was the right of the malis to bonus uncler the Bonus Scheme.\n\nEmployers tn Relation le. the Bhowra Collilry\n\nVo Their W01kmlll\n\nSarkar J.\n\ntHI - ~·\"' ~,..,., ....... c.11;,,,\n\n•• n.;, w .. 1 ....\n\ns.t.J.\n\nWe think that the appellants' contention is well foundt,'n, 376 employees of the old company gave a notice under s. 42(1) of the Bombay Industrial Relations Act, 1947, and claimed compensation. The Textile Labour Association made an appearance before the Labour Court and contended that the application should be dismissed iii view of the compromise arrived at before the Labour Appellate Tribunal. The Labour Court accepted the contention and dismissed the application. The workmen went in appeal to the Industrial Court but their appeal was also dismissed.\n\nThey made a petition in the Higl) Court under Art. 227 of the Constitution but that was summarily rejected. They have come in appeal to this Court by special leave.\n\nHeld, that where a Representative Union appears in any proceeding under the Act, no one else can be allowed to appear, not even the employee at whose instance the proceedings might have been siarted under s. 42(4). Where che appearance is by any representative of the employees other than a Representative Union, the authorities under s. 32 can permit the employee to appear himself in all proceedings before them. The employee is entitled to appear through any person in certain proceedings sprcified in s. 33.\n\nHowever, whenever the Representative Union makt\"s an appearance, even the employee rannut appear in any proceeding under the Act, and the representation must be confined only to the Representative Union. The complete ban laid bys. 27A on representation otherwise than through a representative of employees remains complete where the representative of employees is a Representative Union that has appeared. If the representa tive of employees that has appeared is other than the Representative Union, ss. 32 and 33 provide for exceptions.\n\nThe bona fides or mala fides of the representative of employees can have nothing to do with the ban imposed Ly s. 27 A on the appearance of any one else except the representative of employees ao defined in •· 30.\n\nThe argument based on the so called tyranny of a Representative Union or its motives in taking the action it may choose to take in any proceedings after it appears can have no relevance if the intention of the legislature is perfectly clear from the provisions of the Act.\n\nCIVIL APPELLATE JuiusnwTION: Civil Appeal o. 189 of 1961.\n\nI96Z\n\nGirja Shoalcor\n\nKaahi Ra\"'\n\nThi Gr9aJat Spinning d: Wtaiiing\n\nCo. L•tl.\n\n116%\n\nGirja SMflkar\n\nJr1111ti R\"\"'\n\nTif Gttjtll Spiruo;., di W \"\"\"\" c:.. Lid.\n\n892 SUPREME COURT REPORTS [1962) SUPP.\n\nAppeal by special leave from the judgment and order dated ovcmber 2i, 1957, of the Indus trii.l Court, Bombay, at Ahmedabad in Appeal (I. C.) 187 of I 95i.\n\nG. T. Daru, V. L. Narasimhamoorthy, E. Udaya rathnam and S. S. Shukla, for the appellants.\n\nc. K. Daphtary, Solicitor General of India. I. M.\n\nNanavati', J. B. Dadaclianji and 0. C. Malhur, for the respondent No. I.\n\nN. M. Barot, Secretary of the Textjle. Labaur Associatirprntation pr1.ssrd on behalf of the respondents were a.ceepten it would amount to tyranny of the Representative Union and this could not be the intention of the legislature in framing the Act.\n\nIt is also contenrled that if the interpretation\n\npressed on behalf of the respondents is correct, the\n\n..,\n\nprovisions in the Act may he liable to be struck down as ultra vires the Constitution.\n\nThe case of the respondents on the other hand is that the provisions of the Act are perfectly plain and provide that where a Representative Union appears in any proceeding it alone, to the exclusion even of the employee who might have made an application under s. 42 (4), is entitled to carry on with the proceedings and the employee concerned has no locus standi in the matter after the application has been filed by him, if the Representative Union chooses to appear.\n\nIt is urged that the so-called tyranny by the Representative Union can have no bearing on the interpretation of the provisions of the Act if they are plain in their intent.\n\nFurther it is contended that there is no question of the constitutionality of the various provisions of the Act in this case as at no stage has the constitutionality of the . provisions been challenged by the appellants, not even in their special leave petition.\n\nBefore we deal with the interpretation of the various provisions of the Act in this behalf we may point out that the constitutionality of the provisions has never been challenged so far and we therefore express no opinion as to the colliltitutionality of these provisions. We are further of opinion that the argument based on the so-called tyranny of a Representative Union or its motives in taking t.he action it may choose to take in any proceeding after it appears can have no relevance if the intention of the legislature as it can be gathered from the various provisions is perfectly plain.\n\nLet us therefore see what the Act provides in this behalf. The main provisions with which are concerned are contained in Chap.Vof the Act which deals with \"representatives of employees and employers, and appearance on their behalf\". It may be stated at the outset that the Act contains elaborate provisions for registrat.ion of unions and approved unions in\n\nGirj11 Shankar\n\nliaski Ram\n\nThe Gujara~ Spinning &: W eavin, e\n\nCo. Ltd.\n\nWancho1 J.\n\nIllOt\n\nGiri• Sh..J:.,\n\nK•sln Rim\n\nv. ,.,., o.; ... 1 S#flti., .b W ,....,\n\nCo. Ltd.\n\nW.....U.J.\n\n896 SUPREME COURT REPORTS [1962) SUPP.\n\nChapters III and IV respectively and ia in this respect riifferent from the Industrial Disputes Act.\n\nUnder Chap. III the Registrar is given the power to register a. Representative Union for any indUBtry in any local area and also the power to cancel such\n\nristration under certain circumstances and there is also a provision for appeal where a registration is oancolled.\n\nThen s, the only exception to this being t.he provisions of BB. 32 and 33.\n\nThere fore, this R<'ctio!I completely bans the appearance of an employee or of any one on his behalf in any proceeding after it has once commenced except through the representative of employees. The only exceptions to this complete ban are to be found in ee. 32 and 33, to which we shall presently refer.\n\nBut it i~ clear that bona /irks or mala fieentative of employees can have nothing to do with th\" ban placed by ~. 27 A 011 the appearance of any one else except the representative of employees a.8 defined in e. 30 and that if anyone else can appPar in any proceeding. we must find a provision in that behalf in either s. 32 or s. 33 which are the only exceptions to 8. 27A. It may be noticed that there is no exception in e. 27A in favour of the empfoyee, who might have made an application under s. 42 (4). to appear on his own behalf and the ban which is placed bys. 27A will apply equally to such an employee. In order however to aoften the rigour' of the provisions of a. 27A, for it may well be that the representative of employees may not choose to appear in many proceedings started by an employee under 8. 42 ( 4 ), exceptions are provided in es. 3:? and 33. The scheme of these three provisions clearly is that if the Representative Union appears, no one else can appear and carry on a proceeding, even if it be i, egun on an application under s. 42 (4\\ but where the Representative Union does not cho06e to appear there are provisions in BB. 32 and 33 whi.ch permit others to appear in proceedings under the Act.\n\nSection 32 gives power to a conciliator, a boa.rd, a wage board, a. labour court and the industrial court to permit an individual, whether an\n\nemployee or not, to appear in any proceeding before him or it.\n\nThis shows that the complete ban imposed bys. 27A can be removed if the authorities under the Act think it expedient to permit another person to appear and that person may be an employee or not.\n\nThus the employee who has made an application under s. 42(4) may be permitted to appear before tbe authorities under the Art ; but this provision is subject to a proviso namely that no such individual which would include an employee who has himself made an application under s. 42(4), shall be permitted to appear in any proceeding in which the Representative Union has appeared as the representative of employees.\n\nReading therefore ss. 27A, 30 and 32 together, it is clear that no one else can appear in any proceeding under the Act except a representative of employees ; but the authorities ari; i empowered to permit anyone to appear whether he be an employee or not, if they consider it expedient for the ends of justice (and we have no doubt that where representative of employees does not choose to appear the authorities will generally permit the employee who has made the application under s. 42(4) to appear). but this power is subject to the proviso, namely, that no one will be allowed to appear if the Representative Union has made an. appearance. It will be seen that the proviso puts the Representative Union in a special position out of the six classes mentioned as representatives of employees in s. 30.\n\nThuss. 32 makes it clear that where the Representative Union of the six classes in s. 30, appears no one else can appear, including the person who\n\nmiht have made an application under s. 42 (4).\n\nIf the other five classes which ~.re mentioned in s. 30 as representatives of employees appear, the authorities have the P.Ower to allow the employee or any other person to appear along with them.\n\nQirj• ShtinkM\n\nKash1 Ram\n\nThe Gujar•t\n\n~·; innint tb W ea•inl\n\nCo. Ltd.\n\nWanchoo J,\n\n]~· o;,;. si-ur\n\nKeslti Ram\n\n•• Ti.. G.J.,.al Spitllt#i14' W..W.1\n\nCo. Lid.\n\nW•.loo J.\n\n900 SUPREME OOURT REPORTS [19!12) SUPP.\n\nThen we come t-0 s. 33, which starts with a non obBllt.nte clause and deals with the appearance of an employee or a repreRentative union through any person. 8Pction 33 thus is an exception to s. 27 A an :I authorisea an employee who could not appear in any proceeding under the Act except through the representative of employees under 8. 27 A, to appear through any perRon in certain proceedings men tioned in 8. 33, but this again i.~ subject to provisos, with the first of which we are not concerned here.\n\nThe second proviso lays down that no employee Rhall he entitled to appear through any person in any pro<'PMing unrler thr- Aet in which the Representativ\" Union has appeared as the rPpresente.· tive of timployees.\n\nThis proviso age.in gives a. special position to the Representative Union out of the six classes of representatives of employees provided in s. 30 anrl makes it clear that though an employee may appear in certain proceedings specified in s. 33 through any person in spite of s. 27A, he cannot do so where a Representative Union has appeared as tho representative of em ployees. Here again the position is the same as in s. 32; if a representative of employees other than a Representative Union has appeared in the proceeding the employee can also appear through any pers'?n in the proceedings mentioned in s. 33; but he cannot do so where the representative of employe011 which has appeared even in proceedings under s. 33 is the RepresentBtive Union.\n\nTho result therefore <•f taking 88. 2i A, 32 and 33 together is that s. 27 A first places a complete ban on the appearanre of an employee in proceed. ings under the Act once it has commenced except throuircumstanees. Un January\n\n12, 1953 the asse88ee created a. trust in respect of a sum of Hs, 25,000/-, the truste1s whereof were the Central Bank Executor & Trustee Co., the &BBeSBoo himself his wife and brother. The scheme of the trust-deed was tha.t the said sum of Rs. 25,000/- was set apart by the asscssee and it was provided tha.t the interest on that amount should be accumulated and adder! to the corpus and a minor daughter of the\n\na88essee, named Chandrika, was to receive the income from the corpus increased by the addition of interest, when she attained the age of 18 on February I, 1959.\n\nShe was to receive the income during her life time and after her death the corpus was to go to persons with whom we are not concerned. Tho income derived from the said trust fund amounted to Rs. 410/- in the relev!l.nt account yea.r and the taxing authorities included this amount in the total inrome of the aRSessee, purporting to a.ct under s. 16(a)(b) and/or s. 16(3)la)(iv) of the Income-tax Act. As regards the second sum of&. 14,170/- it appears that on Deoember l, 1941, the &88e6lletl's father had created a trust in respect of some shares and a caah sum of Rs. 3t.1,0UO/- for the benefit of hie four eoi;.s including the a.s&'88ee.\n\nThe trustees were the Central Bank Executor and Trustee Co. Ltd., the asseSi!ee himself and one other person. The said truateea were to hold the trust fonda upon trust to\n\npay the net interest and income thereof to the assessee \"for the maintenance of himself and his wife and for the maintenance, education and benefit of all his children till his death\". The sum of Rs. 14,170/-. it was stated, accrued as income in the hands of the assessee in the relevant account year from the said trust funde.\n\nThe view of the taxing authorities and the [ncome-tax Appellate Tribunal was that under tho aforesaid provision of the trust deed the assessee was thesole beneficiary and that the a.mount was received by him for his own benefit and ho was not accountable to any one in respect of the amount and, therefore, this amount was liable to be included in his total income.\n\nOn behalf of the assessee the contention was that the sum of Rs. 410/- aforesaid was not liable to be included in the total income of the assessee inasmuch as Chandrika, the minor daughter of the assessee, had no right to the income nor any beneficial interest therein in the relevant year of account under the provisions of the trus~ deed and, therefore, neither s. 16(2)(a)(iv) nor s. 16(3J(b) applied to the case. As to the sum of Rs. 14,170/- the case of the assessee was that it should not be included in his total income as the sole beneficiary, because the beneficiaries under the trust settlement were not only the assessee but his wife and children as well. It was contended that the assessee received the amount in trust for himself and his wife and children and it was open to the Department to proceed under the first proviso to s. 41 (1) of the lncome-tax Act and recover tax on a separate assessment made on the assessee a.s a. trustee in respect of the said sum at the maximum rate, because the individual shares of the beneficiaries on whose behalf the money was reeivable were indeterminate and not known.\n\nThe Income-tax Appellate Tribunal, on an appeal by the assessee, did not accept these contentions. The Tribunal was then moved to state a\n\nIS6t\"\n\nThe Oommissiolur •f\n\nInconte .. tax, Bombay\n\n' Manilal Dl\"mji,\n\nbombo.1\n\nDas J.\n\n1161 n.c_, n-.1\n\nl11ec>.-....X• Be\"'69\n\n•• JI \"\"li:.f:;\"i4\n\ncase to the High Court on two questions of law those questions were :\n\n\"l. Whether the sum of Rs. 410/· is propt•rly includible in the asseSBee's +·:al income either in accordance with the provisi?ns of section IH(3hbJ and/or section lti(3)(a)\n\n(1v) of tho Indian Income-tax Act, 1!!22?\n\n2. Whether the sum of Rs. 14, 170/· is properly includible in the total income of the a.BBessee as the sole beneficiary thereof under the trust settlement made on 1-12-1941 by Dhanji Devsi ?\"\n\nOn being tiatisfied that these questions of law aroee out of the order of the Tribunal dated April 24, 1957, the Tribunal stated a case under s. 66(1) of the Income-ta.x Act.\n\nThe High Court answered both the questions in favour of the asses1ee by its judgment and order dated September 25, 1958.There after the High Court granted a certificate of fitness under s.66A(2) of the Income-tax Act and, as we have already stated, the persent appeal has been brought to this Court on the strength of that certificate.\n\nWe proceed now to deal with the first ques tion which relates to the sum of Rs. 410/·. The question is whether this sum was properly includible in t-he asHeSBee's total income under the provisions of s. l6(3)(b) of the Income-tax Act, bll<'auee Mr.\n\nRajagopal Saatri appearing for thC1 appellant hae not pressed the claim which WM made before the Tribunal on behalf of the Department under the provisions of s. l6(:l)(a)(iv). Before we go to the provisions of s.\n\nJf~:l)(b) it is advisable to set ont the material portions of els. 3 and 4 of the trust deed of January 12, 1953.\n\nThose clauses were in these terms :\n\n\"3. Th\" Trustees shall hold and stand pusscsi; etl of the trust fund and the invest- 1J1ents for the tilni; being representing the\n\nsame and receive the income, divided, interest and rents thereof and invest the same and the resnlting income, dividend, interest and rents ther-:iof so as to accumulate at compound interest to the intent that suc>h accumulations shall be added to the principal trust fund until the settler's daughter Chandrika shall attain the age of eighteen years which age she will attain on the lst February 1959 and after the expiration of the above named period the Trustees shall deal with and dispose of the trust fund as hereinafter stated.\n\n4, The Trustees shall hold and stand possessed of the trust fund and the accumulations thereof upon trust to pay the net interest and income thereof after deducting ail outgoings and charges for collection to the said Chandrika for her life for her maintenance ... \" It is clear from these clauses that during the minority of Chandrika, the income from the trust funds was to be accumulated and added to the trust funds\n\nmd after the attained majority on February l, 1959, she was to get only the income from the\n\nenlrged trust funds.\n\nNow, in the relevant year of account Chandrika was still a minor and under the terms of the trust deed she had no right to the trust income nor any beneficial interest therein ; she could neither receive nor enjoy the income. She did not derive any .benefit whatsoever from the trust funds during her minority and even after she attained majority, she did not have any right to the trust income which arose during her minority and her only right was to enjoy the income arising from the enlarged ti; ust funds, i. e., the original trust funds and the accumulations of trust income during her minority. Therefore, the sum of Rs. 410/- was not the income of Chandrika, but was the income of the trustees and the income }Vas impressed with a trust, namely, that it should be added to\n\nIHB n, CommissiDw of\n\nIncome-ta.., Bom6'!1\n\nManilal Dhonji, ,,,.,....,,\n\nDas J.\n\nTA. CnnmisJiottn o.f IMom,.tax. B00tb•)'\n\nv, M Milo/ DMflji,\n\nBombay\n\nD., J.\n\nthe trust cm pus. The qurbt ion is, does s. 16(3)(b) apply to uch a ell.Se ?\n\nWe shall presently read s. 16(3), but before we do so it is necessary to refer to the soheme or s. 16 of the Income-tax Act.\n\nThe section deals with the computation of total income as defined in s. 2(15) of the Act, and provides that what sums are to be included or excluded in determining the total income.\n\nThe definition of cotal income in~. :?(15) involves two elem('nts-(a) the income must comprise tho total amount of income, profits and gains refe1red to in s. 4( 1), and (b) it must be computed in the manmr laid down in the Act. The exemption granted under the Act is of two kinds ; certain classes of income are exempted from tax and n !so excluded from the computation of total income, while certain other classes of income exempted from tax are to be included in the a86essee's total income. Now cl. (a) of sub-8. (i) of s. Iii provides the sums exempted from tax under certain provisions of the Act should be included in the assessee'1\n\ntotal income. Clause (b) lays down the mode of computing a partner's share in the profit or loss of the firm.\n\nUnder cl. (c) income which arist~ to any person by virtue of any settlement or disposition from assets remaining the property of the settler or disponer etc. is taxed as his income.\n\nThe object of the legislation is clearly designed to overtake and circumvent a tendency on the part of the tax-payers to endeavour to avoid or reduce tax\n\nliability by means of settlements. Sub-Mection (2) deals with grossing up of dividend etc. Then we come to sub-a. (:I).\n\nThis subsection aims at foiling an individual's attempt to avoid or reduce the incidence of tax hy transferring his <1.Ssets to his\n\nwife or minor child or admit ting his wife as a\n\npartner or admitting his minor child to the benefits of a partn\\'rship in a firm in which such individual is a partner. The bU b-scctiu11 crrntes an artificial\n\n2 S.C.R.\n\nSUPREME COURT REPORT.3 909\n\nliability to tax and must be strictly construed.\n\nNow, let us read the sub-seotion.\n\n\"16. (3) In compnting the total income of any individual for the purpose of assessment there shall be included:\n\n(a) so much of the income of a wife or minor child of such individual as arises directly or indirectly :\n\n(i) from the membership of th!l wife in a firm of which her husband is a partner;\n\n(ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner;\n\n(iii) from assets transferred directly or indirectly to the wife by the husband otherwie than for adequate consideration or in connection with an agreement to live apart; or\n\n(iv) from assets transferred directly or indirectly to the minor child, not being a married daughter, by such individual otherwise than for adequate consideration ; and\n\n(b) so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate codsideration to the person or association by such individual for the benefit of his wife or a minor child or both.\" The argume11t on behalf of the appellant is that the conditions laid down in cl. (b) of sub-s. (3) of s. 16 are fulfilled in the present case and therefore the Department was intitled to include in the\n\nTill Oommissiow of lncome .. tax, Bom69\n\nM .. ilol Dlumjl,\n\n, Bolft6q)\n\n1. , ---·\n\nD., .I,\n\n. I96a T\"' c....;,,;.,.,, of l\"\"'111ff-ta1 Bombq,\n\n•• M ,.;/M D\"4nji,\n\nBom/19\n\nDuJ.\n\ntots.I income of the asseiieee so much of the income in the hands of the trusteee as aroee from the aaaete transferred bv the aasesaee for the benefit ofhia minor .child. It is pointed out that the conditions laid down m cl.(b)are-(l)thatthere must be income in thehanda\n\nof any person or Msooiation of persona (trusteea in the prelK'nt caaes;) (2) the inoome must ariae from al!8ets transferted otherwise than for adequate consideration to the trustees; and (3) the transfer mnat\n\nbe for the benefit of the minor child. It is argued that when the oonditions are fulfilled and the only exceptional oaee, namely, where the transfer is for adequat\" oonafderation is out of the way, cl. (b) mW!t apply and the Department ia entitled to include thll inoome in the handll of the trustees in computing th& total irioome of the individual &880811ee who made the transfer.\n\nAt f'rst eight the arirument appeara to be attrac tive and supported by the words used in the olaW!e.\n\nOn a closer scrntinv, however; it seems to us that\n\ncl. (b) must be read\n\n0in the context of the scheme of 16 and the two clauses (a) and (b) of sub-a. (3) thereof must be read togf'ther. So read the only rea.sonahle interpretation appears to be the one which the High Court accepted, namely, that the scheme of the section requires that an &1111e880e oan only be taxed on the income from a truet fund for the benefit of his minor child, provided that in the year of account the minor child derives 1ome\n\nbenefit under the trust deed either he receives the income, or the income accrues to him, or he hu a beneficial interest in the income in the relevant\n\nyear of account. But if no income accrues, or no benefit derived and there is no income at all (eo far as the minor child is concerned), then it is not oonaistent with the scheme of e. 16 that the income or benefit which is non-existent eo far as the minor child ia concerned, will be included in the income of hi1 father. Take, for example, a oaae •here the ueeta\n\n.. .....\n\n.... ·<\n\n2 S.C.R. SUPREME OOURT REPORTS !111\n\nwere trAnsferred ot; berwise than for adequate consideration for the 'benefit of a minor child, but the child has attained majority befor the relevant year of account. After the child attains majority the subsectfon would cease to apply and the income from assets transferred for the benefit of the child would no longer be taxable in the parent's hands. The reason must be that in the relevant year of account there is no benefit to the minor child by the transfer, even though the transfer was originally made for the benefit of th£' child. The same .principle may be illustrated by another example which bas been dealt with by the High Court. Take a case where there are intermediate beneficiaries before the minor gets the benefit under the trust deed. In such a case the learned Advocate for the Department conceded in the High Court that ol. (b) .of sub-a. (3) of s. 16 would not be attracted till the minor derived benefit under the trust ded. Mr. Rajagopal Sastri did not make any such concession before us; but seems to us that principle underlying the illustration is incontestable. If the minor derives no benefit in the relevant year of account, it can hardly be said that for that year the transfer was for the benefit of the minor child. Section 4, the charging section, of the Inoome-tax Act makeR it clear that what is taxed is the total income of the relevant account year, and total income, according to .s. 2 (15), is the income, profits and gains referred to in sub-a. (1) of s. 4 and computed in the manner laid down in tlie Act. In other words, the tax is levied on a yearly basis.· It is true that in the present case there was income in the hands of the trustees and the trustees were liable to pay tax thereon. That, however, is not the question before us.\n\nThe question before us is whether such income in the hands of the trustees could be included in the total income of the assessee under\n\ncl. (b) of sub-a. (:l) of s. 16. In our opinion, when\n\nTiu Commission1r of\n\nIncomt .. t\"2X, Bombay\n\nM anilal Dhqnji,\n\nBomba..~\n\nDas J.\n\nlllOt\n\nTiii c....,;,,;- •f\n\n/11&om~W BomboJ\n\nM .,.ilol D1'anji,\n\nllomb•y\n\nDasJ,\n\ncl. (b) of sub-s. (3) of s. 16 talks of benefit of the minor child it refers to benefit which ari.eea or aoc rue11 to the minor in the year of account. If there be no such benefit, the income cannot be included in the total income of the individual who made the transfer. There is a third type of case which also illustrate the 8&Ille principle. If only a portion of the income of the trust is reserved for the minor child, cl, ( b) would apply and that portion of the income which is set apart for the benefit for the child would be taxable in the handa of the settler. All these illustrations only establiah the principle that the minor child mullt derive some benefit in the relevant year of account before cl. (b) would apply.\n\nFurthermore, we are also of the view that els. (a) and (b) of the sub-section must be read together. Clause (a) begins with the expreeaion\n\n\"so much o: tho income of a wife or minor child of such individual as ariees directly or indirectly\", and this is followed by tho four circumstanoee numbered (i), (ii), (iii) and (iv). There is no doubt that so far as cl. (a) is concerned, there must be income of the wife or miuor child. Mr. Rajagopal Sa.stri has not disputed this. The obvious intention of the Legislature in enacting cl. (b) wa.a to see that the provisions of cl. (a) were not defeated by the a.sst>.88ee creating a trust and in order to deal with that mischief it enacted cl. (b). Instead of the expre88ion \"so much of the income of a wife or minor child\" the expression used in cl. (b) is \"so much of the income of any person or 8.880Cir.- tion of persons etc.\". Obviously, when a trust is\n\ncreated the income is income in the hands of the trustees. But the undHlying principle in the two els. (a) and (b} appears to be the same, namely, there must be income of the wife or minor child under cl.(a) and there must be some benefit derivfld by the wife or minor child in the year of account under ol.(b). Thia is consistent with the scheme of a.16\n\n1968 and particularly subs. (3) thereof. which is intended to foil &tt of ib:e aettier;, We . a.r~ in :11ogreemt with, the: l{tgh C9tirt thi!.t the\n\ndrectfon QOntli.itied' in cl: '7 crea.ted a trust in\n\nfi!.Y.i:r1~.; of th& a$1e'8ee,-his wif& apd. child, ren. . The . . etpre$1iiou ·•\"for the . maintenanc(l of himself and . his wife and for the maintenaQce, . eoucation . and .\n\n. • benefit of au his Chilcrrerl'' i11 .not .indicative of a\n\n.tii:ete d¢sif~· .or bop~: it imfci&e$ a. bi:iiding and\n\nobliga.tocy truJ!t; In r~; BOQ{k, .JJciitk v. Bootk f) a. te$ta.toi\" gli. ve the rtlllidue of his . esta.te to bis 13x:eoutors, on tiruijt, to pay to hii! \\life or permit. her\n\nto recuive the a.nnua.l .in09me thereof'during her life, \"fqr lier use .a.nd .benefit and for the m&intenance a.nd education of my children\".\n\nIt was he.id that the wifti took the income subject to a trui!t for the maiµtenanoe a.nd eduoa.tion of the\n\n. {'~1.-{1Rq4:) r: (::h. ~R1.\n\nTht_Commisfuncr o/\n\n1,.,,,,,,...,.,, Boml>'IJ'\n\n•• Mtinilo Dha'\\ii,\n\n11 ... b'IJ'\n\n_ DasJ.\n\nllHll n, CommiJsio1Wr of\n\nl•ams-•a, Bombff1\n\n•• JIMilal D.\\oiV1\n\nB-NJ\n\nDasJ.\n\nchildren.\n\nA similar view Wl\\8 exprel!8ed in Raike, s\n\nv. Ward (1) and Woods v. Woods(')\n\nOn behalf of the appellant our attention was drawn to s. 8 of the Indian Trusts Act, lb82 (II of\n\n1882) which states that the subject matter of a trust must be property transferable to the bene ficiary and it must not be merely beneficial inter est under a subsisting trust. It is contended that\n\nthe asseesee held a beneficial interest in the income from the trust funds under the trust deed of December l, 1941, and in respect of beneficial interest another trust could not be created in favour of himself, bis wife and children. We think that this argument prooeeds on a misconception.\n\nThe a.ssessee did not create a second trust in respect of the beneficial interest which he held under the trust, deed of December I, 1914. The &SBessee's father created two trusts by that trust deed, one requiring the trustees to pay the trust income to the assessae a.nrl the other requiring the 888C88ee, who wll.8 himself a tn1stee, to spend the income for the maintena.noe, education and benefit of his children. It is not disputed that by a single document more than one trust may be created.\n\nIt is not, therefore, true to say that the subject matter of the trust in the present case was merely a beneficial interest under a subsisting trust.\n\nUnder s. 41 of the Income-tax Act it was open to the Department either to tax the trustees of the trust deed or to tax those on whose behalf the trustees had received the a.mount. The true position of the 8.ll8Cl!IMJO in this case was that he was a trustee and not the eole beneficiary under the trust deed. He held the income on trust for himself, bis wife and bis children.\n\nThe aha.res of the beneficiaries were indeterminate and therefore under the first proviso to s. 41(1) of tho\n\n(I) (1842) 66 ll. R. 1106-1 Hue 44S.\n\n(2) (1836) 4-0 I!. R. 429·1 MY&: C. R .COi.\n\nIncome-tax Act, it was open to the Department to levy anil recover the tax at the maximum rate from the assessee ; but that did not entitle the Department to include the sum _of Rs. 14,170/- in the total income of the assessee as though he was the sole beneficiary under the trust deed, Mr.\n\nRajagopal ::lastri made it clear that the intention of the Department was to include the sum in the total income of the assessee in order to levy and charge super-tax on him. This, we do not think, the Department was entitled to do. In respect of the sum of .Ks. 14,170/- the assessee was a trustee, within the meaning of s. 41 of the Income-tax Act, appointed under a trust declared by a duly executed instrument in writing and as such trustee he had the right to contend that his assessment in respect of the money received by him not as a beneficiary but as a trustee could only be made under the first proviso to s. 41 (1). We have, therefore, come to the conclusion that on the second question also the answer given by the High Court was correct.\n\nThe result, therefore, is that the appeal fails and is dismissed with costs.\n\nAppeal dismissed.\n\n1111 CommissiDnlf' of\n\n[tJCMnl .. ffx, Bomba,\n\nM anilal Dhanji,\n\nBomb!!.]\n\nDaJJ.", "total_entities": 55, "entities": [{"text": "s. 42", "label": "PROVISION", "start_char": 345, "end_char": 350, "source": "regex", "metadata": {"statute": null}}, {"text": "THE COMMISSIONER OF INCOME-TAX\n\nBOMBAY", "label": "PETITIONER", "start_char": 639, "end_char": 677, "source": "metadata", "metadata": {"canonical_name": "THE COMMISSIONER OF INCOME-TAX BOMBAY", "offset_not_found": false}}, {"text": "IANILAL DHANJI, BOMBAY", "label": "RESPONDENT", "start_char": 684, "end_char": 706, "source": "metadata", "metadata": {"canonical_name": "MANILAL DHANJI, BOMBAY", "offset_not_found": false}}, {"text": "C. 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"start_char": 6101, "end_char": 6112, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16(3)", "label": "PROVISION", "start_char": 6120, "end_char": 6128, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 6143, "end_char": 6157, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 16(2)(a)(iv)", "label": "PROVISION", "start_char": 7632, "end_char": 7647, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16(3J(b)", "label": "PROVISION", "start_char": 7652, "end_char": 7663, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 41", "label": "PROVISION", "start_char": 8109, "end_char": 8114, "source": "regex", "metadata": {"statute": null}}, {"text": "Indian Income-tax Act", "label": "STATUTE", "start_char": 8936, "end_char": 8957, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 66(1)", "label": "PROVISION", "start_char": 9302, "end_char": 9310, "source": "regex", "metadata": {"linked_statute_text": "Indian Income-tax Act", "statute": "Indian Income-tax Act"}}, {"text": "s.66A(2)", "label": "PROVISION", "start_char": 9522, "end_char": 9530, "source": "regex", "metadata": {"linked_statute_text": "Indian Income-tax Act", "statute": "Indian Income-tax Act"}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 9538, "end_char": 9552, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 9892, "end_char": 9906, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 16(3)(b)", "label": "PROVISION", "start_char": 12475, "end_char": 12486, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16(3)", "label": "PROVISION", "start_char": 12536, "end_char": 12544, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 12608, "end_char": 12613, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 12621, "end_char": 12635, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 2(15)", "label": "PROVISION", "start_char": 12707, "end_char": 12715, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4( 1)", "label": "PROVISION", "start_char": 12977, "end_char": 12985, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 15610, "end_char": 15615, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 18806, "end_char": 18811, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4", "label": "PROVISION", "start_char": 19188, "end_char": 19197, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 2", "label": "PROVISION", "start_char": 19359, "end_char": 19363, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 19432, "end_char": 19436, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 19881, "end_char": 19886, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 20097, "end_char": 20102, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 22393, "end_char": 22398, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 64", "label": "PROVISION", "start_char": 22680, "end_char": 22685, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 22757, "end_char": 22762, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 64", "label": "PROVISION", "start_char": 22807, "end_char": 22812, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 64", "label": "PROVISION", "start_char": 23223, "end_char": 23228, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 23316, "end_char": 23321, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 23581, "end_char": 23595, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 25", "label": "PROVISION", "start_char": 23782, "end_char": 23787, "source": "regex", "metadata": {"statute": null}}, {"text": "English Income Tax Act, 1918", "label": "STATUTE", "start_char": 23795, "end_char": 23823, "source": "regex", "metadata": {}}, {"text": "English Finance Act 1922", "label": "STATUTE", "start_char": 23894, "end_char": 23918, "source": "regex", "metadata": {}}, {"text": "s. 16", "label": "PROVISION", "start_char": 24439, "end_char": 24444, "source": "regex", "metadata": {"linked_statute_text": "the English Finance Act 1922", "statute": "the English Finance Act 1922"}}, {"text": "clause 3", "label": "PROVISION", "start_char": 25061, "end_char": 25069, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 8", "label": "PROVISION", "start_char": 28314, "end_char": 28318, "source": "regex", "metadata": {"statute": null}}, {"text": "Indian Trusts Act", "label": "STATUTE", "start_char": 28326, "end_char": 28343, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 41", "label": "PROVISION", "start_char": 29506, "end_char": 29511, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 29519, "end_char": 29533, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 41(1)", "label": "PROVISION", "start_char": 29970, "end_char": 29978, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 30070, "end_char": 30084, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 41", "label": "PROVISION", "start_char": 30684, "end_char": 30689, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 30697, "end_char": 30711, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 41", "label": "PROVISION", "start_char": 30979, "end_char": 30984, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_918_926_EN", "year": 1962, "text": "W62 -.. -\n\n.JptH1'.J 3J.\n\n918 SUPREME qbURT REP$.'.F~ f~9621 SUPJ . . jl.~p~I.S:A.N -~· : .. , .. ,. ~· v .;· ~1 . - •. .THE'STATE Q.F M~HA°R:AsiI'l'RA & 0T~E.RS\n\n(~.P. SINHA;-O:SQ.lKA~ and 'ii'. I,,.\n\n V.El'\\.KATARA}b\\ A'.IY AR,]].) .1 .. _ .. ' _~ ·~~-:~ ·~: ... .,,' ~- . '!: '\"~-1 ~~· ·-·~ ~-'-'\".. '• Pfeveiltive. Difeniion~Ord, r aluf'grounds >; n )!J.nglisli-\n\nDtenue not.knowing. Englisli:..:..pppbitunity ti ', tnake .. rep';-e8enta.- . tion; whther .denieted April IO, 1961, and that the Order and the grounds of detention being in English, he was unable to understand them, and therefore, asked for a Hindi version of the same so that he may be able to follow and understand the charges levelled against him and take necessary steps for his release from jail. He raised some other questions also in that letter, but it is not necessary to refer to them here. To that letter the District Magistrate replied by his letter dated April 23, 19ol, the second paragraph of which, in the following terms, sets out his views of the matter:\n\n\"The order of detention and the grounds of detention already communicated to you are given in English which is the official language in this district. It is not possible to supply any translation of the same for is\n\n(sio) it legally necessary under the Preventive Detention Act, 1950. The order and the grounds of detflntion served on you were fully explained to you by the .Police Officer\n\nin the presence of the D.8.P. Nagpur City.\" The High Court, dealing with this contention on behalf of the detenue, ca.me to the conclusion that under the Constitution English still continued to be the officia.l la.nguage of the State of Maharashtra., and that service of the Order in English upon the detenue was sufficient compliance with\n\nlHI\n\nH.WU..\n\n•• Tiw81ot.of MaltM.uhlr•\n\nSinlla C.J.\n\nHarilrisci\n\nv, n.s11z1 .. 1 Mttlior911ttr•\n\nSW.• C.J.\n\n922 SUPREME OOURT REPORTS [1962] SUPP.\n\ntheTequircmeute of cl. ( 5) of Art. 22 or' the Constitution. It also held that the failure oft.he District Magistrate to supply the grounds in Hindi did not have the effect of preventing him from making his representation to the authorities. Furthermore, the High Court pointed out that the District Magistrate had stated in his letter that the grounds were explained to the appellant in Hindi by the Police Officer at t.he ti:ne the Order and the grounds were served upon him.\n\nIn the view of the High Court, therefore, the explanation or translation of the grounds by the PolicP Officer at the time he served those on the appellant should be d .. emed to be enough to enable him to make an effoctive representation against hiR detention.\n\nMr. Bobde, for the appellant, has vehemently argued that the requirements of the Constitution had not been complied with inasmuch as cl. (5) of Art. 22 of the Constitution required that the grounds on which the Order of Detention had been based had to be communicated .o the detained person. His argument further was that \"communication\" of the grounds was not equivalent to serving the grounds in English upon a person who was not convel'l!ant with the English language, and that oral tra.mlation by the police officer, said to have been made to the detenue, was not sufficient compliance \\Vith the requirements of the constitutional provisions, which must be fully satisfied in order that the detenue may be in a position to make an effective representation against the Order\n\nof Detention. He also contended that we do not know in what terms the police officer translated the lengthy document or whether his translation was correct.\n\nOn behalf of the late !Jf Maharashtra, the lea.med Attorney-General first attempted to show that the appellant knew En11lish.\n\nIn this connection he hati referred to the aliidavit of the District Magistmtc, the exact words of which arc as follows:\n\n2 S.C.R.\n\nSUPREME COURT REPOR'rS\n\n\"He (the detenue) had also asked me to supply the grounds in Hindi to enable him to\n\nunderstand the same. l admit that I had replied to this letter and had declined to eom- munieate the grounds in Hindi. I deny that this hJtS been done with a view to keep the petitioner in.dark as to the grounds of his detention. The petitioner as per my informa- . tion, is ail educated ma~ and ean understand English. The question th&t the petitioner did not underStand the grounds, therefore. does not a.rise. I deny that the petitioner is\n\nentitled to receive the grounds in Hindi.\n\nThe grounds were supplied to the petitioner in the court language and also they were explained to him by the Police Inspector Shri W.B. Bobde who had served them on the t 't' \" pe i 1oner ........ .\n\nThat statement of the District Magistrate is apparently based on the following statement, in the affidavit of Shri W.B. Bobde, the Police Inspector :\n\n\"The Order of Detention as well as the grounds of detention were translated by me orally in Hindi and explained to Shri Harikisan Kishorilal Agrawal, in the presence of the District Superintendent of Police, Xagpur City.\" It has not been found by the High Court that the appellant knew enough English to understand the grounds of his detention. The High Court has only stated that \"he has studied upto 7th Hindi Standard, which is equivalent to 3rd English Standard\". The High Court negatived the contention raised on behalf of the appellant not on the ground that the appellant knew enough English, to understand the case against him, but on the ground, a, s already indicated, that the service upon him of the Order and grounds of detention in English was enough communication to him fo enable him to\n\n116f\n\nHariltisan\n\nTl., s1a1 .. f\n\nM\"'\"\"\"'\"\"\"\n\nSiMo c.J.\n\nI Ht\n\nHorikis1111\n\nv, Tltt 111•1,.f M .Ila as/ti'°\n\nSU1~0 C.J.\n\n924 SUPREiIE COURT REPORTS [1962) SUPP.\n\nmake his representation. We must, therefore, proceed on the l\\8811mption th11.t the appellant did not know enough English to understand the l(rounds, contained in many para.graphs, as indicated above, in order to be able effectively to make his rt\"presentation against the Order of Detention. The learned Attorney-General has tried to answer this contention in several ways. He has first contf'nded that when the Constitution speaks of communicating the grounds of detention to the dotenu!'I, it means communication in tho official language, which continues to be English ; 'llccondly the communication nood not be in writing and the translation and explanation in Hindi offered by the Inspector of Police, while serving the Order of Detention and the grounds, would. be enough compliance with the retjuirementa, of the law and thll Constitution ; and\n\nthirdly, that it was not necessary in t.he circumstances of the case to supply the grounds in Hindi, in our opinion, this was not sufficient compliance in this case with the requirements of the Constitution, as laid down in cl. ( 5) of Art. 22.\n\nTo a person, who is not conversant with tho English language, service of the Order and the grounds of detention in English, with their oral translation or explanation by the police officer serving them does not fulfil the requirements of the law. As has been explained by this Court in the case of The Sf/JU of\n\nBomhay v. Atma Ram Sridhar Vidya, (1) cl. (5) of Art. 22 requires that the grounds of his detention should be made available to the detenue as soon as\n\nmay be, and that the earliest opportunity of making a representation against the Order should also bo afforded to him. In order tha.t the detenuu should have that opportunity, it is not sufficient thai\n\nhe h u been physically delivered the means of knowledge with which to make his representation.\n\nIn order tha.t tho detenue should be in a position effectively to make his represcnta.tion against tho Order, ho should have knowledge of thti grounds of\n\n(II (19SIJ s.c.R. 157.\n\ndetention, which are in t.he nature of the charge against him setting out the kinds of prejudicial acts which the authorities attribute to him.\n\nCommunication, in this context, must, therefore, mean imparting to the detenue sufficient knowledge of all the ground& on which the Order of Detention is based. In this case the grounds are several, and are based on numerous speeches said to have been made by the appt>llant himself on different occasions and different dates. Naturally, therefore, any oral translation or explanation given by the police officer serving those on the detenue would not amount to communication, in this context, must mean bringing home to the detenue effective knowledge of the facts and cir<'nmstances on which the Order of Detention is based.\n\nWe do not agree with the High Court in its conclusion that in every case communication of the grounds of detention in English, so long as it continues to be the official language of the State, is enough complia:nce with the requirements of the Constitution. If the detained person is conversant with the English language, he will ne.turally he in a position to understand the gravamen of the charge against him and thefacts and circumstances on which the order of detention is bawd. But to a person who is not so conversant with the Enp; lish\n\nlanguage, in order to satisfy the requirements of the Constitution, the detenue must be given the grounds in a language which he can understand, and in a script which he can read, if he is a literate person.\n\nThe Constitution has guaranteed freedom of movement throughout the territory of India and has laid down detailed rules as to arrest and detention.\n\nIt has also, by way of limit&tions upon the freedom of personal liberty, recognised the right of the State to legislate for preventive detention, subject to certain safeguards in favour of the detained\n\nHarikisan v.\n\nThe State of ,\\.laharashtra\n\nSinha C.J.\n\nJ962 a.au ..\n\nTIN St.u •f 14 Uar11s•tra\n\n.SW.. c J.\n\nJHI\n\nFbU4? I.\n\nperson, as laid down in els. (4) & (5) of Art. 22.\n\nOne of those safegui.rds is that the detained peraon has the right to be communicated the grounds on which the ordor of detention has been made against him, in order that he may be able to make his representation against the order of dentention. In our opinion, in the circumstances of this oaee, it has not been shown that the appellant had the opportunity, which the law contemplates in his favour, making an effective representation against his detention. On this ground alone we declare his detention illegal, and et aside the Order of the High Court and the Order of Detention pa88ed against him.\n\nAppeal allo!jled.\n\nTHE HO:N'ORA:i; tY SECRETARY, SOUTH INDIA\n\nMILLOWl\\\"ERS' ASSOCIATION AND OTHERS\n\nTHE SECRETARY, COfMBATOH.E DISTRlill\n\nTEXTILE WO~KERS' UNION [And connected avpeals) (P. B. GA.JENDRAGADKAR, and K. N. WANCHOO, JJ.)\n\nI ndll8trial Di8puie-Boniu-Rehabilitation-Life of t.ztile mnchinery-C/aim in. ruptel of old machi~ Det1elopmntt rebate-D•dwction-U ae of dtprtciatwn amount-lnt.rut-Tu•o Reparate conce,.,.._When eonali It& one unit-Indian lnoome-kJ:c Act, 1922 (11of1922), •· IO\n\n(2)(vi), Erp/anation (2), prolliao (b).\n\nIn respect of the di.pules which arose between certain textile mills a.ild their respective employees in regard to the bonus for the year 1956, the matter was reftrred to the Industrial Tribunal which made its award on September 5, 19~8.\n\nThe Tribunal held, (1) that the period allowed for rehabilitating textile machlne1y should be 25 years and n'>t 15 as contended by the appellants, and that eome addition should be made to the estimated life of the machinery by reference to", "total_entities": 19, "entities": [{"text": "P. SINHA", "label": "JUDGE", "start_char": 166, "end_char": 174, "source": "metadata", "metadata": {"canonical_name": "BHUVNESHWAR PRASAD SINHA", "offset_not_found": false}}, {"text": "Art. 22(5)", "label": "PROVISION", "start_char": 1077, "end_char": 1087, "source": "regex", "metadata": {"statute": null}}, {"text": "Article 22(5)", "label": "PROVISION", "start_char": 1168, "end_char": 1181, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 2891, "end_char": 2899, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 491", "label": "PROVISION", "start_char": 2931, "end_char": 2937, "source": "regex", "metadata": {"statute": null}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 2945, "end_char": 2971, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 3(1)", "label": "PROVISION", "start_char": 3579, "end_char": 3586, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 3(l)(a}(ii)", "label": "PROVISION", "start_char": 4274, "end_char": 4293, "source": "regex", "metadata": {"statute": null}}, {"text": "S1", "label": "PROVISION", "start_char": 4385, "end_char": 4387, "source": "regex", "metadata": {"statute": null}}, {"text": "Preventive Detention Act, 1950", "label": "STATUTE", "start_char": 4422, "end_char": 4452, "source": "regex", "metadata": {}}, {"text": "Art. 22( 5)", "label": "PROVISION", "start_char": 6289, "end_char": 6300, "source": "regex", "metadata": {"statute": null}}, {"text": "Preventive Detention Act, 1950", "label": "STATUTE", "start_char": 7574, "end_char": 7604, "source": "regex", "metadata": {}}, {"text": "s11", "label": "PROVISION", "start_char": 8123, "end_char": 8126, "source": "regex", "metadata": {"linked_statute_text": "the Preventive Detention Act, 1950", "statute": "the Preventive Detention Act, 1950"}}, {"text": "Art. 22", "label": "PROVISION", "start_char": 8232, "end_char": 8239, "source": "regex", "metadata": {"linked_statute_text": "the Preventive Detention Act, 1950", "statute": "the Preventive Detention Act, 1950"}}, {"text": "Art. 22", "label": "PROVISION", "start_char": 9086, "end_char": 9093, "source": "regex", "metadata": {"statute": null}}, {"text": "s1", "label": "PROVISION", "start_char": 11912, "end_char": 11914, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 22", "label": "PROVISION", "start_char": 13140, "end_char": 13147, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 22", "label": "PROVISION", "start_char": 13511, "end_char": 13518, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 22", "label": "PROVISION", "start_char": 16134, "end_char": 16141, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_926_948_EN", "year": 1962, "text": "J962 a.au ..\n\nTIN St.u •f 14 Uar11s•tra\n\n.SW.. c J.\n\nJHI\n\nFbU4? I.\n\n926 SUPREME COURT REPORTS [1962) SUPP.\n\nperson, as laid down in els. (4) & (5) of Art. 22.\n\nOne of those safegui.rds is that the detained peraon has the right to be communicated the grounds on which the ordor of detention has been made against him, in order that he may be able to make his representation against the order of dentention. In our opinion, in the circumstances of this oaee, it has not been shown that the appellant had the opportunity, which the law contemplates in his favour, making an effective representation against his detention. On this ground alone we declare his detention illegal, and et aside the Order of the High Court and the Order of Detention pa88ed against him.\n\nAppeal allo!jled.\n\nTHE HO:N'ORA:i; tY SECRETARY, SOUTH INDIA\n\nMILLOWl\\\"ERS' ASSOCIATION AND OTHERS\n\nTHE SECRETARY, COfMBATOH.E DISTRlill\n\nTEXTILE WO~KERS' UNION [And connected avpeals) (P. B. GA.JENDRAGADKAR, and K. N. WANCHOO, JJ.)\n\nI ndll8trial Di8puie-Boniu-Rehabilitation-Life of t.ztile mnchinery-C/aim in. ruptel of old machi~ Det1elopmntt rebate-D•dwction-U ae of dtprtciatwn amount-lnt.rut-Tu•o Reparate conce,.,.._When eonali It& one unit-Indian lnoome-kJ:c Act, 1922 (11of1922), •· IO\n\n(2)(vi), Erp/anation (2), prolliao (b).\n\nIn respect of the di.pules which arose between certain textile mills a.ild their respective employees in regard to the bonus for the year 1956, the matter was reftrred to the Industrial Tribunal which made its award on September 5, 19~8.\n\nThe Tribunal held, (1) that the period allowed for rehabilitating textile machlne1y should be 25 years and n'>t 15 as contended by the appellants, and that eome addition should be made to the estimated life of the machinery by reference to\n\npractical considerations as to when the employer would be able to make rehabilitation in fact, (2) that in the case of old machinery purchased, only half of the claim for rehabilitation should be normally allowed and whether more or less should be allowed would depend upon the age of the machinery at the time of the purchase, (3) that the amount al lowed in respect of the development rebate could not be treated as a prior charge, and ( 4) that interest in respect of the amount of depreciation used by way of working capital could not be allowed.\n\nHeld: (I) that it is well settled that in determining the claim of the employer for rehabilitation twl factors are essential to ascertain, viz., (I) the multiplier which has been determined by reference to the purchase price of the machinery and the price which has to be paid for rehabilitation or replacement, and (ii) the divisor which has to be determined by deciding the probable life of the machinery. When determining the divisor, it is not open to the Tribunal to add to the estimated life of the machinery on the ground that the employer may, in fact, not be able to rehabilitate or replace his machinery.\n\nIn finding out the life of the machinery in a. particular case, no rule can be laid down because the question has to he determined on the evidence. adduced by the parties.\n\nThe Mill Owners Association, Bombay v. The Rashtriya Mill Mazdoor Sangh, Bombay, [1950] L.L.J. 1247 and Associated Industries Ltd. v. It. Workmen, (1958) 2 L.L.J. 138, cc, nsidered.\n\n(2) that it would not be riitht to insist that an employer who purchases second hand machinery must rehabilitate it by purchasing second hand machinery in turn, and in dealing with the question of the rehal:iilitation of second hand machinery purchased by an employer it would he erroneous to hold\" that only 50% of rehabilitation amount should he allowed.\n\n(3) that the development rebate allowed is in part recognition of the claim for depreciation, and proviso (h) to explanation (2) ofs. 10(2)(vil of the Indian Income-tax Act, 1922, as introduced by the Finance Act, i 958, cai; mot he treated as constituting a bar against taking the said amount into consideration in ascertaining the available surplus. The expression \"distribution by way e>f profits\" in the said proviso means the distribution of profits to the partners. ( 4) that if an employer shows that the amount of depreciation was actually available and has, in fact, been used as working capital during the releyant year, he would be entitled to claim a reasonable return on the said amount.\n\nThe H11r1or11ry Seor1tory, Sout1' India M jl/qWnlfs'\n\nA.ssociarion\n\n•• r1t1 Seci elarJ, Coimbatore Distri&t\n\nTextile Workers'\n\nUnion\n\nTlo1 HoOOf'<':I 811\"111<;,, StNJll fUia Millnwt11rJ'\n\nAss1Kiohan\n\nY, Th s,,,,,.,,.\n\nCWnh11tor1 Di.Jtriel\n\nT txlil1 W 01t,,1'\n\nllttion\n\nPet/ad Turkey Red I>ye Work. Ltd. v. [)yea&. CM,,.ical ll'orl.m' Unirm, Petlad, [1960] 2 S.C.R. 906 and My\"Jre Kir/nskar Ltd. v. /ts Workmen, [1961] 2 L.L.J. 657, relied on.\n\nThe appellant was runnin11, two millr, one at Coimbatore and the other at Madurai, the latter having been started later in 1956. The appellant's contention before the Tribunal in deal ing with the question of bonus payable to the employees In the two respective mills, was that the two mills should he treated as separate units and not as one.\n\nThe Tribunal took the view that the two mills constituted one unit. The facts showed that the two mills were situated at places separated by nearly 200 miles, that they manufactured different count• of yarn, that the workers working in the two mills were different and were not transferable from one mill to the other and that different accounts were maintained. It was also found that the profit and loss account for both the mills was one consoJl. dated account.\n\nHeld, that the finding of the Tribunal that the two mills constitut•d one unit could not be considered to be erroneous in ta,\\·,\n\nThe question as to whether two different concerns run by the same employer constitute one industrial unit f'lr the purpose of bonus ha re 'e detcrmir--1 In the light of the facts in each case.\n\nFunctional integrality is a very important test but it is not a decisive one.\n\nIn the complex and complicated forms which modrrn industrial enterprise assumes it would be unreasonable to su~cst that anv one of the relevant tests is decisive ; the importance and significance of the tests would vary according to the facts in each case.\n\nThe question must always be determined bearing in mind all the relevant t., ts and co-relating them to 'the nature of the enterprise.\n\nWhere two concerns run by the employer are allied to ••ch other, the question would have to be considered whether thev are functionally integrated or mutually inter-dependent.\n\nIf thev are that would be an important factor in favour of the plea that the two concerns constitute one unit.\n\nAaaocinlitd C•\"\"\"' Compa11iu Ltd . . v. Thar Worimti& [19611]1 S.C.R. 703 Pratap Pr.u v. TM.ir Worl:nu11, f1960) 1 L.L.J. 497 and Pakahiraja StudW. v. If.A Work,,.u, 1961) 2 L. L.J. 380, relied on.\n\nCIVIL APPELLATE JURISDICTION: Civil Appeals Noe. 419of1960, 302of1959and159of1961,\n\n...\n\nAppeals from the Awards dated September 5, 1958, September 15, 1958 and January ll, 1960, of the Industrial Tribunal, Madras, in I.D. Nos. 13 of\n\nHl58, 32 of l9fi7 and 47 of 1959 respectively.\n\nA.V. Viswanatlui Sastri and G. Gopalakrishnun, for the appellants. .B.R. Dalia and Rame, shwar Nath, for respondent No. l (in Appeals Nos. 419 of 60 and 159 of 61).\n\nM.K. Ramarnurthy and T.S. Ve:nkataraman, for respondent No. 2 (in C.A. No. 419 of 60) and respondents Nos. 2 and 4 (in C.A. No. 159 of Hl6l ).\n\nM.K. Rarnamurthy and Rarneshwar Nath, for the respondent (in C.A. No. 302 of 59) .\n\n1962. February l. The Judgment of the Court was delivered by\n\nThi Honaraty Secretory, South India Milt-owners'\n\nAssociation\n\nT~ 8ecrttt#y, Coimhator• District\n\nTextili Workeis'\n\nUnion\n\nGAJENDRAGADKAR, J.-These three appeals arise Gajendrafadkor J. out of an industrial dispute between the industrial employers who are the appellants and their respective workmen who are the respondents in respect of the latters' claim for bonus. They have been heard together because they raise some common questions of general importance. We would first set out briefly the material facts in the three respective appeals.\n\nThe Honorary Secretary, The South India Millowners' Association, and other mills are the appellants in Civil Appeal No. 419/60. A dispute arose between 44 mills and their respective employees in regard to the bonus for the year 1956. The said dispnte wns referred for industrial adjudication to the Industrial Tribunal, .l\\fadras.' State Government on the 13th March 1958. To this reference, the different mills and three unions which represented the employees were made parties. It appears that for the four years prior to 1956, the question of bonus had been disposed of by a tripartite Boan! of Arbitration appointed for each year by the Government. For the year 1956, negotiations were\n\nTAI H.-ary 8e&r11-,, Btidia /Adi. J1Ulou.11s'\n\nAssO•\n\n940 SUPREME OOURT REPORTS [1962] SUPP.\n\nrelevance. Unity of purpose or design. or even parallel or co-ordinate activity intended to achieve a common object for the purpose of carrying out the busineSB of the one or the other can also aasumo relevance and importance, r; ide Ahm~\n\nM anuja.cturitl{J & Oalioo Printing Co. LU. v. Their\n\nIf orkrnen (').\n\nMr. Sastri, however, contends that functional integrality is a very important test and he went so far as to suggest that if the said test i~ not satisfied,\n\nthen the claim that two mills constitute one unit must break down. We are not prepared to accept this ar1mment. In tho complt1x and complicated forms which modern industrial enterprise assumes\n\nit would be unreasonable to suggest that any one of the relevant tests is decisive; the importance and si, iDifica11ce of the tests would vary according to the facts in each caoe and so, the question must always be determinetl bearing in mind all the relevant tests and co-relating them to the nature of tho enterprise with which the Court is concerned.\n\nIt would be soen that the test of functional integrality would be relevant and very significant when the Court is dealing with difforenl. kinds of busi nesses run bv the samo industrial cstablihmt>nt or employer. Where an <-mployer runs two different kinds of businell8 which are allied to each other, it is pertinent to enquire whether the two lines of\n\nbusinel!ll are funotionally integrat!>d or are mutually inter dependent. If they arc, that would, no doubt,\n\nbe a very important factor in favour of the plea that the two lines of business constitute one unit.\n\nBut the test of functional in'.egrality would not be as important when we are dealing with the case of an employer who runs the sam11 business in two different plaotll!. Tho fact that the test uC fun<•· tional integrality ie not and generally cannot be satisfied by two such concerns run b; v the i.ame\n\n(I )[1951] 2 L.l.J. ~7.\n\nemployer in the same line, will not necessarily mean that the two concerns do not constitute one unit. Therefore, in our opinion, Mr. Sastri is not justified in elevating the test of functional integrality to the position of a decisive test in every case. If the said test is treated as decisive, an industrial establishment which runs different factories in the same line and in the same place may be able to claim that the different factories are different units for the purpose of bonus.\n\nBesides, the context in which the plea of the unity of two establishments is raised cannot be ignored.\n\nIf the context is one of the claim for bonus, then it may be relevant to remember that generally a claim for bonus is allowed to be made by all the employees together when they happen to be the employees employed by the same employer. We have carefully considered the contentions raised by the parties before us and we are unable to come to the conclusion that the finding of the Tribunal that the two mills run by the Saroja Mills Ltd. constitute one unit, iil erroneous in law.\n\nIn this connection, it would be necessary to refer to some of the decisions to which our attention was drawn. In the case of Asaociatbl CemR, nt Campanies LUl. and their Workmen (1), this Court held that on the evidence on record, the limestone quarry run by the employer was another part of the establishment (factory) run by the 11ame employer within the meaning of Section 25E (iii) of the Industrial Disputes Act. It would thus be seen that the question with which this court was concerned was one under s. 25E (iii) of the Act and it arose in reference to the limestone quarry run by the appellant Company and the cement tactory owned and conducted by it which are normally two different businesses. It was in dealing with this problem that this Court referred to several tests which would be relevant, amongst\n\n(1) [1960] l.S.C.R. 703,\n\nThe Bonorazy Secree.r,,- South India M illowners'\n\nAssociation\n\nThe Swrd\"'1f, Coia1\"tor1 Di$hid\n\nT .xti/1 W erM•'\n\nUniMI\n\nGqjendragAl/br J,\n\n'l'IN Hooarory Bmll!'li.!:.:,\" hdia Mil s' A.ss°'*ioft\n\nv. :flw !it test of functional integrality naturally aesumes importance and it was that the test which was empha.11ised by this Court in coming to the conclusion that the Press and the Paper did not constitute one unit. Besides, the conduct of the proprietor in dealing with the two businesses and other relevant facts were taken into account in reaching that conclusion.\n\nIn Palcshiraja Studios v. Its Workmen, (1) this Court was dealing with a case of the managem('nt of a cinema studio which also carried on the business activities of producing films and taking dist, ribution rights of pictures, and in coming to the conclusion that the two lines of business were not distinct but together constituted one single industrial unit, this Court emphasised the importance of the \\est as to whether there is functional integrality and unity of finance and employment of labour.\n\nThus, it would be seen that the question as to whether two different concerns run by the same employer constitute one industrial unit for the purpose of bonus, has to be determined in the light of facts in each case. As we have already indicated, after carefully considering the relevant facts in the present case, we are unable to hold that the conclusion of the Tribunal is erroneous in law.\n\nThat takes us to Civil Appeal No. 159/61.\n\nThe first point which has been raised in this appeal relates to the claim made by the Coimbatore Cotton Mills Ltd., one of the appellants, in respect of the development rebate \"llowed to it to the extent of Rs. 1,25,000. Before the Tribunal it was urged that this amount should be treated as a prior charge but the Tribunal rejected the contention and we think, rightly. In this Court, the argument has\n\n(I) (1961] 2 L.L.J. 380.\n\nJ96S\n\n1h1 Ho1uw•f\"J St&rttar_1, South India Millownera•\n\nAs•oet.Nn\n\n•• Tiu r1er1l•r.J,\n\nm/Jattll'I Dlffricl\n\nTetih Wor.bfos•\n\nUniott\n\nGajrndrattvl/oar J,\n\n'1At llottoraty, /he•\"\"' S...1' I .Uc Ji tlltwtUrJ •\n\n. 4Hl!Ci9'io• • 7\".&.n-11•')', Co\"\"\"'11tte Diltricl\n\nTe.dill Worier•'\n\nu111 ..\n\nG.;-k•,.,,.... J.\n\n944 SUPREME COURT REf()RTS [1962] SUPP.\n\nta.ken another form. It is urged that this rebate must ho loft out of account in determining the available surplus because there is a statutory bar which precludes thu appellant from utilising this amount for the payment of bonus. This argument ba.sed on the provisions contained in proviso (b) to explana.tion ( 2) of Section IO (2 )(vi) as intro duoed by the Finance Act XI of 1958. The relevant portion of the statutory provision on which reliance has been placed reads thus :-\n\n\"Provided that no allowance under this clause shall be made unless :-\n\n(a) .................... ··········· ............ .\n\n(b) o.xcept where the asset!Seo is a company being a licensee within the mea\n\nning of the Electricity (Supply) Act, 1948 or where th(l ship has been acquired or the machinery or plant has been installod before the I st day of January, 1958, an amount equal to 75% of the development rebate to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve account to be utilised by him during a period of ten yea.rs next following for the purpos~ of the business of the\n\nundertaking, except :\n\n(i) for distribution by way of divi donda or profits : .................. \" It is the last clause which is the b11.11is of the present argument. Mr. Saatri contends tba.t bonus is awarded\n\nout of profits available in the bands of the emplo yer and the statutory provision just quoted prohibits the employer from distributing tho development rebate a.mount allowed to him by way of profits. There is no substance in this argument.\n\nWhat the statute prohibits is the distribution of the amount in question by way of dividends to the ahare-holdere or profits to the partners. In the\n\n...\n\ncontext, the distribution by way of profits means nothing else than the distribution of profits to the partners. Besides, it is obvious that the amount of bonus paid by an employer to his errployees is allowed to be treaterl as admissible expense under s. llJ(2)(x) of the Incometax Act. It is clear that the , development rebate allowed is in part recognition of the claim for depreciation and the provision in question cannot, therefore, be treated as constituting a bar against taking the said amount into consideration in ascertaining the available surplus in the hands of the employer during the year in question.\n\nTherefore, the argument which has been urged before us in respect of the development rebate of Rs. 1,25,000 cannot be upheld.\n\nIt is true that in support of this argument Mr.\n\nSastri has relied on the decision of this Court in The Central Bank of India v. Their Workmen (1).\n\nIn that case, section lO(i) of the Banking Companies Act prior to its amendmPnt in 1956 fell to be construed. Section (I) (b) ; ii) provides, inter alia that: \"No banking company shall employ any person whose remuneration or part of whose remuneration ta.kes the form of a share in the profits of the company\". It was held that this provision prohibited the grant of industrial bonus to bank employees inasmuch as such bonus is remuneration which takes the form of a share in thf' profits of the banking company. We do not see how this decision can assist the appellant a.t all. What we are called upon to construe in the present case is the expression \"for distribution by way of dividends or profits\" and, as we have pointed out, the context makes it perfectly c!ear that the distribution by way of profits which is prohibited is the distribution by way of profits amongst the partners. Therefore, the decision in the case of\n\nI. (I) [1960] I s.c.R. 200.\n\nil1 ll\"1trO.r:1 B1cr11a,, 6•utla Indi• .Mitl.rorurs'\n\nAsstci•tiM\n\n•• Tlte Stcrelo1, J, Cfttnllallf'1 Distric\n\nT1Xtil1 W trklf's'\n\nUniMJ\n\nt1.; entra1U/i.,. J. \\\\\n\n\\ \\\n\nTh. HMorary 81crtklry, South India Al illownn1\"\n\nAssoci4tion\n\nTiit Sut'etary, Coimbale11 District\n\nT \"'tit. W ., l:ns' u.,;..,\n\nCentral Bank of India is of no assist&nce to the a.pp\n\nellant in the present case.\n\nThor<· is one more point which needs to be considered in this appeal and that is in regard to the claim for interest made by one of the appell an ta, the Coimbatore Cotton fills Ltd., in respect of the amount of depreciation used by it by way of workin-' capita.I. The interest claimed a.mounts to Rs. 33.42!1. The Tribunal has held that the appellant is not entitled to claim any retum on depreciation and in that connection, it has referred to its earlier d guidance of the Tribunal when it may have to deal with similar disputes between the parties fo future. Therefore, these two appeals are, in substance dismissed. Parties will bear their own costs.\n\nThat leaves Civil Appeal No. 302/59. In this appeal, as we have already noticed, the Tribunal has found the available surplus to be Rs.1,60,000 and it has directed that out of it Rs. 1.25 lakhs should bA distributed as bonus for the relevant year. One of the points which the Tribunal had to consider in dealing with the respondents' claim for bonus in this case was in regard to the life of the machinery and it held that the normal economic life of the printing machinery can be easily fixed at 20 year8.\n\nThen it proceeded to consider what should be the period of spread over after the total rehabilitation requirement is ascertained, and following its decision in the award from which Appeal No. 419/60 arises, it purported to divide th\" machiner.v into three categories and proceeded to make ad hoc additions to the normal life of 20 years already determined by it. We have already held that this ad hoc addition to the normal life of the machinery as determined by the Tribunal is not justified.\n\nIt is conceded before us by the respondents that if the addition thus made by the Tribunal is set aside, then there would be no available surplus in the hands of the appellant for the relevant year. In that view of the matter, it is unnecf'ssary to consider the other points which the appellant wa.nteGI to raise before us in the present appeal. On the bais\n\n'\"' He n-\"'\"1 becrdaty, Soulh lt1dit1 M UllWfllfs'\n\nA1.roeiafion\n\nThe Secrett:ry, Coimbator1 Distrit; t\n\n1'extilt Wtffklrs'\n\nu.w.\n\nGt1jenir'1Mk•r J.\n\n~H..,,...., S\"retttrJ, S.U. /\"\"\"' Jli/1...-,'\n\nil•10ri4Ji011 ... 'l'A1 S\":r•\"\"' ~'\"\" Dislri&t 7 ,.,; i, IF\"'\"'' um.\n\nlllfl\n\nFdnoar; J I,\n\nthat the normal lifo of the printing machinery is\n\n20 years, a divisor will have to be adopted and by the adoption of the proper divisor it would follow that there is no available surplus for the relavant year. That is why the award passed by tho Tribunal directing the appellant to distribute Ra. 1.25 lakhs byway of bonus amongst its employees for the year I !156-57 has to be set aside. The appeal is accordingly allowed; but there would be no order as\n\nto costs.\n\nBIPAT GOPE\n\nSTATE 0.1!' BIHAR\n\n(.M. Hm..i.YA.TULLAH and J.C. S.ILUI, JJ.) Criminal Prowlure-CommiUmml proettding-Ortlu of di4cltatr; e l>y M agi4trate, First Ola&, after trying tlae wlwk caae -Procedure under s. 207A(6), Criminal Procedure Code Jol/Dwt4-l/ in ezcuo of jurisdktio-Code of CrimiMl P..-.\n\ndure, 1898 (Act V of 1898), s, 207..4(6).\n\nIn procccdinl!.' under s. 207A(6) of the Code of Criminal Proccdwe the Magistrate discharged the accused after recording the evidenc~ in the case. The High Court on rev.illon set aside the order and directed the Magfatrate to commit the accused to stand trial before the court of scssbn. The Magiatrate examined witnesses, held spot inspection.\n\nHe did not stop to find out if there was evidence which, if believed, would establish, at least, a prima facie case, but went on further to disbelieve that evidence, by an elaborate and paimtaldng process of examination, in aid of which he brought to bear his own appraisal of inconsistencies, improbabilities etc. In •hort, he tried the whole case from one and to the other and established his point in a fairly elaborate order.\n\nHeld, that the jumdiction conferred by sub-s. (6) of s. 207 A, does not entitle the Magistrate to try the case on his own, and forestall the drcision of the court of session.\n\nThe order of discharge passed by him in the present case, therefore, wu in cxccas of jurladic:tion, and muat he set aside.", "total_entities": 20, "entities": [{"text": "Art. 22", "label": "PROVISION", "start_char": 150, "end_char": 157, "source": "regex", "metadata": {"statute": null}}, {"text": "N'ORA:i; tY SECRETARY, SOUTH INDIA\n\nMILLOWl\\\"ERS' ASSOCIATION AND OTHERS", "label": "PETITIONER", "start_char": 789, "end_char": 861, "source": "metadata", "metadata": {"canonical_name": "THE HONORARY SECRETARY, SOUTH INDIA MILLOWNERS' ASSOCIATION AND OTHERS", "offset_not_found": false}}, {"text": "THE SECRETARY, COfMBATOH.E DISTRlill\n\nTEXTILE WO~KERS' UNION", "label": "RESPONDENT", "start_char": 863, "end_char": 923, "source": "metadata", "metadata": {"canonical_name": "THE SECRETARY, COIMBATORE DISTRICT TEXTILE WORKERS' UNION", "offset_not_found": false}}, {"text": "K. N. WANCHOO, JJ.", "label": "JUDGE", "start_char": 976, "end_char": 994, "source": "metadata", "metadata": {"canonical_name": "K.N. WANCHOO", "offset_not_found": false}}, {"text": "Indian Income-tax Act, 1922", "label": "STATUTE", "start_char": 3813, "end_char": 3840, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "[1960] 2 S.C.R. 906", "label": "CASE_CITATION", "start_char": 4713, "end_char": 4732, "source": "regex", "metadata": {}}, {"text": "s.10", "label": "PROVISION", "start_char": 16926, "end_char": 16930, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 16946, "end_char": 16960, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 17652, "end_char": 17666, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "S1", "label": "PROVISION", "start_char": 21382, "end_char": 21384, "source": "regex", "metadata": {"statute": null}}, {"text": "S1", "label": "PROVISION", "start_char": 25550, "end_char": 25552, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 25E", "label": "PROVISION", "start_char": 33279, "end_char": 33290, "source": "regex", "metadata": {"statute": null}}, {"text": "Industrial Disputes Act", "label": "STATUTE", "start_char": 33304, "end_char": 33327, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 25E", "label": "PROVISION", "start_char": 33419, "end_char": 33425, "source": "regex", "metadata": {"statute": null}}, {"text": "Finance Act XI of 1958", "label": "STATUTE", "start_char": 38576, "end_char": 38598, "source": "regex", "metadata": {}}, {"text": "Companies Act", "label": "STATUTE", "start_char": 40895, "end_char": 40908, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 207A(6)", "label": "PROVISION", "start_char": 46930, "end_char": 46940, "source": "regex", "metadata": {"statute": null}}, {"text": "Criminal Procedure Code", "label": "STATUTE", "start_char": 46942, "end_char": 46965, "source": "regex", "metadata": {}}, {"text": "s. 207A(6)", "label": "PROVISION", "start_char": 47090, "end_char": 47100, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}, {"text": "s. 207", "label": "PROVISION", "start_char": 47897, "end_char": 47903, "source": "regex", "metadata": {"linked_statute_text": "Criminal Procedure Code", "statute": "Criminal Procedure Code"}}]} {"document_id": "1962_2_948_954_EN", "year": 1962, "text": "~H..,,...., S\"retttrJ, S.U. /\"\"\"' Jli/1...-,'\n\nil•10ri4Ji011 ... 'l'A1 S\":r•\"\"' ~'\"\" Dislri&t 7 ,.,; i, IF\"'\"'' um.\n\nlllfl\n\nFdnoar; J I,\n\n948 SUPREME COURT REPORTS (1962) SUPP. '\n\nthat the normal lifo of the printing machinery is\n\n20 years, a divisor will have to be adopted and by the adoption of the proper divisor it would follow that there is no available surplus for the relavant year. That is why the award passed by tho Tribunal directing the appellant to distribute Ra. 1.25 lakhs byway of bonus amongst its employees for the year I !156-57 has to be set aside. The appeal is accordingly allowed; but there would be no order as\n\nto costs.\n\nBIPAT GOPE\n\nSTATE 0.1!' BIHAR\n\n(.M. Hm..i.YA.TULLAH and J.C. S.ILUI, JJ.) Criminal Prowlure-CommiUmml proettding-Ortlu of di4cltatr; e l>y M agi4trate, First Ola&, after trying tlae wlwk caae -Procedure under s. 207A(6), Criminal Procedure Code Jol/Dwt4-l/ in ezcuo of jurisdktio-Code of CrimiMl P..-.\n\ndure, 1898 (Act V of 1898), s, 207..4(6).\n\nIn procccdinl!.' under s. 207A(6) of the Code of Criminal Proccdwe the Magistrate discharged the accused after recording the evidenc~ in the case. The High Court on rev.illon set aside the order and directed the Magfatrate to commit the accused to stand trial before the court of scssbn. The Magiatrate examined witnesses, held spot inspection.\n\nHe did not stop to find out if there was evidence which, if believed, would establish, at least, a prima facie case, but went on further to disbelieve that evidence, by an elaborate and paimtaldng process of examination, in aid of which he brought to bear his own appraisal of inconsistencies, improbabilities etc. In •hort, he tried the whole case from one and to the other and established his point in a fairly elaborate order.\n\nHeld, that the jumdiction conferred by sub-s. (6) of s. 207 A, does not entitle the Magistrate to try the case on his own, and forestall the drcision of the court of session.\n\nThe order of discharge passed by him in the present case, therefore, wu in cxccas of jurladic:tion, and muat he set aside.\n\nCRIMINAL APPELLATE JumsmcTION: Criminal Appeal No. 153 of 1960.\n\nAppeal by special le!lve from the judgment and order dated July 28, 1960, of the Patna High Court in Criminal Revision No. 1243 of 1959.\n\nSarjoo Prasad, B.K. Banerje, e, P.K. Ohatterje, e, and A.K. Nag, for the appellants.\n\nS.P. Varma, for the respondent.\n\n1962. February 1.-The Judgment of the Court was delivered by\n\nII/di\n\nB; plll 00[>1\n\nS:ate of Bilrar\n\nH!DAYATULLAH, J.-This is an appeal by Hidqyaluifoh J, special leave against an order of the High Court of Patna, by which an order passed by the Magistrate, First Class, discharging the appellants under s. 207A(6) of the Code of Criminal Procedure, was set aside, and the Magistrate was directed to commit the appellants to the Court of Session to stand their trial under ss. 307 /34 and 148 of the Indian Penal Code. The only question that is argued is whether the High Court was justified in setting aside the order of the Magistrate, which, it is cla.imed was passed in the proper exercise of the jurisdiction conferred by s. 207A(6) of the Code.\n\nThe facts of the case, in rief, are as follows: 011 March 26, 1959, at about 10-15 p.m. one Rajbahadur Rai alias Chhote Rai, was alleged to have been assaulted by the appellants at a place where Chhote Rai WllB sitting, at the pan shop of one Raghunath Prasad. The appellants are said to have arrived there in a private car and a tandem, and after assaulting Chhote Rai, to have gone away in these two vehicles. After investigation, the ppellants were prosecuted under ss. 307 i\n\n34 and 148 of the Indian Penal Code, with the result already mentioned.\n\nBefore the order of discharge was made, the Magistrate heard the evidence of nine witnesses\n\n!NI\n\n/Jij>ol llep1\n\n•• Stw•JBV..\n\nHiioyobJ/o~ J,\n\nSUPREME OOURT REPORTS [1962) SUPP.\n\nincluding Chhote Rai and Ragbunath, who had given the first information report. Tho witn!'sses\n\nalso includtod two other alleged eye-witne>:oes, Bhushan ::iingh (P.W. 2), aud ::-heonandim Yadcv\n\n(P.W. 6).\n\nThe Magistrate, aft.tr nicording the evidence and holding a spot inspection and hearing the parties, discharged the appellants, as he \"a;; of opinion (in his own words)- \"in view of the aforesaid di8ere pant, unreliable and incredible and highly int fixing of dat\"\"· iH•uing of procc&.•cs and ensuring that copies of the trate, in which case he shall proceed accordingly.\"\n\nThis subsection, it is contended, gives the\n\nBipat Gop.\n\nStal• of Bihor\n\nHida;>alullah J.\n\nIHI\n\nBf1<1 G ...\n\n•• 81•1,.JBiA•\n\nH~WJ.\n\n952 SUPREME COURT REPORTS [1962) SUPP.\n\nMagistrate the option not to oommit an accused but to disohargo him, if he is of opinion. for reasons to be recorded, that the evidence discloses no grounds for committing the accused peNon, unless it appears to him that the person should be tried before himself or some other Magistrate. The Magistrate, in this case, thought that the power conferred upon him by this sub-section enabled him to examine the evidence throughly, and if it did not satisfy him, to discharge the accused. This view of the Magistrate was not accepted by the High Court.\n\nMr. Sarjoo. Pra88d for the appell, nts, contends, on the basis of the ruling of this Court in Ramgopal Ganpatrai Ruia v. TM State of Bombay (' ), that the course followed by the Magistrate in determining whether there was credible evidence or not was the right course, and point!! to certain passages in the jud2ment in the above case as supporting his proposition. The cited case interpreted s. 209 of tho Code of Criminal Procedure, which, after amendment of the Code by Act 26 of 1955, deals with proceedings instituted otherwise than on a police report, and under whirh the\n\nMagitrate can discharge Bii accused if he finds that there aro \"not sufficient grounds\" for committing the accused person for trial. The words of the two SPctions are not the samll, and it is possible to sa. y that the force of the two sections is also not the same, and that s. 209 gives a power to enter upon the merit~ of a case in 11 manner which s. 207 A doer not warrant. Whether the hanp; e of the language iR deliberate or due to the fact that different draftsm1•n drafted tho two sortions, the test for diecharging the accused must, in a large way, be the\n\nsame under both tho sections, and it is hardly necessary to decide the full of ambit of s. ~07 A.\n\nand contrast it with that of H. 20!l. If there is any indic ition in the la11gua11e, it is altogether on the side that. the Magistrate must find a stronger case for discharging an accuso1 .. 1 '\n\n95t SUPREHE COURT REPORTS [1962] SUPP. l l\n\nh11.rdly necessa.ry in this case to show how far a Mal!?istrate ca.n go to find that there is no ground for committing the accused to stand bis trial in a Court of Seesion. We seo no reason to interfere with the order of the High Court, 11.nd diemiAs the 11.ppeal.\n\nIt is a matter of regret that much delay ha.s taken place in this ca.se, and it may harm the case on the one side or the other. We hope that now thll case will be he11.rd from day to day, 11.nd disposed of, 11.6 expeditiously 11.S possible. We further make it clear to the Court or Courts de11.ling with this case that any expression of opinion on the merits of th\" case whether b:v us or by the High Court or the Magistrate, who first heard it, or elRe where, in this ordPr or the ordrrs prece ding this, is to be completely ignored. and the case shall be decided without being influPncecl in any way by Ruch expression of opinion.\n\nAppeal dismissed.\n\nRAMALINGAM & CO.\n\nTHE Sl'ATE OF MADRAS (S. K. DAS, M. HrnAYATULLAH and J. C. SHAH.\n\nJJ.)\n\nSalu Taz-Contratt for sale of goud1 by corresponden\"- C. I. F. or G. F. controcf.1-Bill of /fJding hand.d otier to banus tD port with only on paym.nt-Whtfh-r properly in good8 pa&Jed ;,. Mttdraa-Pooition of banker1 Vi•-a-Via wler and foreign buy.,,_J,.i.,,,., diary bank1 .. 1 '\n\n95t SUPREHE COURT REPORTS [1962] SUPP. l l\n\nh11.rdly necessa.ry in this case to show how far a Mal!?istrate ca.n go to find that there is no ground for committing the accused to stand bis trial in a Court of Seesion. We seo no reason to interfere with the order of the High Court, 11.nd diemiAs the 11.ppeal.\n\nIt is a matter of regret that much delay ha.s taken place in this ca.se, and it may harm the case on the one side or the other. We hope that now thll case will be he11.rd from day to day, 11.nd disposed of, 11.6 expeditiously 11.S possible. We further make it clear to the Court or Courts de11.ling with this case that any expression of opinion on the merits of th\" case whether b:v us or by the High Court or the Magistrate, who first heard it, or elRe where, in this ordPr or the ordrrs prece ding this, is to be completely ignored. and the case shall be decided without being influPncecl in any way by Ruch expression of opinion.\n\nAppeal dismissed.\n\nRAMALINGAM & CO.\n\nTHE Sl'ATE OF MADRAS (S. K. DAS, M. HrnAYATULLAH and J. C. SHAH.\n\nJJ.)\n\nSalu Taz-Contratt for sale of goud1 by corresponden\"- C. I. F. or G. F. controcf.1-Bill of /fJding hand.d otier to banus tD port with only on paym.nt-Whtfh-r properly in good8 pa&Jed ;,. Mttdraa-Pooition of banker1 Vi•-a-Via wler and foreign buy.,,_J,.i.,,,., diary bank b•nkcr; were interposed for the pr., trction of the seller a• well a• the buyer. The issuing b inker did not purport to act a• agent of the buyer and the intermediary bankcn accepted the general offer of the issuing banker negotiatin~ te draft.\n\nBy so accepting the offer and bv taking over the Bill of Laing, the insurance certificate and the invoice which represented title to the goods the intermodiary bJnkcr did not act as an agent or the seller.\n\nC1vrr. APPELLATE JURISDICTION: C.A. No. 10 of 1961.\n\nAppeal from the julment a.nd decree dated March 5, 1956 of the Madras High Court in A.S. No. 256 of 1951, R. Ramamurlhi Aiyar and R. Gopalakrishnan, for the appellants.\n\nR. Ganapalhy Iyer and D. Gupln, for the Reepondent.\n\n1962. February l. The Judgment of the Coitrt was delivered by\n\n' I\n\nSHAH, J.-Messrs. Ramalingam & Co.-hereinafter called the assessees-are a firm doing business principally as exporters of vegetable fibres to foreign countries. They have their place of business at Tuticorin in the district of Tirunelveli in the\n\nState of Madras.\n\nThe contracts of sale are made by correspon dence on approval of samples sent by the assessees to the foreign buyers. The contracts are C.I.F. or C.F. and the price is payable by draft upon bank credit to be opened by the buyer. The course of dealing between the assesseee and the foreign buyers was as follows :- After the contract for a quantity of goods was finalised by correspondence and the price ascertained the foreign buyer opened with his own bankers an irrevokitble Letter of Credit in favour of the assessees for 95% of the net invoice value.\n\nIntimation of the opening of the Letter of Credit was then given to the assessees through a bank operating in the Province of Madras. The asses11ees then shipped the goods, obtained Bills of Lading in their own names and lodged the shipping documents endorsed in blank with their own bankers together with the invoice and Bill of Exchange for 95% of the invoice value.\n\nThe assessees then discounted the Bills through their own bankers. The shipping documents were forwarded to t.he foreign banker who on presentation paid 95% of the invoice amount. The Bill of Lading was then delivered by the foreign banker to the buyer and the goods were unloaded.\n\nFor the year 1945-46 the Commeroal Tax Officer, Tirunelveli determined for the purpose of computing tax liability under the Madras General Sales Tax Act, 1939, the turnover of the assesseee at Rs. 15,61,200/-.\n\nThe Commercial Tax Officer rejected the claim of the ..esessees that the amount of Rs. 15,22,000/· in reepeot of overseas transactions\n\nRamalingam dr Co. v.\n\nTb• Slal1 •f Jl.wu\n\nSIW> J.\n\n-.1..,..cl:Co.\n\nTAI Btou of Modraa\n\nSW J.\n\nSUPREME OOURT REPORTS [1962) SUPP.\n\nwas exempt from liability to tax.\n\nHe held that the export transactions in respect of which the\n\nex cm ption was claimed wer<' sales within the province of Madras and suhjPct to sales.tax under the Madras General Sales Tax Act, 1939. Tho order t>f tho Salea-tax Officer was confirmed by tho Board of cvenne, Madras, except as to the amount of freight.\n\nThe Board of Revenue held that the propcrty in the goods passed to the buyers in a large majority of the expo1t transactions when the goods were shipped. On remand, the Commeroial Tax Officer recomputed the turnover at Rs. ll ,23,603/8/8 inclusive of the local sales of the value of Rs. 75,082/14/0. After paying the tax tho aBSessees sued the Province of Madras in the Court of the Subordinate Judge, Tuticorin for a decree for Rs. 10,485/· being the amount oi tax paid by them on export sales pursuant to the order of &88essment and interest thereon at 6% until realisation.\n\nThe assesseee contl.'mled that the export salPs were at the matt'lial time \"totally outside the provisions of the Madras Genna) Sales Tax Act, and the order of assessment was ultra ifres and beyond the powers of the authorities\". Tbfl !-'ubordinate Judge decreed the claim for Rs. 10,323/· with interest at 6% till realizaticn. Jn appeal, the High Court of Madras reversed the decree and dismissed the suit filed by the aSBeBBees.\n\nWith certificate granted by the High Court this appeal is preferred by the a88ell8ees.\n\nIt is oommon ground that in the yeoar 1945-46, under the Madras GenPral Sales Tax Aot; 1939, the taxing authorities had no power to levy sales-tax on sales which took place outside the Province. The decision of the appeal, therefore, depends upon the determination of the question whether the export sales took place within the Province. If they took place within the Province, the sales wert' properly taxed.\n\nWe may observe that the plea that a suit for a decree for refund of tax paid in pursuance of\n\n. '\n\n-,.\n\n2 S..C.R.\n\nSUPRElME COURT REPORTS 959\n\nan order of assessment passed by the taxing authorities on the basis that the sales took place within the Province did not lie in the civil court, was not raised in the Court of First Instance, nor in the High\n\nCourt. Counsel for the State of Madras has also stated before us that he does not desire to contend in this case that the suit was, in view of the adjudication by the taxing authorities, not maintainable.\n\nWe therefore proceed to deal with the only question which was debated before us at the Bar : whether the export sales which ar.e the subject matter of\n\ndispu~ in this appal were completed within the\n\nProvmce of Madras.\n\nThe dispute relates to turnover in respect of seventeen export transactions with merchants in different destinations overseas. As typical of the transactions the files relating to the shipments to Messrs Begbie Philips and Ha.yla.y, London and Messrs Hindley and Company, London were tendered in evidence and the case proceeded to trial on the footing that those transactions were typical of all other transactions.\n\nOn April 16, 1945, the Mercantile Bank of India wrote a letter in connection with the shipment to Messrs Begbie Philips and Hayley, London a.bout a contract of sale of five tons pa.lmyra fibre. The letter is in the following terms :-\n\n\"Dear Sirs,\n\nWithout any responsibility on the part of this bank we beg to advice receipt of a telegram from our London office reading :- \"We open irrevocable credit favour Ra.malingam Company, Tutioorin, £400 (four hundred pounds) drafts on Mercantile Bank of India Limited, 60 d/st. invoices, full set shipped bills of lading order bank endorsed certificate of origin insurance oovered in London about 5 tons palmyra fibre at £80 (eighty pounds) not per ton C and F. Shipment soonest India to\n\nlHB\n\nB\"\"'alU., ... .tCo.\n\n\" Tho s,.,, of M•• 1\n\nShi J.\n\nR__,..,__.c •.\n\nT• SI-. of Mo'1a•\n\n8W .1.\n\n. 960 SUPREME COURT REPORTS [1962) SUPP.\n\nUnited Kingdom by approved ship.\n\nPart shipments allowed expiry 6th October, 1945 a/c Bagbie Phillips Hayley, Limittd, IicC'ncc No. 198281.\"\n\nWhen submitting documents under this credit we would emphasise the fact that the goods must be described beth in the bill of lading and invoice identically as advised above and the relative bill marked \"Drawn under telegraphic credit No. 88-A/36 of 12th April 1945\".\n\nWe shall furnish you with further parti culars on receipt of written confirmation.\n\nOwing to frequent mutiliations in coded telegrams the above message is subject to any neooBBary corrections on receipt of eonfirma. tiou by mail.\n\nKindly note that the negotiation of bills under this credit is entirely optional on our part am! this advice does not release you from the liability attaching to the drawer of a Bill of Exchange.\n\nThis letter must be produced with all bills drawn unr!er this credit.\n\nYours faithfully\n\n(signed) ..•\n\nManager\".\n\nOn May 28, 19!5, the National Bank of India, Tuticorin wrote a letter to the asseBBeell in regard to a sale of a qua.utity of fibre, which is as follows:-\n\n\"Dear Sirs,\n\nWe beg to inform you that we are in reoeipt of advice by cable of 24th instant\n\n-..\n\nfrom our London office that they have received from Messrs Hindley and Company, Limited, No.35, Crutched Friars, London,.!<:. C. 3 an undertaking to honour your bills on Messrs. Hindley and Company, Limited No. 35 Crutched Friars, London E. C. to the c xtent of £370 (three hundred and seventy pounds) sterling being 95 per cent of invoice value on the following conditions :- Bill to be drawn payable 90 days after sight and to be accompanied by - Invoices.\n\nFull sets of on board bills of lading made out to order and blank endorsed representing shipments of:- Five tons Tuticorin medium cut and dyed bassine 7 inches and 7-l/2 inches equally at £78 per ton in l Cwt. (ballots) C and F United Kingdom post Shipment June/July from Cochin freight paid of deducted and credit reduced accordingly - Freight basis 22nd May, 1945.\n\nInsurance including was risk with unlimited transhipment covered in London.\n\nSuch shipping documents are to be dt-livered on payment of the bills which should bear the clause - \"Drawn under N.S.I. credit number 83 cabled 24th May 1945\".\n\nBills fulfilling the above-mentioned conditions must be negotiated on or before-Extended till 30th April 1946.\n\nPlease note that the bank accepts no liability for the above undertaking and this advice does not release you from the lir.bility attaching to the drawer of a Bill of Exchange.\n\nThe above message lli continued by us on behalf of the opening bank for your informa- ,.. tion but without any responsibility on our\n\nl!J62\n\nBamalingam &: Co. v.\n\nThe Slat• of Madras\n\nShah J,\n\nIHZ n...i;.8,,.. .t Co. v.\n\nTiu 814<• II/ Modru\n\nSAala J.\n\n962 SUPREME OOURT REPOR'l'S [1962] SUPP. ...-.:\n\npart eiroept for the correctness ot this copy of the telegram as received by us.\n\nWhen uegotiating bills please produce this letter to have the amounts reoordcd on the back hereof.\n\nI am, Dear Sirs,\n\nYours faithfully (Signed) ..... .\n\nManager.\" On receipt of intimation the asseBBees shipped the goods and banded over the Bill of Lading and the invoice to their own bankers, accompanied by a Bill of exchange for the amount for which the Letter of Credit was opened by the fonign banker. The aHBCS\n\ndCes then discounted the bills for the amount for which credit was opened.\n\nThe taxing authorities taxed these transactions, because, in their view, the sales were effected in tho Province of Madras and not outside.\n\nThe assessees in the plaint in paragraph IV cl. (e) stated that one of the salient features of the business was that \"The bills of lading are handed over to the Plaintiffs bankers with the clear and definite instructions to pass on the shipping documents to the bu~ era only on pay. ment.\n\nThey are what is styled in commercial paralance as D/P bills, i.e., documents to be handed over on payment\".\n\nThis averment in the plaint was not traversed in their written statement by the defendants. The only witness examimcl at the trial was A.V. Samuel, one of tho partners of the a.Raes sees' firm.\n\nHe deposed to the practice which was follow1d by the assessees. He stated .-\n\n\"After shipment we obtain Bill of Jadiug made out in our name as shipper. We draw a bill of Exchange and along with bill of ladil1g and invoice. These documents are deposited with\n\nNational Bank. We endorHe in Rank on th\" Dill of Lading. It is only after paymeut ol\n\nthe Bill of exchange by the foreign Bank on behalf of tho purchaser, the Bill of Lading is handed over. Till the bill is paid for no title in the goods pass and the goods are at our disposal. If the bill is not honoured the Bank will ask us for directions as regards the disposal of goods. Under instruction from the buyers foreign banks give instruction to any local Bank to give credit up to a certain limit. Inspite of letter of credit as drawers we are responsible under the bill of exchange. We can discount in any bank and not merely in the credit opening bank.\" In cross-examination he stated that the \"credit opening b'1nk opens credit on behalf of the purchasers.\n\nThose banks are not known to us before,\"\n\nIt is clear from the terms of the two letters dated April 16, 1945, and May 2S, 1945, that the foreign buyers had opened letters of credit for the benefit of the assessees, for the amounts set out therein. These, it appears, were general credits and\n\nintimation thereof was given by the local bankers in India who were agents of the foreign bankers. The local bankers, however, did not undertake any liability by intimatmg the opening of the letter of credit and the assessees were expressly informed that they (the assessees) would not be released from their liability under the Bills of Exchange drawn by them. The assessees negotiated the Bills through their bankers after receiving an intimation of the opening of credit.\n\nCounsel for the State of Madras submits that the property in the goods which were the subject matter of sale passed in Tuticorin when the assesees received an amount which represented the price\n\nf the goods against delivery of the Bills of Lading ndorsed in blank with authority to complete the ndorsement. In substance, the plea is that the oreign bank opening the letter of credit is an agent\n\nR1molio1..,•do,\n\nTlw St& oJ Mdr11\n\nSWJ,\n\n964 SUPREME COURT REPORTS (1962) SUPP. ~\n\n1961 of the buyer, and that bank authorizea its own a._i0w,...,, c.. branch to pay the price to the ahippers and by the n. 51 vef Mw arrangementa made by opening the letter of credit, \"' price is paid to the vendor in his own country against SAaloJ. the bill of Lading endoraed in blank.\n\nIt ia necessary to appreciate the true nature of the commercial letter of credit extensively used in fo, eign trade.\n\nDuring the last fow decades, expanaion of international trade involving overseaa tranaaotiona has raiaed problema of peculiar difficulty.\n\nThe partiea to a contract to supply gooda are generally unknown to each other and the contract ia the result of correapondence between the parties. Often neither the seller nor the buyer is prepared to trust the other.\n\nAgain, between the delivery of the goods in such trade on board the ship and its ultimate delivery at the destination, the seller ia reluctant to tie up his funds.\n\nThe seller himself is generally a purchaaer of gooda from the local market and ha.8 in vested funda in purchaaing the goods. The buyer is also unwilling to make payment in advance. To tide over the problem created by thia reluctance of the seller and the buyer, bankers of international repute and credit interpose.\n\nThey for a small commieaion undertak11 b; v opinion letters of credit to honour the Bill of Exchange drawn b; v the seller accompanied by the insuranc11 policy and the invoice relating to the goods forming the subject matter of the contract. At the instance of the buyer the banker issues a letter of credit which ia addreaaed\n\nto the world at largo or more frequently to specified person or persons : thereby the banker undertakes to honour the Bills of Exchange drawn on the faith of that let.ter. Invariably, the Bille are payable in future but the exporters as tho benefioiariea under the contract, have the guarantee of the banker that payment will be forthcoming and are alao entitled to discount the bills with any party oogniaant of the undertaking of the original\n\n...\n\nbanker. There are generally four parties to such a transaction -the buyer, the seller, the banker who issues the letter of credit, called the issuing banker and the intermediary or the negotiating banker who allows credit to the seller on the bills lodged with him. Between the buyer and the issuing banker, the contract is that he will pay bills drawn by the seller of the goods against delivery of the Bill of Lading, insurance certificate and invoice. The buyer undertakes to put the banker in funds to enable him to make payment if the documents are presented. The relation between the buJer and the banker is not of pricipal and agent. The contract between the issuing banker and the negotiating bankllr may be of a durJ character. Where the issuing banker's instructions are merely to advise the credit, and the credit calls for bills to be drawn either on the issuing banker or on the buyer, the intermediary banker may negotiate the beneficiary's bills. In such a case he stands qua the issuing banker as principal to principal, for either he succeeds to the rights of the beneficiary under the credit or, if he negotiates relying on the credit alone, as acceptor of the offer it contains. If the instructions call upon the intermediary banker to p1ty or to negotiate the beneficiary's bills, the intermediary banker is tho issuing banker's agent.\n\nUnder the I erms of the contract between the assessees and the foreign buyer the price was to be paid \"by draft after 90 days under bank credit to be opened by the buyer for 95% of the net invofoe amount.\" By the letter of credit the foreign banker guaranteed to pay the amount in London.\n\nThe issuing hank intimated the opening of the letter of credit., but there is no evidence of any expri; ss directions to its agent in India to pay or negotiate the draft. The letter of credit was gomiral; and it was open to any bank on the faith\n\nR11m11.biripam & Co.\n\nThe 61ai. of Madras\n\nSlfah J,\n\nIHI ... ,, ..... °'\n\n\"· 'f'/w SW. ~JI od< ..\n\naw .1.\n\nSUPRBMB OOURT REPOR~ [1982] SUPP.\n\nthereof to negotiate the bill issued by the asseesees.\n\nThe payment m&de by the intermediary bank was not and could not therefore be on behalf of the issu\n\ning bank much leee on behalf of the buyer. By negotiating the bill, the banker of the weeeeee became the acceptor of the offer contained in the letter of credit of the issuing bank, and as suoh aooeptor obtained the Bill of Lading, the invoice and the Bill of Exobange and presented them for payment.\n\nThis arrangement was not an arrangement for pay, ment of prioe on behalf of the buyer.\n\nIt appear• clear from the two letters dated April 4, 19'5, and May 28, 1945, that the banks accepted no liability by intimating the opening of the letter of credit and the liability attaching to the &SBell8etll by drawing Bills of Exchange was not discharged. If the liability of the &18e811008, as drawers of the Bills of Exchange continued, the arrangement made by the buyer could not be regarded as one to pay the prioe throngh his banker in India. As stated hereiDbefore, the relation between the buyer and his i.ssuin~ banker was not of principal and agent, nor was the relation between the issuing bankar and the inti>rmediary banker that of prinoipal and agent. Tho two bankers were interposed for the protection of the seller 1111 well as the buyer. The issuing banker did not purport to act as agent of the buyer and the intermediary banker acoepted the general offer of the issuing banker by negotiating the draft. By so accepting the offer and by taking over the Bill of Lading, the insurance certificate and the invoice which represented title to the goods the intermediary\n\nbanker did not &et as an agent of the 11eller.\n\nThe price in respect of the goods was not received in the Province of Madras, and the pro perty in the good& also did not p\"88 to the buyer\n\nwithin the Province. Tax in respect of the ea.le of 1962 fibre by the assessees under tne disputed transac- Ramalingam.,, Co. tions was therefore not exigible under the Madras v.\n\nGeneral Sales Tax Act.\n\nTiu Stat• of Madras\n\nThe appeal is therefore allowed : the decree of the High Court is set aside, and the decree of the trial Court is restored with costs in this Court and the High Court.\n\nAppeal allowe.d.\n\nM/S. BALLABHDAS AGARWAL\n\nTHE STATE OF BIHAR\n\n(J.L. KAPUR, M. IIIDAYATULLAH and RAGHUBAR\n\nDAYAL, JJ.)\n\nSales Tax-Appeal from order of Board of Revenue-No A 71peal from ordei of High Oourt.--Assesaet if can agitate the correctness of deci•ion of Board by Special Leave-Remedy open lo assessre wlien que .. tion asked for, not replied by the Board to Tligh Court-Appeal not maintainabk where breach of Rule of Natural. Justice or violation of principle of law not shown-Bihar Sales Tax Act, 1947 (Bihar 19 of 1947), ss. 6,24,25,28.\n\nThe appellant, a Railway contractor, having Refresh ment Rooms and Tea Stalls at various stations, was registered as a dealer under the Bihar Sales Tax Act, 1947. He being aggrieved bv the assessment for the year 1950-51 made by the Sales Tax Officer took the usual .appeals to the Sales Tax Authorities and after the appeals were rejected he took a revision under s. 24 of the Act before the Board of. Revenue Bihar which was dismissed. He then applied under s. 25 of the Act to refer six questions of law to the High Court.\n\nThe Board referred only one question to the High Court.\n\nThe High Court after reframing the question answered it in the negative against him.\n\nAgainst the order of the Board of Revenue the appellant brought an appeal by special leave to the Supreme Court but he did not appeal against the judgment and order of the High Court.\n\nShah J.\n\nJ96B\n\nF•b•UJJry 2.", "total_entities": 14, "entities": [{"text": "RAMALINGAM & CO", "label": "PETITIONER", "start_char": 1022, "end_char": 1037, "source": "metadata", "metadata": {"canonical_name": "RAMALINGAM & CO", "offset_not_found": false}}, {"text": "THE Sl'ATE OF MADRAS (S. K. DAS", "label": "JUDGE", "start_char": 1040, "end_char": 1071, "source": "metadata", "metadata": {"canonical_name": "THE Sl'ATE OF MADRAS (S. K. DAS", "offset_not_found": false}}, {"text": "C. SHAH", "label": "JUDGE", "start_char": 1096, "end_char": 1103, "source": "metadata", "metadata": {"canonical_name": "J.C. SHAH", "offset_not_found": false}}, {"text": "General Sales Tax Act, 1930", "label": "STATUTE", "start_char": 3133, "end_char": 3160, "source": "regex", "metadata": {}}, {"text": "Sales Tax Act", "label": "STATUTE", "start_char": 3704, "end_char": 3717, "source": "regex", "metadata": {}}, {"text": "Madras General Sales Tax Act 1939", "label": "STATUTE", "start_char": 4405, "end_char": 4438, "source": "regex", "metadata": {}}, {"text": "Madras General Sales Tax Act, 1939", "label": "STATUTE", "start_char": 9010, "end_char": 9044, "source": "regex", "metadata": {}}, {"text": "Sales Tax Act", "label": "STATUTE", "start_char": 9871, "end_char": 9884, "source": "regex", "metadata": {}}, {"text": "General Sales Tax Act", "label": "STATUTE", "start_char": 25249, "end_char": 25270, "source": "regex", "metadata": {}}, {"text": "Justice or violation of principle of law not shown-Bihar Sales Tax Act, 1947", "label": "STATUTE", "start_char": 25897, "end_char": 25973, "source": "regex", "metadata": {}}, {"text": "ss. 6", "label": "PROVISION", "start_char": 25994, "end_char": 25999, "source": "regex", "metadata": {"linked_statute_text": "Justice or violation of principle of law not shown-Bihar Sales Tax Act, 1947", "statute": "Justice or violation of principle of law not shown-Bihar Sales Tax Act, 1947"}}, {"text": "Bihar Sales Tax Act, 1947", "label": "STATUTE", "start_char": 26147, "end_char": 26172, "source": "regex", "metadata": {}}, {"text": "s. 24", "label": "PROVISION", "start_char": 26376, "end_char": 26381, "source": "regex", "metadata": {"linked_statute_text": "the Bihar Sales Tax Act, 1947", "statute": "the Bihar Sales Tax Act, 1947"}}, {"text": "s. 25", "label": "PROVISION", "start_char": 26471, "end_char": 26476, "source": "regex", "metadata": {"linked_statute_text": "the Bihar Sales Tax Act, 1947", "statute": "the Bihar Sales Tax Act, 1947"}}]} {"document_id": "1962_2_967_973_EN", "year": 1962, "text": "28.C.R.\n\nSUPREME COURT REPORTS 967\n\nwithin the Province. Tax in respect of the ea.le of 1962 fibre by the assessees under tne disputed transac- Ramalingam.,, Co. tions was therefore not exigible under the Madras v.\n\nGeneral Sales Tax Act.\n\nTiu Stat• of Madras\n\nThe appeal is therefore allowed : the decree of the High Court is set aside, and the decree of the trial Court is restored with costs in this Court and the High Court.\n\nAppeal allowe.d.\n\nM/S. BALLABHDAS AGARWAL\n\nTHE STATE OF BIHAR\n\n(J.L. KAPUR, M. IIIDAYATULLAH and RAGHUBAR\n\nDAYAL, JJ.)\n\nSales Tax-Appeal from order of Board of Revenue-No A 71peal from ordei of High Oourt.--Assesaet if can agitate the correctness of deci•ion of Board by Special Leave-Remedy open lo assessre wlien que .. tion asked for, not replied by the Board to Tligh Court-Appeal not maintainabk where breach of Rule of Natural. Justice or violation of principle of law not shown-Bihar Sales Tax Act, 1947 (Bihar 19 of 1947), ss. 6,24,25,28.\n\nThe appellant, a Railway contractor, having Refresh ment Rooms and Tea Stalls at various stations, was registered as a dealer under the Bihar Sales Tax Act, 1947. He being aggrieved bv the assessment for the year 1950-51 made by the Sales Tax Officer took the usual .appeals to the Sales Tax Authorities and after the appeals were rejected he took a revision under s. 24 of the Act before the Board of. Revenue Bihar which was dismissed. He then applied under s. 25 of the Act to refer six questions of law to the High Court.\n\nThe Board referred only one question to the High Court.\n\nThe High Court after reframing the question answered it in the negative against him.\n\nAgainst the order of the Board of Revenue the appellant brought an appeal by special leave to the Supreme Court but he did not appeal against the judgment and order of the High Court.\n\nShah J.\n\nJ96B\n\nF•b•UJJry 2.\n\nM /s. Ballablu:los\n\n..1garuaJ\n\n\"· ' TM- Stal< nf Bihar\n\n'\"\"\"' J.\n\nHeld, that an as.cssee is not entitled to agitate the correctness or otherwise of the decision given by the Tribunal in regard to the questions which were agitated before the\n\nHi, h Cn11rt and were decided against him and against which no appeal wcs brought to the Supreme Court.\n\nHeld, further, that if any question on which the 1Wessee wanted a reference to the High Court was not referred, it was open to the a'5esscc to apply to the High Court for a reference under s, 28 of the Bihar Sales Tax Act, 1947.\n\nH•'d, also, that it has not been shown that there was any such breach of the rules of natural justice or violation of any principle of law which would be a good ground for our interferrnce direct with the orders of the Board of Revenue in an appti1l under Art. 136 of the Constitution,\n\nChimmonlal Ram,.hwarlal v, Commi.i&ioMr of lncomt Tar (Centralj, Calcutta AJ.R. 1960 S.C. 280 and Chandi PrtllJad Chokltaui v. Stak of Bi/tar, A, I.R. 1961 S, C. 1708, applied.\n\nCrv1L APPELLATE JurusnrcTION: Civil Appt>al No. 3i!l of 1961.\n\nAppeal by special le&ve from the Re11olution qnent to f.h1lse mentioned in the letter above referrerl to were also taxed according to the arrangement contained in that letter. For the period April I, 1950, to llfareh 31, 1951, the gross turnover was Rs. 11,16,270-11-0 and the appellant claiment and order of the B 1gh Court.\n\nThi\" Court in M/s. Chi.mnonlsioner of Income-tax ( Centrnl) Clllc.utt11{ 1) held that in <\"ll.Set whPre a reference is made to the High Court ancl tho appeal is brought only against the order of the Income Tax Appellate Tribunal thPn the 8upreme Court, if it intl'rferNl, would in fact be SC'tting aside the judgmont of the High Court without\n\nthere being an appeal to this Court, and that this Court cculd not bypafs the normal proreduro which\n\nwas to l.io adopted for tho purpose. In a later .Judgm••nt i11 Charuli Pra.sad Cho!.:hani v, Strife of\n\nBihar(') a Rimilnr view was taken that as the assessco had nut obtained 8pocial Leave in resywct. of any of the orders pasROd by the High Court un'.ler s. 2:; thos\" onltJrs became final arid binding and the lB:!essce could not he allowed to bypass or o behind 1 hu or whero tho result may be a conflict of the rlecision •Jf two courts of competent jurisdiction, which was evernment to the Sastry tribunal in January 1952. This tribunal held an elaborate inquiry and made its .. award which was published on April 20, 1953.\n\n19'1\n\nPunjab Notional.\n\nBonk Limitd\n\nE L. Irharhno ...\n\nWan; h .. J,\n\nJN!\n\nP1D1jd N•tinol\n\nBilM Liait1d\n\n•• lf.L. Khorbaa\n\nw-.1.oJ.\n\n980 SUPR!ME COURT REPORTS [1962] SUPP.\n\nAppeals were preferred by the banks and their employNls against the said award before the La.hour Appellate Tribunal, and on April 28, 1954, the Appellate Tribunal substantially confirmed the recommendations and directions of the Sastry tribunal with certain modifications. In the present appeal, we are not concerned with the further history of rhe disRute, for it is admitted that the provisions of the Sastry award with respect to the matter in controversy before us have remained unmodified when finally the dispute was set at rest by the Industrial Disputes (Hanking Companies) Decision Aot, (XLI of 1955).\n\nThe Sastry tribunal deoided after oonsidering the matter from all aspects to provide only one scale for clerks in all banks, though banks them\n\nselves were divided into four cl&l!Ses and the places where the baoks were situate were divided into three areas. In the present appeal we are oc>ncerned with Cla1!8 A, area I, for which t.he grade provided was from Rs. 85 to Rs. 280 with varying increments (see para J 19 of the award) to which it is unnecessary to refer. Aft3r having provided one cadre of clerks, the Sastry tribunal then oonsidered the question of certain special posts where the incumbent required special skill for the c-fficient discharge of his duties and the problem before it was whether there should be a separate scale for such special posts or whether the incumbents of such posts should be in the same scale as clerks with certain advantages in the shape\n\neither of additional increments in the same soole or additional allowance over and above the scale or a combination of both. The Sastry Tribunal rejected the formulation of a separate IK'ale for these special posts and decided to grant a special allowance over and above the pay of the cleriMl scale. One suoh class of special posts with which the Sastry award was concerned was the class of supervi1ors to which the respondent belongs and it\n\n2S.C.R.\n\nSUPREME COURT REFORTS 981\n\nprovided -i special allowance of Rs. 50/- in the case of A class bank~ in area I for supervisors by para. 164 thereof.\n\nThen arose the question of fixing the pay of the employees of the banks into the new scale provided in the award and that matter was dealt with in para. 292. '.The Sastry award divided the employees into categories, namely, (i) those who entered the service of the banks before January 31, 1950, and\n\n(ii) those who entered the service of the banks after January 31, 1950. In the preeent case we are concerned with those who joined the service of the bank after January 31, 1950. The relevant provision with respect to such employees is cl. (7) of para 292 which reads as follows :-\n\n\" (7). The workmar. shall be fitted into the new scale of pay on a point-to-point basis as though it had been in force since he joined the service of the bank, provided that his adjusted basic pay is not less thawhat it would be under a point-to-point adjustment on the corresponding 'pre-Sen' scale.\" It may be mentioned that the respondent was appointed as a supervisor by the appellant on April 22, 1951 on the basic salary of Rs. 120/- per mensem. . At that time the basic '!Jcale for supervisors was Rs. 120-8-200-EB-J0-300 while there was a basic scale for graduateclerksetc. ofRs. 75-5-120- 8-200. The respondent was appointed on the initial\n\nbasic salary of Rs. 120/- per mensem. The dispute between the parties is that the respondent claims that his basic salary should be fixed under para 292(7) according to the supervisor's scale for the purposes of the proviso while the appellant claims that it can only be fixed at the highest on the scale for graduate clerks, and the appellant fixed the respondent's pay on that basis, and that led to the respondent's makin. g thtlresent application unde. r s. 33-0(2) of the Act. ne tribqna.l has foqnd in favour of the\n\nJ96S\n\nPunjti> National\n\nBcnk Limited ..\n\nK.L. Kharbanda\n\nWanchoo J,\n\n; HI\n\n,..,, job N111i4n.l\n\nB..tLO.Ud\n\n•• X.L. Xh .. 1 on'-\n\nWant 1n J.\n\nrespondent. The appellant therefore applied for\n\nspecial leave which was granted ; and that is how the matter has come up before us.\n\nThe first question therefore that falls for decision is whether such an application e&n be ma.de under s.33- C(2) of the Act, Section 33-C (2) reads\n\nas follows :-\n\n\"(2) Where any workman is entitled to receive from the employer any bent•fit which is capable of being computed in terms of money, the a.mount at which such benefit should be computed may, subject to any rules that may, ma.de under this Act, be determined by such Labour Court a.a may be specified in this behalf by the appropriate Uovernment, and the amount so determined may he recovered as provided for in s11b-section (I).\" It is contended on behalf of the appellant that s.33-C(2) deals only with such oases where the workman is entitled to receive from the employer 11.ny benefit which is non-monetary but. which could be computed In terms of money. It is said that it is only in such a case where the workman claims a non monetary benefit from his employer that he\n\ncan apply to the• labour court for converting the value of this non-monetary benefit into money and computing the amount due in teI'IDll of money. On the other hand, it has been contended on behalf of the respondent that the benefit to which e. workman may be entitled need not necessarily be non-monetary and that any benefit to which be is entitled under an award if it requires computation can be the subject-matter of an application under s. 33-0 (2). Reliance has been placed on behalf of the respondent in this connection on e. couree of decisions by the indlll!trial tribune.ls and the High Courts where the meaning of the word\n\n\"benefit\" in sub-s.(2) has not been oonfined to non monetary benefits only.\n\n2 S.C.R.\n\nSUPREME COURT REPORTS 983\n\nThe crucial words which we have to interpret are \"any benefit which is capable of being computed in terms of money\". The word \"benefit\" is of wide .import, and the dictionary meaning thereof is \"advantage, profit\". This would naturally include monetary advantage or monetary profit. There is no reason therefore for excluding 'monetary benefits, from the word \"benefit\" used in this sub-section, unless it is clear frotn the words used that monetary benefits were not intended to be included in the wide word \"benefit\" used therein. It is urged on behalf of the appellant that we should exclude monetary benefits from the meaning of this word in the context of this sub-section because the word is qualified by the words \"which is capable of being computed in terms of money\". This, it is urged, suggests that the meaning of the word 'benefit\" here excludes ntonetary benefits, for, according to the appellant, there would be no sense in computing monetary benefits in terms on money. But this contention overlooks the fact that the word used in the qualifying clause is \"computed\" and not \"converted\". If the word bad been \"converted\" and the clause bad read \"which is capable of being\n\nconvert.id in terms of money\" there would have been a clear indication that the benefit which was to be converted in terms of money was other than monetary benefit. The dictionary meaning of the word \"corivert\" is \"to change by substituting an equivalent\"; and if the word \"convert\" bad been used in the qualifying words, the argument that the word \"benefit'' only means non-monetary benefit might be incontrovertible. But the word in the qualifying clause is \"computed\" and the dictionary meaning of the word \"compute\" is merely \"to\n\ncalculate\". Therefore, where the benefit to which a workman may be entitled has not already been calculated, for example, in an award which confers on him the. benefit, it stands to reason that sub-s.(2) would apply for oomput'\\tion of such benefit if\n\nfunfab _N ,_ tion1l\n\nBtt11k Limitad\n\nK.L. Kh., b1nd&\n\nWach•• J,\n\n1•61\n\n/',,.j Ut.e about it. Further, if we compare sub-s.(I) with sub-s.(2) of this section, it will appear\n\nthat suo-s,(Il applies to cases where any money is due to a workman from an employer under a settle\n\nment or an award or under the provisions of Chap.\n\nVA and that contemplates that the amount is already computed or calculated or at any rate there can be no dispute about the oomputation or oalculr.- tion; while sub-s.(2) applies to cases where though the monetary benefit has been conferred on a workman under an award, it has not been caloulated or computed in the award itself, and, there is dispute as to its calculation or computation. It cannot therofore be said looking to the words used in sub-s.(2) that it only applies to cases of non-monetary benefit which has to be oonverted in terms of money. It appears to us that it can also apply to monetary benefits to which a workman may be entitled which have not been calculated or computed, say, for example, in an award and about their r.alculation or computation there is dispute bet'lteen the workman and the employer. It may be added that s.33-C was put in the Act for the purpQflell of execution in J 956 after the Industrial Disputes\n\n(Appellate Tribunal) Act, (48 of 1950) was repealed in that year. The Appellate Tribunal Act con t&ined s. 20 which provided for execution of awa.rds and was in terms almost similar to s.33-C. When the Appellat.e Tribunal Act was repealed in 1956 a provision Himilar to that contained in s. !:O waa brought into the Act at the 88UlO time. It is clear therefore that s.33-C is a provision in the nature of executing and where the amount to be executed is worked out (for example in an award) or where it may be worked out without any dispute, 1.33.q I) will apply. But where the amount due to workman is not stated in the award itself and there is a dispute as to its calculation, sub-s.(2) will apply and the •orkman would be entitled to apply thereunder to have the a.mount computed provided he~\n\nr' ! .\n\n2 S.C.R.\n\nSUPREJ.\\IE COURT REPORTS 985\n\nentitled to a benefit, whether monetary or nonmonetary, which is capable of being computed in terms of money.\n\nThis matter had come up before Appellate Tribuniil in l\\J55 in Glaxo Laboratories ( lndia) Limited. Bombay v. Shri A. Y. Manjrekar. (1). 'l'he appellate tribunal took the view that s. 20 of the Appellate Tribunal Act was concerned purely with execution and there was no reason to hold that sub-s. (2) only applied to non-monetary benefits. '1 he same view was taken by the Madras High Court in South Electricity Distribution Company Limited v. Elumalril (2) by a learned Single Judge and again by the same High court in M.S.Y.S.\n\nTransports' Tiruchirapalli v. Rajaram (K)(3 ) by a Division Bench. Looking therefore to the words of the sub-section and the previous decisions with respect tn them we are of opinion that the word \"benefit\" used in sub-R. (l) is not confined merely to non-monetarv benefit which could be converted in terms of 11101; ey but is concerned with all kinds of benefits, whether monetary or non-monetary, to which a workman may be entitled, say, for example, under an award and that the sub-section oomes into play when the benefits have to be comput,!ld or caloulated and there is a dispute as to the calculation or computation. After the benefits have been so computed, the workman can apply under.sub-s. (l) for recovcr.v of the amount in the same manner as arrears of land-revenue. As in this case, the Sastry award had conferred a benefit on the respondent and thosH like him by providing for fixation of pay in the new scale, even though that benefit may be monetary and therewas a disput11\n\nbetween the parties as to the amount of tl:rat benefit, it was ope1;1 to the respondent-to apply to \\, he labour court for computation of that benefit in terms of money, and the labour court would have\n\n(I) (1955) L.A.C.505.\n\n• (2) (1959) J.L.L., J. 624,\n\n(3) (1960) J.t.L.J. 336.\n\nP .. jtiJ National\n\nBank Limiwl\n\n•• IC.L. Khmbanda\n\nWiuwlwoJ.\n\nIfft\n\nPunio • ft' •lion, l\n\n&nit limikd\n\n•• K'.L. Jrh., b,..U\n\njurisdiction to entertain the application and compute the amount due on the basis of the bt nefit conferred by the award.\n\nThis brings us to the next question, namely, •as to how the basic salary should be fixed.\n\nThe main emphasis on behalf of the appellant in this connection is on tho word \"corres.ponding\" appear ing in cl. (7) of para. 292. It is urged that the Saatry tribunal fixed one scale for all clerks and\n\nas supervisors are clerks the respondent could only be considered as belonging to the corresponding scale for clerks in the appellant-bank for the application of the proviso and thereafter he would be entitled to the special allowance of Re. 60( • per meneem. On the other hand, the respondent contends that Eupervisors are workmen, as has been held in a diapute between this very bank and its supervisors, referred to an industrial tribunal which gave an award on April 4, 1967, (see the observations ofthia Court in the Punjab National Bank Ltd.\n\nv. Their Workmen) (l), and therefore all tha.t was necessary to find out th\" corresponding scale was to 1ee in what scale of workmen the respondent was\n\nat the relevant time. In this connection, we ma.y incidentally add that it is not disputed by the appellant tha.t its supervisors, accountants and accounts in-charge are generally workmen under the Act, though some may not be so. The diffi culty, so far u the appellant is concerned, arose on account of the fact that the appellant had nine scales which applied to workmen of all kinds beginning with peons and chaukidars and ending with aocountants and accounts in-charge. Three of these scales were for what may be called subordi nate eta.If under the Sastry award while six were for what is clerical staff under the Sastry award. These six included the grade of supervisors. The appellant however contends that only\n\n(I) C.A. 450of1959, Dockltd Oii December 9, 1960.\n\n' '\n\n\"'i\n\n2 S.0.R. SbPREME COURT REPORTs 987\n\nfour gra:des, namely (i) Assistant Cashiers. (ii) Head Cashiers, (iii) Undergraduate clerks, typists and Godown keepers, and (iv) Graduate clerks, all stenographers in sanctioned stenographer's posts, should be treated as clerks for purposes of correspondence with the scale for clerks fixed by the ::-astry\n\naward and the remaining two grades, namely, (i) Supervisors, and (ii) Accountants and Accounts in-charge, should not be treated as clerks for the purpose of correspondence. In view, however, of the decision o{ the industrial tribunal in the dispute between the appellant and s0me of its supervisors and accountants already referred to, it is obvious that these two grades -for supervisors and accountants and accounts in-charge were also grades for workmen prevalent in the appellantbank. What the Sastry award did was to make one grade for all clerical workmen and when cl.\n\n(7) spe iks of correspondence it relates in our\n\nopinion to the corresponding grades of workmen by whatever name they may have been known in particular banks. The fact that certain clerical workmen in this bank were called clerks while certain others were called supervisors, accountants and accounts in-charge would not in our opini(, n make any difference to thequestion of correspondncfl, para 292 deals with workmen generally and not separately with clerical staff and subordinate staff. Further cl. (7) itself lays down that the workmen shall be fitted into the new scale of pay on a point-to-point basis and therefore when we have to find the corresponding scale for the purpose of the proviso in cl. (7) we have to look at the corresponding scale which relates to a workman at a time before the Sen award. Now if the supervisor's scale was the scale of a workman previous to the Sen award then it must be held to be a corresponding scale for the purpose of fixation so far as the respondent is concerned, irrespective of the name by which this class of workmen was designated in this particular bank. The proviso\n\nPunja6 JV stional\n\nBank Limited v.\n\nK. L. Kharh•ni.a\n\nhnj•b Nationol\n\nBank CimiW\n\nKl Klt.rillNfa\n\nWon&hoo J.\n\n988 SUPREME URT REPORTS [1962) SUPP. t\n\nsays th11t after adjustment the basic pay she.II not be leBB than what it would be under a. pointto-point adjustment on the corresponding pre-8en scale. If therefore the supervisor's scale is a.\n\nworkman's scale it must be the corresponding prc- Sen scale so far a.s the respondent is concerned; consequently his be.sic pa.y oa.nnot be fixed in the new era.le prescribed by the Sa.stry a.ward below what it would be on the corresponding pre-Sen scale. We ha. ve already pointed out that it has\n\nbeen already held between this very bank a.nd its. workmen that supervisor's are workmen a.nd therefore the supervisor's scale in this bank was a workmen's scale; therefore when the fixation of pay has to be ma.de under cl. (7) we have to find out the corresponding workmen's scale in the case of the respondent at a. time before the Sen a.we.rd \\l'nB ma.de and th1't in our opinion can only be the supervisor's scale, for supervisors hf!ove been held to be workmen between the parties to the present dispute. The fact that the Sastry a.we.rd provided for a specie.I pay for certain employees including super\\•isors has no rE>levance on the question of correspondence which has to be worked out under\n\ncl. (7) in order to find out the be.sic pay for purposes of fixation. In view of what we have said,\n\nthe superviloor's sea.le being a scale for workmen in this bank, the respondent is right in his claim\n\nthat his be.sic pa.y cannot be reduced below what it would be under a point-to.point adjustment on the corredponding scale which he was drawing before the Sen award. in this bank as a. workman.\n\nIn this view of the matter the view taken by the labour court is correct. Once the principle is fixed, there is no dispute as the amount due to the respondent.\n\nThe appeal therefore fails and is hereby dismiBBed wit b costs.", "total_entities": 27, "entities": [{"text": "977\n\nPUNJAB NATIONAL BANK LIMITED", "label": "PETITIONER", "start_char": 35, "end_char": 68, "source": "metadata", "metadata": {"canonical_name": "PUNJAB NATIONAL BANK LIMITED", "offset_not_found": false}}, {"text": "K. L. KHARBANDA", "label": "RESPONDENT", "start_char": 78, "end_char": 93, "source": "metadata", "metadata": {"canonical_name": "K. L. KHARBANDA", "offset_not_found": false}}, {"text": "GAJENDRAGADKAR", "label": "JUDGE", "start_char": 95, "end_char": 109, "source": "metadata", "metadata": {"canonical_name": "P.B. GAJENDRAGADKAR*", "offset_not_found": false}}, {"text": "A. K. SARKAR", "label": "JUDGE", "start_char": 111, "end_char": 123, "source": "metadata", "metadata": {"canonical_name": "A.K. SARKAR", "offset_not_found": false}}, {"text": "K.N. WANCHOO, JJ.", "label": "JUDGE", "start_char": 129, "end_char": 146, "source": "metadata", "metadata": {"canonical_name": "K.N. WANCHOO", "offset_not_found": false}}, {"text": "Disputes Act, 1947", "label": "STATUTE", "start_char": 386, "end_char": 404, "source": "regex", "metadata": {}}, {"text": "s. 330", "label": "PROVISION", "start_char": 419, "end_char": 425, "source": "regex", "metadata": {"linked_statute_text": "Disputes Act, 1947", "statute": "Disputes Act, 1947"}}, {"text": "s. 33C", "label": "PROVISION", "start_char": 1056, "end_char": 1062, "source": "regex", "metadata": {"linked_statute_text": "Disputes Act, 1947", "statute": "Disputes Act, 1947"}}, {"text": "Disputes Act, 1947", "label": "STATUTE", "start_char": 1085, "end_char": 1103, "source": "regex", "metadata": {}}, {"text": "s. 33C", "label": "PROVISION", "start_char": 1787, "end_char": 1793, "source": "regex", "metadata": {"linked_statute_text": "Disputes Act, 1947", "statute": "Disputes Act, 1947"}}, {"text": "s. 33C", "label": "PROVISION", "start_char": 1883, "end_char": 1889, "source": "regex", "metadata": {"linked_statute_text": "Disputes Act, 1947", "statute": "Disputes Act, 1947"}}, {"text": "s. 33", "label": "PROVISION", "start_char": 3839, "end_char": 3844, "source": "regex", "metadata": {"statute": null}}, {"text": "Industrial Disputes Act", "label": "STATUTE", "start_char": 3857, "end_char": 3880, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 33", "label": "PROVISION", "start_char": 4776, "end_char": 4781, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 33", "label": "PROVISION", "start_char": 9988, "end_char": 9993, "source": "regex", "metadata": {"statute": null}}, {"text": "s.33", "label": "PROVISION", "start_char": 10430, "end_char": 10434, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 33", "label": "PROVISION", "start_char": 10453, "end_char": 10463, "source": "regex", "metadata": {"statute": null}}, {"text": "s11", "label": "PROVISION", "start_char": 10901, "end_char": 10904, "source": "regex", "metadata": {"statute": null}}, {"text": "s.33", "label": "PROVISION", "start_char": 10968, "end_char": 10972, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 33", "label": "PROVISION", "start_char": 11708, "end_char": 11713, "source": "regex", "metadata": {"statute": null}}, {"text": "s.33", "label": "PROVISION", "start_char": 15242, "end_char": 15246, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 20", "label": "PROVISION", "start_char": 15444, "end_char": 15449, "source": "regex", "metadata": {"statute": null}}, {"text": "s.33", "label": "PROVISION", "start_char": 15525, "end_char": 15529, "source": "regex", "metadata": {"statute": null}}, {"text": "s.33", "label": "PROVISION", "start_char": 15706, "end_char": 15710, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 20", "label": "PROVISION", "start_char": 16478, "end_char": 16483, "source": "regex", "metadata": {"statute": null}}, {"text": "S.0", "label": "PROVISION", "start_char": 20131, "end_char": 20134, "source": "regex", "metadata": {"statute": null}}, {"text": "s0", "label": "PROVISION", "start_char": 20749, "end_char": 20751, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_2_989_1008_EN", "year": 1962, "text": "2 s.c.R.\n\nSUPREME COURT REPORTS 989\n\nTHE STATE OF RAJASTHAN\n\nMST. VIDHYAWATI AND ANOTHER (B. P. SINHA, c. J., J. L. KAPUR, M. HIDAYATULLAII,\n\nJ.C. SHAH and J. R. MUDHOLKAR, JJ.) Tort-Suit for damages-Liability of State for tortious aci of its Bervant acting as such-Con•titution of India, Arts. 300 (I), 294, 295-Government of India, Act 1935 (25 and 26 Geo. v. C.\n\n42) s. 176 (1)-Gavernment of India Act, 1915 (5 & 6 Geo.\n\nV. C. 61), s. 32-Government of India Act, 1858 (21 and 22\n\nVictoria Ch. U.V. 1)\" a. 65.\n\nThe respondent l's husband and father of minor respondent 2 was on February 11, 1952, knocked down by a Government jeep car rashly and negligently driven by an employee of the State of Rajasthan, while being taken from the repair shop to the Collector'• resodence, and mbsequently died in hospita'. On a •uit by the respondents for damages, the trial court decreed the same exparte as against the driver but dismissed it as against the State, holding that a• the car was being maintained for he use of the Collector, in discharge of his official duties, even though it was not being used for arty purposes of the State at the time of the occurrence, that was sufficient to absolve th\" State of any vicarious liability as the employer. The High Court on appeal, disagreoiug with the trial court, decreed the suit as against the State as well.\n\nHeld, that the liability of the State for d images in respect of a tortious act committed by its servant within the scope of his employment and functioning as such was the same as that of any other employer.\n\nThe relevant provisions for determining the.extent of that liability were not those contained in Arts. 294 and 295 which were primarily concerned with the devolution of rights, assets and Iiabili ties but those of Art. 3o0 ( 1) of the Constitution, which by using the expression \"in like cases\" in its second part defined the extent of t!1at liability and referred back to the legal position obtaining before the promulgation of the Constitution.\n\nArticle 300 (1), read in the light of s. 176 (l) of the Government of India Act of 1935 , s. 32 of the Government of India Act, 1915, , md s. 65 of the Government oflndia Act, 1858, left no manner of doubt that ihe extent of the liability of a State must be :lie same as that of the East India Company as decided by the Supreme Court of Calcutta, in the case of Peninw.lar \"nd- Onental Steam Navigation Co. v. The SecrefJl, ry of State for , India.\n\nl~6S\n\nF eiruar.v 2.\n\nIHI\n\nT/t, St.t,.f\n\nRojutltan\n\n•• Msl. Vidriyawah\n\n990 SUPBEME OOURT REPORTS [1962] SUPP.\n\nPtnin.na1ar and Oriental Buam N avi4alion Co. \"· Tht. l'lecrda'rg of 8'attfor India, (1868-69) 5 Born.\n\nH. C.R. 1, approved.\n\nR•gard beln11: had to the stai:ies by which the State of RaJa. Mt11l>n, for thll appellant.\n\n8. N. Andley, Ramuhwar Nath and P.L. Vohra, for the reapondenta. .. \"\n\n-< •\n\n1962. February 2. The Judgment of thE\" Court was delivered by\n\nSINHA, C. J.-This appeal, on a certificate granted by the High Court of Rajasthan under Art. 133(l)(c) of the Constitution, raises a question of considerable importance, namely, the extent of the vicarious liability of Government for the tortious acts of its employees, acting in the course of their employment as such. The Trial Court dismissed the claim for compensation as against the State of Rajasthan, which was the second defendant in the suit for damages for tortious act of the first defendant. Lokumal, who is not a partyto this appeal.\n\nOn appeal by the plaintiffs against the judgment and decree of the Trial Court, the High Court of Rajas thnn passed a decree in favour of the plaintiffs allowing compensation of Rs. 15,000/· against the State of Rajasthan also, which is the appellant in this Court.\n\nThe facts of this case may shortly be stated as follows. The first defendant Lokumal, was a tempo rary employee of the appellant State, as a motor driver on probl>.tion. In February, 1952, he was employed as the driver of a Governmi>nt j iep car, registered as No. RUM 49, under the Collector of Udaipur. The car had been ent to a workshop for necessary repairs. After repairs had been carried out, the first defendant, while driving tho car back along a public road, in the evening of February 11, 19'i2, knocked down one Jagdishlal who was walking on the footpath by the side of the public road in Udaipur city, mmsing him multiple injuries, including fractures of the skull and backbone, resulting in in his death three days later, in the hospital where he had been removed for treatment. . The plaintiffs who are Jagdishlal's widow and a minor daughter, aged three years, through her mother as next friend sued the said Lokumal and the State of Raja, sthan for damages for 'the tort aforesaid. They claimed the compensation of Rs. 25,000/· from both the\n\nTh, State of\n\nRojatlaon ...\n\nJlst. Vidhjawcti.\n\nSinh• C. J,\n\nntSt•ef ilV-IMa\n\n1111. V; A,,_.i;\n\nsw..c J.\n\n1!92 SUPREME OOUR'.l' llEl'OHTS (1002] SUPP.\n\ndefendants. The first defendant remained llX-parte.\n\nThe suit was contested only by the second defendant on a number of issues. But in view of the fact that both the Courts below have agreed in finding that the first dE>fendant was rash and negligent in driving the jeep oar resulting in the accident and the ultimate death of Jagdiahlal, it is no more necessary to advort to all the questions raised by way Of answer to the suit, except the one on which the appeal has been preesed before us.\n\nThe second defendant, who was the resp'ondent in the High Court, and is tho appellant before us, conte1led the suit chiefly on the ground that it was not liable for the tortious act rif its employee. The Trial Court, after an elaborate discuseion of the evidence, decreed the suit against the first defendant e:i:-parte; and dismissed it without oosts against the second defendant. On appeal by tho plaintiff•, the High Court of Hajasthan (Wenchoo C.J., and D. S. Dave J.) allowed the appeal and .lecreed the suit against the second deftndant also, with costs in both the Courts.\n\nThe State of Rajasthan applied for and obtained the necessary certificate \"that the case fulfils the require men ta of Art. 1 :~3( I Xe) of the Uomtitution\n\nof India\". Tlie High Court rightly observed that an important pciint of law of general publio importance, namely, the extent of the liability of tho State in tort, was involved. '\n\nIn s11pport of the appeal, couns<.'l for the Appellant raised substantially two questions, namely, (1) that under Art. 300 of tho Constitution, the State of\n\nRa.jaathan, was ..iot liable as the corresponding Indian State wollld not have been liable if the ~.ase had arisen before the Constitution came into force; and\n\n(2) that the jeep oar, the rash and negligent driving of wt:ch led to the claim in the suit was being ma.intained \"in exercise of sovereign powers\" and not as part of any commercial activity of the State.\n\nThe second question may shortly be disposed of before we address ourselves to the first question,\n\nwhich is the more serious of the two raised before us. Can it be said that when the jeep oar was being driven back from the repair shop to the Collector's place, when the accident took place, it was doing anything in connection with the . exercise of sovereign powers of the State? It has to be remembered that the injuries resulting .in the. death of Jagdishlal were not caused while the jeep car was being used in connection with sovereign powers of the State. On the findings of the Courts below it is clear that the tortious asta upon the true construction and effect\n\nof Art. 300(1) of the Constitution, which is in these terms:·\n\n\"The Government of India may me or bf' sued by the name of the Union or India and the Government of a State may sue or he sued by the name of the State and may, subject to \"' any provisions which may be made by Act of Parliaft'lent or of the Liislature of suoh State enacted by virtue of powers conferred by this Constitution, sue or be sued in relation to 1 heir respective affairs in the like cases as the Dominion or India and the corresponding Provinces or the corresponding Indian States might have sued or been sued if this Consitution had not been enacted.\"\n\nIt will be noticed that this Article consists of three pa.rte, namely, (I) the first part provides for the form and the cause-title in a suit and says that a State (omitting any reference to the Government of Ind; a.) may sue or Jie sued by the name of the State, and\n\n(2) that a state may sue or be sued in reltion to its affairs in like cases as the corresponding Provinces vr the correflponding IndianSte.te might have ued or been sued if this Constitution had not been enacted; and (3) tha~ the second p:ut is subject to any provi- 11ions which may be made by an Act of the Le, eislature of tbe 13tate concerned, in due exorcise of its\n\nlegislative £unctions, in pursuance of po,:-ers c<•nferred bv the Constitution. The learned Adv0me Court of Calcutta repelled the a, rgument\n\nadvanced on behalf of the Secretary of State in these terms :\n\n\"It was contended in argument that the Secretary of State in Counoil, 88 regards his liability to be sued, must be oonsidered -.ii the State, or as a public officer employed by the\n\nstate. But, in our opinion his liability to be sued depends upon an express enactment in the 21st & 22nd Viot. c. l 06, by weich he is oonstitututed a mere nomial defendant for the purpoee of enforcing payment, out of the\n\nl'evenues of India, of the debts and liabilities which had been contracted or incurred by the East India Company, or debts or liabilities of a similar nature, which might afterwards be contracted or incurred by the Government of India. We are further of opinion that the East India Company were not sovereigns, and therefore, could not claim all the exemption of a sovereign ; and that they. were not the public servants of Government, and, therefore, did not fall under the principle of the cases with regard to the liabilities of persons; but they were a company to whom sovereign powers were delegated, and who traded on their own account and for their own account and for their own benefit, and were engaged in transactions partly for the purposes of government, and partly on their own account, which without any delegation of sovereign rights, might be carried on by private in di vir distinction betwetm 'acts done in the exercise of what are usually termed sovereign powers, and acts done in th:J conduct of undertakings which might be carried on by private individuals without having such powers delegated to them : Moodaley v. 'L'he East Indw Company and 'l'he Same v. Morton (1 Bro. 0. O. 469) \".\n\nIt was also argued before that Court tha.t the East India Company having the two-fold character of a sovereign power and of a .trading company, it would be very difficult to determine whether a particular act had been done in the exercise of sovereign powers or of its activity in relation to business. In answer to this contention, it was pointed out by the Court that the Company would not have been liable for any act done by its officers or soldiers in carrying on hostility or in seizing property as prize property or while engaged in\n\n1 h< St.te of\n\nBajasu.an\n\nM 81. Vidh)•rn.\n\nIn the case of State of Bihar v. Abdul Majid (1), thia Court has recognised the right of a government servant to sue the Government for recovery of arrears of salary.\n\nWhen the rule of immunity in favour of the Crown based on common Law in the United Kingdom has disappeared from the land of its birth, there is no\n\nlegal warrant for holding that it has any validity in this country, particularly after the Constitution.\n\nAs the cause of action in this case arose after the coming into effect of the Constitution in, our opinion, it would be only recognising the old established rule, going back to more than 100\n\n(I) [1954] S.R.C.c786.\n\n\"196'\n\nTM •tote of\n\nBajasilum\n\n•• Ms,, YidhJawati\n\nSin!za C. J.\n\nTiii Stall of\n\nBttjaJIAa\n\nv •• Jlsl. VidAJ...,.,;\n\nSW.. C. J.\n\n1008 SUPREME OOURT REPORTS [1962] SUPP. l\n\nyears at lea.at, if we uphold the vioarioua lia.billty of the St&t.e. Art. 300 of the Constitution itself has saved the r.ight of Parliament or the Legislature\n\nof a State tq enact such law as it may think fit and proper ip this behalf. But so long as the Legis. lature has not expressed its intention to the contrary, it mu&t be held that th~ law i1 what it has been ever ilinoo the days of the East India Company.\n\nIn view of these considerations, it mnat be held that there is no merit in this appeal, &Dd it i& accordingly dismissed with costs.\n\nA pptal dismissed.", "total_entities": 59, "entities": [{"text": "989\n\nTHE STATE OF RAJASTHAN", "label": "PETITIONER", "start_char": 32, "end_char": 59, "source": "metadata", "metadata": {"canonical_name": "THE STATE OF RAJASTHAN", "offset_not_found": false}}, {"text": "MST. VIDHYAWATI AND ANOTHER", "label": "RESPONDENT", "start_char": 61, "end_char": 88, "source": "metadata", "metadata": {"canonical_name": "MST. VIDHYAWATI AND ANOTHER", "offset_not_found": false}}, {"text": "L. 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"metadata": {"statute": null}}, {"text": "s. 5", "label": "PROVISION", "start_char": 19687, "end_char": 19691, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 25", "label": "PROVISION", "start_char": 22159, "end_char": 22164, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 65", "label": "PROVISION", "start_char": 22654, "end_char": 22659, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 66", "label": "PROVISION", "start_char": 23673, "end_char": 23678, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 10", "label": "PROVISION", "start_char": 24325, "end_char": 24330, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 65", "label": "PROVISION", "start_char": 24392, "end_char": 24397, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 10", "label": "PROVISION", "start_char": 24462, "end_char": 24467, "source": "regex", "metadata": {"statute": null}}, {"text": "s.65", "label": "PROVISION", "start_char": 24484, "end_char": 24488, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 10", "label": "PROVISION", "start_char": 25749, "end_char": 25754, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 300", "label": "PROVISION", "start_char": 31739, "end_char": 31747, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 300", "label": "PROVISION", "start_char": 33582, "end_char": 33590, "source": "regex", "metadata": {"statute": null}}, {"text": "Government of India Act 1858", "label": "STATUTE", "start_char": 33638, "end_char": 33666, "source": "regex", "metadata": {}}, {"text": "s.65", "label": "PROVISION", "start_char": 33668, "end_char": 33672, "source": "regex", "metadata": {"linked_statute_text": "the Government of India Act 1858", "statute": "the Government of India Act 1858"}}, {"text": "Govern ment of India Act, 1858", "label": "STATUTE", "start_char": 34838, "end_char": 34868, "source": "regex", "metadata": {}}, {"text": "Section 2", "label": "PROVISION", "start_char": 35546, "end_char": 35555, "source": "regex", "metadata": {"linked_statute_text": "the Govern ment of India Act, 1858", "statute": "the Govern ment of India Act, 1858"}}, {"text": "United Kingdom before it was altered by the said Act", "label": "STATUTE", "start_char": 36173, "end_char": 36225, "source": "regex", "metadata": {}}, {"text": "Art. 300", "label": "PROVISION", "start_char": 38583, "end_char": 38591, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_3_105_114_EN", "year": 1962, "text": "3 S.C.R.\n\n. SU~REME COURT REPORTS 105\n\nThe contention urged before us is that this provision has no retrospective operation and that in consequence t.he proceedings which had been pending before the old Tribunal on March 10, 1957, could not be transferred to the new Tribunal under thi\" section. This content.ion is clearly untenable, because the whole object of s.30(2) is to provide for the hearing of disputes which were pending before the old Tribunal, and its operation is entirely retrospective. This contention must therefore be rejected.\n\nIn the result, the repeal fails and is dismissed with costs. \"\n\nA ppe, al dismissed.\n\nSRI SATYA NARAIN SINGH\n\nDISTRICT ENGINEER, P.W.D. AND ANOTHEli\n\n(B. P. SINHA, J. L. KAPUR, M. HIDAYATULLAH, J. C. SHAH and J, R. M:uDHOLKAR, JJ.)\n\nPu.blic ferry--Toll-Right to coUent to tlw appellant and to issun rm int1l'im direction to the respondents asking tht!m to refrain from rcalis\n\ning the unpaid monthly instalments of the licence fees till the decision was gi1\",11.\n\nBefore the petition was decided the appellant's licence had run out and, therefore, at the hearing the appellnnt confined himself to one relief, tha, t id, commanrling the rnspondcnts to allow rebate une account of the excmp tion of the Roadw:iys buses from liability to pay the tolls. The petition W•L<, however, not amendP-d.\n\nWe may incidentally mention that 11part. from the\n\nrelief,; a.bo\\'C referred to, the appellant clrdmed two more reliefo, one of which was to pass any such\n\noth•-r and further order as may be 1lc1nwd fit and proper.\n\nThe learned single , Judge of t.he High Court\n\nh,9 decided the petition ill the first instance cme\n\n~ S.C.R. SUPBEMJ1J COUBT REPOBTS lO!:J\n\nto the conclusion that the appelhnt was entitled to abatement of rent under the third paragraph of s.15 of the Act and directed the issue of a writ tu the respondents directing them to \"perform their statutory duty relating to abatement of rent\" payable by the appellant consequent on the exemption ofBoad-\n\nWll, JS buses from payment of tolls under the aforesaid provision before claiming or recovering arrears of rent from him.\n\nThe respondents preferred an appeal under the Letters Patent which was heard by a Division Bench of the Allahabad High Court.\n\nThe learned Judges held that a licensee is not entitled to abatement of rent unless the Government makes a declaration under s.15 of the Act subsequent to the grant of licence to him. It pointed out that the G.O. No. 1946/17-,') l dated December 11, 1951 upon which reliance was placed by the learned single Judge being prior in point uf time to the grant of the licence to collect tolls to the appellant, did not entitle him to claim abatement. It, however, held that the appellant may be entitled to claim abatement of rent or licence fee under the general law but that such a relief could be claimed only in a suit but not in a proceeding under Art. 226 of the Constitution.\n\nThey thus allowed the appeal and dismissed the petition.\n\nSection 15 of the Northern India Ferries Act, 1878 runs thus:\n\n\"Toll, according to such rates as are from time to time fixed b} the State Government, shall be levied on all persons, animals, vehicles and other things crossing any river by a public ferry and not employed or transmitted on the public service: Provided that the State Government may from time to time, declare that any persons, animals, vehicles or other things shall be exempt from payment of such tolls .\n\nSri Satya Jllarain\n\n8ingh\n\nDiBtrict Engi111er1\n\nP. lV. D.\n\nMudhollcar J.\n\nSri \"aty.i Na rain\n\nSir.gh\n\nDirtrict f~'neintn,\n\np_ IF. D.\n\n!rludlw/kar J,\n\nI 10 SUPREfE COIJR.T REPORTS [1962] SUPP.\n\n. \\VherP the tolls of a. ferry have been let under sction 8, any such decl>iration, if made\n\nnftr the date of the lease, shall entitle the ]Pssce to such abatement of the rent payable in rc8poct of tho tolls as may be fixed by the . Commisioner of the division or such other officer as tho :qtatc Government may, from timp, to time, appoint in this behalf by 11ame or virtue of his office.\" The proviso to the section confers upon the State Govp, rnment power to declare from time to time any persons, anima Is, vehicles etc., exempt from p'\\yment of such tolls.\n\nBefore the question of allo\\\\'imr ahatement of rnnt or licence fee can arise it must first ho est.ah!ishod that there was a valid exempt.ion with respect to any vehicles etc., under s. 15 of the Act.\n\nThe section also provides that where such declaration is ma.de sub- 8equent to the grant of licence to colloct tolls under s. 8 the licensee is entitled to abatement of rent.: The Government order to which reference has been made in th<> two judgments of the High Court runs as follows:\n\n\"Subject: Exemption from payment. of toll.\n\nI am dt•sircd to sa:v that a question ha.a hecn raised whether the Roadways Motor v., hicles should be exempt from payment of\n\nforrv tolls while crollSing any river by a\n\npublic ferry.\n\nGovernment have given their full consiclera.t.ion to this matter and havti come to the conclusion that the motor vehicles run by the Road\\\\'ays with the operational fitaff 'accompanying them on duty fall under the exemption granted from payment of frrry toll in paragraphs 2(a) of notification no. 252/-fX.20!J/(10) dated March 16, Ul25\n\n(published on page 347 of the District Board Manual). . 2.\n\nI am, however, to observe tbat the passengers travelling in these vehicles with their goods and all the private goodF, being tans ported in the Roadways trucks shall be hable to the payment of tolls as heretofore according to the rates fixed by the Local Government. 3.\n\nThe District Magistrate, District Board and ferry contractors in your division may please be informed accordingly.'' It may be pointed out that this order, if what appears to be merely a communication addressed to certain authorities can be regarded as a Government order, does not itself confer any exemption with respect to the buses run by the U. P. Roadways but sets out. the opinion of the Government that such buses must be regarded as being exempted under a notification of March 16, 1925 issued under s. 15 of the Act. That notification reads thus:\n\n\"2. The following shall be exempt from the payment of tolls:\n\n(a) All persons animals and vehicles crossing -tny river by a public ferry when employed or transmitted on the public or District Board service.\"\n\nAdmittedly at that date thn State was not running any bus services in the IJnited Provinces (now the State of Uttar Pradesh). May be there were no Government-owned buses at all in any other province of India at that time. Moreover it would not be reasonable to assume that a State enterprise of this kind was even in the contemplation of the U. P. Government nt that time. At that time, apart from running some railways the\n\nStiite had not entered the commercial field.· It is in the light of these facts that the language of the notification of March 16, 1925, must be interpreted.\n\n196Z\n\nSri Satya Narain\n\nSingh\n\nDislrict Engineer,\n\nP.W.D.\n\nM u.dholkar J,\n\nSri Satya .1\\'aroi11\n\nSm.r; h\n\n\"· Diilrict E11Ji11tt1,\n\nP. W. D.\n\nMudholkar J.\n\nii2 SUPREi\\IE COtJRT HEPORTS [l!l62] surP.\n\nWhat the notification exmpts is fit motive. It may be that plying stage carriage buses even though for hire is an acthity undertaken by the Government for ensuring the people a cheap, regular and reliable mode of tranoport and is in that sense henrficial to the public. It does not, however, cease to be a commercial activity if it is run with profit motive.\n\nIndeed even private operators in order to attract custom are also interested in providing the samo facilities to the public as the Government under-· taking provides. Since that is so, it is difficult to see what difference there is between the activity\n\ncarried on by private individuals and that carried on by Government. By reason of the fact that a commercial undertaking is owned and run by the State\n\n\\ -\n\nit dos not ipso .facto bepome a 'public service'. It is not disputed before us that the Roadways department of the Government of U. P. is running a profit making and a profitable activity by excluding every kind of competition. In the circumstances, therefore, we find it impossible to hold that its vehicles crossing over ferries can be regarded ltB crossing on public service. They are, therefore, not entitlec'I to any exemption under the notification of March 15, 1925. Since thev are not entitled to any exemption the question of abatPment of rent does not arise.\n\nIt is true that the petitioner, as already stated, confined himself at the sfa ge of ar1rnments in the High Court to the relief of abatement because of change of circumstances which took place between the date of filing his petition and its hearing. He did so evidently upon a misundAr\n\nstanding of the legal position with regard to the scope of the notification of March 16, l!l25.\n\nHow ever, the appellant has raised an alternntive con tention in his Statement of the case to the effect that the Roadways buses which carry passengers are used by the Government for carrying on a commercial undertaking '1.nd that; therefore they do not come within the exemption made by the noti fica ti on of the year 1925.\n\nIn view of this and of the fact that the petition which contains a prayer for grant of 'other relief' has not been amended and is thus in its original form we see no difficulty in granting appropriate relief to the appellant.\n\nIn the result we allow the appeal and set a•ide the judgment of the Division Bench as well as of the single judge of the High Court of Allahabad and direct that a writ in the nature of mandamus shall issue to the respondents directing them to pay to the appellant full tolls with respect to every\n\n196t\n\nSri Satya Narai'i\n\nSint, h\n\n\"· District Engineer,\n\nP. W.D.\n\nMudholkar J.\n\nSri Sntya .1Va1ain\n\nSill th\n\nDist1ict Enginr:4, and the dnto on which the licence in favour of the appellant expired. • The costs of the appellant here and in the High Court will lrn borne by the r•,8pondents.\n\nAppeal allou:ed.\n\nIXDER LAL v.\n\nLAL SINGH\n\n(P. B. GA.JJ::>DRAC:ADKAU, A. K. SARKAU e.ncl\n\nIC N. \\VANCHOO, JJ.)\n\nElccfion~--Cornpf Praclicr-Faf.i; e statement in relatt'on to 7ir.u; o11al 1;/ir1ractcr ()Y r:onducl of canitidaU-StaU.nient alleging ]Htrr}, osing of iof-es-lj tf'dales to pi.rsonal charactr:r-Rcpresnla rion of II\" l'eop!c Act, 1951 ( 4:J of Jli:jl), \"· 123 (4).\n\nRespondent I was declared rlected to the Legislative Asscrnbly. llis election \\\\'as challenged, inter a./ia, on the ground that he had committed the rorrupt practice under s. 123 (4~ of the Rep\"sentation af People Act, 1951 of making false statements in relation to the personal character or conduct uf H.espo11dent 2, a defeated candidate. The staterrcnts \"ere rontained in a pamphlet issued by the agent of Respondent I ,, ith his consent.\n\nAmong other statements the patnphlct contained a false statement that the Respondent 2 \\\\'as ''purchasrr of the cpponents of the Congress hy rncans of moneyn.\n\nRespondent I cont, nded that the staten1ent related to the public: or political character of Respondent 2 an4, and the dnto on which the licence in favour of the appellant expired. • The costs of the appellant here and in the High Court will lrn borne by the r•,8pondents.\n\nAppeal allou:ed.\n\nIXDER LAL v.\n\nLAL SINGH\n\n(P. B. GA.JJ::>DRAC:ADKAU, A. K. SARKAU e.ncl\n\nIC N. \\VANCHOO, JJ.)\n\nElccfion~--Cornpf Praclicr-Faf.i; e statement in relatt'on to 7ir.u; o11al 1;/ir1ractcr ()Y r:onducl of canitidaU-StaU.nient alleging ]Htrr}, osing of iof-es-lj tf'dales to pi.rsonal charactr:r-Rcpresnla rion of II\" l'eop!c Act, 1951 ( 4:J of Jli:jl), \"· 123 (4).\n\nRespondent I was declared rlected to the Legislative Asscrnbly. llis election \\\\'as challenged, inter a./ia, on the ground that he had committed the rorrupt practice under s. 123 (4~ of the Rep\"sentation af People Act, 1951 of making false statements in relation to the personal character or conduct uf H.espo11dent 2, a defeated candidate. The staterrcnts \"ere rontained in a pamphlet issued by the agent of Respondent I ,, ith his consent.\n\nAmong other statements the patnphlct contained a false statement that the Respondent 2 \\\\'as ''purchasrr of the cpponents of the Congress hy rncans of moneyn.\n\nRespondent I cont, nded that the staten1ent related to the public: or political character of Respondent 2 anllantand contended that the election petition filed by the appellant should he dismissed.\n\nOn the pleadings of th<' parties, the Election Tribunal framed as many as ~(j isnt>s. In substance\n\nit held that the scvcrnl al!Pgations made by the appellant in respect. of the rccPipt of invalid votes had not been proved and so the first ground on which r<'spondent No. l's election was challenged by appellant, could not succeed.\n\nIn regard to the second ground on which rrspondcnt Xo. l 'H election was challenged by the appellant, the Tribu1rnl held that Ext. 3 had hecn published by the ageut of rcspo11dent No. I bnt; not with his expreRs consent and in regard to Ext. 6, the Tribunal was not Ratisfied that it hacl been published by respondent\n\no. l's agent.\n\nTh:tt. is how even tho second grounrl made by the appellant disputing the Yalidity of respondent No. J's election did not sncc<'<',\n\nby the Tribunal on the second ground it;; ultimate conclusion was the\" same as that orthe Tribunal.\n\nTho appeal preferred by the appellant was accordingly dismissed. lt is against this order that the appellant has come to this Court by Special leave.\n\nIn thi• appeal, the only question which we aru called upon to consider is whether the two pamphlets justify tho wntention of the appellant that respondent No. 1 has committed a corrupt practice under s. 153( 4). The question a.s to whether respondent Nu. l's election has been materially assisted by the receipt of invalid votes, is concluded by concurrent fiudiug of fact recordod against the appellant and su we have not allowed Mr. Sastri to dispute the correctness of that finding .\n\n. Before dealing with the short point raised for our decision under s. 123(4) of the Act, it is necessary to sot out the material portion of the pamphlets on which the appellant's case uf currupt practice is based. The relevant portion in the pamphlet Ext, 3 to which objection is ta.ken by the appellant reads thus :-\n\n\"(1) Enemy of Democracy? (2) Agent of th:i foreigners strangling the freedom of Bharat?\n\n(3) Supporter and collaborator of the conspiracy of Pakistani attack on Bharat?\n\n(4) Bringer of tyrannical rule of Rajas in Rajastha.n?\n\n(5) Destroyer of Hindu 2\\Iuslim unity by raising tho slogan of Ham llajya.?\n\n(6) Purchaser of the opponents of tho Congress by means of Money?\n\n\"Maharawal of Dungarpur, Shri Laxman Singh, who was defeated in the last election by thousands of votes, has come to mislead the people of Chittor, has come to push back the backward district of Chittor by 100 years, has come to destroy the peace and tranquillity of Chittor under cover of communal organisation, has come to provide means to the public to spend their hard earned money on drinking orgies, has come to intensify again the tynmny of Raja Maha.rajas in Rajasthan, has come to make a gift of Kashmir to the aggressor Pakistan, has come to enslave India again by collaborating with Pakistan and Pakistan's friends.\n\nHe is a friend of Raja Maharajas and an enemy of cultivators and labourers. He wants to grant la, nd to Bhooswit is nevertheless\n\ncriticism made against him in his public and politi\n\ncal character and as such, a. 123 (4) cannot be invoked.\n\nIt is, therefore, necessary to determine the true scope and effect of the relevant provision in s. 123 (4). Section 123 dea!s with corrupt praoticea and amongst them, is the corrupt practice specified by sub-section (4). That sub.section roads thus :-\n\n\"The publication by 0: candidate or his agent or by any other1person, of any statement of fact which is false, and which he either believes to bo false or docs not believe to be true, in relation to tho personal character or conduct of any candidate, or in relation to tho candidature, or withdrawal, or retirement from contest, of any candidate, being a. statement reasonably calculated to prejudice the prospects of that candidate's election.\" It would thus be aeon that the publication in question must be by a candidate or his agent or by any other person ; the said publication should be\n\nin regard to a statement of fact which is false and which he either believes to be false or does not believe to be true ; that it must have relation to the personal character or conduct of the candidate, or should have relation to the candidature, withdrawal or retirement from contest of any candidate and that it should be astatement reasonably calculated to prejudice the prospects of that candidate's election.\n\nAll the requirements of this sub-section, except one, are held to have been satisfied by the High Court.\n\nThe only requirement of the sub-section which has not been satisfied according to the High Court is that the statement has no relation to the personal character or conduct of respondent No. 2. Mr.\n\nSastri contends that this finding of the High Court is erroneous in law.\n\nIt would be noticed that in prescribing the requirement that the false statement should have relation to the personal character of the candidate, a distinction is intended to be drawn between the personal character of the candidate and his public\n\nor political character.\n\nThe provision postulates that if a false statement is made in regard to the public or political character of the candidate, .it would not constitute a corrupt practice even if it is likely to prejudice the prospects of that candidate's election.\n\nThis assumption is presumably based on the theory that the electorate being politically educated and mature, would not be deceived by a false criticism against the public or political character of any candidate.\n\nThe public and political character of a candidate is open to public view and public criticism and even if any false statements are made about the political viewa of a candidate or his public conduct or character, the electorate would be able to judge the allegations on the merits and may not be misled by any false allegations. in that behalf. It is on this theory that false statements of fact effecting the public or political character of a candidate are not brought\n\nInder Lal\n\nLal Singh\n\nGajendragadk'lr J.\n\nJ9G2\n\nJr, dn Lal v.\n\nLal Si1:9h\n\nG•jtndro1:adkdr J.\n\n122 SUPRE~IE COUHT REPORTS [!DG5J Sl'PP.\n\nwithin the mischief of ss. 123(4). In order that tho elections should be free, it is necessary that tho electorate should be educated on political i&mcs in a fearless manner and so, the Legislature thought that full and ample scope should bo left for free and fcarloss criticism by candidates against tho public and political character of their opponents.\n\nBut the position with regard to the private or persona.I character of the candidate is very different.\n\nCirculation of false statements about tho private or. personal character of the candidate during tho period preceding elections is likely to work against tho freedom of election itself inasmuch as the effect created by false statements cannot be met by denials in proper time and so tho Constituency hrested part1e~.\n\nBut 1n the present cast' there could hardly he any such rtason!'.. The appellants had really no justification for doubting the authenticitv of an ordr.r cornmunica ted to them hyan A th,.re \\vac; no helicf in the cxic; ff'nc:e of the ordrr.\n\nIt mav nnt he ncc:es<:.arv that the party against l\\hom a p'\"ohihitorv order ,., a<:. m:v1f\" must he sr.r\\'cre informed by certain interested personR, t-o whom we shall prt•scnt.]y rofor, that a.n extenion of the stay ordn up to :\\lay 2:J,\n\nI!J; i8, had been granted by the Higli Court.\n\nIn spite of thiR information, however, the second appellant, in consultation with am] undN instruction, of the first. nppcllant, formally dispossess<'d the respondentand handed ovn possession of the land t.o Rudh Singh.\n\nIn these circumstances the allegation on lwhalf of tb\" respondent wa• that the two appellants hnd committed cont<>mpt of court hv di\"ob<'ying the orckr\n\nof tho High Court stnying delicry of possession i II Ma:v 23, 19:'58. The respondent made an applica~1on to the High Cnurt for taking Rnitahle action ag, rn1st\n\nthe two appellants. Thi\" application was mad\" on llfay 27, 1958.\n\nOn this application the High Court\n\nissued notice and after hearing the parties, Falshaw, J. (as he then was) who dealt with the application came to the conclusion that the two appellants were aware of the order of the High Court extend- . ing the operation of the stay order and yet they disobeyed the said order by dispossessing the respondent and handing over possession to Budh Singh. He held them guilty of contempt of court, but at the same time expressed the opinion that the appellants honestly believed that they were not bound to hold their hands in the absence of an official communication of the High Court's order extending the operation of the stay order. In this view of the matter, the learned .Judge instead of committing the two appellants for contempt of court merely administered a warning to them and directed them to pay the costs of the respondent.\n\nOn behalf of the appellants several points have been urged in support of their contention that they were not guilty of contempt of court. Firstly, it has be1m contended that on the materials on the record, the High Court was wrong in proceeding on the footing that the two appellants were informed by the interested parties that an extension of the stay order up to May 23, 1958, had been granted in the case of the respondent. It has been argued before us th'1t on May 20, 1958, the appellants did not know that the stav order had been extended till May 23, 1958, iri the writ petition filed on behalf of the respondent Gurbachan Singh, though in another case of Didar Sin1th relating to allotted land in the same village, the appellants were informed by an ad vacate that the stay order had been extended till May 23, 1958.\n\nIt has been contended before us that in the a, bsence of positive evidence fixing the two appellants with knowledge of the extension of the stay order in the particular case of the respondent, the High Court was wrong in finding that the two appellants had wilfully disobeyed the order of the High Court.\n\nHorhiar S in:h\n\n•• Gubrachan Sing~\n\nDasJ.\n\n196t\n\nHoshiar Singh\n\nGurbochan Singh\n\nIJa1.J.\n\n132 SUPREME COURT REPORTS [l!J62] SUPP.\n\nIn order to appreciate this argument urged on behalf of the appellants it is necefisary to state some more facts. In para. 17 of the applir.'1tion which the respondent made to the High Court for taking\n\nneceliSary action against the appellants for alleged contempt of court, it was stated that at f).30 a.m. on May 20, 19:;,;, two persons named Bir Singh and A vtar Singh WPnt personally to the house of appellant No. 2 and told him that the stay order had been extcnver, afTidavits made on behalf of Dida.r Singh. Teja Singh, Ganga Bishan and Avta.r Singh.\n\nThe learned Advocate for the parties have taken.us through those affidavits. The a.Jgument presented on behalf of the appellants is that though thoy knew of thc extension of the stay order in Didar Singh's case by reason of the application and affidavit filed on his behalf before thom, they did not know that a similar extensiou of the stay order had been granted by the High Court in the other ca; ies as well.\n\nThis argument has been pressed before us with some vehemence and we proceed now to consider it. It is worthy of note that such an argument which goes to the very root of tho matter was not presented to the High Court. It is not disputed that \"disobedience of a. judgmcn t or order requiring a porson to do a.ny a.ct other than tho payment of money, or to\n\n3 S.C.R. SUPREME COUH,'f REPORTS 135\n\nabstain from doing anything i~ a cont.empt of court punishable by attachment or committ, al\" ; but disobedience, it is argued, if it is to be punishable as a contempt, must be wilful ; in other words, the party against whom a proceeding by way of contempt is taken must know t:ii.e order before it can be said that he has disobeyed it. It is somewhat surprising that if the stand of the appellants was that they did not know of the order made by the High Court on May 19, 1958, in the respondent's case, such a point was not urged in the High Court. Falshaw, J., (as he then was) said in his judgement that it was not in dispute before him that 011 the morning of May 20, 1958, both the appellants were informed that an extension of the stay order upto May, 23, 1958, had been granted by the High Court.\n\nThis statement of the learned Judge must have reference to\n\ntho case of the respondent which he was considering.\n\nApart, however, from the point that such an argument on behalf of the two appellants was not presented in the High Court, it appears to us that on the affidavits made available to the Court, the only reasonable infernce is that though the application and the affidavit were made on behalf of Didar Singh, both the appellants were informed that the High Court had granted an extension of the stay order in all the cases. It is admitted on both 8ides that there were three cases in which deli very of possession had to be given of lands in village Jagmalera. It is also not seriously in dispute that on May 9, 1958, appellant No. 1 made an order directing that delivery of possession should be given to the allottees of their respective areas and persons in unauthorised occupation would be dispossessed.\n\nOn May 16, 1958 three writ petitions were made\n\nwhich were placed before the Chief Justice who made an interim order of stay lasting for three days.\n\nOn May 19, 1958 the writ petitions were placed before a Division Bench for admission and that Bench\n\nt962\n\nHoshiar Singh\n\nGurbachan Singh\n\nDat J,\n\nHoJhiar Singh\n\n•• Ourbachan Singh\n\nj),,, J.\n\n136 SUPREME COURT REPOI~TS (1962J SUPP.\n\nextended the stay order till May !!3, 1958.\n\nThese are the admitted facts. It is also admitted that the respondent Gurbachan Singh did not appear before the appellants on May 20, 19ii8, a fact which has been emphasised by the learned Advocate for the appellants. Let us, however, seo what the affidavits filed in the case show. Teja Singh said in his affiJavit that Harbans Singh Gujral, who was the advocate acting on behalf of the petitioners in all the cases, told him on the telephone on May 19, 1958 that the High Court had extended the stay order in all the cases upto May 23, 1958.\n\nTeja ingh iiccompa.nied Didar Singh, Ganga Biahan, Mastan Singh and others to the village on .illay 20, HJ68, and he said that au application was\n\nmado to appelle.nt No. 2 in which it was stated that the stay order had been extonded by the High Court.\n\nThe affidavit of Ganga llishan is very eignificant in this connection. He said that on May ~O, 1958, ho drafted the application which was later ma.de to appellant No. 2.\n\nGanga Bishan said that it was stated to appellant No. 2 th:it the stay ordor made by the High Court related to all tho cases of village Ja.gmalera. He further said that appellant o. 2\n\nwas informed that stay of delivery of possession had been extended by the High Court upto May 23, 1958 ; appellant No. 2, ho, vever, wanted to be shown the order of the lI igh Court ; thereupon an affidavit of Didar Singh to the effect that tho stay order had been extended by the High Court upto :May 23, 1958, was filed.\n\nGanga Bishan also said that appellant No. I was also informed that the High Court had i.xtended the stay order upto May 23, 1958. The affidavits made on behalf of Didar Singh and A vtar Singh were also to the same effect. In view of theso affidavits we find • it very difficult to hold that the appellants knew of the stay order only in Didar Singh's case but did not know of the stay order in the other cases.\n\nIt is worthy of note here that\n\nin the counter-affidavits filed on behalf of the appellants the Doint that was made on their behalf was that they. considered it unsafe to rely on the applications and affidavits made, in view ot the background of enmity between the parties. The two appellants did not say in their counter-affidavits that they came to know of the stay order only in one case and not in the others . .:Such a point does not appear to have been specifiqally made on behalf of the appellants at any stage of the proceedings in the High Court.\n\nTherefore, we have come to the conclusion that the appellants knew of the order of the High Court\n\nin all the cases and it is not correct to say that the appellants knew of the order of the High Court\n\nonly in one case and not in the others. We find it difficult to believe that Ganga Bishan would not tell the appellants that the High Court had extended the stay order in all the three cases of the village Ganga Bishan says in his affidavit that he did tell the appellants of the extension of the stay order in all the three cases and there was no counter-affidavits on behalf of the appellants traversing the statements made by Ganga Bishan. We must, therefore, overrule the first point urged on behalf of the appellants.\n\nThe second point which has been urged on behalf of the appellants is that in the absence of an official communication of the order, they were justified in not acting on what they came to know from interested parties and their advocate.\n\nThe learned Advocate for the appellants has submitted that in a case of this nature, before wilful disobedience of the order of the High Court could . be imputed against the appellants, it was legally essential that the order should be officially communicated or served on the appellants and in the absence of such communioation or service, the proceeding for contempt must fail.\n\nWe are unable to accept this contention as correct.\n\nlioshiar Sinqh\n\n•• Gurbacf1an Singh\n\nDas J.\n\nH oshiar Sfr1vh\n\nOwbachan Singh\n\nDas J,\n\n138 SUPREl\\IE COURT HEPORTS [1962] SUPP.\n\nTho legal position ha.~ been very succinctly put by Oswald: .\n\n\"The judgment or order should be served on the party personally, except in the following cases: (I) prohibitive orders, the drawing up of which ii! not completed; (2) orders embodying an undertaking to do an act by a named day; (3) orders to answer interrogatories or for discovery or inspection of documents: (4) where an order for substituted service has been ma.de; (ii) where the res\n\npondent has evaded service of the order ......\n\nIn order to justify committal for breach of a prohibitive order it is not. necessary that the order should havo been served upon the party against whom it has been granted, if it bo proved that he had notice of the order aliunde, as hy telegram, or rtewspaper report, or otherwise, and knew that it was intended to be enforced, or if ho consented to the order, or if he was present iii Court when the order was pronounced, or when the motion was made, although he loft before tho order was pronounced.\" (Oswald's Contempt of Court, 3rd Edn. pp. 199 and :!03).\n\nThe order in the present case was a prohibitory order and if thn appellants knew that the High Court had prohibited delivery of possession till May 23, 1958, it was undoubtedly the duty of the appellants to carry out that order. Wo nce.\n\nJn our opinion, there are no ground~ for interference with the order of the High Court. 'l'he appC'al accordingly fails and is dismissed.\n\nRAOHQ!AR DAYA!., J.-I have had the previlcge of perusing thP , Judgment of my learned brother S. K. Das, J., bnt regret. my inability to hold that tho appellants committed contempt of Court.\n\nI need not repeat the fact.I' set out in the majority judgment.\n\nNo conviction for committing contempt of Court r.an be based on the finding of the High Court that the appellants delivered poesesion believing that they were not bound to hold their bands in the absenr.e of the official communication of the High Court's orckr. The finding mrans that they dPlivered po~SPesion not in defiance of the High Court's ordN, but bPcause they honestly thought. that in the absence of the official communication of the order, they could uot act on the supposition that the original stay ordn. whieh was to be effective up to !\\fay rn, 1958, continued to he effective.\n\nIf in their honest opinion no stay order existed at the time, their conduct cannot be said tdings are criminal or quasicriminal procPedin11s. It is essential that the nccusation made against the opposite part.v by the peti- tionPr for taking action against him should be\n\npreeiRe and Rhould dearly make ont that the oppositr partv had, by some specific act, committod contempt of Court. The conviction of the opposite party must rest on the facts nlhged and proved by. tho petitioner. A conviction mny also rest on the sole admisgion of the allPged contemner if that eRtnblishcR his commit.ting contempt of Court, but, in that to the party concern.,iJ SUPP.\n\nwoulcl have Leen the best evidence of what was conveyed lo appellants Noa. I and 2.\n\nGanga Bishan's statement that he hacl drafted the uppJi . cation addressed L.1 appellant No. 2 to the off< ct that the st:1y order i;; suerl by the High Court in Jag 1\\lalera N amdhari cases had bcim extended, is not the best evidence of what the application (a fair copy presumably). aetm1lly contained, an application which is in the possession of Didar Singh.\n\nOf courso, the application and aflidavit presented to the Sub-Di\\\"isional Officer, are in the possession of the State. No att{)mpt was made by thn respondent to summon them or to file c!'rt-iJied copies of\n\nthose documentll in these proct'cdings.\n\nIn the aboence of the best evidence, the documents, I am not prepared to hold that the application and aflidavit filed by Didar Singh must have referred to all tho cases. !'\\ ormally, he had no business to refer to the Rtav urders in the other cases and to make praycr fpr thu stay of ddivory of possession in all th<' caoes.\n\nH\" had to restrict his application am! affidavit to his own case.\n\nFurther, what.rver was stmplo)CC rnut lie . tlfu/, lt~.rjt>.r., t\\ l.R. l95a c:al. 465, approvrd.\n\n• Ohscrvations in 'f'r, U:ratr:d Jfuniriprzl nnrl ,'-,'/, irr. Council En1p!oyees' (} 1tion (If .l U.'i{ralia v . .\\1 e /!Jou r11e Cor_JYJrat ion, { 19 J 0 J 2n C.L.R. 'il!I<, relied on.\n\nCrn1. ArrELL.ll'E Ji:msnrCT!ON: Civil Appeal\n\no. 24 of 1!)61.\n\nAp1,.al fn>n1 the judgrn011t and ord\"r datl :'{ovcmber 20, ltl:JS, of the 1.l:irnlny I fo:h Court in\n\nC• • I c. . , \\ 1 t.\n\nN ')~ '') f I'}~ . • 1pec1a. l\\'I .- pp 1r, a 1011 .. 0. -'~· o ,,)'.\n\nA. S II. Cluiri and /(. R. Clwwlknri, for the appellant,,.\n\nS. '/'. !Jcwi, and V.J. Jlerclumt, for responcJ., nts -.\n\nNos. 2 and 1 and the lntcn are rnum<'ratecl. Clause (vi) of s. 2 (n) provides that .an, v industry spccifit•cl in the chcdule us thnrein indic:; tccl woulrl alsri be a puhlic utility service. In 1956, Entry :N\"o. !) among>t\n\nothers, was auirrsts that proft'H sional servire inrlivicluallv rci1derecl st>Lnds on a cliffonnt footi11g from profes, iona I sen ice which is rendered in an organioetl an2] SCPP.\n\nbctwcPn capital anrl labour or hetwecn the employer ancl his employee~.\n\nIt is unde1 this partncr:; hip thn.fthc employer contributes hiA capit:l nnrl the emplo; veP8 their labour a11rl the jnint •.l••ntrihution\n\nof capital anrl Jabour leads dirlldly to tho produe tion which the industry hIH'<'rned wit Ii the production of tPxtilP goorlR; !mt. <-Yll sn, their 1nrk iA so int.cirrall~· conncct<'d with tlw \\\\'Ork carriNI <>I\\ by the majoritv of wnrkmPn \"mplo~·\"d thn.t they are tnal<'d as forming pall. (lf th~ same la hour forC'~.\n\nThu~, there cmi hll no clou lit t I.at\n\nwhen a textile mill is regarded as an industry, it is because capital and labour jointly contribute to the production of goods which is the object of thA\n\nmill.\n\nLet us consider the case of the hospitals.\n\nIn the hospitals, the service to the patients begins with proper diagnosis followed by treatment, either medical or surgical, according to the requirements of the case. In the case of medical treatment, the patients receive medical treatment according to the prescription and are kept in the hospital for further treatment. In surgical cases, the patients receive surgical treatment by way of operation and then are kept in the hospital for further treatment until they are discharged.\n\nDuring the period of such treatment, all their needs have to be attended to, food has to be supplied to them, nursing assistance has to be given to them, medical help from time to time has to be rendered and all incidental services required for their recovery have also to be rendered.\n\nNow, in the c<>se of the activities of an organised hospital, the co operation of the employees is thus directly involved in rendering one kind of service or another which it is the duty of the hospital to render. It is true that the patients are drawn to the hospitals primarily because of. the doctors or surgeons associated with them. But there can be no doubt that the work of the hospital and its purpose are not achieved merely when a surgical operation is performed or medical prescription provided. After medical treatment is determined or a surgical operation is performed, the patient coming to a hospital as an indoor patient needs all kinds of medical assistance until he is discharged and the services rendered to him both initially and thereafter until his discharge are all services which the hospital has been ecltablished to render and it is in the rendering of the said services that the employees of the hospital co-operate and play their part. That is how the test of co-operation between\n\nThe National [Tnion\n\nof Commercial\n\nEmployeer\n\nM.R. Me!ier, lnduJtrial 1Tibunal,\n\nBomhay\n\nGajendragadkar J.\n\nTl.t N a•'ional Union\n\nof Commt1cial\n\nEmpto)'tt\"'\n\nJf.R. Jlfehtr, ln.i1utrial Tritwiol,\n\nBcmWay\n\nGqjt11dragadku J.\n\n166 SUPREME COCRT REPORT.S [19b2] SCPP.\n\ntho employer a11d his employees is satisfied in rcg'.lrd to hospitafa which are properly organibed aml maintained. It is, of course, trne that the quality, the importance and the nature ot the service rendered by different categories of !'mployecs ill a hos pi ta! would not be the same, but nc\\erthclesH, all the categories of service rendered by re,; per:tive classes of employees in a hospital are eHsential for tho purpose of giving service to the pati!'nls which is the objective of the hospital. That is how tho hospitals satisfy the test of co-operation between the employer and his employees.\n\nDoes a solicitorn' firm satisfy that test ?\n\nSuperficially onnsidercd, the solicitors' firm is 110 doubt organiHcd as an industrial concern would be organisNI. There are different catgo1 i!•s of sen-a11ts employed by a firm, each category being assigned separatB duties and functions.\n\nBut it must bo remembered that the service rendered by :\\ Rolicitor functioning either individually or working together with partners is service which is essentially individual ; it depends upon tho professional equipment, knowledge 'lnd efficiency of the soliritor concerned.\n\nubsidiary \\vork which is purely of an i11cidcntal type and which is intended to assist the solicitor in .doing his job has no direct relation to the professional service ultimately rendered by the solicitor.\n\nFor his own convenience, a solicitor may employ a clerk because a clerk would typB his opinion ; for his conve11ienc<', a solicitor may employ menial servant to keep his chamber clean and in order ; and it is likely that the number of clerks may ho large if the concern is prosperous and so would be tho number of menial servants.\n\nBut the work done either by the typist or the stenographer or by the menial servant or other employees in a solicitor's firm is not directly concerned with the sorvico which the solicitor rend ors to his client and cannot, therefore, be said to\n\nsatisfy the test of co-operation between the employer and the employees which is relevant to the purpose. There can be no doubt that for carrying on the work of a solicitor efficiently, accounts have to be kept and correspondence carried on and this work would need the employment of clerks and accountants. But has the work of the clerk who types correspondence or that of the accountant who keeps accounts any direct or essential nexus or connection with the advice which it is the duty of the solicitor to give to his client?\n\nThe answer to this question must, in our opinion, be in the negative. There is, no doubt, a kind of co-operation between the solicitor and his .employees, but that co-operation has no direct or immediate relation to the professional service which the solicitor renders to his client. Therefore, in our opinion, it is difficult to accept the plea that .a solicitor's firm carrying on the work of au Attorney is an industry within the moaning of s. 2(j).\n\nThere is no doubt that the words used in s. 2(j) are very wide, but as has been held by this Court in the case of Hospitals,(') it is necessary to draw a line in a fair and just manner putting some limitation upon the width of the said words and a working test has been enunciated in that behalf. The application of the said test to the facts in the preRent appeal leads to the conclusion that the work of solicitors which the respondents are carrying on as a firm is not au industry under s. 2(j} of the Act. That is the view taken by the Bombay High Court and we think, that view is right- It may be added that the same view has been taken by the Calcutta. High Court in the case of Brij Mohan Bagaria v. N. 0. Ohaterjee(') and D. P. Dund, erdele v. G. P. Mukherjee(').\n\nLooking at this question in a broad and general way, it is not easy to conceive that a liberal profession like that of an attorney could have been (!) [1960] 2 s.c.R. 668. (2) A.LR. 1958 Cal. 460.\n\n(3) A.LR. 1958, Cal. 465.\n\nThe National Union\n\nof Commercial Employees\n\n~.\n\nM.R.'Meher, Industrial Tribunal,\n\nBombay\n\nGajendragadkar J.\n\n17i1 , Vtltirmal .'Jnini\n\nof Commerciol\n\nEmplngaged in co-operation dispute as to tho basis to bB observed, by the parties engaged, respecting either a sharo of the product or any other terms and conditions of their co-operation.\n\nThis formula exclurlos the two extreme contontione of the claimant and the respondents respectively. It excludes, for instance, the legal and tho medical profeSBions, because they are not carried on in any intelligible sense by tho cooperation of\n\n(I) (1919) 26 C.L.R. 508, S54.\n\n.. '\n\n3S.C.R .\n\nSUPREME COURr REPORTS 169\n\ncapital and labour and do not come within the sphere of indaatrialism. It includes, where the necessary co-operation exists, disputes between employers and employees, employees and employees, and employers and employurs. It implies that \"industry\" to lead to an industrial dispute, is not, as the claimant contends, merely industry in the abstract sense, as if it alone effected the result, but it must\n\nbe acting and be considered in association with its co-operator \"capital\" in some form so that the result is, in a sense, the outcome of their combined efforts\". Those obaervations support the view which we h we taken about the character of co-operation between the employer and employees which affords a relevant test in determining whether the enterprise in question is an indubtry or not. Co-operation to which the test refers must be co-operation between the employer and his employees which is essential for carrying out the purpose of the enterprise and the service to bo rendered by the enterprfae should be the direct outcome of the combined efforts of the employer and the employees.\n\nThere is one more minor point which still remains to be considered.\n\nMr. Chari argued that it would be idle for the respondents to contend that the work of their firm is not an industry under s. (2j) because they have themselves described their work as the work of carrying on business of solicitors. It appears that the document of partnership executed between the different partners of the firm provided, inter alia, that all expenses o! the business of the partnership or losses incurred in carrying on the business of the partnership shall be borne out of the profits or capital of the partnership. It is on the use of the word \"bu8iness\" in this clause that Mr. Chri relies. In support of his argument, he referred us to a decision of .Farwell, J., in Dickson\n\nv. J 1j 31 1.1'.ll. 909,.Jayarnalli Thrani v. G'o1nniissioner of lncl)11t•! 1'r1.r:, (1925j f.L.ll, 1t P..i.L JIJJ, (),1ja!a.}a,_i; hn1i Uinn, iny\n\n}\"'ctory v. (]1 .. Hnrni.s<; i1Jnt:1 of I 11,-:oni•:-ta.i.:, [I 952J 22 I :I'.({. 502,\n\nli1sh11:r11uzth l'ritsad JJ!uzyu-at J>r, i:; asment,-\n\n(a) confirm, reducP, enhance or annnl the asseRSment,\n\n(h) set aside the as.essment and direct the Income-tax Officer to make a fresh assessment aftBr makinl! such fm ther inquiry as the Income-tax Officer thinks fit or the Appellate Assi; tant Commissioner may direct, and the Income-tax Officf'r shall thereupon proceed to mak<' surh fresh assr.ssment and determine whcro necessary the amount of tax pay. ah le on the hasis of such fresh assesmcnt. .. \"\n\nThere is nn doubt that the Appellate Assistant Commissioner can \"enhnce the assessment.\" It\n\nis admitted alo hy the asRe8sre that. within the four cornerR of the sources proccssrcl hy the Income tax Officer, the Appellate Assistant Ccimmissioner can enhance the assessm('nt.\n\nThis power must, at least, fall within the words \"enhance the asspssmcnt\", if they are not to ho rend\" red \\I holly\n\nnuga.f.ory.\n\nThe contro, crsy in this case is about hi;- di,; c., vering new sources, not mentioned in the rrt11rn a!Hl not considered by the Ineomr-tax Officer. Tho High Court held, following its earlier\n\nview in N arron!las M anordass v. Commissioner of Ineome-tax ('), that the Appellate Assistant CommiRsioner has revisional powers, but that they are confined to what was before the Incometax Officer and considered bv the latter. The correctness of this view is challenged in this appeal by the Commissioner of Income-tax, Born bay.\n\nThe earliest caso, which considered 'the meaning of s. 31(3), was Jagarnath ThPrani v. Commissioner of Income-tax (2) decided by the Patna High Court.\n\nIn that case, the assessee had three businesses atPurnea, Jalpaiguri and Calcutta. Hi~ income from Purnea only was assessed by the Income-tax Officer.\n\nOn appeal by the assessee, the Appellate Assist:i.nt Commissioner assessed him with regard to the income from the other two businesses. The head of income was the same with s. 6 of the Income-tax Act, but the sources of income were different.\n\nThe Patna High Court observed : \"Now this section relating to appeals is enacted for the benefit of the subject and also to the limited extent therein stated, for the benefit of the Crown.\n\nBut the subject-mater of the appeal is the assessment and the scope of the appeal must in my opinion be limitcrl by the \"subject-matter\". The appe!l1ttc authrity has no power to-travel beyond the subject-matter of the assessment and, for all the reasons advanced by the appellant, is in my opinion. not entitled to assess new sources of income.\" The view of the Patna High Court receives support from a decision of the Madras High Court in Gajalakshmi Ginninq Factory\n\nv. Commissioner of Income-tax(') where the Divisional Benchobserved as follows:\n\n\"Of course, it would not be open to the\n\n(!) [1957] 31 I. T. R. 909. (21 [1925] I. I, R. 4 Pat. 385.\n\n13) [ 1942] 22 J. T. R. 502, 5(0.\n\nJ96t\n\nThe Commissiorier .1f\n\nlnco~Tax\n\nShapooji Pal/onji\n\nMistry\n\nTl.e Commfrsione1 of\n\nJn, ome-T ax\n\nSh(lpoorji Po Jlon;'i\n\n,\\Jistry\n\nllida;•atullah J.\n\n176 SUPREME COURT REPORT8 [1962] SUPP.\n\nAppellate Assistant Commissioner to introduce into thA assessml'nt new sources, as his\n\nP\"''\"r of enhancement should be restrirtcj nn 1, v to the income whirh was the rnbjectmaftl'f of eonsidl•ration for purposes of asseffment b~· the Income-tax Officer.\"\n\nIn R,\"s1111.wna.th Pmsn.rl Bhaq11mt Prasad v.\n\nCommi~ sionPr of T111:omP.-f1J.r (1), the ApncllatA AsRistant CommiR•ionpr had act.uitll~· rcmandPd the case, bnt whill' con•irforing the powers of the Appl'llate Assistant Commissioner, the Divisional Bench anpP'Lr• to h'lvA apnrovP t.rpated as oln'ter.\n\nIn Nr1rro11das\n\nMm1orrl~ .... V,. enmmis.'!'i011er of Tncome-tax (') is to h\" fmmrl t.h\" \"nlicr casP of t.hri Bomlnv High Court which w:iA followP :i••PRACll wa• carrving on husinAss\n\nin TI om hav :in concession a llo,.-cd hy the Part 13 Stntl'S 'l'nxat.ion ConccRsion OrdP.r.\n\nTh\" assPssee anpPnlNl with rr>snnct to th<' sum of Rs. 1,17,643/, c.ontenrlin[! that the Tbjkot lmsincRs h td no profits hut nnh- ]Oi High Court helrl that tho powers of rl'm, rnrl wNl' ext.rcmel~· wiSi~1wJudge to subat1'tute churycs framed by Cum11iilli11g Alugistrak-.Jl urder-(}onunon Intention-Indian 1'enal Code, 1860 (Act .XLV of 1860), s. 34-Coubjcct of diffrrent trials was unwarranted the trials were not vitiated\n\non this account. The procedural error was curable under ss. 537 of the Code of Criminal Procedure.\n\nThe three offences with which the appellants were charged were of the same kind and one joint trial of those\n\noffeqces was justifiable under s. 234 Code of Criminal Procedure. A joint trial of both the appellants for the three offences each of which was alleged to be committed by them jointly within twelve months would have been justifiable under ss. 234 and 239 of the Code.\n\nEven if there were three committal orders the Sessions Judge could try the accused at one trial if the provisions of ss. 234 to 239 permitted a joint trial.\n\nIn the present case the Sessions Judge did not purport to consolidate the committal orders and try the accused at one trial though really that is what actually happened' when he recorded evidence in one case only and presumably examined the accused also once. The trial was not vitiated by any procedural error nor had any prejudice been shown to have been caused to the appellants.\n\nPayare Lal v. The State of Punjab, (1962) 3 S.C.R. 328, referred to.\n\nRam Charan had been charged for all the offences for which he was convicted.\n\nThe s0-c, lled amended charges framed by the Sessions Judi; e were really additional charges and not in substitution of the charges framed by the Mclgistrate.\n\nThe Sessions J ud!!e had no power to drop any charges under which the accused had brcn committed for trial ; he could frame a charge, or add to or otherwise alter the charge as the case may be where a person was committed for try without a charge or with an imperfect or erroneous charge.\n\nBut the conviction of Ram Charan could not be sustained. He did nothing in any of the three incidents. The facts and circum stances of the case did not establish that he hd a common intention 'vi th Banwari to commit any of the offences.\n\nThere was no allegation that he had enmity with any of the victims or that there was any pre-concert betWfen him and Banwari.\n\nFrom the fact that he was in the company of. Banwari all along no inference of common intention could be drawn.\n\nThe question of his dissociating from Banwari did not arise when he had n0t associated himse]f in the first instance with him.\n\nCRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 80of1961.\n\nAppeal by special leave from . the judgmPnt and order dated December 8, 1960 of the Allahabad\n\n196!\n\nBanwari v. .State nf Uttar Pradesh\n\n1!62\n\nBr.nu, ari\n\nv, State of Uflar P1adtJh\n\nSUPREME COURT REPORTS [1962] SUPP.\n\nHigh Court in Criminal Appeal No. 1517 of 1960 and Referred No. W4 of 1960.\n\nA. S. R. Chari, 0. P. Ra11il and K. K. Sinha, for the appellants.\n\nG. C. Mathur and C. P. Lal, for the respondent.\n\n1962. February 14. The Judgment of the court was delivered by\n\nRcg\\ub\" TJa; al J,\n\nRAOH'C:BAR DAYAL, J.-Banwari and Ram Charan appeal, by special leave, against the ocder\n\nof the Allahabad High Court dismissing their appeal R nd confirming their conviction by the II Additional Sessions Judge, Etnwah. Banwari W!ls conviC'ted of the offences undPr s. 302 Indian Penal Code for committing the murder of Lakhan Singh and Bhagwan Singh and also for an offence under s. 30i Indian Penal Code, for having attcm Jt(id to Commit the murder of Babu Singh.\n\nRam Charan was convicted of the same throe offences mad with s. 34, Indian Penal Codo.\n\nThe facts leading to the appeal nre these, Banwari, a Lodh by c'asti. and Ram Charan, armed with a gun and axe respeetivi>ly, pa8sed the field of Lakhan Singh, Lakhan Singh asked Banwari as to where he was going.\n\nBanwari replied that he was going for shooting birds. I.a.khan Singh turned back.\n\nBanwari fired two shots at Lakhan Singh.\n\nLakhan Singh fell clown and died.\n\nBanwari and Ram Charan, thereafter, proceeded south-wards and at a distance of about six or seven furlongs, mot Bhagwan Singh, who was grazing his cattle. Bhagwan Singh questioned Ranwari as to where he was going.\n\nBanwari said he was going to shoot crocodils in the river.\n\nBhagwan Singh said there were no crocodiles in the river and asked Banwari to go back and look to his work. When Bhagwan Singh turned towards\n\nsoth1 Banwari fireq a s}iot. at liiw, Bhai; wan\n\nSingh sat down. Banwari again fired a shot at him. He further fired two more shots, Bhagwan\n\nSingh died.\n\nThe village people pursued the two appellants and Banwari fired at them. He fired at Babu\n\nSingh, but hit Narayan Singh.\n\nOne report was lodged at the Police Station with respect to these incidents. The police, after . Pnquiry, sent up three charge-sheets ·. under s. 173,\n\nCode of Criminal Procedure.\n\nThe Magistrate registered three cases, one with respect to the murder of Lakhan Singh, another with respect to the murder of Bhagwan Singh and the third with respect to the offence under s. 307 Indian Penal Code, for shooting at Babu Singh and Narayan Singh. Ultimately he committed both the accused for trial to the Sessions Court in each of the cases. Sessions Trials Nos. 34, 37 and 38 of 1960 were registered on the basis of those three committal orders.\n\nIn the case with respect to the murder of Lakhan Singh, the Magistrate framed one charge under s. 302, Indian Penal Code, against Banwari and another charge age.inst Ram Charan for an offrince under s. 302 read with s. 34, Indian Penal\n\nCode.\n\nIn the proceedings with respect to the murder - of Bhagwan Singh, he framed one charge aaainst both the accused Banwari and Ram Charan, for an offence under s. 302 read with s. 34, Indian Penal\n\nCode.\n\nLastly, in the proceedings uner s, 307, be again framed a common charge agamst both the accused for an offence under a. 307 read with s. 34 Indian Penal Code.\n\nAt the commencement of the hearin\" of the Sessions Trial No. 34 of 1960 on July 18, 1960, on\n\nw4ic4 date presumabl; Y the otqer two Sessions\n\nBanwari v.\n\nSlate of Uttar Pradesh\n\nRaghubar DayatJ,\n\nBanwari\n\nState aJ Uttar Pradesh\n\nRt11hubar Dayal J,\n\nSUPREME COLTRT REPORTS [19621 SUPP.\n\nTrials wore also fixed for hearing; the loamed Sessions Judge framed ccrtrtin charges describing them as amend Pd chrtrgcA.\n\nIn Sessions Trial X o. 3t of 1960, ho framed a chargo against Banwari an, to avoid any contention in future in case ho be convieteREME COURT REPORTS 191\n\nIt has been urged that amalgamation of three different Sessions Case11 is not' warranted by the provisions of the Code of Criminal Procedure.\n\nThe Code simply provides by ss. 233 to 239 that ordinarily each distinct offence must be separately tried except in cases covered by the pro visions of ss. 234, 235, 236 and 239. It is clear that if separate commitments had been made of such distinct offences, which did not come within the exception to s. 233, they c0uld not be tried at one trial by consolidating those three cases. But this does not mean that if there had been sepa rate commitments of person who could be tried together at one trial, or of the same person for offences which could be tried together at one trial, the accused could not be tried at one trial. It often hap pens that persons accused of committing a particular offence or offences jointly or in the course of the same transaction are not put up for trial at the same time, usually for the reason that some of them were not available. They may be available later on and sub sequently committed for trial. If no trial has proceeded with respect to the first commitment by that time, the Sesions Judge is not bound to have two separate trials, one with respect to each commitment. He can certainly try all the accused at one trintion with Banwari to shoot at Lakhan Singh or\n\nBhugwan Singh or Bahn Singh arnl Narain Singh, what, to s\"~' of his IHL\\•ing a common inl<'ntion with Banwari to commit the mmder of thu firHt two.\n\nIt is not tbe caHe of the pro•erntion that Ban wari and Ram Charan had an) enmity with any of\n\nthe victims or that they had prearranged between themselves to pick up any sort of conversation or quarrel with Lakhan Singh or Bhagwan Singh and then to shoot at them. All the incidents happened by accident. If Lakhan Singh and Bhagwan Singh had not questioned Banwari, probably, nothing would have happened. They questioned him and for some reason Banwari fired at them. He might have considered that their questions to him a.s to . where he was going was an indirect reference to his going armed and a sort of reflection on his possessing a gun.\n\nThe Courts lbeow imputed common intention to Ram Charan on account of his not disassociating himself from the activities of Banwari.\n\nThe question of dis-association did not arise when he had not associated himself in the first instance with Banwari's activities.\n\nHe was proba blv much bewildered at the conduct of Banwari in shooting Lakhlln\n\nSingh down as Lakhan Singh or any one else would have been. After the shooting of Lakhan Singh\n\nboth Banwari and Ram Charan are said to have just proceeded towards t.he south. It was after Bhagwan Singh had been shot dead that they took to their heels.\n\nRam Charan could not have anticipated a second incident with Bhagwan Singh. There was no reason for their pre-arranging the shooting of Bhagwan Singh. Ram Cha.ran's running away simultaneously with the running away of Banwari after the shooting of Bhagwan Singh could have been motivated by the instinct of saving himself from the villagers who could have thought that he was a party to the various incidents.\n\nWben Courts could consider his presence in that light, the villagers could have thought on those lines much more easily.\n\nHis running away, therefore, is uo indication of his guilty conscience. [twas the result of his anticipating popular reaction. In the circumstances, his possessing an axe at the time was nut for committing any violence against L:.khan Singh or the\n\nBanwari v.\n\nState of Uttar Prad1sh\n\nRaghubar Dau al J.\n\nBomvari\n\nStott of Ultar p, adt•h\n\nll1tlrubar Dayal J.\n\nFt1-1Ili.\n\n196 SUPREJ\\IE COURT REPORTS [1962] SUPP.\n\nother viotims.\n\nHe had it with him Eithrr as a matter of courc or for doing the work hP mil!ht have bren doing that day. We are therrfore of the opinion that ltam Charnn had no common intention with Banwari in his acts towards the \\'arious victims of tho incident anrl t.hat he has been wrongly convicted.\n\n\"\\Ve therefore dismiss the appciil of Ranwari and allow the appeal of Ram Cha.ran and acquit the latter of the offonccs he has been convict.id of.\n\nAppP.al pa.rtly allowed.\n\nTHE FINE KNITTING CO., LTD. v.\n\nTHE IN\"DCSTIUAL COURT, BOJ\\IBAY\n\nAND OTHEHS\n\n(P. B. GA.H::S-DRAGADKAR, A. K. SARKAR :ind\n\nK. N. WA:S-CHOO, JJ.)\n\nlncfu.<; lrial dispu.tt -lndu,, trial conrern-8plit-Linq up of a. going concern-Hosiery Gonzpany-lnsfa!lalion n.f spinnin!f 1nflchinf', ry -Rrc<;1j11ition of Com[>finy as ho-ier11 und.rf1tkinr1 and t.ipinning undlcrtak:1.q 1v~ sr.para.1p -Vrzlidity -Rrnnba.1J [ntb1stri!tl R•Jation-• Act, 1.94r, (Rom. 1 I of /!147), s. 11.\n\nThe. appellant Comparv was incorporated in 1908 and its principal activity then \"\"as to manufac.turc hosiery.\n\nIn 1924 \\\\'hen tilt' appellant shifted its factor to Ahmcdtbarl it installr:d spinnin~ n1achinr:ry \\\\ich a view to ensure suitable and e\\r.n s111)ply of yarn for its hosiery manufacture. ()riginally, a notifiratior. had hccn isst\"d on fay 30, ll39,\n\nunder the Bo1nl>ay Industrial l)i.-p11tc Act, l 93n, ,., hereby hosierv concerns , .. rrc includccl in t.hc dcfination of 11Cotton\n\nTr.xtil~ Tndusrry•·, h11t suhsrqucntly on July 17, t 9:t.1, another\n\nnotification vvas issued as a result of which the lloirry manu facture \\\\'as excluded from thP. (otton 'fcxtile lnd 11stry and it \\'•:ls covt\"red by a separate notificatinn.\n\nFor the purposrs of th~ Ro1n\\Jav Industrial Rlations Act, 1916, th~ appellant concc-rn ,.,•as rccognisrfiny as ho-ier11 und.rf1tkinr1 and t.ipinning undlcrtak:1.q 1v~ sr.para.1p -Vrzlidity -Rrnnba.1J [ntb1stri!tl R•Jation-• Act, 1.94r, (Rom. 1 I of /!147), s. 11.\n\nThe. appellant Comparv was incorporated in 1908 and its principal activity then \"\"as to manufac.turc hosiery.\n\nIn 1924 \\\\'hen tilt' appellant shifted its factor to Ahmcdtbarl it installr:d spinnin~ n1achinr:ry \\\\ich a view to ensure suitable and e\\r.n s111)ply of yarn for its hosiery manufacture. ()riginally, a notifiratior. had hccn isst\"d on fay 30, ll39,\n\nunder the Bo1nl>ay Industrial l)i.-p11tc Act, l 93n, ,., hereby hosierv concerns , .. rrc includccl in t.hc dcfination of 11Cotton\n\nTr.xtil~ Tndusrry•·, h11t suhsrqucntly on July 17, t 9:t.1, another\n\nnotification vvas issued as a result of which the lloirry manu facture \\\\'as excluded from thP. (otton 'fcxtile lnd 11stry and it \\'•:ls covt\"red by a separate notificatinn.\n\nFor the purposrs of th~ Ro1n\\Jav Industrial Rlations Act, 1916, th~ appellant concc-rn ,.,•as rccognisrse decisions that tho point raised by Mr. llkhla has to be consi dered.\n\n:llr. i\\lchta contends that in the present caso there is unity of ownership aml as a necessary corollary, tlwre is unity of mauagement, supervision and control; there is unity of purpose and design and he 11rgucs that there is complete functional integration. According to him, as no hosiery could be manufactured without ya.ru, thereis such a functiu1ml in tcr-dcpendcnco between the spinning and the hosiery sections that the latter cannot exist without the former.\n\nThere is also unity of fornnce and in consequence, there is one capital aud depreciation fund account, one common account of expenditure and incomo, one balanct!· sheet and one profit and loss account. There is also unity of employment and the two concerns function UJ:der the same roof; so there is unity of habitation. It is on these grounds that lllr. Mehta contends that the first and the second respondents were in error in spl, itting up the appellent's establishment into two Hections and recognising them separately as such.\n\nIn dealing with the significance and the effect of the factors on which ;\\Ir. i\\lchta has rightly relied it is necessary to bear in mind certain other relevant foctorn on which the decision wider appeal is substantially baaed. It is true that in 1924, the spinning scct10n of the establishment may have begun as a subsidi111y tu the hosiery section and in order to servo as its feeder.\n\nBut tho evidence on tho record clearly shows that the position is now roversed and that the spinning section has now\n\nassumed major importance and hosiery takes a minor place in tho industrial activities of the appellant. The inspectiou notes made by the second respondent show that it was admitted by the\n\nmanagement tha.t the spinning section has now developed to such an extent that it is like a spinn\n\ning mill by itself; it can no longer be regarded as a minor section attached to the hosiery _works.\n\nIt was conceded before the secowi respondent that only about 20'/'0 of the yarn manufactured in the spinning section is consumed for hosiery purposes while the rest is available to be sold in the market.\n\nThe production figures in the spinning section and 'the consumption of the yarn produced in that sec\n\ntion unmistakably point to the fact that the spinn ing section is no longer a minor department run by the appellant solely for the purpose of its hosiery section. In 1955 in the months of November and December, the production in the epinning department was worth Rs. 1,17,742 whereas whatever was consumed in the knitting department was only Rs. 23,817 leaving a balance which was sold for Rs. 93,!l25.\n\nThe corresponding figures for the year 1956 Mc Es. 6,70,854, Rs. 1,40,105 and Rs.5,30, 749. Similar figures for 1957 are Rs.8,17,153, Rs. 1,31, 725 and Rs. 7,04,018 and for 1958 are Rs. 6,68,095, !'ts. 1,26,252 and Rs. 5,40,873.\n\nThe balance-sheet for the year 1954 shows that the total hosiery sale was worth Rs. 2,37,232-6-0 whereas the total yarn sale was worth Rs. 14,82,705-5-0.\n\nSimilarly, for the year 1955, the hosiery sale was Rs. 2,56,986 and the yarn sale was Rs. 14,44,929.\n\nThe strength of the employees engaged in the two respective sectors tells the same'story. The table prepared by the second respondent from the information supplied by the management shows that .for the year 1955, spinning employees were 174, hosiery employees 5ti and the common work, men 35. For the year 1956, the figures were 217, 54 and 38; for Hi57, the figures were 194, 65 and 38; and for 1958, the figures were 178, 60 and 32.\n\nMr. Mehta quarrels with some of these figures but does not dispute the broad conclusion which is drawn from the figures , that the number of employees engaged in the spinning section is far more\n\nThe Fine Knittjng\n\nCo., Ltd. v.\n\nThe Industrial Court, Bombay\n\nGajendragadkar J.\n\n1!16Z\n\nTht Jr'ine },'n1tt{1,;\n\nCo., Ltd.\n\n•• 1·1i, lnduJll'ial Court,\n\nBombay\n\nGajtndr 'l.cadkar .J.\n\n204 SUPREME COVRT REPORTS [1962] SCPP.\n\nthan that employed in the hosiery section. Thus, there can be no doubt that the spinning activity of the appellant which may have begun as subsidiary to the hosiery activity has now grown in importance and has taken a place of pride in the industritd activity of the appellant coIJ.Sidered as a. whole; it can no longer be regarded as subsidiary to hosiery.\n\nIt is common ground that by the notification issued under the Cotton Textile (Control) Order,\n\nl!J48, the appellant is called upon to supply to the Governm1nt the prescribed quantity of yarn produced by the spinning depa.rtment. It is unnecessary to refer to th!' details of the order or to tho extent of the yarn required to be sup.plied by the appellant under it. 'Vhat is significant is the fact that by the application of the ord!lr issued in that behalf, the Govcmmcnt has treated the appellant as a producer who has a spinning plant and in that sense, the existence of the spinning activity of the appellant bas bocn treated as an independent activity liable to be controlled by the notification issued under the Cotton Textile (Control) Order, 1948.\n\nThen as t-0 the argument that the spinning and the hosiery am functionally integrated, it is clear that hosiery can exist without spinning, provided the industry engaged in hosiery purchases yarn required f'or the purpose of hosiery. That is one aspect of the ma.ttor.\n\nBut the more important aspect on which reliance bas been placed against the appellant is tha.t the appellant's spinning dep artmcnt produces yarn of all counts some of which would admittedly not be useful for boHiery work.\n\nWhen the appellant was asked whether t, he allegation mado by respondents Nos. 3 and 4 in that behalf wa.s true or not, the ma.na.gement of the app ellant hositatingly donicd the said 111lcgation. But an advertisement published in the local daily \"Sandesh\" wa.s produced by respondent.a Nos. 3\n\n3 S.C.R.\n\nSUPREME COURT REPO.ttTS 205\n\nand 4 and it clearly showed that yarn of all counts was offered by the appellant for sale in the general , market. Therefore, it would be idle to contend that the spinning work carried on in the spinning department is meant exclusively or solely for tbe hosiery department. If the spinning department produces yarn which is not useful or necessary for, and which cannot be used by, the hosiery section. the only inferei:ice is that the spinning department is working on its own and is producing yarn to be sold in the market. That being so, the argument of functional inter-dependence or integrality cannot be treated as valid.\n\nBesides, it is not disputed that when the knitting department was closed in 1948, the spinning department was not. If the two departments are functionally inter-dependent, the closure of the one without the closure of the other may need an explanation. The explanation which has appealed to the first and the second respondents Hpparently is that though the spinning work carried on by the appellant may, to some extent, be useful for the hosiery work, the major part of its work is carried on independently with an eye on the market and so the closure of the hosiery cannot and did not affect the continuance of the spinning department.\n\nThere is yet another circumstance on which considerable reliance bas been placed by the first and second respondents in rejecting the appellant's contention that the two departments constitute one unit. This circumstance refers to the conduct of the appellant itself in dealing with the employees engaged in spinning and in knitting departments.\n\nIt is admitted that the minimum wages paid to the employees in knitting differed from the minimum wages paid to the employees in spinning and so does the amount of dearness allowance paid to the respective employees differ. It is difficult to understand how an employer can make a distinction ui\n\nThe Fine Knitting\n\nCo., Ltd.\n\nThe Industrfol Court, Rombay\n\nG ajendragadkar J,\n\nTht Fint Knittin.~\n\nCo., LJr/.\n\nTht Industrial Ccurt,\n\nBombay\n\nOojtndrogadJ:or J.\n\n206 SUPREME COURT REPORTS [1962] SUPP.\n\nthe payment of minimum wa.ges between one class of employees a.ad another if bfJth the classes of employees are engaged in diffllrent departments • of the samo esta blibmcnt or concern. If there is unity of rmployment ancl unity of purpose and design as suggested by ;\\fr. Mehta., it is inconceivn.ble that th\" employees engaged in two departments intt>grally connectnt t.h<, berwfitR of 1'11 relevant conditions of sPrviee which were npplicnhle to the employees in the Textile fndnstrv in Ahm('dabad.\n\nWhat-\n\nPvr ma~' ho the baekgronncl of the dispute and its gPm\"•is, it is clear beyond dc, ubt that. the way in whi0h ihe appellant has t.rrat<'ly.\n\nJt all depends On whether the undertakings arc sepa.rato, distinct and independent. of oaf'h other or n, re functionally integral or intcr-dl'pcndent..\n\nTn the former case, th justified in trPating the several undertakings separa.telv while in tho latter case, hA may recognise all of them as one undortaking.\n\nThere is one minor point to which reference may incidPntally be made. It. appears that before the firnt respondent, it was 'urgcd by the appellant that tlw present applications made by respondents !'\\os. :J and 4 were barred by reA judicata. The\n\nari.rnment wast.hat. sine\" the Aeconrl respondent had on an Ni.rlier 'oncassinn c>nsidcmd the merits of tho cas\" :tnd ' refuRr scconte Government for five years for management and control.\n\nOn October 3, 1960, the State Government issued three no:ifications One of which appointed October 7, 1960, as the date on and from which the management and control of the said undertaking would be taken over by it. The appellant by a petition under Art. 226 of the Comtitution impugned the constitutional validity of the said Act and souht for appropriate writs restraining the State Government for giving effect to it and for quashing the said notifications. The High Court found\n\nagaint the petitioner and rejected the petition.\n\nHeld, th1t the State Lgislature had the competence to enact the impugned Act and its constitutional -validity . was beyond question.\n\nArticle 226 of the Constitution confers a very wide power on the High Court to issue directions and '\\-\\Tits not only for the enforcement of fundamental rights but other legal rights as well.\n\nSince the appellant's lawful rights under t\\le agreement had been abrided, if not wholly destroyed, by the impugned Act, it had the locus • ., tandii'. to apply under Art. 226 of the Constitution.\n\nThe State of Orissa v. Madan Go,,, al Rungta, [1952] S.C.R. 28 and Ohiranjit Lnl Ohoudhuri v. The Union of India, [1950] S. C.R. 869, referred to. 1\n\n. 1962\n\nFebmaryS.\n\nTiu C:11lc'u1ta Ga11\n\nCom/iauy P1cprietorJ) lt1l.\n\nv ?'ht Stau of U' est Btrigal\n\nS11bha I ao J.\n\n2 SUPRE:\\IE OOURT REPORTS [1962] SUPP.\n\n1'hc entries in the three Legislative Lists arr. only lcgisa lativc hcadS or fields of legislation that den1arcatc the area over which the appropriate legislature operates and it is \\\\'Cll settled that tl1e .language of the entries should be widely construed.\n\nIf any entries overlap or are in direct conflict \\Vith each other, C\\'cry attempt should he 1nadc to harmonise thc1n, \\Vhether the fntrics belong to the same List or different \"List-;, so that no entry may be robbed of its entire content and made nugatory.\n\nIn re tl; c Central l'ro1inceR and Berar .1ct, h\"o. XI\\,. of 1933, [1939] F. C.R. 18 and Stale of Bonzl, ay ,._ .\\\"orothamdas Jethabhai, [1951] S. C.R. 51, rcfcrrecl to.\n\nSo construed Entry 24 of List II which is in apparent conflict \\Vith Entry 25 of the !'a.me list, must be he'.d to cover all industries in a State except Ga\" and (; as•\\\\orks \\\\'hich arc specifically dealt \"ith by F.n°try 2'i anrl exclusively a!lotted\n\nto it.\n\nIt is clear that the express intention of the Constitution \\Va'\\ to carve out Ga~ and Gas-\\vorks industry from F.ntrv 24 anws affecting gas and µaswork ; and (!i) even if the Act. i!leidentally trnnches upon any produetion 1rnpect, th<: pith and substance\n\nof the legislation is iras ancl ~:t'work withiu tho meaning of entry 25 of List II.\n\nThe larnccl , Judge~ rcjcotcd. all tho contentions of the appellant and dismissed tho petition by his order nd thi>t, as its rights were preserved by s. 4 of the impugned Act, it has no locus stand; to file the petition under Art. 226.\n\nThe first question that falls to be considered is whether the appellant has lows standi to file tho petition under Art. 226 of the Constitution. The argument of le&rnod counsel for the rPspondenl~~ is that the appellant was only managing the induHtry and it had no proprietary right therein and, therefore, it could not maintain, the application. Article 226 confers a very wide powor on the High Court to issue directionH and\n\nwrits of the nature mentioned therein for the enforcement of any of the rights conferred by Part III or for any other purpose. It is, thPrefore, clear 1 hat persons other than those claiming fundamental right can also approach the eourt seeking a reliefth'\"rcunder. The Article in terms docs not describe the classes of persons entitled to apply thereunder ; but it is implicit in tho exercise of the extraordinary jurisdiction that the relief asked for must be one to enforce a legal right. In The Swte of Ori-~8a v. illadan Gop\"l Runyta( ')this Court has ruled that the existence of the right is the foundation of the exercisn of jurisdiction of the court under Art. 226 of the Consti.\n\ntution. In Chiranjit La/, Chowrlhuri v. The l.:nion of {wlu1 ('), it has been held by this Court. that the legal right that can be enforced under Art. :l2 must orc!inarily be tho right of the petitioner himself who complains of infraction of such right and approaches the court for relief. We do not see any reason why a different principle should apply in the case of a\n\n(I) (1952] s C.R. 28. (2) (195-0J s.c.R. 869.\n\n> •\n\n. )\n\npetitioner under Art. 226 of the Constitution .. The right that can be enforced under Art. 226 also shall ordinarily be the personal or individual right of the peti tioll.er himself, though in the case of some of the writs like habeas corpus or quo warranto thi'J rule may have to be relaxed or modified.\n\nThe question, therefore, is whether in the present case the petitioner has a legal right, and whether it has been in fringed by the contesting respondent.s. The petitioner entered into an agreement dated July 24, 1948, with respondent No. 5 in regard to the management of the Oriental Gas Company. Under the agreement, the appellant was appointed as Manager and the general management of the affairs of the Company\n\nwas entrusted to it for a period ofJ!O years. The appellant would receive thereundf'_ by way of remuneration for its services, (a) an office .allowance of Rs. 3,000/- per mensem, (b) a commissron of IO per cent, on the net yearly profit of the Company, subject to a minimum of Rs. 60,000/· per year in the case of absence of or inadequacy of profits and (c) a commission of Re. I/- per ton of all coal purchased and negotiated by the Manager. In its capacity as Manager, the appellant-Company was put in charge of the entire business and its assets in India and it was given all the incidental powers necessary for the said management. Under the agreement, therefore, the appellant had the right to manage the Oriental Gas C0mpany for a period of 20 years and to receive the aforesaid amounts toward its remuneration for its services.\n\nSection 4 of the impugned Act reads:\n\n\"With effect from the appointed day and for a period of five years thereafter,-\n\n(a) the undertaking of the Company shall stand transferred to the State Governmfclnt for the purpose of management and control ; ·\n\nThe 0 arcutea Gas\n\ncompany. (Proprietary) Ltrl. v.\n\nThe State of West.Bangal\n\nSuhba Rao J.\n\nTht Caladla Gas\n\nCompanl (l'rofJritlarJ) l.Jd. v.\n\nTit Stal< of W11t Bengal\n\nSub6a Raa J.\n\n8 SUPREME COUHT REPORTS [1962] StJl>l'.\n\n'b) the C Jmpany and its agents, includin01\n\nmanaging agents, if any, and servant shail cease to exercise management or control in relation to the undertaking of thl' Company;\n\nI c) all contracts, excluding any contract or contracts in respect of agency or managing agency, subsisting immediately before the appointed day and affecting the undertaking of the Company shall cease to have l'ffoct or to be enforeeable against the Company, its agents or :lny person who was a surety thereto or had guaranteed the performance thereof and shall be of ai; full forre and effect against or in\n\nfavo~· of the State of West Bonga! and shall be enforceable as fully and effectively as if instead of the Company the State of West Bengal had been named therein or had boon a party thereto:\" Under tho said section, with effect from the appointed day and for a period of five years thREMlll COUR1' RlllFORTS 9\n\ns. 4 of the impugned Act, it was deprived of that right for a period of five years. There was cert'.linly a legal right accruing to the appellant under the agreement and that was abridged, if not destroyed, by the impugned Act. It is, therefore, impossible to say that the legal right of the appellant was not infringed by the provisions of the impugned Act.\n\nIn the circumstances, as the appellant's personal right to manage the Company and to receive remuneration therefor had been infringed by tho provisions of the statute, it had wcus standi to file the petition under Art. 226 of the Constitution.\n\nTo appreciate the rival contentions in regard to the other points, it would be convenient and necessary to notice briefly the provisions of the Industries (Development and Regulation) Act, 1951, hereinafter called the \"Central Act.\", and the impugned Act. The Central Act was passed, as its long . title shows, to provide for the development and regulation of certain industries. Under s. 2 of the Central Act, it is declared that it is expedient in the publio interest that the Union should take under its control the industries specified in the First Schedule.\n\nUnder beading 2 of the First Schedule, item (3) is \"fuel gases-( coal gas, natural gas and the like)\". \"Industrial undertaking\" is defined to mean any undertaking pertaining to a scheduled industry carried on in one or more factories .by any person or authority including Government ; and / \"factory\" is defined to mean any premises, including the precincts thereof, in any part of which a manufacturing process is. being carried on or is ordinarily so carried on.\n\nSection 9 authorizes the Government to levy and collect a cess from the industries : Chapter III provides for the regulation of scheduled industries : section 15 empowers the Government to make or cause to be made a full and complete investigation of the affairs of any scheduled industry, if it is of opinion that there is a likelihood of substantial fall in the volume of\n\nThe Calcutta & as\n\nCompany ( ProprietaTy) Ltd. v.\n\nThe Siate of West Bengal\n\nSubba Rao J,\n\n/962\n\nTlia Calcutta (}as\n\nComparrp (Propritliry) Ltd.\n\nTht Statt of\n\nJV est Rtn., al\n\nSubb11 Rao J.\n\nSUPR~~IE COURT REPORTS [1962] SUPP.\n\nproduction or a marked deterioration in the quality of any article produced, or there is likely to bo a\n\nrie in the price of any article produced, therein, or that an undertaking is being managed in a manner highly detrimental to the scheduled industry concerned; and s. HJ authorizes the Central Government, after making the said investigation to issue such directions to the industrial undertaking or undertakings concerned as may he appropriate in the circumstances in order to regulate the production of any article or articles and fi:ic the standards of production, to require it to take such steps to stimulate the development of the industry, to prohibit from resorting to any act or practice which might reduce its production capacity or economic value, or to control the prices or regulate the distribution of articles produced therein Chapter IIIA confers power on the Central Government to assume management or control of an industrial undertaking in cortain cases: section J8A enables it to htke control of an industrial undertaking, ands. 18H(l), inr alia, provides that on the issue of the notified order nuder s. 18A, all persons in charge of management, including persons holdin\" oJfice as managers or directors of the industrial undrtaking immediately before the issue of the notified order shall he deemed to have vacated their offices as such, aud that any contrct of managem•rnt between the industrial undertakmg and any managing agf, nt or any director thrcof holding ofEce as such immediately before the issue of the notified order shaJI be deemed to have been terminated and the person or persons appointed under th~ Act shall be empowered to take over the management and condu'.•t the affairs of the Company\n\nin the place of the previous management. qiapter IIIB enables tho Central Government for securmg the equitable distribution and availability a.t fair prices of any article or class of articles relatahlf_' to any hanrecetd industry, and for controllmg and . ugsdlciuJg the supply, distribution, and price, of the 1\n\n\"\" ..\n\n:I s.C.R.\n\nSUPR)!jM:i): COURT REPORTS 11\n\nsaid articles. Section 20 of the A ct declares that aft.er the commencement ofthe Act, it shall not lie competent for any State Government or. a local authority to take over the management or control of any industrial undertaking under any law for the time being in force which authorizes any such Government or local authority so to do. Briefly stated, the Central Act declares that it is expedient in the public interest to take under its control the scheduled industries; its provisions are designed to provide for the development and regulation of the said industries; it enables the Central Government, for the purpose of promoting and rcgulatini2' the said industries, to investigate into the affairs of an undertaking, to regulate its production, supply and distribution, and, if necessi>.\n\nutilised by the State Government for purposes of production of gas and supply thereof to public institutions mentioned therein and for other purposes. Sections 8 l}nd 9 provide for payment of compensation for taking over the said management.\n\nIt would be seen that the impugned Act intends to serve the same purpose as the Central Act, though its operation is. confined to the Oriental Gas Company. Both tho Acts are conceived to increase tho production, quality and supply pertaining to an industry, and for that purpose to enable the appropriate Government, if necessary, to take over the management for regulating tho industry concerned to achieve the said purposes. .The impugned Act occupies a part of the field already covered by the Central Act. The question is whether the State Legislature has constitutional competency to encroach upon the said field.\n\nAt this stage it would be convenient to read the relevant Articles of the Constitution.\n\nAricle 246. (1) Notwithstanding anything in clauses (2) and (3) Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the \"Union List\").\n\n(3) Subject to clauses (I) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the mattem enumerated in List II in the Seventh Schedule (in this Constitution referred to as the \"State List\").\n\nList I-Union List\n\nEntry 7.\n\nIndustries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war.\n\n Entry 52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.\n\nList I I -&ate List\n\nEntry 24.\n\nIndustries subject to the provisions of entries 7 and 52 of List I.\n\nEntiy 25.\n\nGas and gas-works.\n\nEntry 26.\n\nTrade and commerce within the State subject to the provisions. of entry\n\n33 of List III.\n\nEntry 27.\n\nProduction, supply and distribution of goods subject to the provisions of entry 33 of List III.\n\nBefore construing the sa.id entries it would be useful to notice some of the well settled rules of interpretation laid down by the Federal Court and this Court in the matter of construing the entrie~.\n\nThe power to legislate is given to the appropriate Legislatures by Att. 246 of the Constitution. The entries in the three' Lists are only legislative heads or fields of legislation : 'they demarcate the area over which the appropriate Legislatures can operate.\n\nIt is also well settled that widest amplitude should be given to the language of the entries. But some of the entries in the different List or in the same List may overlap and sometimes may also appear to be in direct conflict with each other. It is then the dnty of this Court to reconcile the entries and bring about harmony between them. When the question arose about reconciling entry 45 of List I, duties of excise, and entry 18 of List II, taxes on the sale of gonds, of Government of India Act, 1935, Gwyer, C. J., in ln re The Central Provinces and Berar Act No. X fV of 1938 (1), observed; '\n\n\"A grant of the power in general terms, standing by itself, would no doubt be construed in the wider sense; bnt it may be qualified\n\n(!) (!939) F. C.R. IB, 42, 44.\n\nThe Calcutla Gas\n\nOompan) (Proprietary) Ltd. v.\n\nThe State of West Bengal\n\nSubba Rao J.\n\nT ht C:oir11fl.1 GaJ\n\n(,'nn, pany (P1ot,1ino•;) l.:d 1\n\nv. r1,, ._<..'taze of JYcir B~Tl'.fcJ.l\n\nSi.bba Uao J.\n\n14 SUPREME COURT REPORTS [1962] SUPP.\n\nby other express pro, isions in the same enactment, by the implication of the context, and even by considerations arising out of what appears to be the general scheme of the. Act.,.\n\nThe learned Chief J usticc procr eded to state :\n\n\" ......... an endra n>ur must be made to sohc it, as the , Judicial Committee have said\n\nby having recourse to the context and scheme of the Act, and a rceonciliation attempted betwmm two apparently conflicting jurisdictions hy reading the two entries together and hy interpreting, and, whrre ncnesary, mod(fying the language of the un\" by that of the oth<>r.\n\nIf indeed i; ueh a rc'bonciliation should prov\" impossible, then, and only then. will the nm1obstantc claue operate and the federal\n\npower prevail.\"\n\nThe Federal Court in that ease held th:it the entry\n\n'\"taxes on the Hale of good\"\" was not covered by the entry \"duties of cxcisi\" :rn so\n\n9onstnecl as to make a nullit, Y of a particular\n\npower !Jonferred by the same Act and operating in the same field, when by reading the former in a more restricted sense effect can be given to the latter in its ordinary and natural\n\nmeaning.\"\n\nThe rule of constru.ction adopted by that decision for the purpose of harmonizing the two apparently conflicting entries in the two Lists would equally apply to an apparent conflict between two entries in the same List. Patanjali Sastri, J., as he then was, held inState of Bombay v.Narothamdas J ethabai(') that the words \"administration of justice\" and\n\n\"constitution and organization of all courts'' in item one of List II of the Seventh Schedule to the Government of India Act, 1935, must be understood in a restricted sense excluding from their scope \"jurisdiction and powers of courts\" specifically dealt with in item 2 of List II. In the words of the learned Judge, if such a construction was not given \"the\n\nwider construction of entry I would deprive entry 2 of ail its content and reduce it to useless lumber.\" This rule of construction has not been dissented from in any of th0 subsequent decisions of this CDlirt. It may, therefore, be taken as a well settled rule of construction tJiat every attempt should be made to harmonize the apparently conflicting entries not only of different Lists but also of the same List and to reject that construction which will rob onu of the imtries of its entire content and make it nugatory.\n\nWith this background let us construe the aforesaid entries. There are three possible constri:ctions, namely, (1) entry 24 of List II, which pJ,\"ovidcs for industries generally, covers the indqstrial aspect of gas and gas works leaving entry 25 to p:ovide for other aspects of gas and gas-works;\n\n(2) \"ntiy 24 provides generally for industries, and \"ntry 25 carves out of it the specific industry\n\n(!) [1951] S. C.R. ,,1,\n\nThe r:alcutta Gas\n\nComp'.my (Proprietary) Ltd.\n\nThe State \"of West Bengal\n\nSttbha Rao J.\n\nThe Caltutta Gas\n\nCom>any ( /l, oprUtat_)) I.Id.\n\nThe Stak of II est IJ, nga/\n\nSul)ba Rao J.\n\nSUPREME COURT REPORTS [1962] SUPP.\n\nof gns and gas-work•, with the result that the industry of gas and gas-works is excluded from entry 24 ; and(::!) the industry of gas and gas-works falls umfor both the entries, that is, there is a real overlapin!! of the said entries. Having regard to the aforesaid principle, while giving tho widest scope to both the entries, we shall adopt tho interpretation which reconciles and harmonizes them.\n\nThe first question that oecurs to one's mind is, what is the meaning of tho cxprt>ssion \"industry\" in entry 24 0f List JI ? IR it 1lifferent from tho meaning of that ilXpresRion in entry 52 of List I ? Whatnver may be its eonnotation, it must, hear t.hn amo meaning in both the entries for thr two entries are so interconnected that conflicting or different meanings given to them would snap the connection. Entry !?4 is subject t.o the proviRions of entrv 7 and entrv 52 of .List I.\n\nEntry 7 of List I provides for indutries declared by Parliament by law to be nr1•cssary for thr purpose of defence or for the prosrcution of war; and entry .~2 for industries t hP control of which by the Union is declared bv Parliam11nt by law to be expedient in tho pn hlfr intcrPst. Therefore ordinarilv indn•tr:v is in the field of State legis. lation ; but, if Parliament by law makes a reluvant declaration or declarations, \"the industrv or industries so declared would bo tR ken off \"its field and passed on to Parliament.\n\nTn the premises. the\n\ncxpresion \"industry\" in all the ent.ries must bP. given tho same mea.ninp-.\n\nNow, \"hat is tho mean ing of word \"induRtrv\"? In Ch. Tika Ramji v.\n\nState nf ntm Pradesh (1), the •xprcssion \"industries\" . is defined to mean the pn, cess of manufacture or production and P.\n\nalternative contention enables entries 24 a.nd 25 to operato fully in their rc8pectivc fields : while entry 24 covers a ve'rv wide field, that iR, the field of the entire industry in the State, entry 2ii. dealing with gas and gas-works, ca.n be confined to a Hpccifi\" industry, that is, the gas industry. There may be many good reasons for the authors of the Constitution giving separate treatment to gas and gas-works.\n\nIf one can surmis(., it may be that, as the industry of gas and gas works was confined to one or two States and was not of all-India importance, it was carved out of entry 24 and given a separate entry, as otherwise if a declaration by law was made by Parliament. within tho mrnning of ;•ntry 7 or entry ii2 of List I, it would be taken out of the legilativo power of States.\n\nBe it as it may, the express intention of the Constitution is to treat it, in nUJmal times, as a state subject and it is not in the province of this Court to ascertain and scrutinize the reasuns for doing so. It is suggested that this interpreta tion would prevent Parliament to make law in respect of gas and gas-works during war or other national emergency. Apart from the relevancy of such a consideration, the apprehension has no justification, for under Art. 249 Parliament is enabled to take up for legislation any matter which is specifically enumrrated in List II whenever the Council of States resolves by two.thirds majority that such a legislation is necessary or expedient in the national interest.\n\nSo too, under Art. ~50 Parliament can make laws with respect to any of the matters enumerated in the State List, if a.\n\nProclamation of Emergency is in operation. Article 2ii2 authorizes the Parliament to legislate for two or more States, if tho House8 of the Legislatures of those ::itatcs give their eonRcnt to the said course.\n\nSubject to sich Pmcrgency or extra-ordinary powers, the entire industry of gas and gas-works is within exclusive legislative competence of a State. It iH, therefore, dear that the scheme of harmoniou\" con struction suggested on behalf of the State gives full\n\n...\n\nand effective scope of operation for both the entries in their respective fields, while that suggested by learned counsel for the appellant deprives entry 25 of a 11 its content and even . makes it redundant.\n\nThe former interpretation must, therefore, be accepted in preference to the latter. In this view, gas and-gas works are within the exclusive field allotted to the States, On this interpretation the argument of the learned Attorney-Genera]. that, under Art. 24.6 of the Constitution, the legislative power of State is subject to that of Parliament ceases to have a, ny force, for the gas industry is outside the legislative field of Parliament and is within the exclusive field of the Legislature of the State. We, therefore, hold that the impugned Act was within the legislative competence of the West Bengal Legislature and was, therefore, validly made.\n\nIn this view the alternative argument advanced on beh.\n\nsame meaning as that iu entry 24 of List II, with the result that the said expression in entry 5 .'. of List I also does not take in a gas industry.\n\nIf so, it follows that the Central Ad, in so f.ir as it purported to deal \"ith the gas industry, is beyond the legislative competeneo of Parliament..\n\nSection 20 is an integral part of the Central Act, and if it is taken out of the Act, it can only operaw in v:.cuum.\n\nThe said section was introduced for the effective implementation of the provisions of the Central .<\\ct.\n\nIt was also enacted by virtue of entry i'::! of List I of the Seventh Schedule to the Constitution. If the Act was constitutionally void in so far as it purported to offect the gas industry, for the aforesaid reasons, s. 20 would equally be void to tho same extent for the same reasons. Jn this context two decisions of this Court, namely, Raylrnbir Singh v.\n\nSlaw of Ajmtr( 1), and State of Bihar v. C111ei; h ./ha('! may usefully be consulted, for in the said decisions this Cour.t held that ancillar.i;. pro1•isiona enacted for carrying nut the objects of a main Act would fall with the main Act on the ground that they were enacted only to subserve the purpose of the main Act. l:lcctiun ::!O, therefore, will not. avi1il the appellant to question the validity uf the State action. Jn the result, we agree with the High Court that the impugned Act was within the legislatiV•l competence of the West Hcngal State Legislature and was validly made. The appeal fails and is dismissed with costs of respondents l to ,1.\n\n(l) [I9;9j Supp. (I) S.C.R. 478.\n\n(2) A.l.R. 1962 S.C. 50.\n\nAppeal dil, mi8sed.", "total_entities": 62, "entities": [{"text": "THE CALCUTTA GAS COMPANY\n\n(PROPRIETARY) LTD", "label": "PETITIONER", "start_char": 27, "end_char": 70, "source": "metadata", "metadata": {"canonical_name": "THE CALCUTTA GAS COMPANY (PROPRIETARY) LTD", "offset_not_found": false}}, {"text": "THE STATE OF WEST BENGAL AND\n\nOTHERS", "label": "RESPONDENT", "start_char": 76, "end_char": 112, "source": "metadata", "metadata": {"canonical_name": "THE STATE OF WEST BENGAL AND OTHERS", "offset_not_found": false}}, {"text": "K. SUBBA RAO", "label": "JUDGE", "start_char": 135, "end_char": 147, "source": "metadata", "metadata": {"canonical_name": "K. SUBBA RAO", "offset_not_found": false}}, {"text": "AYYANGAR, J.", "label": "JUDGE", "start_char": 164, "end_char": 176, "source": "metadata", "metadata": {"canonical_name": "N. RAJAGOPALA AYYANGAR", "offset_not_found": false}}, {"text": "R~ MUDHOLKAR", "label": "JUDGE", "start_char": 177, "end_char": 189, "source": "metadata", "metadata": {"canonical_name": "J.R. MUDHOLKAR", "offset_not_found": false}}, {"text": "Oriental Gas Company Act", "label": "STATUTE", "start_char": 330, "end_char": 354, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 4", "label": "PROVISION", "start_char": 380, "end_char": 384, "source": "regex", "metadata": {"linked_statute_text": "GaB and gas-works-Enactment by State Legislature- OonBtitutional validity-Writ Petition -Locus standi-Oriental Gas Company Act, 1960", "statute": "GaB and gas-works-Enactment by State Legislature- OonBtitutional validity-Writ Petition -Locus standi-Oriental Gas Company Act, 1960"}}, {"text": "Arts. 226, 246", "label": "PROVISION", "start_char": 407, "end_char": 421, "source": "regex", "metadata": {"linked_statute_text": "GaB and gas-works-Enactment by State Legislature- OonBtitutional validity-Writ Petition -Locus standi-Oriental Gas Company Act, 1960", "statute": "GaB and gas-works-Enactment by State Legislature- OonBtitutional validity-Writ Petition -Locus standi-Oriental Gas Company Act, 1960"}}, {"text": "West Bengal Legislature passed the Oriental Gas Company Act, 1960", "label": "STATUTE", "start_char": 769, "end_char": 834, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s.4", "label": "PROVISION", "start_char": 840, "end_char": 843, "source": "regex", "metadata": {"linked_statute_text": "The West Bengal Legislature passed the Oriental Gas Company Act, 1960", "statute": "The West Bengal Legislature passed the Oriental Gas Company Act, 1960"}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 1233, "end_char": 1241, "source": "regex", "metadata": {"linked_statute_text": "The West Bengal Legislature passed the Oriental Gas Company Act, 1960", "statute": "The West Bengal Legislature passed the Oriental Gas Company Act, 1960"}}, {"text": "Article 226", "label": "PROVISION", "start_char": 1650, "end_char": 1661, "source": "regex", "metadata": {"linked_statute_text": "The West Bengal Legislature passed the Oriental Gas Company Act, 1960", "statute": "The West Bengal Legislature passed the Oriental Gas Company Act, 1960"}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 2010, "end_char": 2018, "source": "regex", "metadata": {"statute": null}}, {"text": "S11", "label": "PROVISION", "start_char": 2292, "end_char": 2295, "source": "regex", "metadata": {"statute": null}}, {"text": "[1939] F. C.R. 18", "label": "CASE_CITATION", "start_char": 2934, "end_char": 2951, "source": "regex", "metadata": {}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 4450, "end_char": 4458, "source": "regex", "metadata": {"statute": null}}, {"text": "Act, 1960", "label": "STATUTE", "start_char": 4551, "end_char": 4560, "source": "regex", "metadata": {}}, {"text": "Stock Companies Act, 1862", "label": "STATUTE", "start_char": 4922, "end_char": 4947, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "By Act V of 1857", "label": "STATUTE", "start_char": 4949, "end_char": 4965, "source": "regex", "metadata": {}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 7025, "end_char": 7033, "source": "regex", "metadata": {"statute": null}}, {"text": "Arts. 14", "label": "PROVISION", "start_char": 7978, "end_char": 7986, "source": "regex", "metadata": {"linked_statute_text": "Calcutta for appropriate writs for restraining the State Goyernmont from giving effect to the said Act", "statute": "Calcutta for appropriate writs for restraining the State Goyernmont from giving effect to the said Act"}}, {"text": "Art. 31A(l}(b)", "label": "PROVISION", "start_char": 8010, "end_char": 8024, "source": "regex", "metadata": {"linked_statute_text": "Calcutta for appropriate writs for restraining the State Goyernmont from giving effect to the said Act", "statute": "Calcutta for appropriate writs for restraining the State Goyernmont from giving effect to the said Act"}}, {"text": "Art. 246", "label": "PROVISION", "start_char": 9275, "end_char": 9283, "source": "regex", "metadata": {"statute": null}}, {"text": "Industries (Development and Regulation) Act, 1951", "label": "STATUTE", "start_char": 9458, "end_char": 9507, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Assuming that the State Legislature has power to pass the Act", "label": "STATUTE", "start_char": 9876, "end_char": 9937, "source": "regex", "metadata": {}}, {"text": "Art. 254(1)", "label": "PROVISION", "start_char": 9978, "end_char": 9989, "source": "regex", "metadata": {"linked_statute_text": "Assuming that the State Legislature has power to pass the Act", "statute": "Assuming that the State Legislature has power to pass the Act"}}, {"text": "Industries (Development and Regulation) Act, 1951", "label": "STATUTE", "start_char": 10050, "end_char": 10099, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 4", "label": "PROVISION", "start_char": 11325, "end_char": 11329, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 11401, "end_char": 11409, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 11527, "end_char": 11535, "source": "regex", "metadata": {"statute": null}}, {"text": "Article 226", "label": "PROVISION", "start_char": 11759, "end_char": 11770, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 12504, "end_char": 12512, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 12975, "end_char": 12983, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 13044, "end_char": 13052, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 4", "label": "PROVISION", "start_char": 14516, "end_char": 14525, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 16476, "end_char": 16480, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 16785, "end_char": 16789, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 17359, "end_char": 17367, "source": "regex", "metadata": {"statute": null}}, {"text": "Industries (Development and Regulation) Act, 1951", "label": "STATUTE", "start_char": 17534, "end_char": 17583, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 2", "label": "PROVISION", "start_char": 17776, "end_char": 17780, "source": "regex", "metadata": {"statute": null}}, {"text": "First Schedule", "label": "PROVISION", "start_char": 17937, "end_char": 17951, "source": "regex", "metadata": {"statute": null}}, {"text": "First Schedule", "label": "PROVISION", "start_char": 17977, "end_char": 17991, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 9", "label": "PROVISION", "start_char": 18420, "end_char": 18429, "source": "regex", "metadata": {"statute": null}}, {"text": "section 15", "label": "PROVISION", "start_char": 18571, "end_char": 18581, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 18A", "label": "PROVISION", "start_char": 20149, "end_char": 20155, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 20", "label": "PROVISION", "start_char": 21136, "end_char": 21146, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 22769, "end_char": 22773, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 6", "label": "PROVISION", "start_char": 22983, "end_char": 22987, "source": "regex", "metadata": {"statute": null}}, {"text": "Sections 8", "label": "PROVISION", "start_char": 23449, "end_char": 23459, "source": "regex", "metadata": {"statute": null}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 24421, "end_char": 24437, "source": "regex", "metadata": {"statute": null}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 24691, "end_char": 24707, "source": "regex", "metadata": {"statute": null}}, {"text": "Government of India Act, 1935", "label": "STATUTE", "start_char": 26323, "end_char": 26352, "source": "regex", "metadata": {}}, {"text": "by having recourse to the context and scheme of the Act", "label": "STATUTE", "start_char": 27176, "end_char": 27231, "source": "regex", "metadata": {}}, {"text": "List II of the Seventh Schedule to the Government of India Act, 1935", "label": "STATUTE", "start_char": 29111, "end_char": 29179, "source": "regex", "metadata": {}}, {"text": "Art. 249", "label": "PROVISION", "start_char": 35930, "end_char": 35938, "source": "regex", "metadata": {"statute": null}}, {"text": "Article 2", "label": "PROVISION", "start_char": 36346, "end_char": 36355, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 24", "label": "PROVISION", "start_char": 37241, "end_char": 37248, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 20", "label": "PROVISION", "start_char": 37985, "end_char": 37990, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 20", "label": "PROVISION", "start_char": 38077, "end_char": 38082, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 20", "label": "PROVISION", "start_char": 39219, "end_char": 39229, "source": "regex", "metadata": {"statute": null}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 39505, "end_char": 39521, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 20", "label": "PROVISION", "start_char": 39661, "end_char": 39666, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_3_209_212_EN", "year": 1962, "text": "3 S.C.R.\n\nSUPREME COURT REPORTS 209\n\nbe precluded from making the present application on the ground of res judicata. At the highest, a plea ofres judicata may perhaps be raised against the third respondent but that would not be effective in view of the fact that in the present case, an application has been made by the fourth respondent as well.\n\nThat is why Mr.\n\nMehta did not seriously press the point of res judicata before us.\n\nIn the result, fails the appeal and is dismissed with costs.\n\nAppeal dismissw.\n\nKRISHAN LAL DHAWAN AND ANOTHER\n\nDELHI ADMINISTRATION\n\n(J. L. KAPUR, K. C. DAS GUPTA and RAGHUBAR\n\nDAYAL, JJ.)\n\nCriminal Trial-Trial by Special Judge-Another •pecial Judge conducts further proceedings-Conviction-Valid-ity- Code of Criminal Procedure, 1898 (Act 5 of 18.98), s. 350-\n\nCriminal Law Amendment Act, 1952 (46 of 1952). s. 8, sub's. 3.\n\nThe appellants were charged under ss. 120B and 420 Indian Penal Code ands. 5 (I) (d) read withs. 5 (2) of the prevention of Corruption Act. The trial of the appellants was commenced before a 15pecial Judge who heard the prosecution evidence. 'fhereafter the trial was taken up by another special Judge who examined the defence witnesses. and finally convicted the appellants. The appellants appealed to the High Court and the High Court upheld the conviction and sentence. The appellants thereupon appealed to the Supreme\n\nCourt by special leave.\n\nThe sole question which was raised by the appellants was that in view of the fact the trial commenced before one Special Judge and another Special Judge took up the proceedings are incompetent. . . The respondent relying on s. 8, sub-s. (3), of the Cnmmal Law Amendment\n\nThe Fine IL nit tint\n\nCo., Ltd.\n\nThe fndustrial Court,\n\nBombay\n\nGojentlr•zadk•r J.\n\n196S\n\nKris/um Lal Dhawan\n\nD1lhi AdminiJtration\n\nSUPREME COURT REPORTS [1962] SUPP.\n\nAct, 1952, contcncltcl that trial \\Vas competent and thr conviction and sentence \\\\', and s.5(1 )(cl) rPad with s. 5(:2) of the Prevention of Corruption Act, 194-7; and sentmwing each of them to an aggregate Henknce of six mrmth8' rigorous i m prisonmrn t.\n\nIt is unnecessarv to set. out the fac:ts in cletnil but to put them briefly. 'J he app\"1lant; Albert llfosscs was the Princ:ipal incharge of the Rehabilitation Cc>ntrc, i\\falviya Nagar and Kalkaji\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 211\n\nunder the Ministry of Rehabilitation. The appel !ant, K. L. Dhawan, was a partner in the firm named M/s. Dhawan & Co. apd they supplied a surface plate for a sum of Rs. 1,950/- to the Works Centre of which the a, ppellant Albert Moses was the Principal.\n\nThe trial of the appellants and R. P. Dhawan, who has been acquitted, commenced in the Court of Mr.\n\nJawala Das, Special Judge, Delhi, and he heard the case from the date of the institution of the proceedings on May 21, 1956 to October 26,\n\n1956. He heard the prosecution evidence which was closed on October 2n, 1956. The case was then ta.ken up by Mr. P. D. Sharma, Special Judge, Delhi, from December 20,\n\n1956. He cx:amined defence witnesses and finally convicted the appellants of the offences already mentioned and acquitted R. P. Dhawan.\n\nAgainst the conviction and sentence .an appeal was taken to the High Court but the conviction was upheld and also the sentenes and against that judment and order these two appeals by special le1tve have been brought by the two con victed persons. The sole question which has been raised in this Court is th1tt in view of the fact the trial commenced before one Special Judge and another Special Judge took up thf' proceedings after December 20, 1956, the proceedings are :qot competent and, therefore, the conviction ahd the sV are not inconsistont with that Act, a.pp.licable to pro<'ecrlings before a. Special .Judge and a )so provides t.hat a Special .Judge shall be deemed to be a Ccurt of Session when trying a case under the Criminal Law Amendment Act (46 of l!J52).\n\nIlnt this question was considered in thf' case d1>cidcd hy this Court in P11aralal's wse~') in whi<'h it was held that sub-s.(3) of s. 8 of Act 46 of 1952 did not contemplate thats. 350 of tho Criminal Proeedun• Code becomes npplirable to proceedings hefore a Special Judge.\n\nIt was also held in the case that th\" amendment made in the Criminal Law Amendmrnt Act\n\nby Act 2 of 1956 by which s. 3(a) was adrled to it making the provisions of s.:{50 of the Code appJi. cable to a trial by Special Judg<•s has Iio retrospective effect. In this view of the matter, tho conviction of the appellants must. therefore be set a.Ride.\n\nThe case will be disposed of in accordance with law.\n\nApp ra/ ul/curd.\n\n(I) [1%2] 3 ~.C.R. 328 . •", "total_entities": 29, "entities": [{"text": "KRISHAN LAL DHAWAN AND ANOTHER", "label": "PETITIONER", "start_char": 513, "end_char": 543, "source": "metadata", "metadata": {"canonical_name": "KRISHAN LAL DHAWAN AND ·ANOTHER", "offset_not_found": false}}, {"text": "DELHI ADMINISTRATION", "label": "RESPONDENT", "start_char": 545, "end_char": 565, "source": "metadata", "metadata": {"canonical_name": "DELHI ADMINISTRATION", "offset_not_found": false}}, {"text": "L. KAPUR", "label": "JUDGE", "start_char": 571, "end_char": 579, "source": "metadata", "metadata": {"canonical_name": "J.L. KAPUR*", "offset_not_found": false}}, {"text": "K. C. DAS GUPTA", "label": "JUDGE", "start_char": 581, "end_char": 596, "source": "metadata", "metadata": {"canonical_name": "K.C. DAS GUPTA", "offset_not_found": false}}, {"text": "DAYAL, JJ.", "label": "JUDGE", "start_char": 611, "end_char": 621, "source": "metadata", "metadata": {"canonical_name": "RAGHUBAR DAYAL", "offset_not_found": false}}, {"text": "Code of Criminal Procedure, 1898", "label": "STATUTE", "start_char": 735, "end_char": 767, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 350", "label": "PROVISION", "start_char": 786, "end_char": 792, "source": "regex", "metadata": {"linked_statute_text": "Code of Criminal Procedure, 1898", "statute": "Code of Criminal Procedure, 1898"}}, {"text": "Criminal Law Amendment Act, 1952", "label": "STATUTE", "start_char": 795, "end_char": 827, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 8", "label": "PROVISION", "start_char": 842, "end_char": 846, "source": "regex", "metadata": {"linked_statute_text": "Criminal Law Amendment Act, 1952", "statute": "Criminal Law Amendment Act, 1952"}}, {"text": "s. 3", "label": "PROVISION", "start_char": 852, "end_char": 856, "source": "regex", "metadata": {"linked_statute_text": "Criminal Law Amendment Act, 1952", "statute": "Criminal Law Amendment Act, 1952"}}, {"text": "ss. 120B and 420", "label": "PROVISION", "start_char": 893, "end_char": 909, "source": "regex", "metadata": {"linked_statute_text": "Criminal Law Amendment Act, 1952", "statute": "Criminal Law Amendment Act, 1952"}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 910, "end_char": 927, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "prevention of Corruption Act", "label": "STATUTE", "start_char": 969, "end_char": 997, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 8", "label": "PROVISION", "start_char": 1631, "end_char": 1635, "source": "regex", "metadata": {"linked_statute_text": "Indian Penal Code", "statute": "Indian Penal Code"}}, {"text": "s. 350", "label": "PROVISION", "start_char": 1962, "end_char": 1968, "source": "regex", "metadata": {"statute": null}}, {"text": "Criminal Law Amendment Act, 1956", "label": "STATUTE", "start_char": 2104, "end_char": 2136, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "s. 350", "label": "PROVISION", "start_char": 2164, "end_char": 2170, "source": "regex", "metadata": {"linked_statute_text": "Criminal Law Amendment Act, 1956", "statute": "Criminal Law Amendment Act, 1956"}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 2178, "end_char": 2204, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s.5(1 )(cl)", "label": "PROVISION", "start_char": 3121, "end_char": 3132, "source": "regex", "metadata": {"linked_statute_text": "Criminal Law Amendment Act, 1956", "statute": "Criminal Law Amendment Act, 1956"}}, {"text": "s. 5(:2)", "label": "PROVISION", "start_char": 3143, "end_char": 3151, "source": "regex", "metadata": {"statute": null}}, {"text": "Prevention of Corruption Act", "label": "STATUTE", "start_char": 3159, "end_char": 3187, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 350", "label": "PROVISION", "start_char": 4986, "end_char": 4992, "source": "regex", "metadata": {"statute": null}}, {"text": "[1962] 3 S.C.R. 328", "label": "CASE_CITATION", "start_char": 5212, "end_char": 5231, "source": "regex", "metadata": {}}, {"text": "s. 8", "label": "PROVISION", "start_char": 5444, "end_char": 5448, "source": "regex", "metadata": {"statute": null}}, {"text": "Criminal Law Amendment Act", "label": "STATUTE", "start_char": 5456, "end_char": 5482, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 5535, "end_char": 5561, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Criminal Law Amendment Act", "label": "STATUTE", "start_char": 5787, "end_char": 5813, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 8", "label": "PROVISION", "start_char": 5962, "end_char": 5966, "source": "regex", "metadata": {"linked_statute_text": "Judge shall be deemed to be a Ccurt of Session when trying a case under the Criminal Law Amendment Act", "statute": "Judge shall be deemed to be a Ccurt of Session when trying a case under the Criminal Law Amendment Act"}}, {"text": "s. 3(a)", "label": "PROVISION", "start_char": 6220, "end_char": 6227, "source": "regex", "metadata": {"linked_statute_text": "Judge shall be deemed to be a Ccurt of Session when trying a case under the Criminal Law Amendment Act", "statute": "Judge shall be deemed to be a Ccurt of Session when trying a case under the Criminal Law Amendment Act"}}]} {"document_id": "1962_3_213_217_EN", "year": 1962, "text": ",..\n\n3 S.C.R.\n\nSUPREME COURT REPORTS\n\nTHE STATE OF UTTAR PRADESH\n\nSHAWKAR AND ANOTHER\n\n(J. L. KAPUR, K. C. DAS GUPTA and R~GHUB.Ut\n\nDAYAL, JJ.)\n\nPower of Appellate Court-Conviction b11 MagiatraU- A ppeal to Sessions Court-If can direct commitment of acced-\n\nCode of Criminal Procedure, 1898, (Act V of 1898) s. 423 (1) (b).\n\nThe respondents were convicted by a Magistrate under s. 326 Indian Penal Code. They appea1ed to the Court of the Sessions Judge who set aside the conviction and directed the case to be committed tO the Court of Session. On revision the High Court set aside the orde~ holding that the Sessions Judge had, in an appeal against conviction, no power to direct commitment to the Court of Session.\n\nHdd, that the words of s. 423 (1) (b) of the Code of Criminal Procedure clearly emplwered an appellate court t<> order commitment for trial to the court of Session.\n\nThe power was not limited to cases exclusively triable by a court of Session.\n\nQueen Empress v. Abdul Rahiman, ( 1891) I. L. R. 16 Bom. 580; Queen E'IDpress v . .IJLaula Baktk, ( 1893) I. L. R. 15 All. 205 and Salish Chander Das Bose v. Queen Empress, ( 1899) I. L. R. 27 Cal. I 7i, approved.\n\nCR.!MINAL APPELLATE JurusDICTION: Cr. A. No. 206/l9ti0.\n\nAppeal by special . leave from the judgment and ordei' dated September 11, 1959, of the Allahabau High Court (Lucknow Bench) at Lucknow in Ciminal Revision No. 179 of 1959.\n\nG. C. Mathur and 0. P. Lal, for the appellant.\n\nThe respondent did not appear.\n\n1962. February 15.\n\nThe Judgment of the Colirt was delivered by\n\nKAPUR, J .. -In this appeal against the judgment and order of the High Court of .Allahabad, the\n\nTht Slolt uf Uttar P1odt1h\n\nShdnkar\n\nKapur J.\n\n214 SUPRE:IIE L'OCR'i' REl'OltTS (1962] SUPP.\n\nquestion of the interpretation of s. ,12:3( 1 )(b) of the Criminal Procedure Code arises.\n\nThe case of the prosecution was that respondent Shankar wanted to have illicit intimacy with ?11Rt. .Mithana who was not agreeable to his ad vanecs. In order to take his revenge he cut off her nose on January 28, l!J59.\n\nThe allegation againat the other respondent Goberdhan was that he helped Shanker in foll ing her down and ca, ught her while Shankt•r cut off her nose. Both tho respondents were tried under s. 326 read with s. :J4 of the Indian Penal Code and the i\\Iagistrate Ist class . found them guilty and sentenced them to rigorous imprisonment for 18 months each.\n\nAn appE>al was taken against this order to the Ressions Judge, Sitapur, who on June 12, HJ59, set aside the order of convictin Empres8 v. Suk!UJ('), All1ihabad High Court held that under s. 42:~ of the Code a commitment could bo ordered only when an offence wa1:1 exclusively triable by a court of ::ieion.\n\nThat view wao overruled in the later Allahabad\n\ncaso Queen Empress v. Maula Baksh(') and was not accepted in the Bombay case above quoted. It is not necessary to refer to c&&es decided by other Courts where it ha~ been held that the power to order commitment under s. 423(1) (b) is not limited to cases exclusively triable by the court of Session.\n\nIn Satish Chander U\"'8 Bose v. Queen Empress(') and other c&Sea of the High Court ol Alla.ha.bad the earlier view in Suklw:B case was not accepted.\n\nIn our opinion the words of s. 423 (I) (b) of the Code a.re quite clear and the power of the\n\n(I) (1891) I. L. R. 16. Bom. 58-0.\n\n(3) (1885) I. L. R. 8. AIL 14.\n\n(2) [1893] l. I.. R. 15 All. 205.\n\n(4) (1899) l.L.R. 27 DJ. 172.\n\nAppellate Court to commit is not ci.rcumscribed to oases oxclusively triable b5 a court of Session and the High Court was in error in taking a contrary\n\nview.\n\nWe therefore allow this appeal, set aside the order of the High Court and restore that of the Sessions J utlge.\n\nAppwl allowed.\n\nBALJEET SINGH & OTHERS\n\nRISAL SINGH & OTHERS\n\n(B. P. SINHA, c. J., P. B. GAJENDR.\"-GADIUR\n\nRAGHUBAR DAY.AL, JJ.) and\n\nCivil Procedure-Res judicata-Twelve suits against four sets of defenda .. ts-Decreed by common judgment-Twelve app.\n\ngranted on April 18, l9:i5.\n\nBy the time the appeals came up for hearing, some other events took place and as a result of them the respondents filed an application for adducing additional evidence under O • .XLV, rr.J to 5, Supreme Court gules in ovem\n\nber 195\\!, and also mcluded in their statement of case a narration of those events and their effect.\n\nIt appears that the villages in \"hich the lands in suit were situate, come under Consolidation Operations under the U.l'. Conolidation of Holdings Act, l!l.'ia( U. P. V of 1954 ), hereinafter callccl the Act, sometime in July 1954, when a declaration was issued by the State Government under s.4 of the Act to the effect that it had been decided to make a Scheme of consolidation fur that area. In December 1954, a statement of plots and t<1nure holders waa prepared and in J\\Iay HJ55 a statement of proposals under s.19 'was prepared; in August 11155 final otatements in chak form 25 were issued.\n\nOn October 17, J!J55, the State Government publi- 1hod a notification under s.52 of the Act.\n\nSection 52 of the Act thon read :\n\n\"As soon as may be aftu tho tenure-holders have entered into possession of their new holding in pursuance of l:Scction 2ti, the t:itate Government shall issue a notification in the\n\nOfficial Gazette that the Coneolidation operations have been closed in the village and the village shall then c\"ase to be under consolidation operation.\" It is thus seen that this village remained under Consolidation operations from some time in July 1954 to October 1 i, 1955.\n\nThe appellants did not file any objection8 before the Consolidation authorities under s.12 of the Act disputing tho correctness or tho nature of the entries in the statement prepared under s.11 or under s.20 against the atate ment of proposals prepared under s.l!I.\n\nSection 2t provides for the fixing of a date for the enforcement of the consolidation scheme.\n\nSection 25 provides for the issuing of the allotment order showing the new fields allotted to each tenure-holder in accordance with the said scheme.\n\nSection 26 provides for the tenure-holders to enter into possession of th~ fields allotted to them on or after a certain date. Section 27 provides for the pr<'paration of new village maps, khasra and the record-of-rights, in accordance with the provisions of the U. P. Land Revenue Act, 1901. Its sub-s.(2) provides that all entries in the record-of.rights prepared under sub-s.( l) shall be final and conclusive.\n\nSection 30 provides that the rights, title, interest a.nd liabilities of the tenure holder in his original holding shall be extinguished and he will have the same rights, title, interest and liabilities subject to modification, if any, in the plots allotted to him under s.25 with effect from the date on which he enters into possession of the plots allotted to him.\n\nIt was contended for 'the respondents that in view of these consolidations operation and s.5 of the Act, as amended up to date, these appeals have become infructuous as this Court cannot pass any\n\norders ou the.merits of the controversy. The Act has been amended several times since it was originally enacted.\n\nThe various amending Acts are: Act XXVI of 1934 which came into force on December\n\n13, 1954; Act XIII of 1955 which came into force on June 10, 1955; Act XX of 1955 whfohcame into force on October 21, 1955; Act XXIV of 1956 which came into force on July 3, 1956; Act XVI of 1957 which came into force on May 25, 1957 and Act XXXVIII of 1958 which came into force on November 19, 1958.\n\nDuring the perio:l the village in suit was under Consolidation Operations. the Act applicable\n\nBaljtet Singh\n\n•• Biaal Singh\n\nBaghubor Df!1a/ J.'\n\nBaljeet 8in.f!h\n\n•• Risa! Singh\n\nRaghubo1 Dayal J,\n\nSUPREME OOURT REPORTS [1962] SUPP.\n\nto the proceedings was the Original Act.as amended by Acts XXVr of l!J54 and XIII of 1955. The other Acts came into force subser1uent to tho issue of the notification under s.; i2 of the Act.\n\nIt is\n\n11ccesary to bear this in mind in vi<,\"\\\\' of the contentions raised.\n\nSection ii of Act V of 1954 was as follows :\n\n\"(\\) Upon the publication of the declaration nnder ection 4, the district or the local area, as the case may be, shall be deemed to he under consolidation operations from the date of such publication until this publiation of the oti fication under section 52 in the official Gazette to the effect that the consolidation operations hnve been closed.\n\n(2) Where a district or any other local arna is under consolirlatfon opnations, the duty of preparing and maintaining the maps, the khasra and the annual register under Chapter III of the U.P. Land Revenue Act,\n\nHlO I, shall stand transferred to the Sett lenwnt Officer (Consolidaticm), and thereupon all the powers conferred on the Collector, Assistant Co!leeter and the Tahsildar under the said Chapter shall, AO long a• that district or the area remains 1111(\\cr consoliclation operations. he exercised reAfll'ctively by the Settlement Officer (Consolidation), Consolidation Officer ancl the Assist.ant Consolidation Officer.''\n\nAct XXVI of I 9G4 deleted the last port.ion of AubR.(21 commeneiug from the words 'and thereupon'.\n\nNo chn.nge in this Aection was made by the Am0.nding Act XIII of I \\lf>ii.\n\nThere was therefore nothing in thiA sectioi1 which in any way won!? have\n\naffecter! th<> hearing of. these appeals, tlurmg or after the consoliJal J.\n\n~26 SUPREME CoURT REPORTS [1962) SDP~.\n\nstayed to the extent it relates to such plot and shall thereafter be disposed of in the manner prescribed .\n\n(7) A qucBtion of t.itle in respect of a11y plot mentioned in the statement in clause ( c) of sub-section I of section ll, which might and ought to have been raised under subsection (I) but had uot been raised, shall not be raised in any objection filed under subsection ( 2) of section 20, or under sub-seetion (I) of section 34.\"\n\nIt is for the first time that such suits and pro- • ceedings in the various Courts had to be stayed iu which a question of title in respect r, f any plot mentioned in the statement with reference to ol. ( c) of 1ub-s. ( 1) of s. 11 had been raised and that these stayed suits or proceedings were to bo decided sub- . sequently in the manner prescribed, i. e., in the manner laid down under rules framed under the Act.\n\nThose provisions of aub-s. (5) do not affect the appeals as they were prospective in operation and could apply to those cases only in which statements under s. 11 were filed aftor the amondm., nt had been ma.de.\n\nThe amendments rnado by tho other sections of this Act and Act XVI of 1957, do not affect the hearing of the appeals in any way.\n\nThereafter case Act XX XVIII of I 958. This Act again substituted a new s. 5, and the relevant portion of the substituted section reads:\n\n5. Upon the publication of the notification under section 4 in the Official Gazette, the consequences, as hereinafter sot forth, shall, subject to th11 provisions of this Act., from the date specified thereunder till the publication of notification under section 52 or sub-section (1) of section 6, as the caae may -\n\n3 s.c.h.\n\n!\"_,. ·~ •'.'._'1it'~-~ SUPREME OOUR'l' REPOR'l'S 227\n\nbe, ensue in the area to which the declaration relates; namelyx x x x x\n\n(b) (I) rill proceedings for correctin of the records and all suits for declarat10n of rights and interest over land , or f('.r possession of land or for partition, pendmg before any authority or court, whether of first instance, appeal or reference or revision, shall stand stayed, but without prejudice to the right of the persons affected to agitte the right or interests in dispute in the said proceedings or suits before the consolidation authorities under and in accordance with the provisions of this Act and the Rules made thereunder:\n\n(ii) the findings of consolidation authorities in proceedings under this Act in respect of such right or interest in the land, shall be acceptable to the authority or court before whom the proceeding or suit was pending which may, on communication thereof by the parties concerned, proceed with the proceeding or suit, as the case may be;\" These provisions operate prospectively. The consequences mentioned in s. 5 ensue upon the publication of the notification under s. 4 in the Gazette and continue up to the publication of the notification under s. 52.\n\nThey do not continuii thereafter and could not operate on these cases in which the notification under s. 52 was issued on the 17th October 1955.\n\nThey do not therefore bar the hearing of these appeals. These appeals have not therefore become infructuous. Sections 7, 8, 9, 10,. II, II-A, 11-B, 12, 1'2-A, 12-B, 12-C and 12-D have been substituted by new Sflction which apply to proceedings taken in consolidatio11 operations subsequent to the coming into force of the Amending Act XXXVIII of 1858. Sub-s. (l) of\n\n1_962\n\nBaljeet Singh\n\nRisal Sigh\n\nRoglwbar Dayal J.\n\niJalju• Sinth ...\n\nIliaol Singh\n\nlia4huja< Dayal J.\n\n228 SUPREME COURT REPORTS [1962] SUPP.\n\ns. 12 makes it clear that the matters mentioned in that sub-secton cannot bo raised subsequent to the date of notification under s. 52 •\n\nThere has been no material change made in ss. 27 and 30, buts. 49 now reads:\n\n\"49. Notwithstanding anything contained iu any other law for the time being in force the declaration and adjudication of rights of tenure holders in respect of land lying in an area, for which a declaration has been issued under section 4, or adjudication of any other right arising out of consolidation proceedings and in regard to which a proceeding could pr ought to have been taken under this Act, shall be done in accordance with the provisions of this Act and no civil or revenue court shall entertain any suit or pror, ceding with respect to rights in such land or with respect to any other matters for which a proceeding could or ought to have been taken under this Act.\"\n\nThis now provides that the adjudication of rights of tenure holders in respect of land lying in an area under consolidation operations shall be done in accordance with the provisions of the Act.\n\nThis leads practically to the same result to which cl. (ii I of sub-a. (b) of s. 5 leads to. The provisions of this section are not expressly limited to the period between the declaration under s. and the notification under s. 52, hut can be so construed as thev relate back to s. 5 (b) (ii) of the Act as the s as may b1' prescribed. Thl' appellants arc registe1<'cl dealern unrl they hn.ve made returns nder that section. Section I 5 de:lls with\n\n-, .\n\n...\n\n3 S.C.R.\n\nSUPREME COURT REP01tTS 23\n\nproduction and inspection of' accounts and s. 24 enumerates the offences under the Act.\n\nThe alleged offence of the appellants falls under s. 34(1)\n\n(b) and (g). i. e. failing without sufficient cause to submit any return or' furnishing false returns and knowingly producing incorrect accounts, registers or documents or knowingly furnishing incorrect information. Section 26 relates to the 'protection of persons acting in good faith and limitation for suits and prosecutions. The section when\n\n• quoted is as follows : s. 26 (1) \"No suit, prosecution or other legal proceedings shall lie against any servant . of the Government for anything , which is in good faith done or intended to be done under this Act or rules made thereunder . (2) No suit shall be instituted against the Government and no prosecution or uit shall be instituted against any person in respect of anything done or intended to be done under this Act unless the suit or prosecution .has been instituted within three months from the date of the act complained of.\"\n\nIor the appellants, it was contended that the words \"no prosecution or suit shall be instituted against any person in respect of anything done'\" in rnb-s. (2) of s. 26 cover their cases also and they fall within the words \"any person\". The respondent's submission on this point was that the two sub-sections of s. 26 should be read together and the intention of the Legislature was to give protection to Government servants in regard to prosecrrtions or other legal proceedings.\n\nThat, in our opinion, is not what the words used in sub-s. (2) mean. They are words of wider import and would ·\n\ncover cases of all persons including persons other than Government servants. There are no words nistricting the .meaning of \"an1 person\" aqd nq\n\nSitar.Jm\n\n'.,~ Stale of Madhya Pradesh\n\nKapur-J,.\n\nJg62\n\nSitoram\n\nv. .\n\nS141e of M atlhJa P14desh\n\nKapurJ.\n\nreason has been shown why those wor. (2) of s. 66 of the Bombay prohibition Act. 1949, as amended by the Bombay Prohibition (Extension and amendment) Act, 19.59.\n\nThe High Court dismissed the appeal in /imine.\n\nThereupon the appellant appealed to the Supreme Court by way of Special Leave on the same ground as was raised before the High Court.\n\nHeld, that the st•tement of the accused recorded under s. 342 of the C>dc of Criminal Procedure can be taken into consideration in _juclging the innocence or guilt of a person.\n\nIf the explanation given by the accused in. his statement is acccptahle to the court it must be held that the accused has discharged the burden under s. 66 (2) of the Rombay Prohibition Act. 1949.\n\nO. S. D.\n\nS1r, r11ny v. Stla'e, distinguished.\n\nCRDfi:\\AL APPl'Jf, LATE f\\ppeal No. 58 of 1961,\n\n(1950)\n\nS. C.R. 461,\n\nAppeal by special leave from the judgment and order dated October 17, 1960, of the Bombay High Court in Criminal Appeal No. 1235 of 1960.\n\nR. H. Dhebar, for the appellant.\n\nThe respondent did not appear.\n\n1962. February 16. The Judgment of the Court was delivered by.\n\nKAPUR, J.-This appeal by Special Leave against the decision of the High Court of Bombay dismissing the State's appeal against the acquittal of the res, Pondent arises out of proceedings under s. 66(l)(b) of the Bombay Prohibition Act, 1949 (Act 25 of 1949), as amended.. hereinafter called the •Act'.\n\nThe respondent was arrested by Police Constable Laxman Sabaji on August 8, 1959, at 8-15 p.m. on the ground that he was smelling of liquor and had therefore contravened the provisions of the Act. The respondent was taken to the hospital where he was examined by Dr. Dadlani Prabhu Rochiram P. W., who has deposed th11t the respon dent was smelling of liquor but his speech, beha viour, gait, coordination and memory were normal.\n\nFrom this he concluded that the respondent had consumed some alcoholic substance but was not under the influence of liquor. In cross-examination he stated that Tincture Neem would produce blood concentration of 0.146% M/V of ethyl alcohol.\n\nThe respondent in his examination under s. 342 stated:\n\nQuestion: \"What do you wish to say with reference to the evidence given and recorded against you?\n\nAnswer : I have not consumed prohibited alcohol.\n\nI had taken 6 ounces of eem as I am\n\nIJSed to W'1\n\n196!\n\nStat, of Maharashlr•\n\n•• /Axman J air am\n\nKapur J.\n\n232 SUPREME OOURT REPORTS (1962] SUPP.\n\n1961 On this evidence the Presidency Magistrate Mr.\n\nStat, of Mahorosht,. Lokur acquitted the respondent. Ho observed:-\n\n•· Laxman Jci111m\n\nKapur J,\n\n\"Neem is a medicinal preparation con taining about 40% of alcohol and is readily available in the market. I do not see why I should not accept the explanation given by the accused that he hail taken Necm in order to satiate his craving for alcohol. It has £cen held by Bavdekar and Chainani, JJ., in Criminal Appeal No. 1611 of 1954 dated 25-2-1954 that taking an excess dose of medicinal preparation docs not amount to consumption of 'prohibited liquor. In Criminal Appeal No. 1562 of 195!) State v. Domnic Robert D'Sliva where a\n\nsimilar defence was taken up it was held that con!!umption of 6 ounces of essence of Neem did not constitute an offonco. Following these judgments I hold that tho accused has not committed any offence. I therefore acquit the accused\".\n\nAgainst this order an appeal was taken to the High Court and one of the grounds taken in the memorandum of Appeal was that the mere statement of the reapondent that he had consumed 8 ounces of Tincture of Ncem was not sufficient to rebut the presumption arising out of sub-s.(2) of\n\nR. 66 of the Act. But tho High Court dismissed the appeal in limine. It i~ against that order that the\n\nState has come by Special Leave to this Court.\n\nThe main question raised on behalf of the State is that hy tho introduction of s. 66(2) in th11 Act as a result of tho Bombay Prohibition (Extension and amendment) Act, 1959, (Act 12 of 1959), the onus is on the accused person and that that onus had llot been discharged in the predent oase.\n\nSection li6(2) is as follows:-\n\nS. 66(:!) \"Suliject to the provisions of sub-sectioµ,\n\n...\n\n19GZ\n\n(3) wherein in any trial of an offence under cla.use(b) of sub-section(!) for the consumption of an intoxicant, it is. alleged that the accused person consumed liquor, and it is proved that the concentration of alcohol in the blood of the accused person is not less tha.n 0.05 per cent. weight in volume, then the burden of proving that the liquor consumed was a medicinal or toilet preparation, or an antiseptic preparation or solution, or a flavouring extract, essence or syrup, containing alcohol, the consumption of which is not in contravention of the Act or any rules, regulation or orders made thereunder, shall be upon the accused person, and the Court shall in the absence of such proof presume the contrary\".\n\nSlate of Maharashtra\n\nThe argument was put in this way that if thA prosecution proves that the concentration of alcohol in the blood of an accused person is more than 0.05% then under s. 66(2) of the Act the burden was on him to show that .the liquor which he had consumed was a medicinal or toilet preparation the consumption of which is not in contravention of the Act or any Rules made thereunder. It was further submitted that in order to discharge the onus mere statement of the accused is not sufficient.\n\nOnr attention was drawn to the scheme and some of the provisions of the Act.\n\nThe prosecution, in the present case, has provE\"d that the respondent's breath was smelling of liquor and that on examination of his blood it • was found to contain 0.146% but the respondent gave an explanation showing that he had taken 6 ounces of Tincture pf Neem and Dr. Dadlani Prabhu Rochiram has deposed that the consumption of 6 to 8 ounces of that substance will produce that l\\IllOUQt of coqcentration of blood. This was\n\nv, Laxman Jairam\n\nKapur J,\n\nSt.Jlt llf M aiiarashtra\n\nLa.'( man J air am\n\n234 SUPREME COURT REPORTS [1962] SUPP.\n\naccepted by the learned Presidency Magistrate and by the High Court. 'fherefore on this finding it must be held that the explanation given by the res. pondent of the cause of his smelling of liquor and of the blood concentration was accepted by the High Court a.a being sufficient to discharge the ·\n\nonus placed 011 him. But Mr. Dhebar for the State submits th1it mere statement of an accused person is not sufficient for the discharge of such onus and relics on a judgment of this Court in C. S. D.\n\nSwamy v. The State('), where Sinha, J. (as he then was), observed:-\n\n\"In this case, no acceptable evidence, beyond the bare statements of the accused, has been adduced to show that the contnuy\n\nof whiit has been proved by the prosecution, has been <'StabliBhed, because tlw requirement of the section is that the accused person shall be prosumcd to be guilty of criminal misconduct in the discharge of hie official duties \"unless the contriiry is proved.,.\n\nThe words of the statute are pernmptory, and the hurdcn must lie all the time on the accused to prove\n\nthe contrary\".\n\nAll that thl• learned Judge there meant to say waH that the cviclcnce of the statement. of the accused in the circumstanl'eB of that ease was not sufficient to discharge the onus but that does not mean that in no case can thn statement of an accuHcd rJerson be taken to be sufficic11 t for the purpose of 'discharging the onus if a statute placeR the onus on him.\n\nUnder s. 342 of the Criminn.I Prncedure Code the Court has the power to examine the accused so as to enable him to explai11 n.ny circumstance iippearing in evidence against him.\n\nUnder suh-s. (3) of tha.t section the answers given by an accused person may be taken i11t o consideration in such enquiry or trial. The object of examination under s. 342 therefore is to give the accused an opportunit; v tg\n\n(1) [l 960J I S.C.R. 461, 471. .\n\nexplain the case made against hiin and that state ment can be taken into consideration in judging the innocence or guilt of the person so accused.\n\nTherefore if the courts below have accepted this explanation it must be held that the respondent has discharged the onus which was placed on him by s. 65(2) of the Act.\n\nThe appeal is therefore dismissed.\n\nAppeal dismissed.\n\nIZHAR AHMAD KHAN v.\n\nUNION OF INDIA\n\n(P. B. GAJENDRAGADKAR,\n\nA. K. SARKAR,\n\nK. N.\n\nWANCHOO, K. C. DAS GUPTA and N. RAJAGOPALA\n\nAYYANGAR, JJ.)\n\nCitizenship, Termination of-Determination by Central Government-Rule rnaking obtaining of passport from another country conclusive evidence-Validity-Citizenship Act, 1955( 57 of 1955), s. 9(2)-Citizenship Rules, 1956, Sch. Ill, r 3.\n\nThe petitioners claiming to be Indian Citizens sought to enforce their fundamental rights under Art. 19 (1) (e) of the Constitution. The crucial question was \\Vhethcr they \\Vere citizens of India.\n\nWhile the petitions were pending the Government of India under s. 9(2) of the citizenship Act, 1955\n\ndetermined that they had voluntarily acquired the citizenship of Pakistan by the application of r. 3 of Sch. III of the Citizenship Rules, 1956, framed by the Central Government under s. 18 of the Act.\n\nSection 9 of the Citizenship Act, 1955, provides as follows:-\n\n\"( I) Any citizen of India who by naturalisation, regist ration or otherwise voluntarily acquires, or has at any time between the 26th January, 1950, and the commencement of this Act voluntarily acquired, the citizenship of another country, shall, upon such acquisition or, as the case may be, such commencement, cease to be a citizen of India .\n\n(2} If any question arises as to whether, when or how any person has acquired the citizenship of another country, jl Jlla!! be detertnil)ed by such uthority! in s.uGh i; nanqer1 alj~\n\n198%\n\nStat1 of Mahorasher a\n\n•• Luman J airam\n\nKapurJ.\n\n19•1", "total_entities": 33, "entities": [{"text": "STATE OF MAHARASHTRA", "label": "PETITIONER", "start_char": 54, "end_char": 74, "source": "metadata", "metadata": {"canonical_name": "STATE OF MAHARASHTRA", "offset_not_found": false}}, {"text": "LAXMAN JAIRAM", "label": "RESPONDENT", "start_char": 76, "end_char": 89, "source": "metadata", "metadata": {"canonical_name": "LAXMAN JAIRAM", "offset_not_found": false}}, {"text": "L. KAPUR", "label": "JUDGE", "start_char": 93, "end_char": 101, "source": "metadata", "metadata": {"canonical_name": "J.L. KAPUR*", "offset_not_found": false}}, {"text": "K. C. DAs GUPTA", "label": "JUDGE", "start_char": 103, "end_char": 118, "source": "metadata", "metadata": {"canonical_name": "K.C. DAS GUPTA", "offset_not_found": false}}, {"text": "DAYAL, JJ.", "label": "JUDGE", "start_char": 134, "end_char": 144, "source": "metadata", "metadata": {"canonical_name": "RAGHUBAR DAYAL", "offset_not_found": false}}, {"text": "s. 66", "label": "PROVISION", "start_char": 408, "end_char": 413, "source": "regex", "metadata": {"statute": null}}, {"text": "Code of", "label": "STATUTE", "start_char": 430, "end_char": 437, "source": "regex", "metadata": {}}, {"text": "s. 342", "label": "PROVISION", "start_char": 481, "end_char": 487, "source": "regex", "metadata": {"linked_statute_text": "Code of\n\nCriminal Procedure, 1898", "statute": "Code of\n\nCriminal Procedure, 1898"}}, {"text": "s. 342", "label": "PROVISION", "start_char": 891, "end_char": 897, "source": "regex", "metadata": {"linked_statute_text": "Code of\n\nCriminal Procedure, 1898", "statute": "Code of\n\nCriminal Procedure, 1898"}}, {"text": "Code of Criminal Procedure", "label": "STATUTE", "start_char": 905, "end_char": 931, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 66", "label": "PROVISION", "start_char": 1278, "end_char": 1283, "source": "regex", "metadata": {"linked_statute_text": "Code of\n\nCriminal Procedure, 1898", "statute": "Code of\n\nCriminal Procedure, 1898"}}, {"text": "s. 342", "label": "PROVISION", "start_char": 1635, "end_char": 1641, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 66", "label": "PROVISION", "start_char": 1908, "end_char": 1913, "source": "regex", "metadata": {"statute": null}}, {"text": "S1", "label": "PROVISION", "start_char": 1966, "end_char": 1968, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 66(l)(b)", "label": "PROVISION", "start_char": 2536, "end_char": 2547, "source": "regex", "metadata": {"statute": null}}, {"text": "Bombay Prohibition Act, 1949", "label": "STATUTE", "start_char": 2555, "end_char": 2583, "source": "regex", "metadata": {}}, {"text": "s. 342", "label": "PROVISION", "start_char": 3357, "end_char": 3363, "source": "regex", "metadata": {"linked_statute_text": "the Bombay Prohibition Act, 1949", "statute": "the Bombay Prohibition Act, 1949"}}, {"text": "s. 66(2)", "label": "PROVISION", "start_char": 5103, "end_char": 5111, "source": "regex", "metadata": {"statute": null}}, {"text": "S. 66(:!)", "label": "PROVISION", "start_char": 5349, "end_char": 5358, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 66(2)", "label": "PROVISION", "start_char": 6319, "end_char": 6327, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 342", "label": "PROVISION", "start_char": 8720, "end_char": 8726, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 342", "label": "PROVISION", "start_char": 9058, "end_char": 9064, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 65(2)", "label": "PROVISION", "start_char": 9449, "end_char": 9457, "source": "regex", "metadata": {"statute": null}}, {"text": "Citizenship Act, 1955", "label": "STATUTE", "start_char": 9818, "end_char": 9839, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 9(2)", "label": "PROVISION", "start_char": 9854, "end_char": 9861, "source": "regex", "metadata": {"statute": null}}, {"text": "Citizenship Rules, 1956", "label": "STATUTE", "start_char": 9862, "end_char": 9885, "source": "regex", "metadata": {}}, {"text": "Art. 19", "label": "PROVISION", "start_char": 9999, "end_char": 10006, "source": "regex", "metadata": {"linked_statute_text": "Citizenship Rules, 1956", "statute": "Citizenship Rules, 1956"}}, {"text": "s. 9(2)", "label": "PROVISION", "start_char": 10164, "end_char": 10171, "source": "regex", "metadata": {"linked_statute_text": "Citizenship Rules, 1956", "statute": "Citizenship Rules, 1956"}}, {"text": "citizenship Act, 1955", "label": "STATUTE", "start_char": 10179, "end_char": 10200, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "III of the Citizenship Rules, 1956", "label": "STATUTE", "start_char": 10311, "end_char": 10345, "source": "regex", "metadata": {}}, {"text": "s. 18", "label": "PROVISION", "start_char": 10386, "end_char": 10391, "source": "regex", "metadata": {"linked_statute_text": "III of the Citizenship Rules, 1956", "statute": "III of the Citizenship Rules, 1956"}}, {"text": "Section 9", "label": "PROVISION", "start_char": 10405, "end_char": 10414, "source": "regex", "metadata": {"linked_statute_text": "III of the Citizenship Rules, 1956", "statute": "III of the Citizenship Rules, 1956"}}, {"text": "Citizenship Act, 1955", "label": "STATUTE", "start_char": 10422, "end_char": 10443, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}]} {"document_id": "1962_3_235_287_EN", "year": 1962, "text": "3 S.C.R. SUPREME COURT REPORTS 235\n\nexplain the case made against hiin and that state ment can be taken into consideration in judging the innocence or guilt of the person so accused.\n\nTherefore if the courts below have accepted this explanation it must be held that the respondent has discharged the onus which was placed on him by s. 65(2) of the Act.\n\nThe appeal is therefore dismissed.\n\nAppeal dismissed.\n\nIZHAR AHMAD KHAN v.\n\nUNION OF INDIA\n\n(P. B. GAJENDRAGADKAR,\n\nA. K. SARKAR,\n\nK. N.\n\nWANCHOO, K. C. DAS GUPTA and N. RAJAGOPALA\n\nAYYANGAR, JJ.)\n\nCitizenship, Termination of-Determination by Central Government-Rule rnaking obtaining of passport from another country conclusive evidence-Validity-Citizenship Act, 1955( 57 of 1955), s. 9(2)-Citizenship Rules, 1956, Sch. Ill, r 3.\n\nThe petitioners claiming to be Indian Citizens sought to enforce their fundamental rights under Art. 19 (1) (e) of the Constitution. The crucial question was \\Vhethcr they \\Vere citizens of India.\n\nWhile the petitions were pending the Government of India under s. 9(2) of the citizenship Act, 1955\n\ndetermined that they had voluntarily acquired the citizenship of Pakistan by the application of r. 3 of Sch. III of the Citizenship Rules, 1956, framed by the Central Government under s. 18 of the Act.\n\nSection 9 of the Citizenship Act, 1955, provides as follows:-\n\n\"( I) Any citizen of India who by naturalisation, regist ration or otherwise voluntarily acquires, or has at any time between the 26th January, 1950, and the commencement of this Act voluntarily acquired, the citizenship of another country, shall, upon such acquisition or, as the case may be, such commencement, cease to be a citizen of India .\n\n(2} If any question arises as to whether, when or how any person has acquired the citizenship of another country, jl Jlla!! be detertnil)ed by such uthority! in s.uGh i; nanqer1 alj~\n\n198%\n\nStat1 of Mahorasher a\n\n•• Luman J airam\n\nKapurJ.\n\n19•1\n\nlzhar Ahmod Khan\n\nv. llnion nf Trltli•\n\n236 SUPREME COURT REPORTS [1062]\"SUPP.\n\nhaving regard to such rules of evidence, as mav be prescribed in 1his behalf.\" ,\n\nRule 30 of the Rules which made the Central Government the authoricy for the purpose of s.9 (2) provided that for a determination under that section the Central Govern ment should have due regard to the rules of evidence specified in Sch. II I of the Rules.\n\nRuic 3 of the said schedule was as follows. \"The fart that a citizen of India has obtained on any date a passport from the Government of any olhcr country shall be conclusive proof of his having volunlarily acquired the citizenship of the country before that date.'.' After such determination by the Central Government the petitioners challenged the constitulional validity of s. cr conferred by s. 9(2) of the Act was an unguided power. That sub-section gave enough guidance to the Central Government to fran1e rules of evidence.\n\n'l'he question \\vhethcr the petitioners had acquired foreign natio11ality must, 1hcrcforc he detfrminrd by the Government leaving r. 3 of Sch. I II of the Citizenship RGles,\n\n1956, out of account.\n\nOnrnINAL Ji:nismcTION : Pctiti0ns Nos. IOI and 136 of 1959 and 88 of 1961.\n\nPetitions Under Art. !32 of the Constitution of India for enforcement of Fundamental Rights.\n\nThe Judgment of (:l6jendragadkar, Wanchoo and Ayyangar, JJ., was deli1•cred by Gajendragadkar, J.\n\n• The Judgment of Sarkar and Das Gupta, JJ., 1962 was delivered by Das Gupta, J.\n\nIzhar J.hmad Khan\n\nGAJENDRAGADll:AR, J.-These three Writ Petitions are filed by the three respective petitioners under Art. 32 of the Constitution for the enforcement of their fundamental right under Article 19(1) (e).\n\nThey were heard separately but it would be convenient to deal with them by one common judgment because they raise for our decision the same constitutional questions. In all the petitions, the constitutional validity of section 9(2) of the Citizenship Act, 1955, (Act LVII of 1955) (hereinafter called the Act) and of rule 3 in Schedule III of the Citizenship Rules, 1956, is challenged. It would also be convenient to set out briefly at the outset material facts on which the three petitions are based.\n\nIzbar Ahmad Khan, the petitioner in Writ Petition No. 101 of 1959, claims to be a citizen of India and was a resident of Bhopal. He was enrolled as a voter in the Parliamentary as well as State Legislative Assembly Electoral Roll. On the 20th August, 1952, he was taken into custody by the police from the restaurant which he used to run at Bhopal and was told that he had been arrested under an order from the then Bhopal Government under section 7 of the Influx from Pakistan (Central) Act.\n\nHe was the; n removed by train the very next day and left at the Pakistan border and was asked to go to Pakistan despite his protests. Thereafter, his elder brother, Iqbal Ahmad moved the Court\n\nof the Judical Commissioner, Bhopal, under Art.226 of the Constitution for the issue of a writ in the nature of Habeas Gorpus.\n\nIn February, 1953, . the learned Judicial Commissioner pronounced hie judgment in the said writ petition.\n\nHe found in favour of the petitioner that he was born in India and was a citizen of India.' Even on the question of migration, the Judicial Commissioner made a\n\n•• Union of India\n\nGojendragadkar J,\n\nldrar Ahmad Khan\n\nU11icm of liuiia\n\nGajtndragatlkm J.\n\n240 SUPREME COURT REi;>oRTS [1962] S~PP.\n\nfinding in his favour. He, however, observed that the petitioner was in Pakistan in l\\Iay an the tcrrit.ory of India from the territory now induclt•d in l'aki stan shall be deemed to he a ritizcn of India at the commencement of the Constitution if he satisfies the tests prescribed by claucs (a) and ( b).\n\nUnder Art. 7, a person who has after the first day of March, 19·17, migrated from thP. territory of India to the territory now included in Pakistan shall not be deemed to b0 a citizen of fnrlia, notwithstanding anything contained in ArtH. fl and fi.\n\nThis Article is ubjc.ct to tho proviso to which it is unnocessafy to rcfor. Art. 8 deals with the right.\"\n\nof citizenship of :t person who or either of whoso\n\nparents or any of whosn grand-parents were born in India as defined in the Government of ln we are not concerned with the eases falling under that proviso.\n\nThat takes us to sub cl.(:.?) of s.!J. This clause provides that if any question arises as to the acquisition by an Indian citizen of foreign citizenship, it shall be dotcrmiucd by such authority, in such manner, and having regard to snch 1 ules of evidence as may be prescribed in this behalf. In other words if any dispute arises 11<1 to whether foreign eitizenship has be. 292, Para. 2192.\n\nhe observes, \"these so called conclusive presump tions are rules which belong properly speaking, to\n\nthe various branches of substantive law and not to the Jaw of evidence, such as the presumption that an infant under seven is incapable of committing a felony or that all men know the law ( i. e., that ignorance of.the law is no excuse for crime).\" (1).\n\nIt would thus be noticed that according to Phipson, it is not true as a general inflexible rule that all conclusive presumptions pertain to the branch of substantive Jaw and he has illustrated his statement by taking two instances of conclusive presumptions to show that the said presumptions are really matters of substantive law. Therefore, if the test laid down by Phipson is reliable then the question as to whether a conclusive presumption in a given case is a part of the substantive law or forms a part of the rule of evidence, properly so called. Will have to be decided in the light of the content of the rule and its implications.\n\nStephen also has considered this problem. \"Conclusive presumptions\". he says, \"appear to me to belong to different branches of the Substantive Law, and to be unintelligible except in connection with them. Take for instance the presumption that every one knows the law.\n\nThis rule cannot be properly appreciated if it is treated as a part of the Law of Evidence. It belongs to the Criminal Law. In the same way, numerous presumptions as to rights of property (in particular easements and incorporal hereditaments) belong not to the Law of Evidence but to the Law of Real Property'.\n\nHaving said so, the learned author adds that 'the only presumptions which, in my opinion, ought to find a place in the Law of Evidence, arc those which relate to facts merely as facts and apart from the part.icular rights which thuy constitute(').\n\nThat is how in his Digest, he has included certain\n\n(l) Phipson on Evidence. JX Edition P. 698.\n\n~2) Stephens Digest of the Law of Evidence, page vii.\n\n' ' , .\n\nI:::liar .fhmarl Khan\n\nUnion of India\n\nGajendragadkar .1.\n\nI tlurr Ahmad Khan\n\n•• Uniort of lridia\n\nGajt11draga, lkar J.\n\n256 SUPREME COURT REPORTS [19112) SUPP.\n\npresumptions under Arts. 98 to 10;).\n\nThese are respectively, presumption of legitimacy, presumption of death from seven years' absence, presump t.ion of loRt gmnt, presumption of reimlarit_v and of deeds to completfl title estoppel by conrluet, estoppel of tenant and licenRee, estoppel of acceptor of bill of exchange and estoppel of bailee, agent and license('. It would thus be sei>n that ostoppel of the four kinrl• j1rnt indicat.od constitutes a branch of rule of evidence, _according to Stephen.\n\nDicey seems to take the view that even for purposes of domestic Jaw, irrebuttahle presumptions of law are rules of substance, ancl he adds that \"rebut table presumptirms of law mtrnt. for th.- present purpose, be further suh-dividerl.\n\nFirst, there are those which only apply in certain contexts, such as the presumptfons of arlv•rncPment., eatisfact.ion and ademption. It. is Huhmitfod that thee are so closely connected with the Pxistence of suhstantivf> rightH that they ought to be classified aR rnlPs of substm1ce.\n\nSerondly, there are those which apply (though not always in prPeiscly the same way) to all types of cases, such as the presumptions of\n\nlegitimacy, marria!!e and death. It is uncertain wh!'t her such presumptions are rules of sn hstance or ru]Ps of procedure.'\" ( 1) According to Dir.e.v, for the purpoHes of English dompstic law, eHtoppcl is generally treated as a ruin of evidence.\n\nIn dealing with this topic, Dicey has observed that : \"in order tsumptions of facts. he t.hinks t!Htt, st.ri!'.tly speaking. tht\\Y h; n-P 110 legal effect at, all; they are merely common inferences an rluty of going forward, in argument or evia an attempt, by legislatirn fiat, to enact int0 existonce a. fact which here does not, and cannot he made to, exist in n.ctua.Iity, 11.nd the\n\nrc1.mlt. is th1~ same, unleRs we a.re rrady to O'rnrrule the Schlesin!!er r, a, se. as we a.re not.; for tha.t carn dealt with a.·-conclusivc presumption and the Court held it: invalid without regard to tho ciuestion of its -\n\nt.echnieal ch'lracterization.\" ThuR, the observa. tiomi madn hy Mr. Justice S11thnland in regard to the cha.racter of the rule of irrehutta.ble presutnp t.ion afford nssistance to the contention raised hdoro U'3 on behalf of the Union of India.\n\nBut it is i:; a.id t.}rnt a conclusive presumption preYcnts the party against wh<>m it is drawn from disproving the inference about the exist~!nc:e of fact B whirh is required to he drawn from f.he proc)f of fact A.\n\nThi~ circumstancP, however, does not tffect the character of the rnlo a.s falling within th~ domain of the law of e\\•iUlt; this bar ag, tinst tlw party and precludes him frwn prodng t.hat the thing in q1wstion is untrue, is treated as a. ru lo of e, idencc. Therl'for<>, the fa.ct that a. ha.r is created prevont.ing a pnrty from . -\n\nproving the truth or falsity of a thing the existence of which is inferred, does not show that the rule itself is a part of the substantive law.\n\nJzhar Ahmad Khan v.\n\nUnion of India Then it is argued that the conclusive rule in Gajendragadkar J, the present case extinguishes the status of citizenship and as such\", is a part of the rule of substantive law.\n\nWe are not impressed by this argument either. What the rule really provides is that when one fact in established, another fact shall be deemed . to have been established. The fact established is that an Indian citizen has obtained a passport from a foreign Government on a certain date. From this fact, an irrebutta ble presumption is required to be drawn that the obtaining of the passport from the foreign Government establishes the acquisition of the citizenship of the said foreign State. This is a case where from the proof of fact A an inference as to the existence of fact B is required to be drawn. As to the inherent probative and persuasive value of fact A in relation to the existence of fact B in this context, we will have occasion to discuss it later on. The argument that the application of. the rule may in some hypothetical cases conceivably lead to hardship and injusti••e, is not relevant or material in dealing with the constitutional validity of the rule.\n\nIn deciding the question as to whether a rule about irrebuttable presumption is a rule of evidence or not, it seems to us that the proper approach to adopt would be to consider whether fact A from the proof of which a presumption is required to be drawn about the existence of fact B, is inherently relevant in the matter of proving fact B and has inhe.rently any probative or persuasive value in that behalf or not. If fact A is inherently relevant in proving the existence of fact B and to any rational mind it would bear a probative or persuasive value in the matter of\n\n19G2\n\nJ;:har Ahma'l Kh1111\n\nUr:ion._of lndic\n\nOajer.Ur, giadJ.:4: J.\n\n262 SUPREME COURT HEPOitTS [1962] SUI P.\n\nproving the existence of fact B, then a rnle pre8cribing either a. rebuttablc presumption or 1>11 irrebuttable presumption iu that behalf would be a rule of evidenoe.\n\nOn the other hand, if fr1ct A is inherently not relevant in proving the existence of fact H or has no probative value in that behrilf and yet a rule is made prescribing af a rebuttablc or an irrebuttable presumption in that connection that rule would be been acquired or not.\n\nThat dew, in our opinion, is clearly erroneous.\n\nThe definition of a passport given by Lord Alverstono, C. J., in R. v.\n\nBruiiford (')has been adopted by the House of Lords in the joyce case ( ') and it is of some assistance in dealing with the point with which wo are concerned. \"It is a document\", says Lord Alvcrstone, \"issued in the name of\n\n(I) ll905J 2 K.11. 730.\n\n(2) ll946] A.C. 3~7. -\n\nthe Sovereign on the responsibility of a Minister of the Crown to a named individual, intended to be presented to the Governments of foreign nations and to be used for that individual's protection as a British subject in foreign countries\".\n\nAs P. Weis observes: \"a passport is considered in Great Britain and the United States to be prima facie evidence of the national status of the holder, but it is not conclusive evidence\".\n\nHe adds that \"the United States has on many occasions insisted that foreign authorities were not entitled to ignore an American passport, i.e., to refuse to regard it as sufficient proof of the holder's nationality\"(').\n\nIt appears that in support of the viaw that a passport is not relevant in an enquiry as to the citizenship of a person holding a passport, reliamJe is sometimes placed on the observations made by Mr.\n\nJustice Thompson in Domingo Urtetiqui v. John N.\n\nD'arcy, Henry Didier and Domingo D'Arbel: (2) \"Upon\n\nthe general and abstract question,\" observes Thompson J., in delivering the decision of the Supreme Court of the United States, \"whether the passport per se, was legal and competent evidence of the fact of citizenship, we are of the opinion that it was not.\" It would, however, be seen on looking at the whole of the judgment that the learned Judge made it parfectly clear during the course of the latter portion of his judgment that on that issue, the court was divided in opinion, and the point was of course undecided. So, the general observation made in the earlier part of the judgment is really of no a ssistance in the matter. That case shows that the plaintiff had produced a passport granted by the Secretary of States of the United States, in order to show that he was the citizen of the State of Maryland. The defendant, on the other hand, offered in evidence the record of the District Court\n\nof the United States for the District of Louisiana which contained proceedings in a suit which had {I) P. Weis on 'Nationality and Statelessness in International I aw'\n\nP. 225-226\n\n(2) (1835) 9 Law. Ed., 692.\n\nJzhar Ahmad Khan v.\n\nUnion of India\n\nGajendrag11akar J.\n\nJr.har . .fl1111ad K hon , ..\n\nU11iv11 of India\n\nGtJ}rwlracadkar J. ·\n\nSUPREME COURT REPORTS [1962] SUPP.\n\nbeon originally instituted against the plaintiff to the effect that he wM an alien and it appears that of the two pieces of evidence, the latter was held to be more reliable.\n\nTherefore, in our opinion, tho loarned counsel for the petitioners were quite right in conceding that the passports obtained by the petitioners were relevant in the enquiry as to the question whether they had acquired the oitizenship of Pakistan or not .. If that be so, applying the test which, we think, is appropriate in such cases, it must be held that the impugned rulo of evidence and not a rule of substantive hw. The fact of obtaining the passport from Pakist:rn on which a. conclusive presumption is drawn as to the voluntary acquisition of the citizenship of Pakistan is relevant and tho rule merely make> its probative value conclusive. Therefore, we are not disposed to uphold tho objection raised by the petitioners that the impugned rule is a rule of substantive law and as 8UCb, falls outside tho purview of SOC\n\ntion 9(2). If it is a rule of evidence properly so. called, it would be within tho scope of the :Luthority conferred on the Central Government by s. !l(2) and its validity cannot be successfully challenged.\n\nThere is oue decision to which we ought to refer before we part with this topic. The petitioner8 in support of their argument thSc facts, it was held that the question of survivorship depended on tho provision of the German Civil Code under which\n\n(I) [1945] Ch. D.S.\n\nthe deaths were presumed to have taken place simul taneously and so she .was not a person living t\n\nthe timl' when the succession to her mothers estate opened and, therefore, was not entitled to the property. The provision contained in section 184 of the English Law of Property Act, 1925, however, was to the contrary. It provided that where two or more persons have died circumstances rendering it uncertain which of them survived the other or others, such deaths shall, (subject to any order of the Court) for all purposes affecting the title to the property, be presumed to have occurred in order of seniority, and accordingly the younger shall be deemed to have survived the elder. It was held that the two releva.nt statutory provisions both of English and German Law were rules of substantive law. In fact, the relevant English section occurred in the Law of Property Act and its setting and context import that it was a rule of substantive law. So was the rule contained in Article 20 of the Civil Code of Germany treated as a rule of substantive law.\n\nThe main reason given in support of the conclusion that the two rules were rules of substantive law appears to be that each one directed a certain presumption to be made in all cases affecting the title to property. It would be noticed that the scope, purport and effect of the two rules is substantially different from the scope, purport and effect of the rule with which we are concerned. In the rules with which the court was concerned in re-Cohn, there is no question about the probative value of one fact being judged or appreciated under statutory rule in regard to the proof of the existence of anothe.r fact. Like the rule that ignorance of la, w is no excuse, the rules with which the court was concerned were clearly rules of substantive law.\n\nTherefore, in our opinion, not much assistance can be drawn from the judgment of Uthwatt, J., in the case of re-Cohn.\n\nIt is clear that the simultaneous deaths of two persons is\n\n196t\n\nlzhar Ahmad Khan\n\nUnion of India\n\nGajendragodkar J.\n\n19G2\n\nIz/, ar Ahmad Khan ..\n\nUnfon cf ltidia\n\nGajtndrogodkar J.\n\n26(3 SL'PRE.ME CCl'RT REPORTS [1!162) SUPP.\n\nneither rationally or inhen•ntly rcle'l'ant to, nor hail it any inherent probati\\'e value in, the proof of the question as to the sequence of the two cleaths and, therefore, the provisions in the t\\\\'O sections being purely arbitrary, wern rightly held to be matters of substantive law.\n\nIn dealing with this q1H'st.ion, it may also be rcleva.ilt to considl'r the practical aspect of the rule; and that takes us to the pro0<•rl11rc whi relevant Pakistan\n\nlaws makes it abundantly clear that the application for the passport has to be made by a citizen of Pakistan, it has to contain a declaration to that effect and the truth of tho declaration has to he established to the satisfaction of the Pakistan officials before a passport iH granted.\n\nWhen a passport is obtained under these \"circumstances, so far as the Pakistan Government is concerned, there oan be no doubt that it would be entitled to claim\n\n3 S.C.R.\n\nSUPREME 00\\JRT REPORTS 267\n\nthe applicant as its own citizen. The citizen would be estopped from claiming against the Pakistan Government that the statement made by him about his statuR was untrue.\n\nIn such a case, if the impugned rule prescribes that the obtaining of a passport from the Pakistan Governme, nt by an Indian national, (which norm'tlly would be the result of the prescribed application voluntarily made by him) conclusively proves the voluntary acquisition of Pakistani citizenship, it would be difficult to hold that the rule is not a rule of evidence. In our opinion, it would be pedantic and wholly unrealistic to contend that the rule in question does not purport to assess the probative value of fact A in the matter of proving fact B but imports considerations whieh are relevant to substantive law. Our conclusion, therefore, is that the impugned rule of evidence and falls within the scope prescribed by s. 9 (2).\n\nThe challenge to its validity on the ground that it is rule of substantive law must, therefore, fail.\n\nBut quite apart from this theoretical or jurisprudential aspect of the matter, there is another independent consideration which supports the same conclusion. The question raised before us is one of construing the words \"rules of evidence\" used in s. 9 (2) of the Act, and in construing the said words, it would obviously be necessary to bear in mind the legislative history of the content of the words\n\n\"rules of evidence\" in India.\n\nThe Evidence Act (Act No. I of 1872) was passed as early as 1872 and by section 4 it recognised as rules of evidence the rules which prescribe for a presumption which may be drawn, for a presumption which shall be drawn subject to rebuttal and for a presumption which shall be conclusively drawn. Sections 41, 112 and 113 are illustrations of conclusive presumptions.\n\nIt will be recalled that similar provisions were included by Stephe:q in his draft of the Law of Evidence after expressing the opinion that the said\n\nW62\n\n[har Ahmad Khe\n\nUnion of India\n\nGaJendr.:igadkar ~\n\nar Almud K!um\n\nv. nion of India\n\n268 SUPREME COURT REPORTS [1962] SUPP.\n\npresumptions form part of the Law of Evidence, Therefore, from 18i2 onwards, it has been accepted\n\nin India that a conclusive presumption is a part of the law of evidence .\n\n. jmd•ogadkarJ.\n\nBearing this fact in mind, we have to consider what the denotation of the expression \"evidence'' would be in the relevant entries to the Seventh Schedule in the Government of India Act of I 935 as well as the Constitution. Entry 5 in List III of the Seventh Scheclule of the earlier Act was : \"Evidence and oaths ; recognition of laws, public acts and records and judicial proceedings.\" Similarly Entry 12 in the concurrent List of the 7th Schedule to the Constitution reads in the same way.\n\nIt is well settled that \"when a power is conferred to legislate on a particular topic, it is important in determining the scope of the power to have regard to what is ordinarily treated as embraced within that topic in legislative practice and particularly in the le!!islative practice of the State which has conferred the power(') (Croft Dunphy). A relevant instance in point of this rule of construction is afforded by the decision of the Federal Court in '1.'he Central Provinces and Baar -'.ct No. XIV 1938 (') Tualing with the content of the expression \"exciso\",\n\nGwyer, C. J., observed : ·\n\n\"Parliament must surely be presumed to have had Indian legislative practice in mind and, unless the context otherwise clearly requires, not to Lave conferred a legislative power intr and having regard to such rules of evicknce, as may be pn\"('ribcd in this tiohalf.\"\n\nRule 30 of the Citizenship Rules 1956, framed by the Central Govornmnt und'Cr Section 18 of the Citiz<>nship Act, Hl55, (Act, No. 57 of 195ii) prnvides: (I} that if any question arises as to whether, when\n\nor now any perAon ha;; acquired the cit iz('nsh ip of another count.ry, t.hc authority to determine such question shall, for the purposes of s. 9(:!) he the Central Covefnmcnt ; and (2) the Central Government shall in detPTmining any such question have clue regard to the rules of evidence specifkd in Sch.\n\nIII. Schedule III cont1iins five rules of which r. 3 runs thus:-\n\n\"Tho fact that. a citizen of India bas obtained on any date a pasRpor~ from the Governmeut of anv other country shall ho conclusive proof c; f his having .:oluntarily\n\nacquired the citizonf plrad. . \" mg.\n\nThis reasoning is obviously at the basis of Wigmore's view in s. 2492, Vol. IX of th~ same treatise that rules laying down conclusive presumptions are really rules substantive law. \"In strictness,\" says he, \"there cannot be such a thing as a \"conclusive presumption.\" Wherever ' from one fact another is said to be conclusively presumed in the sense that the opponent is absolutely precluded from showing by any evidence .that the second fact does not exist, the rule is really providing that, where the first fact is shown to iixist, the second facts existence is wholly imma terial for the purpose of the proponent's case ; and to provide this is to make a substantive law and not a rule apportioning the burden of persuading as to certain propositions or varying the duty of coming forward with evidence.\"\n\nThe same view has been expressed by Prof.\n\nHoldsworth in his History of English Law.\n\nAt page 139, Vol. IX, of this history, he, after tracing how presumptions have been evolved by the Courts\n\nor the legislature, proceeds to says: ~\"In this way the law as to presumptions of different kinds comes to contain a confused and heterogeneous mass of rules, relating to many different legal topics. In so far as the courts or the legislature treat these presumptions as conclusive, they cannot at the present day be regarded as parts of the law of evidence.\" They are rather rules of substantive law.\" Again at page 143, the learned author after stating that rebuttable presumptions of law though belonging primarily to those particular branches of the substantive law with which they are concerned, are all connected with that part of the adjective law which is concerned with evidence, observes: \"Irrebuttable presumptions of law, on the other hand, belong at a present day more properly to the substantive\n\nlaw than to the law of evidence. But they are\n\nlzhar Ahmad K v.\n\nUnion of Indi,\n\nDas J.\n\n/;, hr Ahmad Khan\n\nUni-J11 of lr.dio\n\nDas J.\n\n278 SUPREME COURT REPORTS [rn62) SUPP.\n\nrules of substantive law which borrow tho terminology and adopt the guise of that branch of\n\nthe law of evidence which is conc(•Jncd with p1esumptions; and, historically, they vriginate in the period whou the law, not having arrived at thl: conception of a trial by thoexamination of tho evidence produced by the contending parties,' aimed at obtaining a conclu:iive proof which cotzld settle the controversy. It might therefore be said that these irrebuttable presumptions have never been part of the law of evidence, in the sense which wo give to the term \"law of evidence\" in modern systems of t.Lw.\"\n\nWhile both Wigmore and Holdsworth seem to regard all conclusive presumptions as rules of Rubstantive law, Pbipsm in his Law of E1•id1mce says, more guardedly, that many of s11ch conclusive presumptions are rules of substantive law.\n\nAt page 6!18 of his hook the learned author says :- \"In many cases these so-called conclusive presumptions are rule~ which belong, properly speaking, to the \\'arious brnnelwR of substantive law and not to the law of evidence, such as the presumption that an infant under seven is incap1tble of committing a felouy, or that all men know the law (i.e., th:>t ignoranco of the law is no excuse for crime).\" Hn then gives several instances of matters which are\n\nconclusive presumptions or amount to conclusive evidence. either by statut-0 or common law.\n\nBut unliko Wigmore and Holdsworth, he does not say\n\nthat :>II rules of conch1sive presumptions are rules\n\nof snbstantivo.\n\nThe ma.tter has been critically considered again by Sir James Stephen in his Digest of the Law of evidence. After stating first {p.xiii) that all law may be divided into substantive law, by which ri\"hts, duties and liabilities are defined, and the law of procedure, by which the substantive law is applied to particular cases.\n\nStephen says that tho law\n\nof evidence is that part of the law of procedure, which, with a view to ascertain individual rights and liaiblities in particular cases, decides : (1) what facts may and what may not be proved in such cases; (ii) what sort of evidence must be given of a fact which may be proved and (iii) ):>y whom and in what manner the evidence must be produced by which any fact is to be proved.\" Speaking of presumptions, he says at p.xvii: \"Again, I have dealt very shortly with the whole subject of presumptions. My reason is that they also appear to me to belong to different branches of'the substantive law, and to be unintelligible, except in connection with them. Take for instance the presumption that every one knows the law. The real meaning of this is that, speaking generally, ignorance of the law is not taken as an excuse for breaking it. This rule cannot be properly appreciated if it is treated as a part of the law of evidence. It belongs to the Criminal Law. In the same way numerous presumptions as to rights of property (in parti0ular easements and incorporeal here ditament) belong not to the law of evidence but to the law of Ral Property.\" After saying this, the learned author proceeds to distinguish certain conclusive presumptions which in this opinion, may rightly be considered to form part of the law of evidence and observes:- \"The only presumptions, which in my opinion, ought to find a place in the law of evidence, are those which relate to facts merely as facts, and apart from the particular rights which they constitute. Thus the rule, that a man not heard of for seven years is presumed to be dead, might be equally applicable to a dispute as to the validity of the marriage, an action of ejectment by a reversioner against a tenant pur autre vie, the admissibility of a declaration against interest, and many other subjects. After careful consideration, I have put a few presumptions of this kind into a Chapter on the subject, and have passed over the\n\nIzhar A 'imhar Ahmad Khan\n\n•• Union of l•1i•\n\nDas J.\n\n284 SUPREME COURT HEPORTS [1962] SUPP.\n\nanother country will be conclusive proof of the fact of voluntary acquisition of citizenship of another country ? Under B, 9 the fact of voluntary acquisi\n\ntion of citizcnRhip of another country results in the extinction of his right as an Indian citizen. The rule therefore directly affects a subtantive right and, in the context of s. !.!, must be taken to have beon intended to do so. Such a rulfl cannot obviously be a rule of evidence; it is clearly a\n\nrule of substantive law.\n\nUnder the law as laid down in the impugned • rule tho fact of obtain'-ng a foreign passport will\n\nhave this result, even though it may very well he that though he has voluntarily acquired such a\n\npassport he has not thereby, or for that purpose acquired the citizenship of another country. This may happen for instance, when a person who is a citizen. of India by reason of descent, but is at the same time a citizen of another country, says, France by birth, obtains a passport from the French authorities. Again, each country is of course free to make its own laws. Supposu a foreign country makes a law under which it can issue :i passport to one who is not its national. 'If an Indian takes such a passport, he does not under the law of that country become its national but under the rule now being considered, he is to be taken as a foreign national. The obtaining of such a passport in either case cannot under the ordinary - process of reasoning have any value whatsoever to show that he ha.i< voluntarily acquired foreign citizenship. Yet, under tlw impugned rule a passport so obtained by an Indian nitional will extinguish his right of citizenship of India. Clearly, therefore, the impugned rule is a rule subatantive law as distinct from a rule of evidence.\n\nAs a last attempt to save thn rule it was argued on behalf of the respondent that it is not really a rule of irrebuttable presumption. It is pointed out that r.30(2) lays down that the Central -\n\nGovernment shall in determining the question whether, when or how a person has acquired the citizenship of another country \"have due regard to\" the rules of evidence specified in Scheduled III.\n\nThe effect of the words \"shall have due regard to\", it is urged, is that the Central Government would have normally to take these rules into account but was not strictly bound to do so. Reliance was placed for this contention on the observations of Viscount Simon in Ryots of Garabandho v. Zamindar of Parl.akimadi(1).\n\nT.hat authority appears to U3 to be of no • avail for the interpretation of the words \"shall have due regard to\" in the present case.\n\nThe effect of . the words \"shall have due regard to\" will necessarily be defferent in different contexts. The present context is that the deciding authority is directed to ha.ve due regard to a rule that one fact will be conclusive proof of another. It is idle to contend that in this context the deciding authority will or can disregard the rule and in the face of the fact which is said to be conclusive proof of another hold the other fact not to have been proved.\n\nIt is really unnecessary however to consider the effect. of the words \"shall have due regard to\",\n\nfor as soon as it is held that the Rule is void because of its being outside the powers of the rule-making authority any decision in which any regard has been paid to the rule beeomes \"\"'void.\n\nThe question of validit.y of Rule 3 of Schedule III of the Citizenship Act came up for consideration before several High Courts in India. The High Com:t\n\nof Madras in Mohomed Usman v. State of Madras(') and the Rajasthan High Court in Ghaural Hasan v.\n\nStare of Rajasthan (') held the Rule to be valid ; while the Andhra Pradesh High Court in Mohd.\n\nKhan v. Govt. Andhra Praaesh (')and the Allahabad High Court in Sharafat Ali Khan v. State of U.P.(')\n\n(I) (1943) L.ll. 70 I.A. 129, 168.\n\n(3) A.LR. (1951) Raj. 173, =- (2! A.LR. (1961) Mad. 129.\n\n(4) A.J.R. [1957] Andh. 1047.\n\n(5) A.J.R. (1960] All. 637.\n\n196S'\n\n[4har Ahmad Khan\n\nUnion of India\n\nDasJ.\n\nJ9Gt\n\n[{l11r Amad Kha11\n\nL'nion r.f India\n\nDasJ.\n\n286 SUPREME COURT REPORTS [1962] SCPP.\n\nheld the Rule to be void.\n\nFor the reasons mentioned earlier we are of opinion that the dew taken by .the Andhra High Court and the Allahabad High Court is correct.\n\nThe necessary consequence of our conclus10n that r.3, Sch. III of tho Citizenship Rules is\n\nvoid is that the dot-0rmination of the Central Go, ernment that the petitioner has voluntarily qnires, should be decided. So far aH the subsection gives power to frame rules of evidence, we\n\nthink there iR enough guidance provided. All that the Government is empowered to do is to frame rn le• of evidence. 'Whatevo~ difficulty there may be in deciding whether a particular rule is of evidence or not, there is no vagueness about the power given.\n\nIt is clear cut and limited, for the power is to make -\n\nrules of evidence and nothing else. If that power is exceeded then, as in our view has happened in this case, the exercise of the power becomes bad.\n\nThe difficulty, if any, in deciding what is a rule of evidence, cannot make a power to frame rules of evidence vague or too wide.\n\nFor the disposal of the present petitions in the view that we have taken however, it is necessary that the question whether the petitioners have acquired foreign nationality should he considered and determined by the Central Government in accordance with law. We would therefore direct the Central Government to decide the question whether the petitioners have voluntarily acquired the citizenship of Pakistan after the 26th January, 1950, in accordance with law, leaving out of account r.3 of Sch. III of the Citizenship Rules, 1956, and on receipt of the result to the enquiry we would proceed with the further hearing of these petitions.\n\nBY COURT. In accordance with the decision of the majority, the petitions fail and are dismissed.\n\nThere will be no Order as to costs.\n\nIzhar Ahmad Khan\n\nUnion of India\n\nDas J,", "total_entities": 156, "entities": [{"text": "s. 65(2)", "label": "PROVISION", "start_char": 332, "end_char": 340, "source": "regex", "metadata": {"statute": null}}, {"text": "IZHAR AHMAD KHAN", "label": "PETITIONER", "start_char": 409, "end_char": 425, "source": "metadata", "metadata": {"canonical_name": "IZHAR AHMAD KHAN", "offset_not_found": false}}, {"text": "UNION OF INDIA", "label": "RESPONDENT", "start_char": 430, "end_char": 444, "source": "metadata", "metadata": {"canonical_name": "UNION OF INDIA", "offset_not_found": false}}, {"text": "P. B. 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67810, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 9", "label": "PROVISION", "start_char": 68167, "end_char": 68171, "source": "regex", "metadata": {"statute": null}}, {"text": "section 4", "label": "PROVISION", "start_char": 68426, "end_char": 68435, "source": "regex", "metadata": {"statute": null}}, {"text": "Sections 41, 112 and 113", "label": "PROVISION", "start_char": 68651, "end_char": 68675, "source": "regex", "metadata": {"statute": null}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 69331, "end_char": 69347, "source": "regex", "metadata": {"statute": null}}, {"text": "List III of the Seventh Scheclule of the earlier Act", "label": "STATUTE", "start_char": 69428, "end_char": 69480, "source": "regex", "metadata": {}}, {"text": "s. 9(2)", "label": "PROVISION", "start_char": 71341, "end_char": 71348, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 9(2)", "label": "PROVISION", "start_char": 71753, "end_char": 71760, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19", "label": "PROVISION", "start_char": 72058, "end_char": 72065, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "Art.19( I)( e)", "label": "PROVISION", "start_char": 72117, "end_char": 72131, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "Art. 19", "label": "PROVISION", "start_char": 72607, "end_char": 72614, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "Art. 19", "label": "PROVISION", "start_char": 73656, "end_char": 73663, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "s. 9(2)", "label": "PROVISION", "start_char": 73709, "end_char": 73716, "source": "regex", "metadata": {"statute": null}}, {"text": "s.0(2)", "label": "PROVISION", "start_char": 73989, "end_char": 73995, "source": "regex", "metadata": {"statute": null}}, {"text": "section 9(2)", "label": "PROVISION", "start_char": 76220, "end_char": 76232, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 5(l)(a)", "label": "PROVISION", "start_char": 79013, "end_char": 79025, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "s. 9(2)", "label": "PROVISION", "start_char": 79237, "end_char": 79244, "source": "regex", "metadata": {"statute": null}}, {"text": "Citizenship Act", "label": "STATUTE", "start_char": 79252, "end_char": 79267, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 9(2)", "label": "PROVISION", "start_char": 79554, "end_char": 79561, "source": "regex", "metadata": {"statute": null}}, {"text": "Citizenship Act", "label": "STATUTE", "start_char": 79569, "end_char": 79584, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Section 9", "label": "PROVISION", "start_char": 80043, "end_char": 80052, "source": "regex", "metadata": {"statute": null}}, {"text": "Citizenship Act", "label": "STATUTE", "start_char": 80060, "end_char": 80075, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Citizenship Rules 1956", "label": "STATUTE", "start_char": 81029, "end_char": 81051, "source": "regex", "metadata": {}}, {"text": "Section 18", "label": "PROVISION", "start_char": 81092, "end_char": 81102, "source": "regex", "metadata": {"linked_statute_text": "the Citizenship Rules 1956", "statute": "the Citizenship Rules 1956"}}, {"text": "s. 9(:!)", "label": "PROVISION", "start_char": 81361, "end_char": 81369, "source": "regex", "metadata": {"linked_statute_text": "the Citizenship Rules 1956", "statute": "the Citizenship Rules 1956"}}, {"text": "Schedule III", "label": "PROVISION", "start_char": 81533, "end_char": 81545, "source": "regex", "metadata": {"linked_statute_text": "the Citizenship Rules 1956", "statute": "the Citizenship Rules 1956"}}, {"text": "s. 9(~)", "label": "PROVISION", "start_char": 82042, "end_char": 82049, "source": "regex", "metadata": {"linked_statute_text": "the Citizenship Rules 1956", "statute": "the Citizenship Rules 1956"}}, {"text": "Citizenship Act", "label": "STATUTE", "start_char": 82106, "end_char": 82121, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "III of the Citizenship Rules", "label": "STATUTE", "start_char": 82348, "end_char": 82376, "source": "regex", "metadata": {}}, {"text": "s. 2492", "label": "PROVISION", "start_char": 86641, "end_char": 86648, "source": "regex", "metadata": {"statute": null}}, {"text": "s11", "label": "PROVISION", "start_char": 89345, "end_char": 89348, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 9", "label": "PROVISION", "start_char": 98607, "end_char": 98616, "source": "regex", "metadata": {"statute": null}}, {"text": "Citizenship Act", "label": "STATUTE", "start_char": 98624, "end_char": 98639, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "section 9", "label": "PROVISION", "start_char": 99025, "end_char": 99034, "source": "regex", "metadata": {"statute": null}}, {"text": "section 2", "label": "PROVISION", "start_char": 99248, "end_char": 99257, "source": "regex", "metadata": {"statute": null}}, {"text": "section 9", "label": "PROVISION", "start_char": 99261, "end_char": 99270, "source": "regex", "metadata": {"statute": null}}, {"text": "Schedule III of the Citizenship Act", "label": "STATUTE", "start_char": 104167, "end_char": 104202, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "III of tho Citizenship Rules", "label": "STATUTE", "start_char": 105098, "end_char": 105126, "source": "regex", "metadata": {}}, {"text": "s.9", "label": "PROVISION", "start_char": 105426, "end_char": 105429, "source": "regex", "metadata": {"linked_statute_text": "III of tho Citizenship Rules", "statute": "III of tho Citizenship Rules"}}, {"text": "Art. 11", "label": "PROVISION", "start_char": 105653, "end_char": 105660, "source": "regex", "metadata": {"linked_statute_text": "III of tho Citizenship Rules", "statute": "III of tho Citizenship Rules"}}, {"text": "Section 9", "label": "PROVISION", "start_char": 105766, "end_char": 105775, "source": "regex", "metadata": {"linked_statute_text": "III of tho Citizenship Rules", "statute": "III of tho Citizenship Rules"}}, {"text": "s.9(2)", "label": "PROVISION", "start_char": 105835, "end_char": 105841, "source": "regex", "metadata": {"linked_statute_text": "III of tho Citizenship Rules", "statute": "III of tho Citizenship Rules"}}, {"text": "Art. 11", "label": "PROVISION", "start_char": 105983, "end_char": 105990, "source": "regex", "metadata": {"linked_statute_text": "III of tho Citizenship Rules", "statute": "III of tho Citizenship Rules"}}, {"text": "s.9(2)", "label": "PROVISION", "start_char": 106019, "end_char": 106025, "source": "regex", "metadata": {"linked_statute_text": "III of tho Citizenship Rules", "statute": "III of tho Citizenship Rules"}}, {"text": "III of the Citizenship Rules, 1956", "label": "STATUTE", "start_char": 107551, "end_char": 107585, "source": "regex", "metadata": {}}]} {"document_id": "1962_3_25_35_EN", "year": 1962, "text": "...\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 25\n\nDALBIR SINGH AND OTHERS\n\nTHE STATE OF PUNJAB (B. P. 'INHA, o. J., :K. SuBBA RAo, N. RAJAGOPALA\n\nAYYANGAR, , J. R. MuDHOLKAR and\n\nT. L. VENKATARAMA AIYAR, JJ.)\n\nPolice 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.\n\nSection 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 .. ,.,,\n\nAfter 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.\n\nThey 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).\n\nHeld, 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.\n\nThe 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\n\nFebruary 6.\n\nDalbir _ Singh\n\nv. 7 A~ State oj Punjab\n\nAJya11ga1 J.\n\nSCPREME COURT REPORTS [1962) SUPP.\n\nresult 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).\n\nl9upr:rintendent, ('fntral /lrison, Frrll'.lu; arh v.\n\nRr1111 Manohar Lohia, (1960) 2 S. C.R. 821, relied on.\n\nHeld, 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.\n\nCnnni; AL A l'PJ:LLATE .J cn1s PICT!ON: Criminal Appeal No. I 02 of 1960.\n\n 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.\n\nHardei.• Singh ancl Y. Knmar, for the appellants.\n\nS. JJ. Sikri. Advocate.General for the Stat, e of Punjrtb, S. S. Rindm and P. I>. Menon, for the\n\nrespondent.\n\n1962. February 6.\n\nThe .Tmlgment of the Court wa8 delirnrf the Pepsu P3 ), which will be referre6 of tho Pepsu Public S; ifoty Orilinancc (Xo. 7 of Sam 1at 2006), (2) under s. 33 of tlte said Ordinance,\n\nJLnd (3) under\"· 3 of the impugned Act.\n\nWt• shall he referring to th\" provisinns of the ralb ir Singh\n\n' T~ SL2tt of Pun, j\"h\n\nSUPREME COURT REPORTS [1962] SUPP.\n\nOrdinance. 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\n\nof s. :i of the impugwd Pcpsu Polic~ (Incitement to disaffection) Act which appellants I, 2 and 4\n\nwere found to have violated and for which thev were sentenced to :t tcrm of imprisonment. •\n\nLe1trned 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,\n\n2 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.\n\n\\Vn shall first take up for consideration the attack on the validity of s. :i of the impugned Act.\n\nPatiah 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\n\nJ!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.\n\nThe 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) ).\n\nThereafter 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 ;\n\n3 'S.C.R.\n\nSUPREME COURT REPOR'.l'S 29\n\n\"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.\"\n\nThere 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 :\n\n\"An Act to provide a penalty for spreading disaffection among the police and for kindred offences.\"\n\nIt is the 3rd section of this cnJ.ctm0nt whose vali- . dity is challenged in this appe1.l and that reads :\n\n\":1.\n\nPenalty 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\n\nboth.\"\n\nThe 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).\n\nBefore 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\n\nEalbir Singh\n\nv. 'The State of Punjab\n\nAyyangar J.\n\nDa/bir ; Singh\n\nThi State nf Punjab\n\nA)'J.lngar J.\n\n30 SUPREME COURT .REPoRTs (1962] SU.PP.\n\nthe provision contained in Art. 3:l of the Constitution bus nu relevance. That 'Article enacts :\n\n\"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.\n\nArticle 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).\n\nArticle 1!1(2) as it. stands after the amendment by the Constitution (First Amendment) Act of 1951 reads :\n\n\"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\n\n• ...\n\n::i S.C.R.\n\nSbPREMtll COURT REPoRTS 31\n\nin 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 h1ctivities in thti interests of the Police service which is tho -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.\n\nThe 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\n\nrcponcicnts 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.\n\nHowever the High Court made it clrar that it-; decision in question \\\\'ould not\n\npreclue 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\n\nGovernmnt must ignorer. 3 of sch. Ill \\vhich in its view was ultra l'irr.\"~.\n\nIt 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.\n\nTlrTrl., that the points rai-; ed in these appeals are concluded bv the decision of this Court in lzhar Ahmad K hrzn\n\nv. [:.nion of lnrlir:r.\n\nIn 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.\n\nIn dealing \\'lith the question the Central Government Would undoubte<• 1; ires, but found that. r. 3 of Sch. 3 of tlie Citizcmhip\n\nRuls was ultra vires.\n\nIn 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\n\n& writ of mandamus was issued directing thf'\n\n3 S.C.R.\n\nappellant to forbear from enforcing the said orders of deportation.\n\nThe 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\n\ntion 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\n\nof 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\n\nvalidity of the impugned Rule that the appellant has come to this Court.\n\nThe 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.\n\nThe point raised by the appellant in thfse appeals iP, therefore, concluded in its favour by this decision.\n\nThis position is not disputed by the respondents.\n\nThat raises the question about the proper order to be passed in the present appeals.\n\nIt 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:\n\nThe Goue.rnment of\n\nAndhra l'rodesh\n\nSyed Mohd. Kkao\n\nGo.jtn.dt'agadkar J,\n\nf hf Gor1YnT1Ut1I of\n\nA nt!hra PrD'ksh\n\n•• S:1td Mo/Hi Khan\n\nGajnidrogadk4r J.\n\n292 SUPREM:I<: COURT REPORTS [1962) SUPP.\n\nthat 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 anDHAGAJJIrnlirrfe-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 nDHAGAJJIrnlirrfe-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 nn to bclievr a thing to be true and tr> act on such hcl1ef.\n\nNo estopprl arose in the prrscnt c:Jse on the facts.\n\nGhanshamduss V, r;,,1,11, u; fl•ti, (1927) I. L. R. 50 Med. 'J27, approved.\n\nCrvrL ArPF.LLATJ~ , fL, msoicnox : Civil Appeal No. 273 of 1959.\n\nAppeal 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 .\n\nSarjoo Pmsad, k. UH Mitter in fav<, ur of Mrs.\n\nMitter, 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\n\non behalf of the respondtnt before the High Court was that in view of s. 213 of the Indian Succession\n\nAct, 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.\n\nThe 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.\n\nThe 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.\n\nBut 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.\n\nThe High Court therefore gave her a declaraLion that she was entitled to a half share in the house in dispute.\n\nAs 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.\n\n19~2\n\nMrs.tHemNoliTl i\n\nJudah ' v.\n\nM r1 .. JsoJJn• Barajbashini 8011\n\nWanchoo J.\n\nJ!rs. Htm NoFni\n\nJ\"dah ..\n\nMrs. l1ol; rit Sarojbashi111 Bn1t\n\nJYanclwo J.\n\n300 SUPHEJIIB COURT ItEPORTS (1962] SUPP.\n\nLearnl'h\n\n!{02 Sl'PRRME COURT RF.PORTS [1962) SUPP.\n\nshe could rli8p<>se it of as sho willed.\n\nTho 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.\n\nIn ''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 eviWIH, rsl1ip of :Hrs. litter of this house, it would amount to this th11t the appelln11t was saying that Mrs.\n\nMitter was the own, r of t.he houso as t.he legatee under the will made hy Dr. l\\Iiss Mitter.\n\nThe 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 ars of administration, alleges that Mrs. Mitter was full owner of the property able to will it away to her, ijhe had to prove the\n\ntitle 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.\n\nMittn 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.\n\nThe 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.\n\nWhosoever 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\n\n196B\n\nMrs. Hem NOlini\n\nJulah ·\n\nAirs. fsolyn~ S arojbashini Bose\n\nJ.1' anchoo J.\n\njfrs. Hnn Noli\"i\n\nJuda/I\n\nMrs. l \"'1J111 S 1rojliashirii Beat\n\nlf'ancl.oo J,\n\n~04 SUPHEME COURT REPoRTS (l!J6~] SUPl'.\n\nclaim('(! a> rl was that Mm.\n\n~Jitter lw!'ame thP 1mnr.r of thP. entire house. Of\n\nourse, wi1 hout t.hc will ~Irs. i\\litter was an rqual ht ir with her d,1ughters of the prope1ty left hy Dr.\n\nMifis ~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 judgrne 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.\n\nThe appeal therefore fails and is hereby dismissed: N(• order as to costs.\n\nAppeal dismissed.\n\n;\\tfS. SOORAJ!lfULL NAGAR:'IIULL\n\n\"· COM.\\IISSIONER OF IXCO:llE-TAX, CALCUTTA\n\n(And connected appeal)\n\n(~. K. DAS, III. HIDAYATGLLAH and .J.C. SHAIJ, J.T.)\n\nIncome Tax-Order nf Tribu.nal--Application.s by a.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.\n\nThe appeal therefore fails and is hereby dismissed: N(• order as to costs.\n\nAppeal dismissed.\n\n;\\tfS. SOORAJ!lfULL NAGAR:'IIULL\n\n\"· COM.\\IISSIONER OF IXCO:llE-TAX, CALCUTTA\n\n(And connected appeal)\n\n(~. K. DAS, III. HIDAYATGLLAH and .J.C. SHAIJ, J.T.)\n\nIncome Tax-Order nf Tribu.nal--Application.s by a.nst the order of the High Court as well.\n\nOhandi 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.\n\nCIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 238 and 239 of 1961.\n\nAppeals 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.\n\nR. 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.\n\nK. 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.\n\n1962. February 19. The Judgment of the Court was delivered by\n\nSHAH, 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.\n\nCounsel 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\n\nM/s. Soorajmull Nagarmull v.\n\nOommiJsiontr of lncometax, Calcuttr\n\nShch J,\n\n/&Ifs. Sootajrn-l!i\n\nNag\"rmull\n\n•• Com'ninionr rJ\n\nJncomtat, Ca/c 1t'\n\nSh2h J,\n\n308 SUPREME COURT REPORTS [l!l62] SUPJ'.\n\npower 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:\n\n(a) When• the aggrieved party approaches the High Court under a taxing Stntute\n\nfor an order cnlling for a statement of the caso and the High Court rtion of sub-s (2) of s. 24, the losses must be\n\nuch losses as cpuld have been set-off under ,:; ub-s.( I) o~ s. 24.\n\nNos.\n\nCIVIL 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. \" '\n\nR. J. Kolah, J. B. Da_dachanji, 0. 0. Math'Ur and Ravinder Narain, for lhe appellants.\n\n• ' J K. N. Rajagopala Sastri and D. Gupta, for the respondent. ·\n\nlndp1t II a/wa Tlnited\n\nMills Ltd v.\n\nThe Commissioner of Incum1-tax (Oentral)\n\n. Bombay\n\n1~6t\n\n/ndurt .~!alu:a Ln:rcd\n\n.\\Jilh Ll.\n\nv. rhe < ... :-:i:11mi11, iot;!r 01\n\n/1,(//Tn(-lt, X (c /11:r'1l.\n\nBombay '\n\nlJa• J,\n\n312 SUPltE~IE COURT HEPORTS [1962] SUPP.\n\nl!J(i2. February 19. The Judgment of the Court was dclivtre 1947-48 1,45,22,377 5,46,322 l,028 1,467 22,495 \"\" ~\n\nw 1948-49 Loss -\n\nI ,57,82,905 60,000 1,992 I ,21i3 729 Cl \"\" (loBs) (loss) ;:i\n\n' • \\\n\nD11ring the course of the assessment proceedings for\n\n1950-5 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/-,\n\nand 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:\n\n\"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 ?\n\n2. Whether the unabsorbed depreciation of the years 1948-49 and 1949-50 is liable to\n\n. 1962\n\nIndore ~1 afwa Ui:ited\n\ni:ll tl ls Ltd.\n\nThe Commissioner of Incame-tax ( Genfrill)\n\nBombay\n\nDas J.\n\nlnrt JI alua Uniltd\n\n.Mi/Ir U 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\n\nor was received in the Indian Stcttes but was not brought into British fnrlia.\n\nTim deletion of this clause became inevitable upon the m in respect of inC'ome accruing or arising without India and not received in India.\n\nThe1efore, 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.\n\nIn 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\n\n0ff within the provisions of s. 24, su b-ss. (I) and\n\n(2) •\n\n. . \\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.\n\nhim 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\n\n• .Ji\n\n3 s.C.R. stiPREME couRT REP61its\n\ntaxable 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.\n\nWe 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.\n\nWe 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.\n\nWe have, therefore, come to the conclusion . that the High. Court correctly answered the question which was referred to it.\n\nAccordingly, the appoals fail and are dismissed with costs, one hearing fee.\n\nAppeals di, smissed.\n\nluJort Malwa United\n\nMillr Ltd,\n\nThe Commissio1t1r oj !neorne .. tax (Central)\n\nBom6ay\n\nD\"s J.", "total_entities": 60, "entities": [{"text": "Shah J.", "label": "JUDGE", "start_char": 87, "end_char": 94, "source": "metadata", "metadata": {"canonical_name": "J.C. 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{"text": "s. 24", "label": "PROVISION", "start_char": 23074, "end_char": 23079, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 23155, "end_char": 23160, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 23281, "end_char": 23286, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 23724, "end_char": 23729, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4( I )(a)", "label": "PROVISION", "start_char": 23752, "end_char": 23763, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 24522, "end_char": 24527, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 24607, "end_char": 24612, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 24", "label": "PROVISION", "start_char": 24798, "end_char": 24803, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_3_324_334_EN", "year": 1962, "text": "\"''\"uarJ 20.\n\n324 SOPREME COURT REPoRTS [1962) SUPP.\n\nGONDu.'.IJOGULA TATAYYA v.\n\nJ>ENUMATCHA A2\\'ANDA VJJAYA VENKATAHAMA THfMA , JAGAPATHH~AJL'\n\n(AND COX~ECTJ<:D APPEALS) (S. K. DAS, M. HlllAYATULLAI! and J.C. SHAH, JJ.)\n\nfnan1. lands-Lcrts1-s-Right aj occupancy-Jfinor ina11u~ -- lr!ie1h1r Fslates --Tc.t--Jfadra\" Est<11':• Land Act, 1908 (Jlad. 1 of JYll8), \"\"amended, s. 3(2)(d) and Explanation (1).\n\n'fhc respondents v-erc holders of inams in a village called Gotcru, one of the Mokhasa yjlJ; Jgrs which ,, ere included iu\n\nthe assets of the Zamindari at the time of the permanent sctt!rment in 1802. The inan1s theinselves \\\\ere pre-settlement inams and were not included in the assets of the ZamincJari. rhc respondents had leased out scrr1c of the lands cou1prised in their inams to the appellant for a fixed period, and in the suits instituted against the latter .:iftcr the expiry of the period of the leases for ejecting rhem f1om the holdings in their possessions, they pleaded, inter alia, that they had got occupancy rights in the suit lands inasmuch as the inams \\Vere part of an estate and that, therefore, they \\Vere not liable to he ej('cted.\n\nThey contended that by reason of the amendments made ins. 3(2)(d) of the Madras Estates Land Act, 1908, in I 93G and I 9-t5, these minor inams being within the village of Gotcru v-erc estates und(\"r s. 3(2)(d), read with Explanation ( 1) of the Act.\n\nIt was not dispiHed that Goteru village was included in the Jlukha\"'' sanad of 1802 and that the Mokhasa grant v0.-as an estate.\n\nJfeld, that the minor inams in the present case were not ); rants of v-'1o!e villages and y., ere not, therefore, estates within the meaninsofs. 3(2)(dJ ol the Madras Estates Land, 1908.\n\n1'he crucial test to find out \\vhether a grant amounted to an estate as defined under\" 3(2)(d) of the Act was whether at the time of the grant tl.c subject matter was a whole village or o\"nly a part of it.\n\nIf it \\Vas only a part of a village, then the: amending Act made no difference and such a part \\Vould not be an estate v-ithin the rneaning of the term ; but if the grant was of the whole village and a named one, then it \\\\'ottld he an estate\n\nDistrict Board, 1'anjuri; '\" J/. K. \"l!-loor Jfohamed llo1rtlicr, A-1 !{. 1953 S.C. 446 and Jfontramdi Hhat'Gnaravana v. Meri:gn Venkalay\"er'il qot \"et!\\t\\l~\"\n\nGo1idumogula T4tayy•\n\n•• Penumatclia Ananda\n\nVi1a a Venkala•\n\nrama Timma.\n\nJ a1:apathiraJu\n\nDas J,\n\nGonlumoyulo\n\nTal•.Y.Ja\n\nPt1UJ111at, M An.,, Ja\n\nVij; i; s Vtnk.Jlaroma Timma J •1npathaju\n\n/)as J.\n\n326 SUPREME OOURT REPORTS [1962] SUPP.\n\nwithin the meaning of s. 3 (2) of the }fadras Estates\n\nLands Act, 190~ (Madras Act I of 1908 ), and the inamdars were entitled to both Jfdvaram and Kudivaram therein ; the respondl'nts leai; ed out these lands to the appellants for a fixed period under an express contract with the appellants, who were the lPssees concorned, thn, t they would quit and deliver possession at tho end of their lease periods; the appellants, however, did not vacate the lands, but continued to be in possession. Twelve\n\nacres and 52 cents of the suit lands wero lfornam service inam and the rest Sarvadnmbala inam.\n\nThe appellants contPnded inlff alia that. the suit lands formed part of the llfolcha.sa of village Goteru and were included in the asPets of the 7..amindari at thC' time of pC'rmanent settlcmt>nt. that thP inams were part of an estate and the appellant had acquired rights of occupancy in the lands in suit under the provisions of the :lfadras Estates Land Act. They also raised certain other picas with which we are not now concerned. The main defence of the appellant.~ w:is that they had got pC>rmanent occupancy rights in the suit lands and therefore, they were not liable to be ejected and the Civil Court had no jurisdiction to try the suit.~.\n\nThe learned District :lfunsif of Tanuku who tried tho suits in the firRt inst:ince dealt with them in three batches. He held in three separate judgments that the suit lands wero pre-sdtlement minor inams, that they wcro not included in the assets of' the zamindari at the time of tho permanent settlement and that thev were not \"estates\" within tho meaning of the proi\"ions of th~. Madras Estates\n\nLand Act.\n\nThe learned :IIunsif also held that as there was a clear undertaking to vacate the lands at the expiry of the period of the leases, no notico to quit was necessary. In the result ho decreed the suits.\n\nThe tenants, appellants herein, then preforred j'lfteen appC>als against the judgments nq\n\n...\n\n3 S.C.R.\n\nSUPREME COCJR L' REPORTS 321\n\ndecrees of the learned Munsif. These appeals were heard together by the learned Subordinat~ Judge of Eluru. By a common judgment delivered on March 29, 1948, the learned Subordinate Judge agreed with the learned Munsif in respect of all the findings and dismissed the appeals. Then; there were second appeals to the High Court of Judicature at Madras. In these second appeals only two points were urged on behalf of the appellants. The first point was that the finding of the courts below that the suit lands were excluded from the assets of the zamindari was vitiated by reason of the burden of proof being wrongly placed on the appellants. The second point was that the inamdars having concerned in the plaints that the tenants were holding over after the expiry of their leases, the inamdars were not entitled to recover possession without issuing notices to quit as required by law. With regard to the first point of the High Court pointed out that though it was settled law that the burden wa5 upon the landlord to ake out his right to evict a tenant from the holding, Sarvadumbala inams or inams granted for public services of a pre-settlement period were ordinarily excluded from the assets the of zamindari at the time of the permanent settlement except in some specific cases, where such lands were as an exception included in the assets of the zamindari, the exceptions being found in the four western Palayams of the zamindaries of Venkatagiri, Karvetnagar, Kalahasti, and Sydapur and the !J!okhasa in Masuli pa tam district. Therefore, with regard to pm-settlement Sarvadambala irrnms or public service inams the peroon who alleged that they were included in assets of the zamindari had to prove that they were so included.\n\nThe High Court then observed that the courts below did not base their judgments on onus of proof, but came to. their conclusions on a consideration of the evidence :given in the suits ;\n\n~4erefore where tqe entire eyiqence was one into,\n\nGoniumogula\n\nTatayya\n\n•• Penum1tcha Ananda\n\nVijaya Venkai4\n\nrama ri.mma Jagapathiraju\n\nDas J.\n\nG\"ndumogula\n\nTotayya\n\nVo l'r.u1T11Jfc1ra A11QJ1t/t1\n\nVi1._,. Vtn-\"l12\n\n,.,,,. 7 inrma J agopalhiraJU\n\nnos J,\n\n328 SUPREME COURT REPORTS (1962] SUPP.\n\nthe question of burden of proof was immaterial. The High Court pointed out that the question whether tho predecessors of tbe respondents herein were grnnted both tho '1'nram-s or Jfelmram only was not rnised before it and the contentions of the parties in the High Court centred round tho only question whether the suit la.nd:i . were pre-settlement inams excluded from the assets of the zamindari or whether they were included in those assets.\n\nThe High Court pointed out that this waq reall.v a question of fact a.nd in second appeal the High Coun could not intcrfe.re with a finding of fact un-less there were permissible grounds for such interference. The High\n\nCourt held that there were no such permissible grounds. However, the High Court refernd again to the documentary evidence given in the casP, namely, Ex. A-1, extract from the register of village service inams in the unonfranchisct.l :11okhasa village of Gotern, Ex. A-2, the till\" deed granted t.o the predecessors-in-interest of the inamt.lars wherein it was specifically recitet.l that the inams were held for service, Ex. A-5, a settlement datet.l December 13, 1942, Ex. A-7, a rel-(ister of service inanrn of Goteru dated Dc()embnr i\":l, 194!1, Ex. A-f), public copy of the village account of Goteru, Ex. B-1, register of ina.rns of village Goteru preparet.l in 1859, Ex.\n\nA-2i, Rhubond accounts reln, ting to Goteru, Komarnvarnm and\n\nSummpudi Mokhasas, and Ex. A-28 Zam•1bandi Pys- . ala Chitta, etc., and came to the conclusion that the inarns in question, both Karw1m service inams and the Sarvadumbala inam~. were pithstanding that it did not includo certain lands in the village of th11t namtatc~ Lam! Act was enacted for the first time iu\n\n1 !JOS s. :!( 2)( cl) was as followH:\n\n\"Any village f Uttar\n\nPradesh\n\nDas J.\n\nShambhoo\n\n•• State of Utt4r\n\nPradesh\n\nDas J,\n\n:~36 SUPREME COURT REPORTS [1962] SbPP,\n\nRhainsora theRc four persons, Shambhoo, Altaf, Sibt.e and Shaukat, of whom Shamhhoo ancl :-; ibte were armed with pistol and Shaukat and Altaf were armed wit.h lat.bis, c:\\me out. of a wheat fi., Jd nearby. 'Vben they demanded money frnrn Dulin, 13hassu and Gb1\\Rita, Ghasita dcli\\crccl the money readily, but his father Dulla reRistett took away the money from\n\n.Bhit~RH aft,., r giving him a lathi blow.\n\nThe alarm whi\"h Dulla, BhMsu arnl Ghasit.1 raised when the robberH att:uked t.hem, hrJ1rnv1>r, brought to the\n\nplar<.' a number of person• who wore working in th<' fit.>ld.< and tbeR<• snece<'ded in felling Sbambhoo and Albf \"'ith th<•ir lathiH so that they could not rrot awa.v.\n\nThf.• other two, Shauire pursued by the&\" villager,;. fn the course of the pursuit Sibte fired his pistol causing bulkt injU1ies to Lal Singh. :IIahcndra and Udaibir, \\\\•ho \\Vt:re tmc11g the puri:; uers.\n\nLeaving thc two pPt sons who had been 1trres\\.<'d and the pi\"tol and twolve live cartridgeH which were sl'izcd from Shambhoo at the place of nc<:urrc11ce Ghasita accompanied by Kain Chowkidar wc\n\n011t to the Thana which was about 4 mil<'S off.\n\nTh\" information uf the occurren•'e as given b, v him was recorded and the Officer-in Ch1trgo, proeee\n\n348 SUPREME OOURT REPORTS [1962) SUPP.\n\nl. N. Shroff, for tho pctition0rs (in Petn. No. 148 of 61) and the appellants (in C. As. Nos. 457 to\n\n474. of !ii).\n\nHar(lei: SiW]h and Y. Knmar for the petitioners (in Petm. Nos. 168 to 174 ad 357 to 361 of6l).\n\nC. K. Daphtary, Solicitor-General of India, K. L.\n\nGo.sain, B. R. L. Iyengar, Lak.sltm.1'. Cliand and J. N.\n\nShroff, for the appellants (in C.As. Nos 453 and 4f>6 of 1961 ).\n\nK. L. Gosain, B. R. L. Iyengar, Lakshmi Chand - and 1. N. Shroff, for the appellants (in C. A. No. 454 of 19fil ).\n\nB. R. L. lyeW]ar, Lakshmi, Chand and 1.N.Shroff, for the appellant; (in C. A. N'o. 455 of 1961 ).\n\nS. ill. Si kn'., Advocate.General, for the Stale of Punjab, N. S. Bindm and P. D. J!enon, for the respondents (in all petitions a.ml Civil App ea.ls).\n\nM. C. Sctalva.d, Attonwy-Gcneral of India., J. B. n111fachanji, 0. C. Matlmr and Ravinder Narain, for fncervoner Xo. l (Sa.tinder Singh).\n\nK. L. ;}fchta, for Intervener No. 2 (l{aghvindcr folingh and others).\n\n1962. February 20. The .Judgment of the Court-was delivPred by\n\nVENKATARA~IA AIYAR, J.-The qurstion that a.rises for our decision in the a.hove writ petitions and appeals is whether certain ja.girs in tho State of Punjab known as the \"Cis-Sutlej\" jagir a.re liable to he resumed under . the provisions of the Punjab Resumption of Ja.girs Act, Hl.57 (Punjtib Act N'o. ; l!) of 1957), hereinafter referred to a.s \"the Act\".\n\nThis Act came into force on Novcmer 14, 1957, imd the respondent State then procpeded to tke action thereunder for resuming the ja.girs.\n\npmber of rititions were hereupon filed in tho\n\nAmarsarjil Singh . v.\n\nHigh Court of Punjab under Art. 226 of the Constitution challenging the validity of the Act, and of the proceedings taken by the respondent State thereunder on the ground, firstly, that the Act was altra vires the powers of the State Legislature and that its provisions were unconstitutional and void ; and, secondly, that even if the Act was intra vfres the jagirs held by the petitioners were not \"jagirs\"\n\nTiu Sl•I• of Punjab\n\nas defined in the Act, and were therefore not liable to be resumed under its provisions.\n\nBy their judgment dated May 25, 1959, the learned Judges held that the legislation was within the competence of the State, and that it did not contravence any of the constitutional provisions.\n\nThey further held ,,. that the jagirs held by the petitioners fell within the definition of \"jagir\" under the Act, and were liable to be resumed thereunder, and that accordingly no writ could be issued against the State for proceeding under the provisions of the Act.\n\nBy thflir Order dated January 27, 1960, the learned Judges granted leave to appeal to this Court under Art. 133 (1) (a), and pursuant to the same, Civil Appeals Nos. 453 to 474 of 1961 have been preferred to this Court.\n\nAppeal No. 50 of 1962 by special leave is also directed against the Judgment of the Punjab High Court in a Writ Petition under Art.\n\n226. Some of the jagirdars have also filed petitions in this Court under Art. 32 of the Constitution, impugning the Act and the action of the State thereunder on the same grounds as those raised in the appeals. We have accordingly heard arguments of learned Counsel both in the writ petitions and in the appeals, and this Judgment will govern all of them.\n\nThough a number of grounds have been taken in the pleadings, impugning the Act as ultra vires and its provisions as unconstitutional, in the argument before us, the only contention that was pressed was that the Cis-Sutlej jagirs do not fall\n\nAi)ar J\n\nAnr1trsarjit Singh\n\n•• T,., State of Pwijab\n\nA0ior J.\n\n350 sbPRkME CODRT REPORTS (i962J sbi?i>.\n\nwithin the definition of jagirs contained in the Act and that accordingly tho State had no authority to resume them under the provisions of the Act .\n\nAnd this contention is sought to be sustained on two ground: ( i) that there was at no time any grant of tho Cis-Sutlej jagirs to their holders, much less any assignment of land revenue to thein; and\n\n(ii) . that even if there was such a grant, it was not one made by or on behalf of tho State Government as required bys. 2 (1). It is argued that if either of these contentions succeeds, the jagirs in question would fall outside the purview of the Act, and the State would have no right undl'r its provisions to resume them.\n\nIt will be convenient at this stage to set out the relevant provisions of the Act. Section 2 (I) defines \"jagir\" as follows:-\n\n,, ''Juir'' mcans-\n\n(a) any assignment of land revenue made by or on behalf of the State Government; or\n\n(b) any estate in la.nd creat-ed or afiir'- med by or on behalf of the State Government cnrrying with it the right of collecting land revenue or receiving any portion of tho land revenue; or\n\n(c)· any grant of money made or continued by or on behalf of the State Government which purports to be or is ex pressed to be payable out of the land revenue; or\n\n(d) any grant of money including anything payable on the part of the State Government in respect of any right, privilego, perquisite or office; and includes any such grant or assignmrnt existing in favour of Cis-Sutlej jagirdars.\"\n\nI 3 s.c.R.· SUPREME COURT REPoRTS 35i\n\n\"Jagirdar\" is definer:] in 's. 2 (2) as meaning the holder of a jagir. Section 2 (5) defines State Government as follows:-\n\n\"State Government\" -\n\n(a) as respects any period before the 1st November 1956, shall mean:-\n\n(i) . the Government of the Patiala and East Punjab State Union or any of the Indian States whioh formed into the Patiala and East Punjab States Union on the 20th August, 1948 and\n\n(ii) the Government of the State of Punjab and all predecessor Governments thereof by whatever name called, the Governor-General or the Governor-General in.Council, as the case may be, and t.he Sikh Rulers, but shall not include the Central Government as defined in the General Clauses Act, 1897, after the period commencing on the 15th August, 1947. (b) as respects any period after the lat November, 1956 shall mean the Government of the State of Punjab.\" Section 3 enacts that-\n\n\"N otwithstanding anything to the. contrary contained in any law or usage any grant settlement, sanad or other instrument, or any decree or order of any Court or authority, all jagirs shall, ou and from. the commencement of this Act, be extinguished and stand resumed in the name of the State Government.\n\nIt ie common ground that the jagirs which are concerned in the present writ petitions and appeals . consist of a right to the revenue payable on lands, and not of any estate such as wi)l fall under s. 2 (1)\n\n(b) of the Act and that they must fall, if at all within s. 2 (1) (a). Therefore the discussion narrows\n\nAmarsarjit Singh\n\nI Y. - Tiu Stde of Pu•j•b\n\nA!1ar J.\n\ni962\n\nAmarsnrjir Singh\n\n' n~ State of Punjab\n\n.1i)!lf' .i.\n\n~52 SUPR~ME COURT REPORTS (1962j SUPP,\n\nitself to the question whether there was, as required by s. :! (I) (a) of the Act, any assignm!'nt. of the revenue of these jagirs and whether such assignment was by tho State Government .\n\nOn the first question, as to whether there was assignment of land revenue, the contention of the petitioners and of tho appellants-and they will hereafter be reforred to compendiously as jagirdars-is that the so called jagirs are not jagirs as ordinarily understood, that they were not the subject matters of any grant by any State that they were in fact originally independent States h!!l reignty over them; and finally took over the admi nistration of the State and paid the revenue collect cd therefrom to the rulers, not as person to whom the land-revenue had been a8signed, because th<'re was no such assignment but as sovereigns of the States. Therefore, it is contended, the co-callc 8utlej was at this time under tho administration of a weak Afghan Governor called Zain Khan. The policy of the British during this period was to hold the J umna as the frontier, and so they were indifferent to tho fate of this Cis-Sutlej area., But the Sikh Chiefs\n\nbeyond the Sutlej could not resist the temptation of overthrowing the Afghan Governor, seizing his territory and establishing themselves as its rulers.\n\nIn 1763 the storm burst when a number of them crossed the Sutlej, overwhelmed the Afghan Governor and occupied the whole country upto Jumna. \"Tradition slill describes\", says Cunningham in his History of the Sikhs, P. llO, \"how the Sikhs dispersed as soon as the battle was won and how riding day and night ea.ch horseman would throw his belt and scabbard, his articles of dress and accoutrement, until he was almost naked into successive villages to mark them as.his.\" When the conqu est was over each Chief declared himself the ruler of the territory which he was able to occupy, and constituted himself its sovereign.\n\nThis state of affairs continued until 1806.\n\nBy this time, Ranjit Singh the \"Lion of the Punjab\", had built up a powerful State across the Sutlej.\n\nHe had already subdued the petty rulers within that area and was turning his attention to the territories south of the Sutlej and had occupied some of them. The Cis-Sutlej rulers became alarmed about their future and appealed for protection to the British, who had, by this time, changed their policy of non-intervention. The appeal was welcome, and met wjt, h prompt resporise.\n\nThe result was that in 1809 the British entered into a treaty with Ranjit Singh whereby he surrendered his acquisitions south of Sutlej and agreed not to interfere with the Cis-Sutlej States. And this was followed by a proclamation by Colonel Ochterlony in May 1809 whereby the Cis-Sutlej Chiefs were assured of their rights as sole owners of their possessions and exempted from payment of tribute, but were required to furnish supplies to the Britijsh Government and assist them against their enemies.\n\nThe British Government also promulgated a rule that whenever any of the rulers died without issues, his State\n\nwould lapse to the British Government.\n\nAmarsarjit Singh\n\nThe Stale of Punjab\n\nAarJ.\n\n.Amo1Ja1jil SinKh\n\nTiu State of P11njob\n\nA(Tar J.\n\n!!54\n\n. • ' 1 ; • i ) . ' 1 \" I • SUPREME COURT REPORTs [1962] StJPP.\n\nThis was the position until 1846 when a drastic change in the situaticn totk place. Jn 1845, thnc was war bet ween the British and the Sikhs, and in that war the CisSutlej rulers far from help\n\ning the Rritish ag iinst the Trans Sutlej Sikhs, were either unsympathetically neutral or actively hostile to them, and that brought about a change in the policy of the British Government towards them.\n\nThe position is thus stated by Kensington in tho Ambala Gazetteer at p. 26:-\n\n\"Having thus ilrcacly lost the confidence of the Government the Sikh Chiefs in the Sutlej cam pa ig11 forfieted all claim to cons id cration. It was seen that the time had arrived for the introduction of sweeping measures of reform anj the Government unhesitatingly resolv\n\ned upon a reduction of their privileges. Several important measures were at once adopted.\n\nThe police jurisdiction of most of the chiefs\n\nwas abolished, the existing system being most unfavourable to the detection and punishment of crime.\n\nAll transit and customs d1Jt ics were also abolished; and thirdly, a commutation was accepted for the personal service of the chief and his contingent. The despat ch of the Governor General embodying this resolution was dated November 7th, 1846.\" While the sweeping changes aforesaid were being introduced, the second Sikh War broke out and that ended in the annexation of tho Punjab. And with that the ne<'d for maintaining appearances and for recognising the Cis-Sutlej Chiefs as rulera came to an end. The British Government then proceeded to act swiftly and firmly, and in June, 1849, they made n declaration that the Chiefs should \"cease to hold sovereign powers, should lose all criminal, civil and fiscal jurisdiction, and should be considered as no more than ordinary subjects of the British Government in the posseSBion of certain exceptional\n\nprivileges\" (').\n\nPursuant to this declaration, the Chiefs were stripped of all their governmental functions, and the final denouement took place in l1S52 when the British took over the collection of revenue for the jgir lands. The rules for settlement of revenue were made by them, and the actual settlement and collection of revenue were made under their authority, and out of the collections the jagirdars were paid their share.\n\nOn these facts, the question is whether it can be said that their was an assignment of the land revenue to the jagirdars. Express grants to th em, there were none.\n\nThe point in debate before us is whether grants of the land revenue could be implied from the facts stated above.\n\nA somewhat similar question came up for decision before this Court in Thakar Amar Singhji\n\nv. State of Rajasthan (') with reference to a class of jagirdars in the State of Rajasthan known as Bhomicharas. They were once the rulers ofthe territories which were claimed to be jagirs, and later on the State of J odhpur imposed its suzerainty over them and exacted an annual payment called \"Foujbal\". The Bhomicharas contended that they had come into possession of the territories as rulers and held them as rulers and not as jagirdars under grants made by any ruler. In repelling this contention, this Court held that a grant may be implied as . well as express, and that on the facts which were proved, the Bhomi1, haras, though they held originally as rulers, must be held to have been reduced to the status of subjects, and that their position was that of jagirdars under an implied grant. The position of the CisSutlej jagirdars bears a close analogy to that of the Bhomicharas in Thakur Amar Singhji's case (').\n\nThey became rulers of the territories when thty took possession of them by conquest in 1763.\n\nThe first inroads iµto their\n\n(1) Griffin's ·•Rajas of the Punjab\", P. 19~. \\2)\n\n[1955] 2 S.C.R. 303,\n\nAmarsarjit Sinth\n\nThe State of Pt1r1iab\n\nAiyar J.\n\nAmtrrJa1ji1 Sin, i:, h\n\nTh, Str.t~ of Punjab\n\nAiyar I.\n\n• • •· 1 •I l•\n\nSVPRE:ME COURT REPORTS [1962] SUPP.\n\nsovereignly wPre made in 1809 when the British established their suzerainty over them and further dcclarecl th, tl the territories of the rulers who died without hl'irs would ceheat to them. Then in 184G the British Government deprived them of police j11risdiction, and the power to levy customs, and in 1849, of all their sovereign functions.\n\nIt is not disputed that as a result of all these acts tlwy were reduced to tho position of ordinary subject.~. that indeed being the' objective of the British Govern! ment as avowed in their •kclaratioTl of J11ne, 18!9.\n\nIt is with referPnce to this background that we must examine the true charnctcr of thn rev1mw 'etth~ rucnt made in 18:\"i2. lf the jagirdars had sunk to the position of suhjc8ts on that date tho payment of revenues to them by the British Government can only be on the basis of an implied grant to them.\n\nLl'arned Counsel for the jagirdars however demur to this conclusion. They contend that the position of the Cis-Sutlej jagirclars differs fundarnenta.lly from that of the Bhomicharas in Tooba Amar\n\nSinghji'8 r; ise ('), that the latter were conquered by the rulers of J odhpur and com polled to pay to them a tribute er.lied \"Foujhal\", but that the Cis-Sutlej Chiefs were never conquered by the British, and\n\nnever paid any tribute to them, that they were receiving revenue from tho lands as rulers before the British came on tho scene, and that they continued to receive the stion was completed in 1849.\n\nIt is indeed conceded on behalf of the jaginlars that after that datu it was the British Government which was exercising sovereign pow<'rs.over th•. territories and that the Chiefs had been redt1ced to the status of its subjects.\n\nBut tho contention that is urgC'd is that nvon when every thing else had hccn\n\n{IJ \\.Vri1 Petitions Nos. 79 of l957, 16i and lGa of 19~8 and 4 of 1959 dtcided on November, 16, 1961.\n\nlost, there was still one relic of sovereignty left with them and that was the right to receive the land revenue. If this were the true position, the status of the jagirdars would. be that of subjects of the British in respect of all matters except as to the right to receive revenue, in respect of which alone they would have to be regarded as sovereigns.\n\nThis is clearly untenable, because a person cannot be both a sovereign and a subject at the same time.\n\nDealing with this identical contention, this Court obderved in Thakur Amar Singhji's case (1):\n\n\"The status of'a person must be eit!ier that of a sovereign or a subject. There is no tertium quid. The law does not recognise an intermediate Htatus of a. person being partly a sovereign and partly a subject, and when once it is admitted that the Bhomicharas had acknowledged the sovereignty of Jodhpur their status can only be that of a subject. A subject might occupy an exalted position and enjoy special privileges, but he is none the less a subject ; and even if the status of Bhomicharas might be considered superior to that of ordinary jagirdars, they were also subjects.\" (pp. 336-337) If the statlld of the Cis-Sutlej jagirdars is in alJ other respects that of subjects, the right to receive the revenue collections must also be ascribed to their character as subjects, and that can only be under an implied grant.\n\nBut it is contended that the implication of a grant in favour of the jagirdars could not be made hne as in the case of Bhomichans in Thakur Amar Singhji's case (1), because a propoHl for resumption and re-grant of the territories of the Cis-Sutlej Chiefs was actually put forward in 1846 but was negatived. Reference wa.s made to the following .\n\n(I) [!955] 2 S. C. R. 303,\n\n19•1\n\nAmarsarjit Singh\n\n' The Stale of Punjab\n\nAiya,. J.\n\n360 SUPREME COURT REPORTS [1962] SUPP.\n\n1'6t account thert>of given in J. llf. Douie's \"Punjab Am•wujitSinih Land Administration Manual\", 1931, p. 45 para •. 102:- 11\" Sl•I• oj l'unja!J\n\nA(il.,. J. \"lt was indeed pruposl'd in 1846 after the firot Sikh War to declare all the estates forfeit on account of the !aches of their huldcro, and to re-grant them under sanads from the Briti8h Government. But Lord Har-Slltloj Chief~ and n11){atived propo3al.\n\nIn a sense thn tlHi Cis-Sutlej ja.girdars, great and sm ill, are mdiatized\n\nrulers, and little though they have ag a bo reason it is impossible to hold that the British Government, in declining to make a re; mmption and re-grant, intended to continue the recognition\n\nof the Chiefs as sovereigns.\n\nOn the ut her hand, the true inforence to he drawn i:; that the British wanted to give the chieftains only the status of jagirdars but for reasons of policy they sought to do it in such manner as tu avoid publicity, anJtt oj Pu if ab\n\nAQtar J,\n\nAmarsarjil Singh\n\nTiu Slate of Punjab\n\nAiyar J.\n\n~2 SUPREME OOURT REPORTS [1962] SUPP.\n\n\"Undn our Settlement arrangcmcntarJ. must reject this contention aleo.\n\nThis diposes of all the points raised' on the merits in the Writ Petitions and Civil Appeals. In Civil Appeal No. 453 of 1961 preferred by one of the jagirdars, Umrao Singh, his son Satinder Singh intervened, and he asks that suitable directions might be given for protecting his interests in the compensation amount which is payable to the appellant nnder the Act.\n\nHe states that under the law the Cis-Sutlej jagirdar is not an absolute owner of the jagir, that he has only a right to enjoy it with- out any power of alienation and that after his life time the next lineal descendant would take it free from all encumbrances created by the previous owner, that the rights of the jagirdar over the compensation amount due on resumption under the Act could only be the same as over the jagir, and that if that is paid to him, his revem, Petitioners Xo:;. 66, 68 and 69, had filed Writ. Petitions under Art. 226 of the Constituation in t.he Punjab High Court., raising the same' contentions as in the present, that the said petitions had heen dismissed on the merits, and no appeal\n\nh:id been preferred against the Orrlers of dismissnl, and in consequence, the concerned petitioners cannot, on tho decisions of this Court, maintain this\n\npetition.\n\nBut. as we aro dismissing these petitions on the merits, no furthn notice need be taken of these points. In the result, the petitions are dismissed with costs, one hearing fet', and the appeals aro dismissed with costs one set.\n\nPetitions and appeal.s dis1ilissed.\n\n(I) [1952] S.C.R. 28.\n\n...", "total_entities": 48, "entities": [{"text": "AMARSARJIT SINGH", "label": "PETITIONER", "start_char": 58, "end_char": 74, "source": "metadata", "metadata": {"canonical_name": "AMARSARJIT SINGH", "offset_not_found": false}}, {"text": "THE STATE OF PUN.JAR\n\n(AND CONNECTED PETITION'S AND APPEALS", "label": "RESPONDENT", "start_char": 76, "end_char": 135, "source": "metadata", "metadata": {"canonical_name": "THE STATE OF PUNJAB (AND CONNECTED PETITIONS AND APPEALS)", "offset_not_found": false}}, {"text": "B. P. 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{"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "Art. 32", "label": "PROVISION", "start_char": 7150, "end_char": 7157, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}, {"text": "Section 2", "label": "PROVISION", "start_char": 8543, "end_char": 8552, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 2", "label": "PROVISION", "start_char": 9346, "end_char": 9350, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 2", "label": "PROVISION", "start_char": 9389, "end_char": 9398, "source": "regex", "metadata": {"statute": null}}, {"text": "Central Government as defined in the General Clauses Act, 1897", "label": "STATUTE", "start_char": 9949, "end_char": 10011, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "Section 3", "label": "PROVISION", "start_char": 10174, "end_char": 10183, "source": "regex", "metadata": {"linked_statute_text": "the Central Government as defined in the General Clauses Act, 1897", "statute": "the Central Government as defined in the General Clauses Act, 1897"}}, {"text": "s. 2", "label": "PROVISION", "start_char": 10702, "end_char": 10706, "source": "regex", "metadata": {"linked_statute_text": "the Central Government as defined in the General Clauses Act, 1897", "statute": "the Central Government as defined in the General Clauses Act, 1897"}}, {"text": "s. 2", "label": "PROVISION", "start_char": 10769, "end_char": 10773, "source": "regex", "metadata": {"linked_statute_text": "the Central Government as defined in the General Clauses Act, 1897", "statute": "the Central Government as defined in the General Clauses Act, 1897"}}, {"text": "s. 2", "label": "PROVISION", "start_char": 11999, "end_char": 12003, "source": "regex", "metadata": {"statute": null}}, {"text": "[1955] 2 S.C.R. 303", "label": "CASE_CITATION", "start_char": 18767, "end_char": 18786, "source": "regex", "metadata": {}}, {"text": "S1", "label": "PROVISION", "start_char": 22960, "end_char": 22962, "source": "regex", "metadata": {"statute": null}}, {"text": "Punjab Land Revenue Act, 1871", "label": "STATUTE", "start_char": 31406, "end_char": 31435, "source": "regex", "metadata": {}}, {"text": "Then there is Punjab Descent of Jagirs Act, 1900", "label": "STATUTE", "start_char": 32102, "end_char": 32150, "source": "regex", "metadata": {}}, {"text": "Punjab Act IV of 1900", "label": "STATUTE", "start_char": 32152, "end_char": 32173, "source": "regex", "metadata": {}}, {"text": "have then the Punjab Jagirs Act", "label": "STATUTE", "start_char": 32471, "end_char": 32502, "source": "regex", "metadata": {}}, {"text": "s. 2", "label": "PROVISION", "start_char": 32852, "end_char": 32856, "source": "regex", "metadata": {"linked_statute_text": "We have then the Punjab Jagirs Act", "statute": "We have then the Punjab Jagirs Act"}}, {"text": "Jagirs Act IV of 1900", "label": "STATUTE", "start_char": 33021, "end_char": 33042, "source": "regex", "metadata": {}}, {"text": "ss. 7 to 10", "label": "PROVISION", "start_char": 33067, "end_char": 33078, "source": "regex", "metadata": {"linked_statute_text": "Jagirs Act IV of 1900", "statute": "Jagirs Act IV of 1900"}}, {"text": "Section 7( l)(b)", "label": "PROVISION", "start_char": 33081, "end_char": 33097, "source": "regex", "metadata": {"linked_statute_text": "Jagirs Act IV of 1900", "statute": "Jagirs Act IV of 1900"}}, {"text": "S2", "label": "PROVISION", "start_char": 33436, "end_char": 33438, "source": "regex", "metadata": {"linked_statute_text": "Jagirs Act IV of 1900", "statute": "Jagirs Act IV of 1900"}}, {"text": "s. 2(l)(a)", "label": "PROVISION", "start_char": 35290, "end_char": 35300, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 2(l}(a)", "label": "PROVISION", "start_char": 35541, "end_char": 35551, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 1(2)", "label": "PROVISION", "start_char": 36606, "end_char": 36613, "source": "regex", "metadata": {"statute": null}}, {"text": "is no substance in the contention that the Amendment Act", "label": "STATUTE", "start_char": 37294, "end_char": 37350, "source": "regex", "metadata": {}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 37614, "end_char": 37630, "source": "regex", "metadata": {"linked_statute_text": "There is no substance in the contention that the Amendment Act", "statute": "There is no substance in the contention that the Amendment Act"}}, {"text": "s. 2", "label": "PROVISION", "start_char": 39076, "end_char": 39080, "source": "regex", "metadata": {"statute": null}}, {"text": "lands had been acquired under the Land Acquisition Act, 1894", "label": "STATUTE", "start_char": 41137, "end_char": 41197, "source": "regex", "metadata": {}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 41366, "end_char": 41374, "source": "regex", "metadata": {"linked_statute_text": "But there the lands had been acquired under the Land Acquisition Act, 1894", "statute": "But there the lands had been acquired under the Land Acquisition Act, 1894"}}, {"text": "Punjab Resumption of Jagirs Act, 1957", "label": "STATUTE", "start_char": 41423, "end_char": 41460, "source": "regex", "metadata": {}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 42979, "end_char": 42987, "source": "regex", "metadata": {"linked_statute_text": "the Constitution of India", "statute": "the Constitution of India"}}]} {"document_id": "1962_3_369_385_EN", "year": 1962, "text": "3 S.C.R.\n\nSUPREME COURT REPORTS 369\n\nKAMESHWAR PRASAD AND OTHERS\n\nTHE STATE OF BIHAR AND ANOTHER\n\n(P. B. GA.JENDRAGADKAR, A. K. SARKAR, K. N.\n\nWANCHOO, K. C. DAS GUPTA and\n\nN. RAJAGOPALA AYYANGAR, .JJ.)\n\nGovernment Servant-Participation in strike.9 or demonstra• tions-Rule prohibiting strikes or demonstrations pertaining to conditions of service-Oondtutional validity of rule- \"Detnonstration\". meaning of-Bihar Governm, ent Servants' Conduct Rules, 1956, r. 4-A-Constitution of India, Art•. 19(1)(a), 19(1)(b), J.9(1) (c), 33, 309.\n\nBy a notification dated August 16, 1957, the Government of Bihar introduced r. 4-A into the Bihar Gevernment Servani:s' Conduct Rules, ! 956, which provided \"No Government servant shall partjcipate in any demonstration or resort to any form of strike in connection with any matter pertaining to his conditions of service.\" The appellants filed a petition before the High Court of Patna under Art. 226 of the Constitution of India challenging the , validity of the rule on the grounds, inter alia, that it violated sub-els. (a), (b) and (c) of Art. 19 and that, in coniequence, the rule was in excess of the rule making power conferred by Art. 309.\n\nThe High Court took the view that the freedom guaranteed under Arts. 19 (1) (a' and 19 (1) (c) did not include a right to demonstrate or to strike so far as servants of Government were concerned, 3.nd that in any case, the impugned rule was saved as impo3ing\n\nreasonable restrictions.\n\nHe.ld, that r. 4A of the Bihar Government Servants' Conduct Rules, 1956, in so far as it prohibited any form of dernostration, be it however innocent or however incapable of causing a breach of public tranquillity, was vioiative of Arts. 19 (1) (a) and 19(l)(b) of the Constitution of India, and since on t~1e language of the rule as it stood it was not possible to so read it as to separate the legal from the unconstitutional portion of the provision, the entire rule relating to participation in any demonstration must he declared as ultre vlrcs.\n\nT/1e Superintendant, Central Pri8on, Fetehgarh v. Ram Marw/iar Lohia, [1960] 2 S. C.R. 821, relie~ on.\n\nThe Constitution has under Art. 33, selected two of the Services uncier the State, the trnbers f WJiich might b~\n\n196!\n\nFebruary 22.\n\nKarruthwar fraxad\n\n•• Staft Qj Bfl1ar\n\ndeprived of the benefit of the fundamental rights guaranteed to other persons and citizens and also has prescribed the limit~ within which such rcscrictions or abrogation might take place; but the ocher clau'iscs of servants of Govcrn1nent in co1nmon with other persons and citizens of the country cannot be exclu pellate .l'llrisdfrtion: Civil Appeal Xo. 41.l of 1959.\n\nAppeal from the judgment and decree dated , July 7, 19.~8, of the Patn:t High Court in\n\n~I. , J.C.\n\no. 456 of 1957.\n\nB. P. Jfoheshwari, for the appellants.\n\nS. P. Va;-ma, for the rcspowlrnts.\n\nB. Sen and R.H. Dhchar, for the Intervener No. l (Cnion of India).\n\nA. S. R. Chari, M. K. Rammni1rthi, R. K. Garg, ]). P. Singh and S. C. Agarwal, for the Inwnener\n\nNo 2 (E. X. Joseph).\n\n1962. February 22.\n\nThe Judgment of the Court was delivered by\n\nAYYA:XGAR, J.-This appeal comes beforo. us by virtue of a certificate of fitness grnntNI under Art. 132 of the Constitution by the High Court of Patna. The question involve Article for tlw Governorn of States to make JU!t's until \"provision in that chalf i~ macle .!':V or unrfor .an Act of the appropriate Leg1slalur<, . We are rvicc our attention was invited to sub-els. (d), (c) and (g) of d. (1). It was said tha.t a Government servant who wa.8 postd to a partieular place could obviously not cxercisP tho freedom to move throughout the t; rritory of India and similarly, his right to reside and settle in any part of India could be said t.o be violated by his\n\n(I) {1958] S. C. R.I05i.\n\nbeing posted to any particular place. Similarly, so long as he was in government service he would not be entitled to practise any profession or trade and it was therefore urged that to hold that these freedoms guaranteed under Art.. 19 were applicable to government servants would render public service or administration impossible. This line of argument, however, does not take into account the limitations which might be imposed on the exercise of these rights by els. (5) and (6) under which restrictions on the exercise of the rights conferred by sub-els. (d) and (g) may be imposed if reasonable in the interest of the general public.\n\nIn this connection he laid stress on the fact that special provision had been made in regard to Service under the State in some of th\\) Artic]esin Part III-such as for instance Arts. 15, 16 and 18(3) and (4)-and he desired us therefrom to draw tho inference that the other Articles in which there was no specific reference to Government servants were inapplicable to them. He realised however, that the implication arising from Art. 33 would run counter to this line of argument but as regards this Article his submission was that it was concerned solely to save Army Regulations . which permitted detention in a manner which would not be countenanced by Art. 22 of the Constitution.\n\nWe find ourselves unable to accept the argument that the Constitution excludes Government servants as a class from the protection of the several rights guaranteed by the several Articles in Part III save in those cases where such persons were specifically named.\n\nIn our opinion, this argument even if otherwise possible, has to be replll!ed in view of the terms of Art. 33. That Article selects two of the Services under the State-members oflthe armed forces charged with the maintenance of public order and saves the rules prescribing the conditions of service in regard to them-from invalidity on the . ground of violation of a.ny of the funda.menta.l\n\n196%\n\nKameshwar Prasai\n\nThe State of Bihar\n\nAyyangar J,\n\nJ96Z\n\nE011Ushwar Prasad\n\nTiu Stat1 of Bihar\n\nAJ; angar J.\n\n380 SUPREME COURT REPORTs [1962) SUPP.\n\nrights guaranteed by Part III and also d<>fines the purpose for which uch abrogation or restriction might take place, this being limited to ensure the\n\nprop!Jr dicharge of duties and the maintenanco of discipline among th('m.\n\nThe Article having thus selected the Services mem hers of which might Le deprived of the bcndlt of the fundamental rights guaranteed to other persons and citizens and also having prescribed tho limits within which such rPStrictions or abrogation might take r)ace, we\n\ncongider that other classes of 5ervants o Govern mcnt in common with other persons and other citizens of t.hc eountry cannot Le excluded from the protection of the rights guaranteed by Part HI by reason merely of their br.ing Government servants artd the nature and inriet the opemtion of any exising law in so far as it imposes, or prevent the State from making any law imposing, in the interests of public order, reasonabfo restrictions on the cxerciso of tho right conferred by the said subclause.\" The learned Judges of the High Court have, as stated earlier, upheld the validity of the rule hv considering them as roasonable rPstrictiohs in t.he interest of public order.\n\nTn coming tot.his co1wl11sion the learned Judges of the High Court did not have the benefit of the exposition of the meaning of the expression \"in the int Nest of public order\" in these two clauses by thiR Court in Snperi111e11dent, Central Prison, Jiutthyarh v.\n\nRam }rfanolwr Lohio (').\n\nSpeaking for the Court Subba Rao, , J., summarised his co11cluHion on tlrn point in these terms:\n\n\"Public order (Art. 19(2) and (!l)) is syno. nymous with public safety and tranquillity.\n\nIt is tho absence of disorder involving breaches of local significance in contradistinctfon to national upheavals such as revolution, civil strike, war affecting the security of the Stat1\"\" The learned Judge further stated that in order that a legislation may be \"in the interests of public order\" there must he a proximate and reasonable nexus bP.twe!'n the nature of the speech prohibited\n\nand public ordAr. The learned .T urlge reject<'d tho argument that the phran \"in the interests of public order\" which is wider than the words \"for the maintenance of public or1ler\" which were found in\n\nth<> Article a• originally cnaited-thNeby sanctioned the enactment of ii law which reHtricted the right merely because the Hpcech had a tendency however\n\n(I) [19'l0) 2 S.C.R. 82J.\n\nremote to disturb 'public order. The connection has to be intimate, real and rational.\n\nThe validity of the rule now impugned has to 1le judged with reference to tests here propounded.\n\nIf one had to consider the propriety of the rule as one int.ended to. ensure proper discipline a part from the limitations on law :making, in a Government servaut and in the context of the other provisions made for the making ofrepresentations and . for the redress of services, grievances, and apart from the limitiations imposed by the Constitution there could be very little doubt nor would it be even open to argument that the rule now impugned was Loth reasonable and calculated to ensure discipline in the Services and in that sense conducive to ensure efficiency in the Service. Based on this aspect of the function of the rule the argument as regards Art.19(2) & (3) was put on a twofold basis: (1) that the maintenance of public order was directly dependent upon the existence of a body of Government servants who were themselves subject to strict discipline. In other words, the maintenance of discipline among Government servants not only contributed to the maintenance ofpublic order but was a sine qua Mn of public order. (2) The other aspect in which it was presented was the negative of the one just now mentioned that if Government servants were ill-disciplined and were themselves to agitate in a disorderly manner for the redress of their service grievances, this must lead to a demoralisation of the public and would be reflected in the disappearance of public order ..\n\nWe find ourselves unable to uphold this sub mission on behalf uf t.he State. In the first place we are not here concerned with any rule for ensuring disciplin~ among the police, which is the arm of the law primarily charged with the maintenance of public order. 'l'hc threat to public order should therefore arise from the nature of the demonstration prohibited. No doubt, ff the rule were so fral)'.leq\n\nKameshwar Prasad\n\nThe Stale of Bihar\n\nAyyangar J.\n\n• 96Z\n\nKo~1hwar Pra1ad\n\nTht Stalt of Bi/111'\n\nA\"angar J.\n\nas to single out those types of demonstration which were likely to lead to a distnrhance of public tran. qnillity or which would fall under the other limiting criteria specified in Art. 19(2) the validity of the rule could have been sustained. The vice of the rule, in our opinion, consists in this that it. lays a ban on overy type of demonstrationbi> the Harne however innocent and however incapable of causing a breach of public tranquillity and does not confine itself to those forms of demonstrations which might lead to that result.\n\nLearned Counsel for the respondent and those who supported the validity of the rule could not suggest that on the language of the rule as it stood, it was poBBible to read it as to separate the legal from the unconstitutional portion of the provision. As no suoh B<>paration is possible the <'ntire\n\nrule has to be struck down as uneonstitutional.\n\n\\Ve have rejected the broad contention that persons in the servicn of government form a class\n\napart to whom the rights guaranfren u. P.,\n\nAl/dab•d\n\nY. tll:ana\"yam Dar\n\nGup,.\n\nWmuhoo J.\n\nSUPREME COURT REPORTS (1962] SUPP. r--\n\nCrv1L APPELLATE Jumsnrcnox: Civil Appeal No. I :12 of I 95!J.\n\nAppeal from the judgment. and decree datWSp•pcrs and the three respondents passed in the second division. Thereafter they prosecuted further studies.\n\nBut in Decembe1 l!l54, their fathern and guardians received information from t.he Principal of the G. S. Hindu Intermediate College that th~ Examinations' Committee of the appellant (hereinafter referred to as the Commi ttee) had cancelled tho result of tho respondents for the examination of l!JM and further that thev had been debarred from appearing at the examination of 1955.\n\nThereupon the respondents filed a write petition in the High Court contending that the Committee had never afforded any opportunity to thl'm to rebut the allegations made against them and that they were never informed about the nature\n\nof the unfair means used by them in the said examination and the fir;; t thing they come to know wa8 the resolution of the Committee cancelling their results and dcbaring them from appearing in the examination of l !}();,, They therefore contended that the; Y were entitled to ap opportunity bein~\n\n.> -\n\nafforded to them to meet the cae against them of using unfair means at the examination before the appellant took action against them by cancelling their results and debarring them from appearing at the examination of 1955. The procedure thus adopted by the appellant was said to he in violation of the principles of natural justice inasmuch as they were given no opportunity whatsoever tG defend themselves and to show cause against the action contemplated against them. It was further contended that the procedure adopted by the appellant violated the provisions of the U. P.\n\nIntermediate Education Act, No. II of 1921 (hereinafter referred to as the Act) and the U. P. Educa tion Code, and therefore, the resolution cancelling their results and debarring them from appearing in the later examination was without jurisdiction and illegal. They therefore prayed for a proper writ or order oanoelling the resolution of the appellant.\n\nThe appellant opposed the application and its case was that the respondents had used unfair means at the examination and their cases were reported to the Committee under the Regulations and the Committee had acted under the powers conferred on it under the Act and the Regulations framed thereunder after a thorough inquiry.\n\nIt was not disputed, however, that no opportunity had been afforded to the respondents to rebut the allegations against them in the inquiry made by the Committee which resulted in the resolution cancelling the results of the examination.\n\nA large number of contentions appear to have been urged in the High Court; but we are here only concerned with one of them, namely, whether the respondents were entitled to a hearing before the appellant decided to cancel the results. The contention on behalf of the respondents before the learned Single Judge was that the appellant was under a duty to act judiciall~ iw1d tijerefor\\l tl:le\n\nBoard of High Schoo\n\ndJ Jntetmediate Educati\"on, U. P., Allahabad v.\n\nGhanshyam Dail\n\nGupta\n\nWanchoa J.\n\nJ!JG2\n\nBoard of Hi1/a School\n\n41 lntermidial6 Rduc•tio11 U. P.\n\nAllahahu , ..\n\nGhan1Jryam DtJJ\n\nGupta\n\nW t111choo I.\n\n40 SUPRE!\\IE COURT REPORTS (1962) SUPP.\n\nrespondents should havo been givon. a hearing bcforo any order was passed against them. The learned Single , Judgo held that no duty was cast on tho Committefl to act judicially and there was no statutory obligation on the Committee to give an opportunity to every cxaminec to be heard; therefore he rejected the petition.\n\nThe respondent!i then went in appeal which was heared by Dayal and Brijmohan Lall, JJ., who however differed. Brijmohan Lall, J., was of opinion that the Committee was not required to act judicially or quasijudicially when it considered cases of this kind and was acting merely administratively; he nevertheless was of the opinion that. on<> of the rules of natural justice contained in the maxim rtudi altera.m pr1rtem would apply in this caRe, even though the Committee was acting administratively. He w•1s therefore in favour of allowing the appeal.\n\nDaval .J., a.greed with thl' view of Brijmoh:in Lall, .J., thnt.\n\nin the present case no duty w1iH cast on the Committee to a<:t judicially and that the action of the Committee wa'\" merely administrative.\n\nHe however did not :igree that the Committee acted in violation of the principles of natural justice inasmuch as it clid not give a hearing to the respondents.\n\nHe was of the view t.hat as tho Committee was acting merely administrativ, oly it waR not bound to give a hearing, as the maxi1n awli alteram. partem applied only to judicial or quasijudicial tribunals. Tho two learned J11dgcs also differer!\n\non two other P\"int~ with whid1 we arc not concerned.\n\nEventnnlly they reforred three questions to be answered by another learned Judge and one of these questions was whether the failure of th~ Committee to provide an opport11nity to the r<>spondents of being heard vit.iated its order, wl1ich waH of an administrative nature.\n\nThe matter then came uofore a third learned Judge, Agarwala, J. He was doubtful wheter the\n\nview of the Bench that there was no duty cast on the Committee to act judicially in the present case was correct; but as on that matter the two learned Judges were in agreement, he dealt with the case on the basis that the Committee was acting merely administratively. Even so, he came to the conclusion that the respondents were entit.led to a hearing and agreed with the view of Brijmohan Lall,\n\n.J.\n\nConsequently, the appeal was placed before the Bench again and in accordance with the opi\n\nnion of the third Judge it was allowed. Then followed an application by the appellant for leave to appeal to this court, which was granted; and that is how the matter has come up before us.\n\nThe main contention on behalf of the appellant is that the High Court was wrong in the view it took that an opportunity for hearing was necessary in this case even though the Committee acted merely administratively. It is contended that wheni. a body is acting merely administratively, it is not necessary that it should give a hearing to a party who might be affected by its decision and that the principles of natural justice, including the maxim, audi alteram partem, apply only to judicial or quasi-judicial bodi'es, i.e., bodies on whom a duty is cast to act judicially. It is submitted that where no such duty is cast on a body and it is acting merely administratively there is no necessity for it to hear the person who might be affected by its order. The respondents on the other hand contend that though the final decision of the High Court is correct, the High Court was not right in holding that the Committee was aoting merely administrati~ vely in a matter of this kind; they contend that comiidering the entire circumstances which operate in c ises of this kind, the High Court should havo held that there was a duty to act judicially and therefore it was necessary to give an opportunity to the respondents to be heard before action was taken aainst them. It is sqbmitted that tile\n\nBoard of lligh Sch.ool\n\n& /nltrmeditJle Education, U. P., Allahabad v.\n\nGhan shy om Das\n\nliuptu\n\nWanchoo ./,\n\nBoard of fiigh Scl1ool\n\nc{• /nlttmtd1att Ed1Jcation U P.,\n\nAli aha bad v.\n\nGhar.shyam Da3\n\nGupta\n\n11' M1choo J.\n\n42 SUPREME COURT REPORTS (1962) SUPP.\n\nmere fact that there was nothing express in the Act or the HPgul:1tions framed thereunder which might make it obligatory for the Committee to call for an explanation an'ee\n\nwhat powcr8 and duties h:we bocn eonferrctl on variou8 committees constituted under the Regula\n\ntions.\n\nSection 13 (I) makca it incumbent on the Board to appoint the Committeo and Ch,.p. Vf.of the Recrulations deal~ with the powers and duties of the° Committee. Rule I (I) of Chap. VI with which we a.re , particularly concerned reaq• 48\n\na s.d.R.\n\n,, 45\n\nfollows:-\n\n\"It shall be the duty of the Examinations' Committee, subject to sanction and control of the Board.\"\n\nx x x \"(l) to consider cases where examinees have concealed any fact or made a false statement in their application forms or a breach of , rules and regulations to secure undue admission to an examination or used unfair means or committed fraud (including impersonation) at the examination or are guilty of a moral offence or indiscipline and to award penalty which may be one or more of the following :- ( 1) withdrawal of certificate of having passed the examination ; ( 2) cance!latio n of the examination; (3) exclusion from the examination.\" There is however no provision ii; i Chap .. VI as to how the Committee will carry out the duty imposed on it by r. 1 (1).\n\nFurther, there is no express provision in the Act or the Regulations casting a duty on the Committee to act judicially when exercising its powers under r. 1 (l); and the question whether the Committee has to act judicially when exercising these powers will have to be deci' ded on an examination of all the circumstances relevant in the matter. At the same time, there is nothing express in the Act from which it can be said that the Committee is not under a duty to act judicially. It is true that there is no procedure provided as to how the Committee will act in exercising its powers under r. 1 ( 1) and it is further true that there is no express provision in that rule requiring the Committee to call for an explanation from the examinees concerned and to hear the examinees whose cases it i~ required to consider.\n\nBut we are of opinion that the mere fact that the Act or the Regulations do not make it obligatory on the Committee to caU for an explanation and to\n\nFoard of High School\n\n& Intern1ediate Education, U. P.,\n\n.Allahabad\n\nGhansh)'am Das Gupta\n\nWanchoo J.\n\nBoard of Higlt. Schtol\n\nU l11te1mtdiatt Edt1catinr1, U. P.,\n\nti l111hahad\n\nOhc.rtJlnam DO.J\n\noUpta\n\nJ11anchoo J.\n\n46 SUPRE:\\1E COURT REPORTS\n\n[1!16~) SUPP.\n\nhear the examinee is not conclusive on the question whether the Committee acts as a quasi-judicial body in excrciRing its powers under r. I (I). Evon though calling for an explanation and hearing: tho examinee may not have been made oxprnssly oblitory by the Act or the Regulations, it is obvious that tho Committee when it proceeds to decide matters covered by r. I (I) will have to depend upon materials placed before it, in coming to its decision.\n\nBefore the Committee decides to award any penalty it has to come to an objective determination on certain factR and onlv when it comes t-0 t.he concluion that those facts.are established that it can pro ceed to punish the examinee concerned. The facts which the Committee has to find before it takes action are -\n\n(i} whether the examinee has concealed any fact or made a false statement in his application form; or\n\n(ii) whether the examinee has made a breach\n\n of tho Rules and Regulations to secure undue admission to an examination ; or\n\n(iii) whether the cxaminee has used unfair\n\nmeans at the examination ; or\n\n(iv) whether the examinee has committed fraud (including impersonation) at the examination ; or\n\n(v) whether the examincc is guilty of moral off'enee or indiscipline.\n\nUntil one or other of the five facts is established before the Committee, it cannot proceed to take action under r. l (I). In order to come to the conclusion that one or other of these facts is established, the Committee will have to depend upon materials placed before it, for in the very nature of things it has no personal knowledge in the matter.\n\nTherefore, though the Aet or the Regulationo do\n\n3 s.d.h.\n\nSUPl'tEME COURT REPORTS 47\n\nnot make it obligatory on the Committee to call for an explanation and hear the examinee, it is implicit in the provisions of r. I (1) that the Committee must satisfy itself on materials placed before it that one or other of the facts is established to enable it to take action in the matter. It will not be possible for the Committee to proceed at all unless materials are placed before it to determine whether the examinee concerned has committed some miscon- . duct or the other which is the basis of the action to\n\nhe taken under r. 1 (1). It is clear therefore that consideration of materials placed before it is necessary before the Committee can come to any decision in the exercise of its powers under r. 1 ( 1) and this can be the only manner in which the Committee can carry out t, he duties impose~ nn it.\n\nWe thus see that the Committee can only carry out its duties under r. l ( l) by judging the materials, placed before it. It is true that there is no lis in the present case, in the sense that there are not two contesting parties before the Committee and the matter rests between the Committee and the examinee; at the same time considering that materials will have to be placed before the Committee to enable it to decide whether action should be taken under r. 1 ( 1 ), it seems to us only fair that the examinee against whom the Committee is proceeding should also be heard. The effect of the decision of the Committee may in an extreme case blast the career of a young student for life and in any case will put a serious stigma on the examinee concerned which may damage him in later life.\n\nThe nature of misconduct which the Committee has to find under r. 1 (I) in some cases is of a serious nature, for example, impersonation, commission of fraud, and perjury; and the Committee's decision in matters of such seriousness may even lead in some cases to the prosecution of the examinee in courts.\n\nConsidering therefore the serious effects following the\n\nBoard of High Sehool\n\n& lntt\"™diate Education, U. P.,\n\nAllahabad\n\nGhanshyam Das\n\nGupta\n\nWanchoo J.\n\n19G2\n\nBoMd of High School\n\nct Jrdermcdialt FAiu cation, U. P .,\n\nAll'lhahad ..\n\nGhansl:yan1 Das Gupta\n\nW01.choo J.\n\n48 SUPREME COURT HEI'ORTS (1962] SUPl'.\n\ndecision of the Committee and the serious nature of the misconduct which may be found in some cast's under r. I (I), it seems to us that the Committee must be held to act judicially in circumstances as these.\n\nThough therefore there is nothing express one way or \\he other in the Act or the Regulations casting a duty on the Committee to act judicially, the manner of the disposal, based as it must be on materials placed before it and the Rerious effects of the decision of the Committee on the examincA concerned, must lead to the conclusion that a dutv is cast on the Committee to act judicially in this matter particularly as it has to decide objeotiYely certain facts which may seriously affect the rights and careers of examinees, hdore it can take any action in the e:irercise or its power under r. l (I). We are therefore of opinion that the Committee when it exercises its powers under r. J (I) is acting quasijudicially and the principles of natural justice which require that the other party, (namely, the examinee in this case) must be heard, will apply tu the proceedings before the Committee. This view was taken by the Calcutta High Court in Dipa I'al v.\n\nUniversity of Calcutta, (l) and B. C. Das Gupta v.\n\nBijoyranjmi Rakohit, (2 ) in similar circumstances and is in our opinion correct.\n\nIt is urged on behalf of the appellant that there are a large number of cases which come up before the Committee under r. I (I); and if the Committee is held to act judicially as a quasijudicial tribunal in the matter it will find it impossible to carry on itH task. This in our opinion is no criterion for deciding whether a duty ie cast to act judicially in view of all the circumstances of the case. There is no doubt in our mind that considering the totality of circumstances the Commit.tee has to act judicially when taking action under r. 1 ( 1).\n\nAs to the manner in which it should givo an opportunity to the examinee concerned to be ' (I) A. I. R. 1952 Cai. 594.\n\n(2) A. I. R. 1953 Cal. 212.\n\nheard, that is a matter which can be provided by Regulations or Bye-laws if necessary.\n\nAs was pointed out in Local Government Board v. Alridge, (1) all that is required is that the other party should have an opportunity of adequately presenting his case. But what the procedure should be in detail will depend on the nature of the tribunal. There is no doubt that many of the powers of the Committee under Chap. VI are of administrative nature; but where quasi-judicial duties are entrusted to administrative body like this it becomes a quasi-judicial body for performing these duties and it can prescribe its own procedure so long as the principles of natural justice are followed and adequate opportunity of presenting his case is given to the examinee. It is not however necessary to pursue this matter further, for it is not in dispute that no opportunity whatsoever was 11iven to the respondents in this case to give an explanation and present their case before the Committee. We are therefore of opinion that though the view of the High Court that the Committee was acting merely administratively when proceeding under r. 1 (1) is not correct, its final decision allowing the writ petition on the ground that no opportunity was given to the respondents \"to put forward their cases before the Committee is correct. We therefore dismiss the appeal. No order as to, in the circumstances.\n\nAppeal dismissed.\n\n(I I [1915] A. C. 120. _\n\nJ9(i'J.\n\nBoard of Hieh School\n\n& lntermediate Education, U.P , Allahabad v.\n\nGhan.dryam Das\n\nGupta\n\nWanchoo J.", "total_entities": 11, "entities": [{"text": "GHAXSHY AM DAS", "label": "JUDGE", "start_char": 114, "end_char": 128, "source": "metadata", "metadata": {"canonical_name": "S.K. DAS*", "offset_not_found": false}}, {"text": "A. K. SARKAR", "label": "JUDGE", "start_char": 161, "end_char": 173, "source": "metadata", "metadata": {"canonical_name": "A.K. SARKAR", "offset_not_found": false}}, {"text": "Education Act 1921", "label": "STATUTE", "start_char": 452, "end_char": 470, "source": "regex", "metadata": {}}, {"text": "s. 15", "label": "PROVISION", "start_char": 491, "end_char": 496, "source": "regex", "metadata": {"linked_statute_text": "Education Act 1921", "statute": "Education Act 1921"}}, {"text": "Intermediate Education Act, 1921", "label": "STATUTE", "start_char": 1304, "end_char": 1336, "source": "regex", "metadata": {}}, {"text": "Intermediate Education Act", "label": "STATUTE", "start_char": 8049, "end_char": 8075, "source": "regex", "metadata": {}}, {"text": "s. 7", "label": "PROVISION", "start_char": 18019, "end_char": 18023, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 18597, "end_char": 18602, "source": "regex", "metadata": {"statute": null}}, {"text": "Section I ii gives power to the Board to make Regulations", "label": "STATUTE", "start_char": 18674, "end_char": 18731, "source": "regex", "metadata": {}}, {"text": "Section 20", "label": "PROVISION", "start_char": 18903, "end_char": 18913, "source": "regex", "metadata": {"linked_statute_text": "Section I ii gives power to the Board to make Regulations", "statute": "Section I ii gives power to the Board to make Regulations"}}, {"text": "Section 13", "label": "PROVISION", "start_char": 19437, "end_char": 19447, "source": "regex", "metadata": {"linked_statute_text": "Section I ii gives power to the Board to make Regulations", "statute": "Section I ii gives power to the Board to make Regulations"}}]} {"document_id": "1962_3_386_391_EN", "year": 1962, "text": "191Z •\n\n386 SUl'itEME CXJURT REPORTS (1962] SUPP.\n\nTEKAN ARD OTHERS\n\nGANESH I\n\n(P. B. GA.TEXDRAGADKAH, A. K. SARKAR and\n\nK. ~. WANCHOO, J, J.)\n\nI.andlord an,/, Tenant-Smtrily of land 1'enures-landowner-Lcssee-Jlortgage-Teuanf -1.rJJser; not lando1cner-No right to ej1:ct-Punjab Security of Land 'l'F.nures Act, 19.53 (Punj\"'' JO of l!Jo3), ss. 2 '.I), 9 (l); 14A ([)-East Punjab Displar.ed l'ersons /, rmd Re,.ettlcmui! Ac!, 194fl (East Punjab .16 of 1!14!1), •· 2-Pnnjah /, and Revwat Acl, ISS7 (Punjab 17 of\n\n1887), . a lessee the appellant holds land under another person na1nely the O\\Vner of the land fro1n whom he has taken the lease and is liable to pay rent. l'he appllant therefore being a tenant \\Vithin s.4 (5) of the Punjab 1, enancy Act cannot he a lando\\..-ner under s.3(2) of the Punjab Land Revenue Act or a landowner \\\\ithin the mean in~ of s. 2 ( 1) of the Punjab Sc'.Curity of Land Tenures :\\ct. Hence he is not entitled to eject the respondent.\n\nCrVIL APPELLATE JURISDICTION: Civil Appeal No 367 of 1959.\n\nAppeal by special leave from the judgmet and order dated November 23, 1957, of t, he Add1tion.P.\n\nwhether the appellan.t is a tenant, within that Act.\n\nDefinition of \"tenant\" in s. ! (5) of that Act is as follows:- \"(5) 'tenant' means a person who holds land under another person, and is, or but for a special contract would be, liable to pay rent for that land to that other person but it does not include-\n\n(a) an inferior landowner, or\n\n(b) a mortgaee of the rights of a landowner, or\n\n(c) a person to whom a holding has been transferred, or an estate or holding has been let in farm under the Punjab Land Revenue Act, 1887 for the recovery of an arrear of land revenue or of a sum recoverable as such an arrear, or\n\n(d) a person who takes from the Government a lease of unoccupied land for the purpose of sublettillg it;\". .\n\nIt is not in dispute that the appellant does not come within the four exceptions mPntioned in this sub-section. It has therefore to be seen whether the appellant is a person who holds land under another person and is, or but for a special contract\n\nwould be, liable to pay rent for that land to that - other person. We are of opinion that the appellant satisfies this definition of the term \"temmt\" in s. 4 ( 5).\n\nAs a lcBBee be holds land undei another person, namely, tho owner of the land from whom he has taken the lease and is liable to pay rent equal to the lease money for the land which he has taken on lease to that other person. The appellant is therefore clearly a tenant within s. 4 (5) of the Punjab Tenancy Act. He cannot therefore be a landowner under s. 3 (2) of tho Punjab Land Itevenue Aot, Incidentally wo may add that this conclusion is borne out by the fact that in tho copy of the Girdwari entries, the appellant is shown as a\n\n' '\n\n3 S.C.R.\n\nSUPREME COuRT REPoRTS 391\n\ntenant, the entry being \"Tekan and others, Gairmaurasian first through Gneshi Gair Maurasi secondhalf. The appellant is thus a tenant of the land of which he has taken lease and cannot be a landowner. keeping in view the definition of that term in the Act and in the Punjab L.and Revenue Act. The appeal therefore fails and is hereby dismissed with costs.\n\nAppeal dismissed.\n\nCOMMISSIONER OF INCOME-TAX, BOMBAY\n\nCITY I, BOMBAY\n\nBAI SHIRINBAI K. KOOKA\n\n(S. K. DAS, J. L. KAPUR, P. B. GAJENDRAGADKAR, A. K. SARKAR, K. SuBBA RAo, K. N. WANCHOO\n\nand N. RAJAGOPALA AYYANGAR, JJ.)\n\nIncome-tax-Profits-Shares purchased by assessee for investment-Sales of Shares subsequently as trading activity- Oomputation of profit.\n\nThe assessee purchased shares by way of investment in 1939-40 at a cost price which was much less than their market value on April I, 1945. Her dividend income therefrom was assessed to income tax. In the financial year 1945-46 the assessee converted these shares iuto her stock-in-trade and carried on business in the shares. Per income for the assessment year 1946-47 was computed on the basis of the profits which she made by the sale of her shares as a trading activity. The assessee contended that the cost price of the shares for compu ting the profits was their market value at the beginning of the year when she started the trading activity, i.e., on April I,\n\n1945. The Department contended that the cost Price of the shares was the actual price for which they were purchased by the assessee, no matter when she bought them and for what purpose.\n\nHeld (per Das, Kapur, Gajendragadkar, Suhba Rao, Wanchoo and Ayyangar, JJ. Sarkar, J., contra), •h•t the profits\n\nIS62\n\nTekon\n\nGtineshi\n\nWonchoo J.\n\nFebruary 23.", "total_entities": 28, "entities": [{"text": "TEKAN ARD OTHERS", "label": "PETITIONER", "start_char": 51, "end_char": 67, "source": "metadata", "metadata": {"canonical_name": "TEKAN ARD OTHERS", "offset_not_found": false}}, {"text": "GANESH I", "label": "RESPONDENT", "start_char": 69, "end_char": 77, "source": "metadata", "metadata": {"canonical_name": "GANESHI", "offset_not_found": false}}, {"text": "A. K. SARKAR", "label": "JUDGE", "start_char": 103, "end_char": 115, "source": "metadata", "metadata": {"canonical_name": "A.K. SARKAR", "offset_not_found": false}}, {"text": "K. ~. WANCHOO, J", "label": "JUDGE", "start_char": 121, "end_char": 137, "source": "metadata", "metadata": {"canonical_name": "K.N. WANCHOO", "offset_not_found": false}}, {"text": "ss. 2", "label": "PROVISION", "start_char": 340, "end_char": 345, "source": "regex", "metadata": {"statute": null}}, {"text": "Punjolr Tenancy Act, 1887", "label": "STATUTE", "start_char": 539, "end_char": 564, "source": "regex", "metadata": {}}, {"text": "s. 14A", "label": "PROVISION", "start_char": 802, "end_char": 808, "source": "regex", "metadata": {"linked_statute_text": "Punjolr Tenancy Act, 1887", "statute": "Punjolr Tenancy Act, 1887"}}, {"text": "s. 9", "label": "PROVISION", "start_char": 823, "end_char": 827, "source": "regex", "metadata": {"linked_statute_text": "Punjolr Tenancy Act, 1887", "statute": "Punjolr Tenancy Act, 1887"}}, {"text": "S 2", "label": "PROVISION", "start_char": 1258, "end_char": 1261, "source": "regex", "metadata": {"linked_statute_text": "Punjolr Tenancy Act, 1887", "statute": "Punjolr Tenancy Act, 1887"}}, {"text": "s. 14A", "label": "PROVISION", "start_char": 1324, "end_char": 1330, "source": "regex", "metadata": {"linked_statute_text": "Punjolr Tenancy Act, 1887", "statute": "Punjolr Tenancy Act, 1887"}}, {"text": "s. 2(1)", "label": "PROVISION", "start_char": 1880, "end_char": 1887, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4", "label": "PROVISION", "start_char": 2097, "end_char": 2100, "source": "regex", "metadata": {"statute": null}}, {"text": "s.3(2)", "label": "PROVISION", "start_char": 2164, "end_char": 2170, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 2", "label": "PROVISION", "start_char": 2241, "end_char": 2245, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 2887, "end_char": 2892, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 9", "label": "PROVISION", "start_char": 3005, "end_char": 3009, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 3643, "end_char": 3648, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 3775, "end_char": 3780, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 2", "label": "PROVISION", "start_char": 4441, "end_char": 4445, "source": "regex", "metadata": {"statute": null}}, {"text": "Punjab Land Revenue Act, 1887", "label": "STATUTE", "start_char": 5806, "end_char": 5835, "source": "regex", "metadata": {}}, {"text": "section 2", "label": "PROVISION", "start_char": 5953, "end_char": 5962, "source": "regex", "metadata": {"linked_statute_text": "Punjab Land Revenue Act, 1887", "statute": "Punjab Land Revenue Act, 1887"}}, {"text": "s. 2", "label": "PROVISION", "start_char": 6321, "end_char": 6325, "source": "regex", "metadata": {"linked_statute_text": "Punjab Land Revenue Act, 1887", "statute": "Punjab Land Revenue Act, 1887"}}, {"text": "s. 3", "label": "PROVISION", "start_char": 6706, "end_char": 6710, "source": "regex", "metadata": {"linked_statute_text": "Therefore he can only claim to be a landowner within this definition if he is a landowner as defined in the Punjab Land Revenue Act", "statute": "Therefore he can only claim to be a landowner within this definition if he is a landowner as defined in the Punjab Land Revenue Act"}}, {"text": "have therefore to go to the Punjab Tenancy Act", "label": "STATUTE", "start_char": 7676, "end_char": 7722, "source": "regex", "metadata": {}}, {"text": "Punjab Land Revenue Act, 1887", "label": "STATUTE", "start_char": 8385, "end_char": 8414, "source": "regex", "metadata": {}}, {"text": "s. 4", "label": "PROVISION", "start_char": 9020, "end_char": 9024, "source": "regex", "metadata": {"linked_statute_text": "the Punjab Land Revenue Act, 1887", "statute": "the Punjab Land Revenue Act, 1887"}}, {"text": "s. 4", "label": "PROVISION", "start_char": 9308, "end_char": 9312, "source": "regex", "metadata": {"linked_statute_text": "the Punjab Land Revenue Act, 1887", "statute": "the Punjab Land Revenue Act, 1887"}}, {"text": "s. 3", "label": "PROVISION", "start_char": 9385, "end_char": 9389, "source": "regex", "metadata": {"linked_statute_text": "the Punjab Land Revenue Act, 1887", "statute": "the Punjab Land Revenue Act, 1887"}}]} {"document_id": "1962_3_391_418_EN", "year": 1962, "text": "3 S.C.R.\n\nSUPREME COuRT REPoRTS 391\n\ntenant, the entry being \"Tekan and others, Gairmaurasian first through Gneshi Gair Maurasi secondhalf. The appellant is thus a tenant of the land of which he has taken lease and cannot be a landowner. keeping in view the definition of that term in the Act and in the Punjab L.and Revenue Act. The appeal therefore fails and is hereby dismissed with costs.\n\nAppeal dismissed.\n\nCOMMISSIONER OF INCOME-TAX, BOMBAY\n\nCITY I, BOMBAY\n\nBAI SHIRINBAI K. KOOKA\n\n(S. K. DAS, J. L. KAPUR, P. B. GAJENDRAGADKAR, A. K. SARKAR, K. SuBBA RAo, K. N. WANCHOO\n\nand N. RAJAGOPALA AYYANGAR, JJ.)\n\nIncome-tax-Profits-Shares purchased by assessee for investment-Sales of Shares subsequently as trading activity- Oomputation of profit.\n\nThe assessee purchased shares by way of investment in 1939-40 at a cost price which was much less than their market value on April I, 1945. Her dividend income therefrom was assessed to income tax. In the financial year 1945-46 the assessee converted these shares iuto her stock-in-trade and carried on business in the shares. Per income for the assessment year 1946-47 was computed on the basis of the profits which she made by the sale of her shares as a trading activity. The assessee contended that the cost price of the shares for compu ting the profits was their market value at the beginning of the year when she started the trading activity, i.e., on April I,\n\n1945. The Department contended that the cost Price of the shares was the actual price for which they were purchased by the assessee, no matter when she bought them and for what purpose.\n\nHeld (per Das, Kapur, Gajendragadkar, Suhba Rao, Wanchoo and Ayyangar, JJ. Sarkar, J., contra), •h•t the profits\n\nIS62\n\nTekon\n\nGtineshi\n\nWonchoo J.\n\nFebruary 23.\n\nCommissio1.e1 of lrrsition in the present case is that there \\\\as a sale of the shares in question in pursuancf\". of a trading or business activity and actual profits had resulted from the sale.\n\nThe question here is ho\\V such cornn1ercial profits arc to be calculated. r n a trading or c:omrnercial sense the only fair measure of assessing such trading profits is to take the 1narkct value at one end and the actu~I sale proceeds at the other. 'fhis is more in accord \\-Vith reality than fiction.\n\nSir Kikabhai Premcltand v. (,101nmiasioner of Inc,, rnr.-tax (Central), Bom&ay, [1954; S. C.R. 219, Shorkr.y '\" lVernhu\n\n(1955) 36 T. C. 275, referred to.\n\nPer, Sarkar J.-The asses.sec's taxable profits on the sale of the shares earlier held as investment are the difference\n\nbet\\veen the sale price and the pric.c at ,, hich she had actually bought those shares. 'fhe profits could not be compu ted on th? basis of a fictional sale Uy the asscssee to herself on 1\\pril I, 19-t5. 'fhe case \\vas governed by the principles laid down by the Supreme Court in Kikabhai's case. The decision of the House of Lords in Sharkey v. JVernher, , ... hich\n\ntook a contrary vic\\v, was not preferable to that of the\n\nSuprmc Court in Kikabhai 's case.\n\nSir Kikabhai Prenicl1and v. Commis\"rionr.r of l11co111elax (Cent.ml), Bombay, JI !l54] S. C. R. 219, followed.\n\nSharkey v. Jl'anher, [19551 36 T.C. 275, not approved.\n\nCn'IJ, APPELLATE Jcms1J1c1·10N: Civil Appeal No. 13:J of I!l58.\n\nAppeal by special leave from the judgment\n\nand order dated March 6, 1956, of the Bombay High Court in I. T. R. No. 49 of 1955.\n\nH. N. S11ny2l, Additionr of Income tax (Centrrzl), Bombay(') reqnir<'d rnconsideration. It mav h•' here stated thin the le:mwd .Judges of the High Court lrnd before lh4] S.C.R. 219.\n\n196Z\n\nCommisiontr of\n\nIncome-tax, Bombay, City I\n\nBai Shirinbai\n\nK. Kooka\n\nDasJ.\n\nColllmissiorur o I\n\nT ncome-tax,\n\nBombay~ City I v.\n\nBai Shirinbai\n\nK. Kooka\n\nDasJ.\n\n398 SUPREME COURT :i; tEPORTfl [1962] SUPP.\n\nin effect held by a legal fiction that the assessee had realised the potential profits 011 the said shares on that date which she had not actually done and henue the very basis of the judgment of the High Court is vitiated by the assumption of a fiction.\n\nThe learned Additional Solicitor-General has also submitted that there was no warrant for the High Court to introduce a legal fiction that there was a notional sale of the shares on April 1, 1945, by the assessee and that the gains which accrued to. the ass.essee on th1tt sale were capital gains; this notional sale it is submitted, violates the basio principle th.at a man cannot sell to himself nor can he make a loss or profit out of transactions with himself.\n\nWii propose now to examine these arguments in some detail. The question raised is a short question bu_t a difficult one. In orde.r to examine the arguments urged on bflhalf of thiappellant, it is necessa, ry first to refer w the decision of this Court in Kikabhai's case (1). +'he facts of that case were these.\n\nThe assessee there was.a dealer in ail ver and shar:es and he maintained his accounts .according to the mercantile system and valued his stock at cost price both in tho beginning and at the end of. the year. Duriog the relevant accoi, mting year he withdrew some silver bars and shares from the business and settleJ them on certain trusts in wb ich he was the managing trustee an!l in his books of account he credited the business with the cost price of the silver bars and shares so withdrawn.\n\nThe income-tax authorities assessed him to tax , on the basis of the d.ifference between the cost priue of the silver bars and shares and their market value at the date of their withdrawal from the. business.\n\nThe High 'Court of Bombay upheld the actio1i of the income tax authorities. This Court, however, by a majority decision came to the conclusion that the asse$see 'fas entitled to value the silver ba.rs\n\n\\ll. ~!951) S. c, R. 219,\n\n' .\n\nand shares withdrawn at cost price and was not bound to credit the business with their market value at the close of the year for a80ertaining $.e assessable profits for the year. Bhagwati, iJ., who expressed the dissentient view said that so far as the business was concerned it made no difference whether the stock-in-trade was realised or with drawn from the business and the business was enti tied to be credited with the market value of the assets withdrawn as at the date of the withdrawal, whatever be the method employed by the assessee for the valun.tion of its stock-in-trade on hand at the close of the year.\n\nThe majority view was expressed by Bose, J., who dealt with the two contentions of the learned Attorney General who appeared for the Revenue (respondent) in that case. Tho Attorney General's first contention was that as the silver bars and shares were brought into the business, any withdrawal of them from the business must be dealt with along ordinary and well-known busi ness lines, namely, that if a person withdraws an asset from a business he must account for it to the business at the market rate prevailing at the date of the withdrawal.\n\nThis contention was repelled by the majority on the ground that the transaction of withdrawal was not a business transaction and by the act of withdrawal the business made no pro fit or gain nor did it sustain a loss and the assess\n\nee derived no income from it. It was pointed out that the assessee, might have stored up a future advantage for himself but as the transactions of withdrawal were not business transactions anrl as the assessee derived no immediate pecuniary gain, the State could not tax them; for under the Incometax Act the State has IlQ pewer to tax a potential future advantage, all it can tax is income, profits and gains made in the relevant accounting year. In other words, the ratio of tha decision as respects tho first contention of the learned Attorney General\n\nws that there was no general principle of t11-xatioq\n\nCommissior oj\n\nIncOme .. tax.\n\nBombay, City f\n\n•• Bai Shirinhai\n\nK. Kooka\n\nDas J.\n\nr.\n\nunder income-tax law under which the State could ai; scsa a peroon on the basis of business profits that hu might have made tm ha.d not chosen to mJ.ke.\n\nIt was also pointed out that it was unreal and artificial to separate the business from its owner and treat them as if they weie separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact was non-existent. It was pointed out that a man could not trade with himself nor could he make profit or loss out of transactions with himself.\n\nThe second contention of the learned Attornl:\\' General was that if tho act of withdrawal was at a time when the market price was higher than the co;; t price then tho State was deprived of a potential profit. This contention was dismissed as unsound because, for income-tax purposes each year is a self-contained accounting period and one must take into consideration income, profits and gains made in that year and tbu assessing autho1 ity wa.s not concerned with p.otential pr-ifits which might be made in another year.\n\nFrom what h1Ls been stated above it would at once app•,, ar that Kikablwi's case (')was the converse of the present case.\n\nIn K.ikabhai's wse ( 1) a. part of the stoc:kin-trade was withdrawn from business, there was no sale nor any 1Lctual • profit.\n\nThe ratio of the decision was simply this: under the Income-tax Act tho State bas no power to tax a potential future advantage and an it can tax is income; profits and gaius made in tho relevant accounting year. [n the case under our consideration tho admitted position is that there ba8 Leen a sale of the shares in pursuance of a trading or business activity and actual profits have resulted from the salu. The question in the present case is not whether the State has a power to tax potential future advantage, but thu question is how should actual profits\n\nI()\n\n[1954] S, C.R. 2(9.\n\n3 S.C.R.\n\nSUPHEME COURT REPORTS 401\n\nbe computed when admittedly there has been a sale in the business sense and actual profits have resulted therefrom. We agree with the High Court\n\nthat in this respect there is a vital difference between the problem presented by Kikabhai's case (1) and the problem in the present case. We further agree with the view expressed by the High Court that the ratio in Kikabhai's case (1) need not necessarily be extended to the very different problem presented in the present case, not only because the facts are different, but because there is an appieciaable difference in the principle.\n\nThe difference lies in this : in one case there is no question of any business sale or actual profits and in the other admittedly there are profits liable to tax, but the question is how the profits should be computed.\n\nWe must, therefore, overrule the first two arguments of the learned Additional Solicitor General that the distinction drawn by the High Court between Kikabhai's case(') and the present case is not warranted on principle and that the ratio of the decision in K ilcabhai's case (1) must necessarily apply to the present case also.\n\nWhile we are on this question we must refer to a decision of the House of Lords in Sharkey v.\n\nWernher (')to which our attention has been drawn.\n\nBriefly put, the facts of that case were these : the wife of the assessee there carried on a stud farm, the profits of which were agreed to be chargeable to income-tax under case 1 of Schedule D.\n\nShe also carried on the activities of horse racing and training, which were agreed not to constitute trading. Five horses were transferred from the stud farm to the racing stables.\n\nThe cost of breeding these horses was debited to the stud farm accounts.\n\nOn the question of the amount to be 'credited as a receipt the assessee contended before the Special Commissioners that the proper figure to be brought in respect !Jf the transferred horses was the cost of\n\n(!) [1954] S.C.R. 219. (2)\n\n(1955) 36 T.C. 275.\n\nJ96Z\n\nCommi•sioner of l ncome-tax, Bombay, Ciry I\n\n•• Bai Shirin6ai\n\nK. Kooka\n\nDa1J.\n\n196%\n\nCommiasiorur 01\n\nlncomt--tn.'1: 0 Bombay, City I v.\n\nBai Shirinbai\n\n/\\, Kooka\n\nDtJJ J.\n\n402 SUPREME coli.HT HEFORTfS [i!!1>2J SUPP.\n\nbreeding. The Crown contended that the market value of the animalH, which was considerably higher, was the proper figure. The Commissioners docided in favour ufthc :is;; essee and the Crown demanded a case.\n\nThe case was first heard by Vaisey, J., who follow\n\ning the decision in Watson liros. v. llornb!f (1), held that the market value of the five horHes t.ransfPrTed from the stud farm wa.s the proper figure that should be credited in the accounts. VaiSl'\\'. J. hai; ed his decision on the ground that the oase' was indistinguishable in principle from an earlier decision,\n\nnamely, tht ofMncna11htPn, .T.. in Watson Bros. v.\n\nHornby ('). Wo mav here Rlato that in w .. tson Bros. v. llornliy (I) the :iFRf'SSt'e <'anied on the bu; iness of poultry brnetlers and dealers. In addition tu keeping birds on their farm for laying purposes, they had a hatchery which produced chicks primarily for sale as 'day-old chicks'. Some of theso chicks were transferred to brooder houses and bocame part of the stock on the farm.\n\nThe asscSBees were assessed to income-tax under schedule Din respect of the profits of tho hatchery part of tlicir business and under Schedule H in respect of the profits of the farm.\n\nTh(' question tl:at arose in that case was whother tho day-old chicks transferred to the farm should be eretlited as stock at the averagtc price at which they were sold and could have been bought in tho open market, namely, 4d. per chick, and that the difference between that price and the admitted cost of production of each saleable day-old chick, 7d., was an allowable loss.\n\nThe Crown contended that t.he hatchery and the farm were two activities of the Harne person who could not make a loss by tmnsferring from 0110 department to the other and therefore the chicks should he credited to the hatchery account at production cost. It was held by Macnaghten, J ., that in the notional :; air bet- \\Veen the hatchery and the farm, which should be treated a8 separate entities, the price to be credited was the \"reasonable price\" laid d.own by s. 8 of tho\n\n(I) (1942) 2• T.C. 506.\n\n- -',\n\nSale of Goods Act, 1893, and that on t.he admitted evidence this reasonable price must be the market price of 4d. per chick. This was the decision which Vaisey, J. followed. From the decision of Vaisey, J. there was an appeal to the Court of Appeal.\n\nThe Court of Appeal referred to 1asons we hold that the answer given by the High Court to the question of law referred to It was correct. The appeal accordingly fails and is dismissed with costs.\n\nSARKAR, J.-Two qu<'stions arise in this Appeal.\n\nThe first is whethPr the judgment of the Courc below is against the decision of this Court in Sir Kikabhai Premdu111d v. Commissioner of Income-tax.(') The second is, if so, does the decision in\n\nKikabhai's ca.se(l) require reconsideration? It appears that in Sharkey v.\n\nWernher(') where the question was the same as in Kikahhai's case(') and which was\n\ndecided a little lator than that case, the House of Lords took a view contrarv to 'that tiikcn in Kikabhai's case. It was on the hasis of the reasoning on which Sharkei/.~ case (') was founded that the ]llarncd advocate for the respondent contended that Kikabhai's case requires reconsideration.\n\nThe assesaee in the present casu is a lady of\n\n(l) [1954] s.c.R. 219; [1957] 23 [, T. R. 506. (:!) [1956] A.C. 58; 361:.C 2n.\n\nsome means. For many year past she had been holding various shares Ly way of investment on the dividends of which she was being charged to income-tax. In assessing the tax for the assess mentyear 1946-47, the accounting period of which was the financial year 1945-46, it was found that the assessee had been carrying on businesa with some of the said shares sincu April, 1945. It is not in dispute that in the accounting year 1 \\!46-47 also, which is the year with which we are concerned, she carried on the business with various such shares.\n\nA question arose in connection with the assessment of tax for 1946-4 7 as to how the profits of her trading activities were to be ascertained. 'rhe trade was one of purchase and sale of shares.\n\nIt is common ground that the profits of such a trade are the difference between what the thing sold fetched and what it cost to arquire.\n\nThe question arose because difficulty was felt in fixing the cost of acq 11isition. In regard to shares acquired by the assessee for her trade afber sue started it, the position was not in controversy, for the cost in respect of such shares was admittedly what he bought them for. The controversy concerned the shares with which she traded in this year and which, prior to April 1, 1945, she had been holding ~-\" investment, having acquired them, it may be, quite ,1 few years ago. The assessee contended t h<1t the cost of acquisition of this latter variety of Hharcs-and with these alone we are concerned in this appeal, wa.s their market value on the date when she started her business and thereby converted them from investment into stock-m-trado of her bmiuess.\n\nThe State contended that the cost of acquisition of these shares would be what she bought them for, no matter when she bought them and for wh,1t purpose. The Tribunal aecepted by a majority the contention of the assessee. At the irn; tance of the State the Tribunal then refoned the followin(;\n\nC ommis.rioner of\n\nlncnrne~ Tax, Bnm.bay,\n\nCity I v.\n\nB\"i Shirinbai .\n\nK. Kooka\n\nSarkar J.\n\n1!J62 •\n\nCommissioner 11/ /~.tar, Bomb~,\n\nC; ty I\n\nBai Shirinhai\n\nK Kook\n\nSarkar J.\n\n408 SUPREME COURT REPORTS [1962) SUPP.\n\nquestion to t.he High Court at Bombay under s.66( I) of the Income-tax Act:\n\n\"Whether the asses.eo's assessable profits on th\" sale of shares is the difference between the Btligainst the decision of the High Court. ·\n\nThe Stato contends that tho High Court's decision is against the judgment oft.his Court in Kikabhai's case.( 1). Thn.t is the first que;; tion which I propose to diRcuss.\n\nThe assessee in Kikabhai's case was a dealer in shares ani! silver. Tho method employed h.1 him in keeping his :wcounts was to ent-Or the cost price of his stock at th\" lwgi1111ing of the year, to credit the sale proceeclo of the sto\"k\n\nsold during the year and value tho unHnld tock a.t tho ond of the y1?ar at cost pricl\\ these latter b1•ing carried forward as the op., ning entries of tho next yea1's 'ccounts. It appe:mid that the asSl'SSt?e had withdr:iwn somo 8ilvor aml shares from his business and settled thC.Jl• upon \"\"rt11in trusts.\n\nIn the accounts he ont.ered the silver and Hh<1res so withdrawn at tlrnir coot price. The St;; ite contP11rh•cl that thes\" should hwc [pen enter1_, rl in tho •1ccount8 at their market value on the datt? th'-'Y wen• withdrawn from tho business. This Court found this contention una\"ccpt:i.blc am! held that tlwrntry sh1rnld\n\nbe of thn cost price irncl not of th\" mark\"t vaJ, ie on that date.\n\nIt h; i.d been contended on Lehalf of the State that \"A~ this is a business, aay witlJt'twc€'n .the t11·0 cases.\n\nThe present case is the sctme, for here n.lso the quc8tion is what an: tho profits of the lt\"i'eSRPt>'B entire trade, that is, how is the cost price to he calculated for\n\n(I) Ll954 \\ S.C.R. 219; [1957] 23 I.T.R. 506.\n\ntht purpose ? Here al-io, if the sale of the investment shares bv themselves was concerned there wollld in all probability have been no trading and no question of assessing the profits of such trading\n\nwould have arisen. Therefore b1th cases dealt with the asso;; smcn_t of actual rrofits ; none was concerned with assessment of notional profits.\n\nBut suppose the two cases are different as suggested, that does not seem to me to make any distinction. In Kikabhai's case ( ') it had been held that the withdrawal was not trading because a man could not trad\" with himself. In the present case f, he assessee did no doubt trade by selling her shares to a stranger. There was no fiction in this trade.\n\nBut when the assessee contends that in ascertaining the profits of a trading transaction actually done by her she should be permitted to value the stock involved in that trading activity which she had not acquired in the course of her trade at the market value of the date of the commencement of that trade,\n\nShe really says that she sh 1uld be allowed to proceed on the basis of a fiction that she had purchased from herself on that date for she had not then purchased it at all. She would be asking us to hold that which Kikabhai's case refused to hold.\n\nI am unable to agree that in the case of a real sale Kikabhai's case does. not forbid a dichotomy between the owner of a business and thebusiness itself for ascertaining the profits of that sale as the assessee .wants us to do.\n\nIt was also said that to apply the principle that one cannot trade with himself to the present case would be overlooking the actual fact that -money's worth was brought into the business. I am\n\nunable to appreciate this contention. There is no overlooking of the money's worth brought in, for\n\n(I) [1954] S. C.R. 219; (1957] 23 I. T. R. 506. '\\\n\n196B\n\nCommissioner of\n\nlncome--la1t, Bombay, City I v.\n\nBai Shirinbai\n\nK. Kooka\n\nCommi••ion1r of\n\nIncome a:r; Bambay. City l ..\n\nRoi Shirinbai\n\nK. Kooka\n\nSari= J\n\n412 SUPREME COURT ItEPORTS [1962] SUPP.\n\nthat money's \\vorth is value at the cost at which the stoek concerned was actually acquired from the market, may be as an investment and not as a stock in trade.\n\nI am un<1ble to appreciate h price at which actually they had be\"n previously acquired by the assessee. The real question is what were the sharos' worth in monoy for calcult1ting the profits. The contention of the respondent assumes that the money's worth must be calcuhted as on the date of the commencement of tho trade :ind hence really begs the question.\n\nChagla, C.J. who delivered tho judgment of the High Court, said that he did not undorstand Kikabhai's m8e (')to mean that evon for the purpoRe of accountancy or for the purpose of ascertaining commercial profits it is not open to the court to value the shares at the market price of the date on which they wPre brought into the buHiness.\n\nI am unable to agree.\n\nAccountancy, I suppose, is not based on fiction but deals with realities.\n\nWe a•c concerned with accountancy only for the purpo8e of ascertaining commercial prolit8, and it was only for\n\nthat purpose that this Court held that you cannot enter in your aeeounts the market value of goodA on the fiotional basi8 that yon sold them to yourself.\n\nChagla. C .. J.. thought that Kikabhai's cas\" wa~ not dealing with commercial profits.\n\nI think that si11ee that case wa8 considering profit\" for incometax purposes it was not dealing with anything else.\n\nI am also unable to 11grec with the view of Chagla, C.J., that the ratio in tho decision of Kikahhai's case has no application to the present caAe.\n\nThe rntio was that for the purpose of ascertaining tax1ible\n\nprofits it is not possible to conceive of one trading\n\n(I) [1954] S. C.R. 219. [1937] 231. T. R. 506,\n\n3 s.c.R. suPREME coURT REPORTS 413\n\nwith himself and it would apply here, for here also taxable profits are being ascertained.\n\nChagla, C.J. observed that what has to be ascertained is what an article costs the business and not the owner, but in Kilcabhai's case (') it was expressly said that when the business is owned by the assessee himself it is unreal to separate the business from its owner and treat them as if they were different entities trading with each other.\n\nChagla, C.J. also said that for Income-tax purposes profits of a busine.is have to be und_erstood in a wav that a man of business would understand it. I a~ not aware that a commercial man must compute profits on the basis of a fiction that he bas bought from himself and cannot compute his profits by deducting from the sale proceeds the price for which he had actually acquired the goods.\n\nKikabhai's case said that you cannot assess taxable profits on the basis of a fictional sale. If you cannot do that, neither do I think can you assess such profits on the basis of a fictional purchase in the market. And that is what the assessee wants us to do.' I am for myself entirely nnable to make any distinction between Kikabhai's case and\n\nthfl present case .\n\n. I have now to refer to Sharlcey's case (') and examine whether on the reasoning on which it was based it is necessary to reconsider Kikabhai's case.\n\nThat is the second question which arises in this case.\n\nI do not find the reasoning of that case so strong as to lead me to the opinion that the decision in Kikabhai's case was wrong. I first note that one of the learned Judges Lord Oaksey, took the same view as was taken by this Court in Kikabbai's case.\n\nIn dealing with Sharkey's case I will be referring to the judgment of the majority. (I) [195•] s.c.R. 219, [1957] 23 LT.R. 506.\n\n(2) (1956] A.C. 58 36; T.C. 275.\n\nCommissiune, of\n\nIncom~.taJC, Bomb2, Y, City I\n\nBai Bhiriribai\n\nK. Kooka\n\nSarkar J.\n\nC-Orrmiissiorur of\n\nIncome-tax, Bomiay, Cily I v.\n\nBai Shirinbai\n\nK. Kooka\n\nSarkar .J.\n\n4i4 SUPREME COURT REPORTS (1962) SUPi>.\n\n:N\"ow, Sharkf'-y's r:ase (') also dealt with tho withdrawal of assots from a taxable business. There a lady owned two enterprises, one a stud farm the incorne of which was liable to tax and another a raeing establishment, which was recreational and therefore not liable to tax. The lady transfcrT('d some horses from the stud farm to the racing establishment. In assessing the incomo of the stud farm a question aroso as to wha.t valuP should be put in its accounts for the horses transferred to the racing establishment. It will be noticed that by the transfer to the racing establishment of which she was the owner, the lady had only withdrawn the horses from her taxal.ile undertaking. The problem there was therefore just the same as in K ikabhai's Case(').\n\nIt was he Id by t.he House of Lords that the valuo to lie put on the horses withdrawn frrm th\" stud form was their market value at the date of the transfer and not the cost incurred on them for breeding and otherwise till the transfer. The House of Lords observed that in Incomc-tax Law a dichotomy between the owner of a busiIJCSS and the husiness is possible and presum:ibly therefore trailing between the two could be conceived for t:ix purposes in certain cases aud rl'ferred to some English authorities in support of this view. [ will assume that such a dichotomy is possibln in some cases but the question is whether it is possible in a case like Sharkey's case. On that question I f the suit the right of Saheblal to a share. in th<' property was not qmstioned: tho dispute principally turned upon the claim made by Bhuribai and her adopted son Rajkumar to a share in the property.\n\nPadamrhand had died before tho enactment of the Hindu Womens' Right t-0 Property Act, 1937, and his widow could not claim by virtue of that Act a share in the property of the family.\n\nBut Bhuribai and Hajkumar pleaded that the parties were governed in the matter of adoption by the customary law prevalent amongst the Jains of Central India, ;\\ladhya Pradesh, Vindhya Pradesh, North and W('stern India, and Hajkumar as a son adopted by Bhuribai to Padam Chand became a coparcener in the joint family a11d entitled to a share in tho property and accretions thereto.\n\nThe validity of the adopt.ion of Rajkumar was challenged 011 many grounds, one only of which is material in this appeal. It was submitted hy the conte5ting defendants and Bhuribai had no authority exptess or implied from her husband Padam Chand to adopt a son and that the adoption of Rajkumar as a son without such authority was invalid. 'lhe Additional District Judge rejected this plea and ordered a preliminary decree for par ti ti on and declared that the share of the plaintiff was I/24th, of ;\\Iunnalal, his wife and _3 sons eolleutivoly was 5/24th, of lamchand and hlB sons l/4th, of Khilonabai I /4th and the remaining l/4th share belonged to Iiajkumar.\n\nAgainst the decree, Munnalal, Ramchad, Khilonabai, wife and sons of Munnalal and the wife and sons of Ramchand who were defendants 1 to 10 preferred an appeal to the High Court of Madhy.a Pradesh.\n\nDuring the pendency of this appeal Khilonabai died on July 3, 1956 and Ramchand and Munnalal applied to be implea~ ded as her legal representatives in respect of the interest in the property awarded to Khilonabai by the preliminary decree. By order dated December 12, 1957, the District Judge held that the interest of Khilonabai devolved upon the applicants by virtue of ss. 15 and 16 of the Hindu Succession Act, 1956 which was brought into operation on June 14, 1956, and that the sons of Munnalal, Rarnchand and Padam Chand could not take a share in Khilonabai's interest.\n\nBefore the High Court two questions were canV:assed: (1) as to the factum and validity of the adoption of Rajkumar, and (2) devolution of the share of Khilonabai declared by the . preliminary decree on her death. The High Court upheld the finding of the trial Court that Rajkumar was in fact adopted by Bhuribai as a son to her husband on July 26, 1952, and that amongst the Jains residing in the North West Province, Central India, Northern India and in Bombay a widow could adopt a son to her deceased husband without any express authority in that behalf. In so holding the High Court relied upon the judgments of the Privy Council in Pemraj v. Mst.\n\nOhand Kanwar and Mangibai Gulabchand v.\n\nSuganchand Baikamcand (1:. But the High Court declined to accept the view of the trial Court that the right ofKhilonabai declared by the preliminary .decree devolved upon Munnalal and Ramchand alone. In their view, Khilonabai's interest under t.he decree being incohate was not \"possessed\" by her within the meaning of s. 14\n\n(I)\n\n(1947) L.R. 74 I.A. 254. (2) A.i, R. (1948) P.C. 177.\n\n1962 -·-\n\n8. S. Munna Ltl\n\nS.S. Rajkumar\n\nShah J.\n\n8 S. !llwmo Loi\n\nS. ). Rojlnanir\n\n:>hoo J.\n\nof the Hindu Succession Act, 1956, and on her rty, and for that pur pose the court authorised bim to ascertain the property, the debts which the family owed and also tho mdividual liability of the parties for the debts.\n\nFor deciding those questions the Commissioner was empowered to record statements of th& part ics, frarue\n\nissues and to record evidence as might be necessary.\n\nThe commissioner waR also directed to submit his proposals relating to the right of Bhuribai to b.e maintained out of the joint family property. This order, it appears, was passed with the consent of all the parties. It is true that the decree drawn up by the trial Court is not strictly in accordance with the directions given in the judgment. But it is manifest that the trial Judge only directed the Commissioner to submit his proposals for partition of the property, and for that purpose authorised him to ascertain the property which was available for partition and to ascertain the liability of the joint family.\n\nBy so authorising the Commis>ioner, the trial Court did not abdicate itR functions to the comissioner : the commissioner was merely called upon to make proposals for partition, on which the parties would be heard, and the Court would &djudicate upon such proposals in the light of the decree, and the contentions of the parties. The proposals of the commissioner cannot f1 om their very nature be binding upon the parties nor the reasons in support thereof. The order it may be remembered was made with the consent of the parties and no objection to the order was, it appears, pressed before the High Court.\n\nWe do not think that any case is made out for modifying that part of the order.\n\nThe parties to this dispute are Digamher J ains of the Porwal sect and are resident of Jahalpur.\n\nJains have generally been regarded as heterodox Hindus and in the absence of special custom they are governed by the rules applicable to Hindus. As observed by the Privy Council in Sheokuarbai v. Jeorafj.(') The Jains are of Hindu origin ; they are Hindu dissenters, and although as was pointed out by Mr. Mayne in paragraph 46 of his Hindu Law and Usages-\"Generally adhering to ordinary Hindu law, that is, the law of the three\n\n(I) A.I.R. (1921) P.C. 77.\n\n196~\n\nS. S. llfuna Lal\n\nv, S. S. Rajkum'°r\n\nShah J.\n\n19~\n\n8. S. llumaa Lal\n\nS, S. J, n)kt.mOT\n\nShah J.\n\n4Hi SUPREME C'OURT REPORTS (1962] stJPP.\n\nsuperior castes, they recognise no divine authority in the Vedas and do not practise tht: Shradhs, or cere111ony for the dead.\" \"The due performance of the Shradhs, or religious ceremonies for the dead, is at the baso of the religious theory of adoption, but the Jains have so generally adopted the Hindu law that the Hindu rules of adoption are applied to them in the absence of some contra1y usage x x x.\" But amongbt the Jains a custom enabling a widow to adopt. a son to her husband without express authority has been recognised by judicial decisions spread over a period longer than a century. In Pemraj v. ,}f'U8Gmmad Chand Kanwar(:), the Judicial Committee of the Privy\n\nCouncil after •a review of the case law obseved :\n\n\"x x x x, in many other parts of India\" (parts other than the Provinces of Madrae and the Punjab) \"it has no\"\" been established by decisions based on evidence from widely separated districts and from different sect.s that the Jains observe the custom by which a widow may adopt to her husband without his authority. This custom is based on religious knants common to all sects of Jaine, and particularly their disbelief of the doctrine that the spiritual welfare of the deceased husband may be affected by the adoption, and though it cannot be shown that in any of the decided cases the parties were of the Khandelwal sect, yet in none oft.he cases has a distinction been drawn between one sect and another. It is now in their Lordships' opinion no longer premature to hold that the custom prevails generally among all Jaine except in those areas in which there a1 e opccial reasons, not operative in the rest of India, which explains why the custom has not established itself, Mayne, in his treaties on Hindu Law and Usage, at pai:o 209, has lent the weight of his authority to the proposition that among the Jains, except in tho MadraH Presidency a sonless widow can adopt a son to her\n\n(l) (1947) L.K. 74 LA. 2$4.\n\nhusband without his authority or the consent of his sapindas\". This view was reiterated by the Privy Council in a case reported in Mangibai Gulabchand\n\nv. 8uganchand Bhikamchand (').\n\nThe Attorney General for the appellants, however, contends that there is no evidence of a custom authorising the widow of a Porwal Digamber Jain residing in Jabalpur to adopt a son to her husband without express authority. Counsel submitted that the observations in the two cases relating to the custom of adoption must be restricted to the sects to which the parties to these cases\n\nbelonged, and in so far as they purport to extend the custom to all Jain residents in India outside Madras and the Punjab they are mere d!cta and not binding upon this Court.\n\nIn Pemraj's case the parties belonged to the Khandelwal sect domiciled and resident in Ajmer and in Mangibai's case the parties were Marwari Jains of the Vis-Oswal sect who having migrated from J odhpur had settled down in the Thana District of the Bombay Province, but the opiniun of the Judicial Committee expressly proceeded upon a well-recognised custom applicable to all Jains in the territory of India (excepting Madras and the Punjab) and not upon proof of a restricted custom governing the sects of Jains to which the parties belonged. Undoubtedly, as observed by this Court in 8araswathi Ammal v. Jagadamhal (') in dealing with the quantum of proof rvquired to prove a family or local custom, \"it is incumbent on a party Retting up a custom to allege and prove the custom on which he relies and it is not any theory of custom or deductions from other customs which can be made a rule of decision but only any customs applicable to the, parties concerned that can be the rule of decision in a\n\nparticular case. x :x: x\n\n(1). A.J.R. (1948) P.C. 177.\n\n(2) {1U53) S.C.R. 939.\n\nS.S. Munna.Lal v.\n\n8. S. Rajkwnar\n\nShah J.\n\nJ96Z\n\nS.S. Munna lREME COGRT REPORTS [1962] SUPP.\n\nTheory and custom arc antitheses, custom cannot be a matter mere of theory but must always be a matter of fact and one custom cannot uo cleductcd from another.\n\nA community living in one particular district may have evolved a particular custom but from that it does not follow that the cummunity living in another district is necessarily following the same custom.\" But the application of the custom to tho parties to this .appeal does not appear to proceed upon analogies or dcductioDS.\n\nIt governs the parties, because the custom has become a part of the law applicable to Jains in India (except in Madras and the Punjab) by a long and uninterrupted course of acceptance. .\n\nA review of the cases decided by difforent Courts clearly shows that the custom is generally applicable to Jains all over India, except the Jain domiciled in Madras and the Punjab. The earliest case of which a report is available is Maharaja is held upon the evidence consisting partly of judicial decisions and partly of oral evidence that tho custom thl]-t a sonless Jain widow wn, s competent to adopt a son to her husband without his permission or tho consent of his kinsmen, was sufficiently established and that in this respect there was no material difference in the custom of the A!l'garwal, Choreewal (Porwal), Khandwal and Oswal sects of the Jains ; and that there was nothing to differentiate the Jains n, t Arrah from the Jains elsewhere.\n\nThe judgment of the case proceeded upon an elaborate examination of numerous instances in which the custom was held established. In Manohar Lal v. Banarsi Das(') and in A8 ha1ji K1tnwar v. Ru.pchanrl(') a similar castom was held esta.hlished. In the latkr ca, se a large number of witnesses were examined at different places and on a review of th0 decisions and the evidence the Court held the m1stom proved. ' The judgment of the Allahabad\n\n(l) (1886)1.L.R.UAl\\.319.\n\n(2) (188'lJl.1-.R.17Cal.5<8.\n\n(3) (18991J.L.R.27 Cal. 379.\n\n(4) (1907) 1.1 .. R. 29 All. 495.\n\n(5) (1908) J.L.R. 30 All. 197.\n\nl:Jb2\n\nS. S. iJ'Iurina L'll\n\nS.S. Rajlcnml'r\n\n19fi2\n\nS.S. Munno LaJ\n\nS. S. Rajkumor\n\nShah J.\n\n430 SUPREME OOURT REPORTS [19e2) SUPP.\n\nHigh Court in .-1sharfi's case was affirmed by the Privy Council in R11p Chand v.· .Jamim Prasod. ( r) It may be stated that the right of a .Jain widow to adopt without authority of her husband was not questioned before the Privy Council. Iu Jiwraj\n\nv. Jft. Sl/R/Jhw:ar/J(Ji (') the Court of the Judicial Commissioner, agpur held that the permission of the husb1ind was not neceHSary in the case of a Jain widow. to adopt a son. This c'l.Be was also carried to the Privy Council and the judgment was affirmed in Slieokuarbut v . .Jr.oraj (\").\n\nIn Banarsi Das v. Samat Prasad(') a similar custom was held\n\nestitblishcd. The decisions in all theRe c&Bes proceeded not upon any custom peculiar to the locality, or to the seet of .fains to which they belonged, but upon tho view that being Jains, they wore govern1•d by the custom which had by long accep\n\nta.nee hecome part of the law applicable to them. It is well-settled that where a custom is repeatedly brought to the notice of the Courts of a countrv, the courts mav hold that custom intro duced into the law without the neceBSity of proof in each individ1ml case. (Ramn. Rno v. Raja of Pitlapnt) (•).\n\nThe plea ahout the invalidity of the 1ldoption of Rajkumar by Rlmribai must therefore fail.\n\nKhilonabai died after the Hindu Succession Act was brought into operation on June 14, l!l51l.\n\nThis Act by s. 2( I )(b) applies to Hindus and also to persons who arc , Jains by religion.\n\nThe preliminary deer\"e was passed on .July ~9, 195.5, and t.J.ercby Khilona.hai wa.s declared entitled to a fourth Hhare in the property of the family.\n\nSection 14 of ,, f the Hindu SuccoHsion Act, l!l51l provide~:\n\n•'14(1) Any property possessed hy a fomalo Hindu, whether acquired before or after the commencement of this Act, ahall be\n\n11) (19IOJ [.J..R. 32All.1f7. 121 A.I.R. (1920\\ Nag.162.\n\n<3) A.!.R. (1921) P.C. 7;\n\n(4) (1936) l.1-R 58 All.1019. (5)\n\n(1918) L.R. 4 5 I.A. 11~.\n\n3 S.C.R.\n\nSUPREMJJ: COURT REPORTS 431\n\nheld by her as full owner thereof and not as a limited owner.\n\nEXPLANATION. In this sub-section \"property\" includes both movable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after • her marriage, or by her own skill or exerti-On, or by purchase or by prescription, or in any other manner \"hatsoever, and also by such property held by her as stridhana immediately beforn the commencement of this Act. ·\n\n(2) Nothing contained in sub-section ( l) shall apply to any property u.oguired by\n\nway of gift or under '.1 will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.\" Section l 5 provides:\n\n\"15 (I) The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16,- -\n\n(a) firstly, upon the sons and daughters (including the children of any predeceased son or d•m\n\nghter) and the husband;\n\n(b) secondly, upon the heirs of the husband;\n\n(c) thirdly, upon the mother ml father;·\n\nS.S MunnaLal\n\nS. s. Bajlcumar\n\nShah J.\n\n' S Af11m1al4l v.\n\nS. ). l111ji..uninr\n\n(d) fourthly, upon the heirs of the father;\n\n(e) lastly, upon the heirs of the mother;\n\n(2) Xotwithstanding anything contained in sub.section (I),--,\n\n(a) any property inherited by a female Hindu from her father or mother shall devolv<', in the absence of any son or daughter of the deceased (including the children of any predeceased son or tation .. Tho expression includes property acq11ired by a Hindu female by inheritance or devise, or at a partition, or in lieu of maintenanee or arrears of maintenance, or by gift from :my perso11, whether a relative or not, before at or aft.er her marriage, or hy her own skill or exert.ion, or hy purclmse or by prescription, or in any other man11er what.so-evcr. Ry s, 14(1) manifostlv it. is intended to convert the interest which a Hindu fomal\" h:tH in property however restricted the mtt.ure of that interest under the Sastrio Hinrlu law may be into absolute estate.\n\nPrata p m11ll'.• case undoubtedly laid down that till\n\nactu:tl division of the share decln.red in her favour by a prelimin11, ry decreP for partition of the joint family estate a Hindu wife or mother, was not recognised as owner, but that rule cannot in our judgm1'nt apply aftpr the ennt.ment of the Hindu Succussion Act.\n\nThe Aet is a codifying nnactmcnt, and has made far reachiu\\( chrty possessed\n\nhy her at th,, time of hor den•:h. It is true that unde!\" the ::i!ce.1 and IJerar Acl. No. XIV of 1938, (1939) F.C.R. 18, The Pro1:ince of Afodra\" v. Boddu Paidanna and Sons, ( 1942) F.C.R. 90 •nd Goi:ernor General in Council v. Province of Madra~, ( 1945) L:R. 72 I. A. 91 applied.\n\nIn vir:\\v of!'. 3 of the repcali11g Ordinance it could not be said that the purpose of the Ordinance had been exhausted.\n\nIn the present case r. 3(a) of the Coal Production Fund Rules 1944, had no applic•tion and the only rules applicable was r. 3 (b). Ruic 6 does not say that if the consignee docs not pay the consignor is liable to pay and it does not purport to enlarge the statutory liability of the consignor or the consignee, as the case may be.\n\nHeld, further, that a point of law not taken in the statement of case cannot ordinarily be allowed to be urged at the time of hearing of the appeal.\n\nCrvIL APPELi.AT~; .Jumsu1C'rION: Civil Appeals Nos. 183, 184 of 1959.\n\nAppeals from the judgment and decree dated September 5, 1954, of the .llaclhya Pradesh High Court in M.C. Case o. 214 of 1!154.\n\nA. V. Visu-anatha Sa, stri and J.B. Dadachanji for the app. D. Mown for respondent No.I. (in both the appeals).\n\n1962. February 27. 'Ihe Judgment of the Court was delivered by\n\nSUllBA RAO, J.-These two appeals by certificates are filed against the judgment and decree of the High Court of Madhya Pradesh, Jabalpur, by the two defendants in Civil Suit No. 1 of 1957, a suit filed by the Union of India, owlng and representing the Central and Western Railways Administrations, New Delhi; against tlie said defendants for the recovery of coal cess amounting to Rs. 81-4-0 and costs.\n\nThe material facts may be briefly stated.\n\nUnder Ordinance No. 39 of 1944, the Central Government was authorised to levy and collect as a cess on all coal and coke despatched from collieries in British India a dutv of excise at such rate, not exceeding Rs. 1-4-0 per 'ton. In exercise of the power conferred on the Central Government under s. 5 of the Ordinance, the said Government made rules ; and r. 3 thereof, the duty of excise imposed under the Ordinance on coal and coke shall, when such coal and coke is despatched by rail from collieries or coke plants, be collected by the Railway Administration by means of a surcharge on freight, and such duty of excise shall be recovered either from the consignor or the consignee, as the case may be. On January 1, 1947, February l, 1947 and February 7/9, 1947, the second defendant, namely the Amalgamated Coalfields, despatched by rail to the first defendant three consignments of coal from Junner-Deo to Indore. The freight for the three consignments was payable at the destination station\n\ni. e, Indore. The first defendant duly paid the freight and took delivery of the coal but by some mistake the cess payable as surcharge on the three consignments was not recovered from the first defendant at the time of delivery of the goods. Under\n\nR.C. Ja •l ...\n\nUnion of India\n\nSubba Rao J.\n\n1116%\n\n11.C .• Jail\n\nY, Um.on o/ /nJ, a\n\nSubba Rao J.\n\n440 SlJPRE;\\lE COURT REPORTS [Hl6:!] SUPP.\n\ns. 55( 5) of the Indiau Hail ways Act the H.ailway Administration can rcco\\'er tho freight or any balance thereof left umecuvercCO\"l\"ered after the Constitution came into force, as thero was no longer any authority of law to suatain the said tax within th1' meaning of Art, 265 of the Constitution. To a11preciato the contention it would be necessary to read the ma.teiial parts of the relevant provisions.\n\nOrdinance 39 of 1944 Section 2.\n\nImposition and Collection of excise and Customs duties.- ( I) With effect from such date as the Central Government may, notification in the Official Gazette, appoint in this behalf, there shall be levied and collected as a cess for the purposes of this Ordinance, on all coal nnd coke despatched from collieries in British India a duty of excise a.t Buch rate, not excoeding one rupee a.nd four annas per ton, as\n\nmay from time to timo be fixed by the Central Govornment by notification in the Official Gazette. 'l'he Repe, aliny Ordinance. Ordinance 6 of 1947.\n\nSection 2.\n\nTho Coal Production l•'und Ordinanoe, 1944, shall be repealed, and for the\n\navoidance of doubts it is hereby declared that the provisions of Section 6 of tbe General Clauses Act, 1897 (X of 1807) shall apply in respect of such repeal.\n\nGeneral Clauses Act, 1897 (X of 1897).\n\nSection 6.\n\nWhere this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto, made or hereafter to be made, then unless a different intention appears, the repeal shall not:- x x x x x x (c) affect any right privilege, obligation or liability acqired, accrued or incurred under any enactment so repealed. x x x x x\n\n(e) affect any ............ legl proceedings or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment ......... and any such legal proceedings or remedy may be instituted, continued or enforeed ......... as if the Regulating Repealing Act or Regulation had not been passed.\n\nSection 30. In this Act, the expression Central Act, wherever it occurs ............ shall be deemed to include an Orilinance made and promulgated by the Gov<'rnOrGeneral .........\n\nConstitution of India Article 372. { i) N otwitbstanding the repeal by this Constitution of the enactments referred to in article :{95 but subject to the other provisions of tbis Constitut, ion, all thn laws in force in the territory of India immediatelr btifore the cmnmenceent of thia,\n\nR. C. Jail\n\nV, Union of /11di1\n\nSuhba Rno J,\n\n19\"2\n\nR.C. Jall\n\nUnion of India\n\nSubha Rao J.\n\n446 SUPREME COUR'.\"i: .REPORTS [1962). SUPJ:>.\n\nConstitution shall continue in force therein until altered or repealed or amended by a competent Legislaturn or other competent authority.\n\nOn August 26, 1944, the Governor-Gener.'>! of In, bys. I (3) of The India and Burma (Emerg•ncy Provisions) Act, 1940, had tho effoct of equating Ordi nances which were promulgated between .June 27,\n\n1940, and April I, 1946, with Acts passccl by t.he Indian Legislature without any limitation of time as regards their c!uration, and therefore continuing in forec until they wore repealed. It followH from thi; i decision that the Ordinance promulgated on August 26, 1944. was I' permanent one and would continue to be in fore till it was repealed.\n\nThe second Ordinance, that itc_ repealing, Ordinance, waH promulgated on April :!6, l!l4i, and the repeal took effect from :lfay I, 1947.\n\nBut in express term it declared that tho provisions of s. G of the General Clauses Act, 189i (X of l89i) Hhall apply in respect of the repeal. 'Vithout the said cxpr<>ss provision, s.H, read with s.30, of tho General Clauses Act, might have achi<'ved the said result, but e.T abundanti cautela and to place the matter bcy•HHI nny\n\ncontroversy, s.(; of the General Clans<'S Act w1Ls expressly ma.de applicable to tho repeal.\n\nUoder s.6\n\n(I) [1957].S.C.R._634.\n\nor General Clauses Act, so far it is material to the present case, the repeal did not affect the right of the railway to recover the freight or the liability of the defendants to pay the same, and the remedy in respect of the said right and liability. Tl)e result was that Ordinance 39 of 1944 and the rules made thereunder must be held to continue to he in respect of the said right and liability, accured or incurr<'d before the said Ordinance was repealed and the remedies available thereunder. But the life of the repea ling Ordinance had expired on.November J, 1947.\n\nWhat was the effect of the expiry of the repealing Ordinance on the said liability continued after repeal in respect of past transactions?\n\nThe repealing Ordinance, being a temporary one, expired after it fulfilled its purpose.\n\nAs it had continued the life of the original Ordinance, which was a permanent one, iu respect of past transactions, the expiry of its life could not have any effect on that law to the extent saved. The decisions relating to the repeal of a temporary Ordinance with a saving clause have no bearing in the present context, for in that case the repealed Ordinance, in so far as it was kept aliv<', could not have a larger lease of life than the repealed and the repealing Ordinances possessed. If so, it follows that the repealed Ordinance, to the e:ictent saved, continued to have force under the Art. 372 of the Constitution until it was altered, repealed or amended by competent Legislature. It cannot, therefore, be said that the coal cess was levied or collected without the authority of law,\n\nIt is then contended that the excise duty cannot legally be levied on the consignee, who had nothing to do with the manufacture or production of coal. The argument confuses the incidence of taxation with tJ>~ machinery provided for the collectjoµ tqereof. The natqre of an e:iccise d11ty J:ias beeIJ\n\nR. G. Joli\n\n•• Uaion of India\n\nSubba Rao J,\n\n/LC.Jail\n\nv, Unim of Ind/•\n\nSubb1 Rao J.\n\n448 SUPREME COURT REPORTS (1962) SUPP.\n\nconsidered by the Federal Court and the Privy Council. In In re lhe Central Province& und Bemr Act No.\n\nXIV of lf)38( 1), which was a spclcial reference by the Governor Genenl to the Federal Court under~. :!l:l of the Govllrnmnt of forl.ia Act, l935. Gwyer, C.J.,\n\ndescribed \"excise duty\" thus:\n\n'But its prima.ry and fundamental moaning in Englih is still that of a. tax on articles produced or motnufactured in the taxing country and int.ended for homo consumption.\"\n\nIn dealing with the contention advanced on behalf of the Government of India that an excise duty was a duty which may bu imposed on home-produced goods at any stage from production to consumption, the learned Chief Justice observed:\n\n\"Thia is to confuse two things, the na. ture of excise duties and the extent of the federal legislative power to impose them.\" After referring to Blackstone and Stophen's Commentaries, the learned Chief .Justice proceeded to state:\n\n\" ......... a brief examination of those duties shows that in practically all ces it iq the producer or manufacturer from whom the duty is collected.\n\nBut there can be no reason in theory why an excise duty shoulrl not be imposed even on the retail sale of an artiele, if the taxing Act so providP8.\n\nSubjeet alway8 to the legislative competence of the taxing authority, a duty on homo-produced good8\n\nwill obv:ioue ly be impose discovered and thereupon the [ncon1e-1ax Officer i:-sucd notice pointing out the error in including in the inco1nc the net dividend without being grossed up, \\Yhilc at the same time allowing credit for the tax deemed to have br-en paid thereon, and averred that this wa.c; a mistake apparent on the record\" which he proposed to rectify under s.35 of the Act.\n\nHeld, that in vic1, v of the dccbion in .M/s. Hou1rah Trading Co. v.\n\nCo, nniissioner uf Income-.1ax, it is only the rcgistere arc entitled to the benefit of the credit for tax paid by the company under s.18(5) as well as tl1e cnnesponding grossing up under s.16(2).\n\nOn that basis the only prsons \\vho were entitled to be treated as shareholders to whom the provisions of s.16(2) ands. 18(5) of the lncomc-1'ax Act \\\\'ere attracccd were the three partners in whose natne the forty shares stood registered.\n\nHeld. further, that the Income-tax Officer and Jurisdiction under s.3j Eo rectify errors but not to effect merely rc-arljustmcn t o as to avoid the illogicality in an error which is still permitted to contint1c.\n\n!Jehl, also, that it is not possible to correct the initial error in the procee:iings because the notice under s.35 issued tu the parties \\\\hich is thr foundation of the jurisdiction to effect the rcc1ific;1tion 1 sought not the correction of the error but the perpetuation of it th'lugh. in an altered and a less objectionable frcn11 the point of vic\\v of Revenue.\n\nlJ!t:ssrs. llo1crnh 7'rading Co., Ltd. v. TM Commis1ioner of Income-tar, Calr.atlct, ll9:19 Supp. 2. S. C.R. 448 applied.\n\nCIVIL APPELLATE JuRISllICTION: C. As. Nos. 502 to 505 of 1960.\n\nAppeals from the judgment and orders datd Janunry 14, 19.57 of the Bomhny High Court in Special Civil Applicn.tions Xos, 1848 to 1851 of 1956.\n\nN. D. Karkhrini8 and P. D. Men.on for the l\\ppellant (in a.II the four appeals).\n\nS. T. Desai .and J. N. Shroff for the Respondents.\n\n1962. February, 27. The Judgment of the Court was delivered by\n\nAYYANGAR, J.-These four appeals are pursuant to certificates granted by the High Court of Bombay under Art. 133(l)(c} of the constitution and raise identical questions for consideration. 'rhe respondent in these four appeals are each of the four partners in a firm constituted under the name of Mafatlal Gagalbhai & Sons and which was composed of Navinchandra Mafatlal, Arvind N.\n\nMafatlal, Yoginder N. Mafatlal and Homant Mafatlal with shares of 5/16, 3/16, 3/16. and 5/16 respectively in that firm (It has to be mentioned that Navinchandra died subsequent to the decision of the High Court and his legal representatives have been\n\nbrought on record in Civil Appeal No. 502of19f9 but this circumstance being irrelevant we are ignoring it for the purposes of these appeals). The firm was registered under the Indian Income Tax Act. There was a private limited company named Mafatlal Apte and Kantilal Limited registered under the Phaltan State Companies Act. Ten Shares in this private company stood in the name of Navin Chandra, 10 in the name of Arvind and 20 in the name of Hamant.\n\nFor the account year of the company ending Sep- . tember 30, 1945 tl:>e company disclosed a net profit of Rs. 1,09,165/-. The company, however, did not declare any dividend out of those profits but paid income-tax and super-tax thereon. After the merger of the Phaltan State in the Indian Union and the extension of the provisions of the Indian Income Tax Act thereto, the Income Tax Officer who had jurisdiction over the assessment of the company, issued notice to it under s. 34 of the Indian Income Tax Act and acting under the provisions of s. ~3A thereof directed that the undistributed assessable incom!' of the company which amounted to Rs. 68,228/- should be deell'.led to have been djstribnted as divide:nd\n\n196!\n\nIhe lni:om1 Tax\n\n • O.fficer •• A.•ind N. Mafatl al\n\nAyyangar J.\n\nTht lncuma TAK\n\nO/fl\"r\n\n•• • Ard\"d N. Maf•llaJ\n\nAyan.('4\" J.\n\namong the shareholders as on the date of the General Rody Meeting of the company (i.e., on Jia.rch II\n\n1940).\n\nBefore the s oi.Jj\"ctcd to the rectification, but almost tho o!ltirely of the grounds on which the objection w~'\n\nbased related to the legality of the original assessment and the assessees desired that if any rectification was to be made it must be in relation to those items and not in regard to that for which notice had been served. The Income Tax Officer by his order dated October 12, 1955 rectified the assessment by grossing up the newly added dividendincome by the addition of the tax deemed to have been paid by the company thereon and retained the original relief granted under 's. 18( 5) of the Act.\n\nAfter unsuccessfully appealing to the higher authorities for relief against this rcetification the assessees filed writ petitions invoking the jurisdiction of the High Court under Arts. 226 and 227 of the constitution for prohibiting the authorities from taking proceedings for the enforcement of the orders dated October 12, 1955.\n\nThe learned Judges allowed the petitions. The Income Tax Officer thereafter moved the High Court for certificates of fitness under Art. 133(l)(c) and these having been granted the appeals are now before us.\n\nThe ground upon which the learned Judges granted• the relief to the respondents was briefly this : The order of assessment had proceeded on the basis that the firm of Mafatlal Gagalbhai & Sons was the shareholder who had bet>n in receipt of the dividend-income and the individual partners of the firm had been made liable for their share of the profits derived from th; s registered firm. In such circumstances the learned Judges held that what was distributed to the individual partners could not be deemed to bn dividend-income within s. 16(2) of the Income Tax Act. It is to test the correctness of this construction of s. 16(2) that these appeals have been preforred.\n\nIn our opinion, however the appeals have to be dismissed on a short ground which does not involve any consideration of the correctness of the constrqction adopted by the Hi$h Coqrt, of s.16(2)\n\n196~\n\nThe ln&\"mt TDX\n\nOfficer\n\nA, vjnd N. Mafatlal •\n\nAyyanlarJ.\n\nTiu ft1rotrl4 T11x\n\nOfji\"'\n\nAt11ind N • .\\l ojatlai\n\n460 SUPREME OOURT REPORTS (1962] SUPP.\n\nof the Income Tax Act. This Court has held in Messrs. Howrah Trading Co., Ltd. v. '!'he Commissioner of Income-1'm: Calwtta (1) that it is only the registered shareholder who is entitled to the benefit of the cr•)dit for tax paid by the co!upany under s. 18(5) ae well as the corresponding grossing up under s. 16( 2).\n\nOn that basis the only prsons who were entitled to ho treated as shareholders to whom the provisions of ss. 16(2) and 18(1) of the Income Tax Act wore attracted W('re the three partnern in whose names thP 40 shares stood registered, as detailed <'Airlier.\n\nAn error had therf'fore been committed by the Ineome Tax Offieer in treating the registered firm as the owner of the shares in respect of the entire number of •IO shares. It was not this initial and fundamental error th:it was sought to be r<'ctified\n\nby tho proceedings under s. 35, hut. tho removal of an , inomaly in that error which continued to be affirmed; in other words the object of the proceedings under s. ;15 was t•> carry out to its logical con clusion the error which had been committed in the order of assesRment dated October 12, l!J55 paBRed after invoking the provisions of s. 34.\n\nWe consider the submission of leiirned Counsel for th?: respondents that the Income Tax Officer had jurisdiction under s. 3.) to rectify errors hut not to effect merely readjustments so as to avoid illogicalities in an error wliih is still permitted to continue is wellfounded.\n\nIt has furthl'r to be mentioned that it is not possible to correct the initial error in these proceedings because the notice under s. 3 3 w)lich is the foundation of tho jurisdiction of the officer to effect the rectification, sou!!ht in realitv not t.he correction of the (•rror but the 1>erpotuation of it though in an altered a11 in the lease to one R and the appellant K , ... hich \\.\\'as accepted hy tht: trustees.\n\nAfter due notice in J 9'i6, the Trustees filed a suit for ejectrnent against Rand K, in tl1c Bombay (; ity Civil Court. R had died before the filing of the suit and the plaint was amended by striking out the name of R. The appellant as defendant took a number of pleas; (a) notice was invalid as it had been served only upon one of the lessees, (b) suit was bad for non-joinder of the heirs and the legal representatives of R, (c) Jurisdiction of City Civil Court was challenged as the suit was governed by Rent Act, (d) and lastly, that the contrar.t to deliver vacant possession \\vas in1possible of pcrformanrc and the said irnpos:siliility rendered the clairn of the plaintiffs incompetent. field, that once it i!' held that the tenancy \\vasjoint a notice to one of thr joint tenants \\vas sufficient, and the suit for the .same reason was good.\n\nHeld, further, that the suit as laid for vacant possession of the site and in tlie City Civil Court '\"'as co1npetant.\n\nHeld, that in view of the definition \"premises\" in s.5(8) and the events leading to the arncndment of s. 4, the amendment was enacted to cut down by a definition the operation the word~ \"any prendses belonging to the Government or a local authority\" by excluding buildings which \\\\ere occupied ny sub-tenants even though tile building belonged to the Government or continued to belong to it and any action of the Government or local authority in respect of the land falls to be governed by >Ubs. (I) and not sub-s (4) (a) of the Rent-control Act.\n\nHeld, therefore, if tl1c Government or a local authority v.:anL<; to evict a person from the land, the provisions of the Bombay Rents, Hotel and Lodging Houses Rates (Control) Act, 1947, do not come in the way.\n\nFor the same reason, the suit for ejectment docs not have to be filed in the court of s111all causes, as required l>y a !lent Control 1\\ct but in the City Civil Co\"rt.\n\nIf the origipa) lessees took on lease not only the land but also the building, it is not open to their assignees to clain1 that the ownership of the Government extended only to the land and not to the buildings.\n\nIf the appellant cannot evict his teilant so as to be able to remove the building, in exercise of the right conferred on him, that is _an unfortunate circumstance, 'vhich does not serve to entitle him to defeat the rights of Pact Authorities.\n\nQuero :-The Port Trust Authorities, whether c.an evict the sub-tenants ? Bhatia Co-operative Housing Society Ltd. v. D. C. Patel,\n\n(1953) S.C.R. 185 and Ram Bhagwandas v. Bombay Corporation, A.I.R. 1956 Born. 364, referred to. .\n\nCIVIL APPELLArE JURISDICTION: Civil Appeal No. 302 of 1961.\n\nAppeal by special leave from the judgment and order dated September 24, 1959, of the Bombay High Court in F.A. No. 731 of 1959.\n\nB. Se:n and/. N. Shroff, for the appellant.\n\nM. C. Seialvad, Attorney General of India, B.\n\nParthasarthi, J.B. Dadachanji, 0. 0. Mathur and Ravinder Narain, for the respondents.\n\n1962. February, 27. The Judgment of the Court was delivered by\n\nI96B\n\nKanji Manji\n\nThe Trustees o/Thl\n\nPort of Bombay\n\nHrnAYATULLAH, J.-This appeal arises out of a Hidayatul/oh J. suit tried in the Bombay CityCivilCourt at Bombay, filed by the respondents, the Trustees of the Port of Bombay, for the ejectment of the appellant, Kanji Manji, and one Rupji Jeraji who had died even before the suit was filed, from a plot situated 'at Haji Bunder Mazgaon, Sewri Reclamation Estate, Born bay. and for possasion of the land. There was a claim for Rs. 10,871-14-0 being the arrears of water charges and property taxes, with which we are not concerned. The suit was decreed by the • Bombay City Civil Court, and the appellant was ordered to vacate the suit premises and to deliver vacant possession thereof.\n\nAn appeal wa.s filed against the decree in the High Court of Judicature at Bombay, but it was dismissed summarily on September 24, 1959. The High Court also refused an application for a certificate, but the appellant applied for special leave, and having obtained it, filed the present appeal.\n\nIn 1924, the Trustees of the Port of Bombay granted a lease of the said land to five persons, who\n\n19~2\n\nKnnji~Manji\n\n•• 'Tlte . rn1stee r of 1 ht\n\nPorl of Bornhay\n\nidayalul/aA J,\n\n464 StJl>REME COURT REPORTS [1962] SVPP.\n\nwere trading in pitrtncrship under the name and style of :\\fancherji Vadilal and Company. This lease was for a term of l 0 'ears commencing from December I!, HJ23. For the first six months, the conventional rent of pepper corn, if demanded, was payable, and thereafter for the remainder of the term, a monthly rent of Rs. 633-5-4 was payable on the first day of every month.\n\nThe lessees were also to p&y all rates, taxes, assessments, etc.\n\nOno of the covenants of the leaso was that the leBBees would, at their own expense and during the first six months period, construct upon the said piece of land buildings for us as bullock stabhis and offices according to the specification given to them by tho s&id Trustees and to be approved by them. It was provided, inkr alia, that upon the expiration of the term, if the lessees had observed and performed all the co.vonants, they\"would ht' at liberty, at their own expense, to remove the buildings erected by them upon the demises on condition that the removal would be completed within three months after the expiration of the term. During this peri.od of throe months, the lessees were to pay the monthly rent and also to pay all rates and taxes etc. and if they failed to remove the buildings within the period of three Calendar moriths from the expiration of the t!lrm and within like peirod to fill up all excavations and to level up and restore the land, the right to remove the buildings would stand determined, and the buildings would bolong to the Trustees, who would be entitled to remove them and to clear, Jovel and restore the land and recover the\n\ncosts from the lessees.\n\nIt is not clear from the record as to what happened actually after the expiry of the term.\n\nBut on August l l, 1942, the Trustees of tho Port of Bombay granted to Moroshwar Narayan Dhotre and Dinshaw lustomji Ogre, carrying on busineBB under the name and style of Messrs.\n\nDinshaw and Company and their respective heirs, executors\n\nadministrators and assigns, a monthly tenancy of the land together with the buildingo standing thereon and all the rights, easem0nts and a ppurtenances belonging to the premises on payment of monthly rent of Rs. 300/ ., clear of all deductions on the first. day of each Calender month and payment of all rates, taxes etc.\n\nThe lessees covenanted not to add to, or alter the said buildings and conveniences etc., without previous consent, in writting, of the Trustees and to maintain the property in good repair. at their own cost.\n\nThey further agreed ;\n\n\"to peacefully leave and yield up the demised premises together with all buildings thereon as prepared and kept at the expiration or sooner determination of the tenancy here- . by created or in the event of the ; renants\n\nbecoming en tit led to remove the buildings .. standing on the demised land at the expira, tion or sooner determination of the . tenii.ncy hereby created pursuant to the proviso in that behalf hereafter con-. tained to peaceably leave and yield up the demised laud cleared and levelled to the. satisfaction in all respects of the Trustees.\" The provisos, inter the Government or a local authority\", by e:x:cluding\n\nonly buildings which were occupied by sub-tenants even though the buildings belonged to the Government or continued to belong to it.\n\nClause (b) of sub-s.(4) c:x:cluded also s. 15, which prohibited subletting by a tenant.\n\nThat, however, was limited to the cas9 of buildings only, and did not apply to the case of land. In this situation, any action by tho Government or tho local authority in respect of land falls to be governed by sub-s.(1) and notsub-s.(4)(a), and sub-s.( l) prrts the case in relation to land entirely out of the Rent Control Act. Tim net result, there. fore, is that if Government or a local anthoritv wants to evict a person from the land, the provision's of the Rent Contrul Act do not come in the way.\n\nFor the same reason, the suit for ejectment docs uot have to be filed in the Court, of Small C1msc•s, as required by the Rent Control Act but in the City Qivil Court, as has been done in this oase.\n\n. Kanji MtJnji\n\nTh. Truslu• ofTJ,.\n\nPorl of Bo; nbnJ\n\nHidoyalu/lah ' .\n\nKonji Ma1iji\n\nTht Tru.stus of The PMt of Bo1nba_;· .. ' l/idayalullah .1.\n\n474 SUPREME OOURT REPORTS (1962] SUPP.\n\nThere is one more reason in this case for reaching the same conclusion, because at. the time of the lease in l!M'.!, the lessee8, from whom the appe]. ]ant claims a.%ignment, wen• given a hase not only of the land but of the buiklings. The wholo tenor of thu agrecml'nt shows that tho title of the lesse<>s\n\nwa~ precarious. Tt was a monthly tDn:incy liable to be terminated with a notice umh•r the rransfer of Property Act, and tiwrc wa.s only a grace that the lessees, when evi\"tecl, might rcmr., n buildings within one month of their eviction.\n\nThis precarious interest was obtained by the assignee by an aRsign mPnt, :tnd the o; amc thing appli('S to them. If the original lessees took on k11s' not onl.v the land but also the lmilding~. it is not. open to thtance, which does not serve to entitle him to defeat the rights of the Port Trust\n\nauthorities. They are only claiming vacant possession of the site, and under the agreement, if the appellant does not remove the b11ildings within one month, then they wmild be entitled to t.ake possession of tl1e land with the buildings, whatever might be the rights of the sub-tenants, and as to which,\n\n[1, S we have pointed out already, we say nothing.\n\nIn our opinion, the appeal must fail, and is rlismissed; but in the circumstances of the case, we do not make any order about costs.\n\nAppeal dismissed.\n\nJ96B\n\nKor.di Mpnji\n\n•• Tiu Trust\"' of The\n\nPort of Bombay\n\nHiday1Jtufla~ J,", "total_entities": 27, "entities": [{"text": "s. 34", "label": "PROVISION", "start_char": 68, "end_char": 73, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 18(5)", "label": "PROVISION", "start_char": 260, "end_char": 268, "source": "regex", "metadata": {"statute": null}}, {"text": "KANJI MANJI", "label": "PETITIONER", "start_char": 515, "end_char": 526, "source": "metadata", "metadata": {"canonical_name": "KANJI MANJI", "offset_not_found": false}}, {"text": "THE TRUSTEES OF THE PORT OF BOMBAY (S. K. DAS", "label": "JUDGE", "start_char": 528, "end_char": 573, "source": "metadata", "metadata": {"canonical_name": "THE TRUSTEES OF THE PORT OF BOMBAY (S. K. DAS", "offset_not_found": false}}, {"text": "M. HIDAYATULLAH", "label": "JUDGE", "start_char": 575, "end_char": 590, "source": "metadata", "metadata": {"canonical_name": "M. HIDAYATULLAH", "offset_not_found": false}}, {"text": "c. SHAH, JJ.", "label": "JUDGE", "start_char": 598, "end_char": 610, "source": "metadata", "metadata": {"canonical_name": "J.C. SHAH", "offset_not_found": false}}, {"text": "Jurisdiction of City Civil Court was challenged as the suit was governed by Rent Act", "label": "STATUTE", "start_char": 2755, "end_char": 2839, "source": "regex", "metadata": {}}, {"text": "s.5(8)", "label": "PROVISION", "start_char": 3343, "end_char": 3349, "source": "regex", "metadata": {"linked_statute_text": "Jurisdiction of City Civil Court was challenged as the suit was governed by Rent Act", "statute": "Jurisdiction of City Civil Court was challenged as the suit was governed by Rent Act"}}, {"text": "s. 4", "label": "PROVISION", "start_char": 3394, "end_char": 3398, "source": "regex", "metadata": {"linked_statute_text": "Jurisdiction of City Civil Court was challenged as the suit was governed by Rent Act", "statute": "Jurisdiction of City Civil Court was challenged as the suit was governed by Rent Act"}}, {"text": "s111", "label": "PROVISION", "start_char": 4138, "end_char": 4142, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 12618, "end_char": 12622, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 12628, "end_char": 12632, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 13384, "end_char": 13388, "source": "regex", "metadata": {"statute": null}}, {"text": "Vnder the Rent Control Act", "label": "STATUTE", "start_char": 15247, "end_char": 15273, "source": "regex", "metadata": {}}, {"text": "s.5(8)", "label": "PROVISION", "start_char": 15309, "end_char": 15315, "source": "regex", "metadata": {"linked_statute_text": "Vnder the Rent Control Act", "statute": "Vnder the Rent Control Act"}}, {"text": "Bombay Act IV of 1953", "label": "STATUTE", "start_char": 15464, "end_char": 15485, "source": "regex", "metadata": {}}, {"text": "s.4(1)", "label": "PROVISION", "start_char": 15499, "end_char": 15505, "source": "regex", "metadata": {"linked_statute_text": "Bombay Act IV of 1953", "statute": "Bombay Act IV of 1953"}}, {"text": "s. 4", "label": "PROVISION", "start_char": 17086, "end_char": 17090, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 17304, "end_char": 17308, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 17765, "end_char": 17769, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4(a)", "label": "PROVISION", "start_char": 19711, "end_char": 19717, "source": "regex", "metadata": {"statute": null}}, {"text": "section 15", "label": "PROVISION", "start_char": 20367, "end_char": 20377, "source": "regex", "metadata": {"statute": null}}, {"text": "s.15", "label": "PROVISION", "start_char": 20681, "end_char": 20685, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4", "label": "PROVISION", "start_char": 21229, "end_char": 21232, "source": "regex", "metadata": {"statute": null}}, {"text": "s.4", "label": "PROVISION", "start_char": 22650, "end_char": 22653, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 4", "label": "PROVISION", "start_char": 24013, "end_char": 24017, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 15", "label": "PROVISION", "start_char": 25048, "end_char": 25053, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_3_476_481_EN", "year": 1962, "text": "\"\"ili62\n\n1Veb; u(f'; jzs.\n\n' t > '~· I ,: l\n\n~ ~· \\\n\n! \\ i\n\n476 sui>.RE'ME oodk'f .R.E.PdRTsp9a2jsdi>P.\n\nK., SIMRATHMULL\n\nV.\n\nS. NANJALI.1\\GfAH GOW DER I\n\n(::i. K. DAS, M . .l:ImAYA'T(JLLA.Ha.nd J'. l). SILl'.H,:Jlf.)\n\n\\ .. ... , Contr!'l't-Coenan!Jor re?onve11~>1c~. ~.prqp~~IK.~.U.?jeYf. to fulfilment of oonditoons-lfailure of cond•t•JJ:J>, whe!her specific 'performarlce could be deln\"nded=Where ri!Jht extinguished-\n\nO'ou>ts equitable.iurisdiction could be invoked-'I'mnsfer of Property Act; (4 of 1882)-Specific 'Reli~' Act (1 of•J877).\n\n' ' • I • , By a, deed dated FebruFy, 19, 1948 the -respondeµ, t .1old his house to the appellant in cohsideration of\n\n0 disharging liability torepay a.loan of Rs, 1500/- borrowed by 1ihe lres- .pondent.\n\nT\\VO other documents Telflting.; to the house were executed on the same day (J) a -deed by• the appellantragreeing, to reconvey the house if the ryspo'!dent paiq, s., l/iOQ/,• in these two years; (2) p. rent note by the, p; spon?ent ., a\\'d. his father agreeing tc1 pay Rs. 26-4-0 per menscm as rent for occupation of the house.\n\nUnder 1the agreement of 'iec6nveyance the exercise of the right td demarfd reconV'eyanc\"'e 'was subject to~ t, vo, conditions, firstlY, that the right nius.t. be exer cised within 2 years and 1 secondly, that,, he rent -payal;>lct_, under .the rent note should not remain in arrears for more than six\n\nmonths at any time.\n\nWhen thai iespoildent Cle'manped sPci fie perfdtmance of -the agreemnt of reconve1ance, !the first condition was fulfilled but the second was, not. The suit for,, specific performance o'f the igreemcnf Of recovey~ anc; e was dismissed, for in the view of the trial.ct:>urt the conditions of the agrcement.t hasi: inot been , stiA•l~.comJSlied with, and the agreement stood cancelled.\n\nTc1e High Court in second appeal reversed the decree and ordered specific J p;:rformabce. ..,\n\nHeld, that the covenant for reconveyance was in the n_ature of a concession granted by the purchaser . . , Held, further that the conces-sion being subject to certain conditions were not fulfilled the right to demand reconveyancc could not be enforced.\n\nThe court had no equitable jurisdictio11 to relieve against the extinction of the right to demand reconveyence.\n\nShanmugam Pillai v. Annnlakshmi Ammal, A. I. R. ( 1950) F. C. 38, folbwed.\n\nJohn H. Kilm the ds.\" By two notifications issued under the said rule the Central Government exempted cotton fabrics produced on po, ver looms owned Dy co-operative societies ti'om the duty leviable thereon subject to certain conditions.\n\nUnder s 38 of the Act the said rule and notifications on publication in the Official Gazette had effect as if enacted in the Act. The petitioners, apprehending loss of business in competition with the fifth respondent, a co-operative society, chal1enged the rule and the notifications on the grounds( I) that the power of exemption conferred on the Union Government violated Arts. 14, 19(l)(fl and (g} of the Constitution and (2) that assuming that it did\n\n196!\n\nK. Simrathmull '.\n\nS. Nanjalingioh\n\nGowder\n\nShah J.\n\nFtbuary 38.", "total_entities": 16, "entities": [{"text": ", SIMRATHMULL", "label": "PETITIONER", "start_char": 107, "end_char": 120, "source": "metadata", "metadata": {"canonical_name": "K., SIMRATHMULL", "offset_not_found": false}}, {"text": "i. K. DAS", "label": "JUDGE", "start_char": 158, "end_char": 167, "source": "metadata", "metadata": {"canonical_name": "S.K. DAS*", "offset_not_found": false}}, {"text": "(1935) L. R. 63 I.A. 26", "label": "CASE_CITATION", "start_char": 2512, "end_char": 2535, "source": "regex", "metadata": {}}, {"text": "s. 26", "label": "PROVISION", "start_char": 4373, "end_char": 4378, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 114", "label": "PROVISION", "start_char": 7915, "end_char": 7923, "source": "regex", "metadata": {"linked_statute_text": "Constitution of India", "statute": "Constitution of India"}}, {"text": "L.R. 63 I.A. 26", "label": "CASE_CITATION", "start_char": 8138, "end_char": 8153, "source": "regex", "metadata": {}}, {"text": "s. 58(c)", "label": "PROVISION", "start_char": 10507, "end_char": 10515, "source": "regex", "metadata": {"statute": null}}, {"text": "Transfer of Property Act", "label": "STATUTE", "start_char": 10523, "end_char": 10547, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Constitutional mlidity-Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 11014, "end_char": 11071, "source": "regex", "metadata": {}}, {"text": "ss. 37(2)", "label": "PROVISION", "start_char": 11083, "end_char": 11092, "source": "regex", "metadata": {"linked_statute_text": "Constitutional mlidity-Central Excises and Salt Act, 1944", "statute": "Constitutional mlidity-Central Excises and Salt Act, 1944"}}, {"text": "Central Excise Rules, 1944", "label": "STATUTE", "start_char": 11105, "end_char": 11131, "source": "regex", "metadata": {}}, {"text": "Constitution of India", "label": "STATUTE", "start_char": 11141, "end_char": 11162, "source": "regex", "metadata": {}}, {"text": "Central Excise Rules, 1944", "label": "STATUTE", "start_char": 11216, "end_char": 11242, "source": "regex", "metadata": {}}, {"text": "s. 37(2)", "label": "PROVISION", "start_char": 11308, "end_char": 11316, "source": "regex", "metadata": {"linked_statute_text": "the Central Excise Rules, 1944", "statute": "the Central Excise Rules, 1944"}}, {"text": "Central Excises and Salt Act, 1944", "label": "STATUTE", "start_char": 11334, "end_char": 11368, "source": "regex", "metadata": {}}, {"text": "s 38", "label": "PROVISION", "start_char": 11840, "end_char": 11844, "source": "regex", "metadata": {"linked_statute_text": "the Central Excises and Salt Act, 1944", "statute": "the Central Excises and Salt Act, 1944"}}]} {"document_id": "1962_3_481_495_EN", "year": 1962, "text": "3 S.C.R.\n\nSUPREME COURT REPORTS 481\n\nconveying the property when a mere loan was intended on the security of the property. It is unfortunate, having regard to the provision of s. 58(c) of the Transfer of Property Act, that the plaintiff is debarred from proving that the transaction was in the nature of a mortgage. In the circumstances we direct that there will be no order as to costs throughout.\n\nAppe, al allowed.\n\nORIENT WEAVING MILLd (P) LTD.\n\nTHE UNION OF INDIA\n\n(B. P. SINHA, c. J., J. L. KAPUR, M. HIDAYATULLAH, J. c. SHAH and J. R. MUDHOLKAR, JJ.)\n\nCentral Excise-Power of Central Government to grant exemption-Rule-Notification granting exemption to co-operah'.ve society-Constitutional mlidity-Central Excises and Salt Act, 1944 (1of1944), ss. 37(2), cl. (xvii)-Central Excise Rules, 1944, r. 8(1)-Constitution of India, Arts, 14, 19(1)(/) and (g), 43.\n\nBy r. 8 (1) of the Central Excise Rules, 1944, framed by the Central Government in exercise of its Power under s. 37(2)\n\ncl. xvii of the Central Excises and Salt Act, 1944, \"the Central Government may from time to time, by notification in the Official Gazette, exempt subject to such conditions as may be specified in the notification any excisable goods for the whole or any part of the duty leviable on such go'.>ds.\" By two notifications issued under the said rule the Central Government exempted cotton fabrics produced on po, ver looms owned Dy co-operative societies ti'om the duty leviable thereon subject to certain conditions.\n\nUnder s 38 of the Act the said rule and notifications on publication in the Official Gazette had effect as if enacted in the Act. The petitioners, apprehending loss of business in competition with the fifth respondent, a co-operative society, chal1enged the rule and the notifications on the grounds( I) that the power of exemption conferred on the Union Government violated Arts. 14, 19(l)(fl and (g} of the Constitution and (2) that assuming that it did\n\n196!\n\nK. Simrathmull '.\n\nS. Nanjalingioh\n\nGowder\n\nShah J.\n\nFtbuary 38.\n\nllMI\n\nOrittil W talting\n\nMills (P) Lld.\n\ny, 1 lu Union of lndi4\n\n482 SUPREME COURT REPoRTs (1962] SUPP\n\nnot do so, the exemption granted by the notifications \\Vas in excess of the power granted by r. 8(1).\n\nfield, that the contentions were \\Vithout substance a1.d must fail.\n\nRule 8 of the Rules was as much a part of the Act as s. 3712) cl. (xvii~ and it was always open to the State to tax certain classes of goods and not to tax others.\n\nIt wa5 the function of the State to .determine what hind of taxes should be levied and in what manner.\n\nR•gard being had to the directive principles contained in Art. 43 of the Constitution, there was no doubt that the State in differentiating between goods produced in big establishments and similar gocds pro duccd by small powerloom weavers iu a co-oprrative societ', had made a classification that was constitutiona!Jy valid.\n\nThere could, therefore, be no excessive dr.kgation of the power to grant exemption.\n\nIt \\\\•as fallacious to contend that exemption, if at all, had to be granted in respect of any particular specified variety of 'cotton fabrics', anr 1, 1955, and has been sustaining losses eversince it started functioning \"due to adverse circumstances in the State of Orissa and due to the heavy taxation and duties\".\n\nEversince the Company started production, it has been paying excise duty~Rs. 2,16,670 for the year 1958- 59, Rs. l,82,529 for the year 1959-60 and Rs. 2,15,500 for the year 1960-61. \"Cotton fabrics\"\n\nis one of the items in the first schedule of the Act, which sets out the description of goods and the rate of duty leviab!e under s. 3 of the Act.\n\nThe petitioner's chief grievance is that the respondent No. 5, the Society, is being granted exemption\n\nOritrd Weaving\n\nMilla (P) Lfd,'\n\nVo '1_.1-, The Union of Indi.~. ..-:,.l Sinha <':7-J.\n\n\"'l ·~\n\n1962 ··- on.ni.JY .... .,\n\nMillo (P) Ltd. . .. .• n. Ullia of Indio -- sa..c.J.\n\n484 SUPREME COURT REPORTs (1962] SUPP.\n\nfrom the excise duty, though, it is contended, it has installed I 00 looms in the same premises and 100 workmen are employed therein. The autho rised capital of the aforesaid Society is lts.2,40 ,000, divided into shares of the value of Rs. 100 each.\n\nIt is said to be a profit earning concern, whose profit is disposed of in accordance with its byelaw 35. The Society, it is further contended, is for all practical purpose~ aimilarly situated alongwith the petitioner Company in the matter of production, distribution and marketing of their produce. It is further stated that the weavers of the Society stand on the same or similar footing as the shareholders of the Company. The exemption was granted to the Society in virtue of the Central Government Notification Xo. 74 of 1959, dated July 31, 1959, and .N'otifioation Xo. 70 of 1960, dated April 30, 1960, iBBued by the Ministry of Finance, Government of India, (Department of Revenue). The notifications are in these terms :\n\n\"Government of India, Ministry of Finance (Dep1i.rtment of Revenue) ew Delhi. The 31st July, 1959.\n\nG. S. R. In pursuance of sub-mle (I) of rule 8 of the Central Excise Rules 1944 as in force in India and as applied to the State of Pondicherry, the Central Govt. hereby exempt cotton fabrics produced by any co-operative society formed of owners of cotton power•\n\nlooms, which iB registered or which may be registered on or before the 31st March, I 961 un.der any law relating t0 co-operative societies, from the whole of the duty leviable thereon, subject to the following conditions:-\n\n(a) that every member of the co-operative societies had been exempt from excise\n\nduty for three years immediately precedin'g the date of his joining such society; I\n\n(bl that the total number of cotton power!ooms owned by the co-operative society is not mere than four times the number of members forming such society;\n\n( c) that a certificate is produced by each member of the co-operative society from the State Govt. concerned or such Officer as may be nominated by the State the number of cotton powerloons in his ownership and actually operated by him does not exceed four and did not tixceed four at any time during the three years immediately preceding the date of his joining the society, and that he would have been. exempt from excise duty even if he had not joined the co-operative society; and\n\n( d) that the exemption shall be available ...\n\n(i) for a period ending on the 31st July, 1962 in respect of registered co-operative societies which have commenced production prior to the date of this notification; and\n\n(ii) for a period of three years from the dat.e of commencement of production in respect of co-operative societies which have been registered \"but have not commenced production or which may be registered on or before the :Hst March, 1961. (No. 74/59) Sd/-Illegible S. K. Bhattacharjee, Deputy Secretary to Govt. of India.\n\nF. N'. 74/59/F. No. 13/59-CXIII\".\n\n\"Government of India, Ministry of .Finance (Department of Revenue) New Delhi. '.J.'he 10th April. 1960,\n\n01Uni W1aViftR Mi/11 (P) Lid.\n\n_, ' \"· ' - Thi Union of lna11\n\nSinha o.J.\n\n1~62\n\nOrit'11 I\\' to-Vint , , Milli (P) L Govt. concerned or such ofticer as may be nominated by the State Govt. that he is a houafide m\"mber of the society and that the num bcr •lf cotton powerlooms owned b.v or allotted to him and actually opt1rated bv him doe8 not \"xceed four and did not exceed four at any time during the three years immediawir preceding the date of his joining te\n\nsociety, and that he would have been ee:°1pt from excise duty even if h\"' had not Jomed the co-operative societies and\n\n( d) that , the exemption shall be available ...\n\n(i) for a period ending on the 3 lst July 1962 in respect of registered co operative societies which have commenced production prior to the date of the notification; and\n\n(ii) for a period of three years from the date of commencement of production in respect of co-operative societies which have been registered but have not commenced production or which may be registered on or before 31st March, 1961.\n\nNo. 70/60 Sd./Illegible G. P. Durairaj, Under Secretary to the Govt. of ifndia No. 70/60/P. No. 13/1/59 CXIII\"\n\nThe Company made a representation to the relevant authorities but to no purpose. As the Company is to pay excise duty on the \"cotton fa 1Jrics\" produced l; y it, its cost of production, as compared to that of the Society, was higher by l :?.5% in 1958 and 10% in 1959, with the result that the Company is at a disadvantage, as compared to tho Society, in the competitive market of Orissa.\n\nDue to heavier taxation on fine cloth, the Company has abandoned the production of that quality and ha\" restricted its production to coarse and medium cloth. The apprehension of the Company is that on account of the exemption granted to the Society, the Company's bn.iiness will be very adverselJ aifecteq. It is contended tqat r. 8 of the CeIJtrl\n\nOrient Weaving\n\nMills (f) Ltd.\n\nVo The Union of India\n\nSinha C. J.\n\nOrient lft2i.rin(\n\nMills , P) Lid.\n\nTlit U11io1l of India\n\nSinha C . ./.\n\nExcise Rules, l!l44, under the Act, vests the Government with unguimpting the Society, or such other similar societies as may horcitfter come into existence, have the effPCt of viol, e of the powers conferred on the Cr•ntrnl Governmont by sub-r.(l) of r.8, the notificatious referred t.o above were issued by the Central Gon, rnment..\n\nBy virtue of s. 38 of tho Act, all rule;; made and notifications iRsued by the Central Government, as aforesaid, are required to he published in the Official Gazette, and thereupon those rules and notifications \"shall have effect a.~ if enacted in this Act\". Thus it is manifest that the notifications and the rule impugned in this case h:i.vc been incorporated into th.1 Act itself, antifications afore8aid, exempting the\n\ngoo!~ prorlucBd by the co-operative societies, like the 5th respondent, from payment of the excise duty.\n\nThat bcin)! so, it is a. little difficult to appreciate tlie first prayer of the petitionerP, a.skin~ for a de<:laration that the levy of excise dutv on the piec•· goods pr•>duceJ by the petitioners be declar(,~] to be unconstitutional. It is one thing t, o nttnck tho constitution1llity of the prn\\'isinn8 of the Act :tut.ho\n\nrising the levy of the excises dut.v on the petitioners; it is quite a different thing to complain of the exemption grant{ld in respoct of the good~ prossible controvNsy which ha8 not ht••n actually raised in the petition.\n\nThe petition is substantially based upto the contention that r.8 suffers from the v ic\" of excessive delegation of powers to the C'..entral Gov!'rnment to exempt partly or wholly an.v excisable good~. and, secondly, thrit the pow..r even it constitutional has been invalidlv exercisPrl in so far as the notifi cations aforesaid containing the exemplion operating in favour of the 5th rospondent have been made. Iµ our opinion, there is Qo sllbsta.nce ill\n\neither of the two contentions. Rule 8 is as much a part of the statute as s. 37(2) cl. (xvii). It is always open to the State to tax certain classes of goods and not to tax others. The legislature is the best judge to decide as to the incidence of taxation, as also as to the amount of tax to be levied in respect of different classes of goods.\n\nThe Act recognises and only gives effect to the well established principle that there must be a great deal of flexibility in the incidence of taxation of a particular kind. It must vary from time to time. as also in respect of goods produced by different processes and different agencies.\n\nThe same principle has been recognised iu s.23 of the Sea Customs Act (VIII of 187&), which bas been applied to excise duty also, by virtue of s. 12 of the Act. The latter section has authorised the Cenral Government to apply the provisions of the Sea Customs Act, to excise duty imposed by the Aot, with such modifications and alterations as it may consider necessary or desirable to adapt them to <'ircumstances. It is a function of the State in order to raise revenue for State purposes, to determine what kind of taxes shall be levid and in what manner. Its function, therefore, is to raise revenues for public purposes.\n\nThe State naturally is interested in raising all the revenue necessary for public purposes, without sacrificing the legitimate interests of persons and groups, who deserve special treatment at the hands of tile State for reasons, which the State may determine, entitling them to be placed in a special class. The Directive Principles of the Constitution, contained in Part IV .. lay down the policies and objectives to be achieved, for promoting the welfare of the people. In the context of the present controversy, the following words of Art. 43 are particularly apposite: ·\n\n\" ............ and in particular, the State shall endeavour to promote cottage industries\n\no, ient We.avin1 Mill• i>.\n\nTHE FAZTLKA ELECTRIC >SUPPLY CO. LTD . v.\n\nTHE CO:IJMISS!ONER OF JNCO)IE-TAX, DELHI\n\n(\"'. K. DA~, J. c. SHAH, .T.J.)\n\nincome Ta:r-.1Jsts81nent of }; xces8 anlount rtaliscd over 21,•riltc11 dou:n 1:uf-ue-Ellclric Supply Company-Term of license-Option for Gottrnment or local bodies to parcltasc the Company-Sale by Company, 1f sale or compulsory rzcqui,, if; on -India EIPdricity Ad 19/0JX of 1910), ,,., 3.7 Indian Income\n\n1'ax Act 1922 (/ l of 1922), s. 10(2) (vii).\n\n1'hc appellant carried on the business of generating and suppl)ing tlcctricity in the to\\\\111 of Fazilka in accordance with the tcrn1s of a license for fifteen vcars.\n\nClause 9(a) of the license gave the Government' an option to acquire the undertaking on expiration of fifteen years fron1 the date of the license. 'l'he said option was in accordance to sub. s. ( 1) of s. 7 of the Electricity Ar.t, 1910.\n\nThe Government of Punjab exercised its option and acquired lhe undertaking on a payment which \\\\aa in excess of the written down value of the building, machinery and plant of the undertaking.\n\nFor the assessrnent of the appcllanl for the rele\\enl year, the Income rax Officer cOrnputed such excess realisation over the writ •en do\\\\'n \\'i:due ;; s did not exceed the difference he tween the original cost and the written down value and held the said sum as taxable in the hands of the appellant by reason of the provisions ins. 10(2)(vii) of the Income Tax Act.\n\nThe appellant contended that no part of the excess was taxable since 1hc undcrlaking had not been voluntarily sold, but had been cornpulsorily acquired by the Govrrnment ; and on a proper construction of 1 he Electricity Act and the rules made thereunder, this so-called sale was really a compulsory acquisition of property and not a S>ie as legally understood. '\n\nlleld, that from the provisions of the Electricity Act, 1910, read alongith thr. rules marle thereunder, it is manifest that the condition as to the option of purchase either by the local authority or Governrnent. is the result ofan agreement between the applicant who had applied for license and the Government who granted the lh:ense.\n\nThe true scope and effect of s. 7 of the Electricity Act is tha it is an enabling ::icction and merely provides for the optio11 of purchase to he exercised Cln the expiration of a certain period agreed to between rhe parties, and s. IO of the Act\n\n3 s.c.:R.\n\nSUPREME CobRT REPORTS 497\n\nfurther provides that in an appropriate case Government may even forego the option. The scheme of the Electricity Act as indicated by the relevant provisions thereof and the rules made thcreuµder, shows beyond any doubt that the option of purchase is the result of a mutual agreement between the parties, the applicant for the license on one hand and the Government on the other.\n\nHeld, further, thats. 7 docs not provide for a compulsory purchase or compulsory acquisition without reference to and independent of any agreement by the licensee.\n\nThe expression \"compulsory purchase\" in the second proviso to sub-s. (1) of s. 7 is another enabling provision which enables a party to specify in the license such percentage as should be added to the value of the building, plant and machinery etc. when the option is exercised, notwithstanding the use of the expression \"compulsory purchase\" in the said second proviso, there is no compulsory purchase or compulsory acquisition in the sense in which that expression is ordinarily understood.\n\nSakalaguna Nayudu v. Chinna Munuswami Nayakar,\n\n(1928) L. R. 55 I.A. 243, Calcutta Electric Supply Corporation\n\nv. Commissioner of Income-tax, WMt Bengal, (1951) 19 I.T.R. 406.\n\nCIVIL APPELLATE JURISDICTION : Civil Appeal No. 183 of 1961.\n\nAppeal from the judgment and order dated' April 24, 1959. of the Punjab High Court in I.T.R.\n\nNo. 18 of 1954.\n\nS. K. Kapur, Bislw, mbar Das and K.K. Jain, for the appellant. ·\n\nK. N. Rajagopal Sa8tri and D. , Gupta, for the respondent. 1962, March 1.\n\nThe Judgment of the Court was delivered bJ\n\nS. K. DAa, J.-On July 23, 1934 the then Government of the Punjab granted a licence under a. 3 of Indian Electricity Act, 1910 (IX of 1910) (hereinafter called the Electricity Act) to two persona named Harbhagwan Nanda and Harcharan . Dass for the generation and supply of electric energy\n\nJ96t\n\nThe Ft1;:, ilkti EJ1ctric\n\nSupplJ Co. Lti.\n\nv • . The Commissioner flf\n\nIncome-tax, Delhi.\n\nDasJ.\n\n1'ht Faillu1 J::lectric\n\nSupp~ C•. /, Id.\n\nThi CommiJsiomr of\n\nlnctmepw, D1thi\n\nDIU J.\n\n49S SUPREME COURT REPORTS [1962] SUPP.\n\nin the town of .Fazilka.\n\nThe licence, which is markt•d annPxure 'A' nnd forms part oft.he >tMement of the case, contained a clause, viz. cl. !!(I)\n\nwhich read 118 follows :\n\n\"9. (I) 'fht., option of purchase givt>n by sub-section (I) of section 7 of the (Elt>ctricity)\n\nAct shall first be exercisable 011 the expiration of 15 years from the date of the notification of this licence and on the expiration of every subsequent period of 10 years. The percentage of the value to be determined in accordance with and for the purpose of sub-&•ction (I) of section 7 of the (Electricity) Act of lands,\n\nbuildings, works, materials and plant of the licensee therein mentioned to be added under the second proviso of that sub-section to such value on account of compulsory purchase shall be 20 percent.\" Under this clause, read with a. 7 of Electricity Act, the Government hai>.\n\nt:iection 10(1) of the Income-tax Act states that Income-tax shall be payable by an assesec undor the head \"Profits and gains of business, profession or vocation\" in respect of the profit or gains of any business, profession or vocation carried on by the assessce. Suh-sectiun (2) of the said section states that such profits or gains shall be computed after making certain allowances referred to in els.\n\n(i} to (xv).\n\nClause (vii) relates to an allowance in respect of any building, machinl'fy or plant wbirh has been sold or discarded or demolished or des troy(,'e\" iu the second proviso to subs. (I) of s. 7, there is no compulsory purchase or compulsory acquisition in the sense in which that exp\\ession is ordinarily understood. The High Court has rightly pointed out that the scheme of the Elctricity Act as indicated by the relevant provisions thereof and therules made thereunder, shows beyond any doubt that the option of purchase is the result of a mutual agreement between\n\nTht F•u1k• Euctric\n\nSuplf; i C1. Ltd. • .. . 'The Co11U11is1ioner of\n\nlncoMelox, D1/hi\n\nDasJ.\n\n506 SUPREME COURT REPORTS [1962] SUPP.\n\ntho parties, the applicant for the license on one hand and Government on the other. The High Court rightly observed :\n\n\"The rules show that a draft license has to be sent by an applicant for license containing definite and specific terms on which the license is sought. This amounts to an offer.\n\nThe Government accepts it or rejects it. If it modifies it in any way, then the applicant or offerer must accept the modification. If the Government accopts the .offer with or without modification, then it grants a license.\n\nIn my view a license granted by the Govern - ment in such circumstances amounts to a contract between the parties.\"\n\nOn behalf of the appellant it ha~ been contended, somewhat faintly, that all the elements necessary to constitute a contract are not present here. We are unabl(! to agree.\n\nThere was an undertaking on the part of the applicant for the Iioense to sell the undertaking to the local authority or Government upon certain terms set out in the license, and the time at which the option was to be exercised and the price which was to be paicl for the property were specified. There was consideration for the contract as the license was granted on thoso terms.\n\nTherefore, all elements necessary for a contract were present, and the sale in pursuance thereof wn, s not a compulsory purchase or acquisition. (8cc Sakalar1una Nay11d1i\n\nv. Chhinna Munusu•amy Nayafoi t').)\n\nWe are, therefore, of the l>pinion that the High Court correctly allJlwered the question referred to it.\n\nThere was a. sale in the present case of tho building, machinery and plant within the meaning\n\n( \\) ( 1928) L, R. 55 I.A. 243.\n\nof cl. (vii) of s. 10(2) of the Income-tax Act. In view of this conclusion it is unnecessary to deal with a somewhat larger question which was canvassed before us on behalf of the respondent that s. 10(2 )(vii) of the Income-tax Act is attracted even to a compulsory sale. Nor do we consider it necessary to examine the decisions bearing upon the question whether a compulsory transfer to and vesting of property in Government, constitute a sale within the meaning of the relevant provisions of the Indian or English Statute. It is sufficient to point out that Calcutt, a Electric Supply Corporation\n\nv. Commissioner of Income-wx, West Bengal (') related to a transaction by which Government acquired the plant etc. and it was held that such acquisition could not be regarded as a sale within the meaning of s. 10(2)(vii) of\"the Income-tax Act.\n\nIn the result, the appeal fails and is dismissed with costs.\n\nAppeal dismissed.\n\n(1) [1951] 19 I.T.R. 406.\n\nThe FSUPPLY CO. 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"start_char": 22108, "end_char": 22122, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 10(2)(vii)", "label": "PROVISION", "start_char": 22698, "end_char": 22711, "source": "regex", "metadata": {"statute": null}}, {"text": "Income-tax Act", "label": "STATUTE", "start_char": 22719, "end_char": 22733, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}]} {"document_id": "1962_3_508_515_EN", "year": 1962, "text": "508 SUPREME COURT REPORTS (1962] SUPP.\n\nSTATE OF ASSAf\n\nTULSI SINGH\n\n(B.P. Sr:nIA, c .. J., K. SusBA RAO N. ltA.JAGOPALA\n\nAYYANGAR, J. R. MuDHOLKAR and T. L.\n\nVF.NKATAR~MA AIYAR, JJ.)\n\nFcrry-Seltlement nf by auction-!11t!es-01tl~ of officer canduc!1'.ng s1!e -Spe:iri! I.Ji'>~ 1nJ.in!ained by Assci1n aovernmcnt of -persons su, pccted or coafit1w:, d l'J b\"- c:>nn '!c!ei 1oit-li sn1.11,7glin'} activilies-Nat?Lre of document-If could be \"died on for sdtlinq f!ivil right-tJ-High Court if CtJ1t'd (lcirle m:11t-r, r entr1t., fed fo execulive authoritie•-lndian Evid-.nce .4cl, 1872 (I of 1872). •.35-Norlhern India Ferrie.• Act, 1878 (17 of 1878), as. 4,8,12, r. 19.\n\nUnder s. 4 of the Northern India Ferries Act, 1Ri8, the ferry at N was declared to be a puhlir ferry.\n\nRule I 9 framed under s. 12 of the Act provided that a s>le of frry w.lS generally to ho auctioned to the highest bidder, and the acceptance of a hid by the officer conducting the sale was subject to the approval of the Chief Enginet-r \\vho had to see v.rhcthcr that officer had taken into consideration all the factors mentioned in r. 19.\n\nFerry at N \\Vas put up tQ auction and sold to the second rcspo11dent whose bid \\''as the lo.vcst, Though the first respondent's hid was the highest, the officer conducting the Sld decide a , question was entrusted to the executive authorities under the Act and make setdement of the ferry.\n\nHeld, that the discretion conferred on the officer conduct ing the sale under s. 8 of the Northern Ferries Act read with r. 19 framed under the Act is wide but not unrestricted.\n\nThe discretion must be based on the material before him and rrlevant for his consideration and if, on a consideration thereof, he declines to exercise his discretion to accept the bid, his decision is not liable to be reversed by the courts,.\n\nBut where there is no material before him on basis of which he rejects a bid his action amounts to non-compliance with the provisions of r. 19 and cannot be upheld.\n\nHeld, further, that the \"Special List\" maintained by the Government of Assam of persons suspected or confirmed to be connected with smuggling activities is not a document falling withins. 35 of the Indian Evidence Act and while such list might serve a purpose in guiding Criminal Intelligence Department, it will be unsafe to re1y on it for deciding civil rights of a person.\n\nHeld, also, that even though the order of authorities is riot in accordance with Jaw, it was for the appropriate authorities. to deal with the matter and the High Court could not itself decide '\\'hat is entrusted to the executive authorities.\n\nVerappa Pillai v. Raman & Raman Ltd., [1952] S.C R. 583, followed.\n\nCIVIL APPELLATE JURISDICTION : Civil Appeal No. 14 of 1962.\n\nAppeal by special leave from the judgment and decree dated July ll, 1961, of the Assam High\n\nCourt in Civil Rule Nu. 64 of HJ6l.\n\nNaunit Lal, for the appellantB.\n\nThe respondent did not appear.\n\nState of.A.ssrm\n\n•• Tulri Singh\n\nSlate of .A.ss.im\n\nTrdsi Sm1h\n\nAi1arJ.\n\nio SUPI~EME COURT REPORTS [1962] SUPP.\n\n1962. March I. The Judgment of the Court waa delivered by\n\nVENKATARAMA. AlYAJt, J.-The short question that arises for our decision in this appeal is whtether the settlement by the Executive Engineer, Golaghat in the State of Assam, of the ferry at N'opcrpatty\n\nc>D the second respondent, Phuka Chandra. Gohain, on January 23, Hi61 was in accordance with the provisions of the orthern India Ferries Act, 1878, hereinafter roferred to as \"the Act\", and the rules framed thereunder.\n\nThe relevant provisions of the Act bearing on this question might now be referred to. Under s.4., the State Government may, from time to time, declare what ferries shall be deemed public ferries.\n\nSection 8 of the Act is as follows :-\n\n\"8. The tolls of any public ferry may, from time to time, be let by public auction for a term not exceeding five yea.rs with the approval of the Commisioner, or by public au<'lion, or otherwise than by public auction, for any term with the previous sanction of the State Government.\n\nThe leSBee shall conform to the rules made under this Act for the management and coutwl of the ferry, and may be ea.lied upon by the officer in whom the immediate superintend<•nce of the ferry is vested, or, if the ferry is managed by a municipal nr other public body under section 7 or section 7 A, then by that body, to give Ruch security for his good conduct and for the punctual payment of the rent as the officer or body, as the tho case may be, thinks fit.\n\nWhen the tolls are put up to public auction, the said officer or body, as the case may be, or the officer conducting the sale on his or its behalf, w \"'v, for reasons recorded in\n\nwriting, refuse to accept the offer of his high est bidder, and may accept any other bid, or may withdraw the tolls from auction.\"\n\nRule 19 framed under s.12 of the Act is as follows:-\n\n\"The sale shall generally be by auction to . the highest bidder. The Officer conducting the sale for sufficient reason recorded in writing under his hand may refuse to accept the offer of the highest bidder or any bid. The Officer shall in accepting the bid consider the following factors among others :-\n\n( i) Whether the bidder is a native or domicile or an outsider.\n\n(ii) Whether the bidder bas experience of the ferry business.\n\n(iii) Whether he has landed property in his own name within the district or State. can apeak the regional language, is finacially sound and of good conduct, etc.\" The ferry at N eparpatty has been declared to be a public ferry under s.4 of Act.\n\nOn January 23, 1961, the Executive Engineer, Colaghat, put up the lease of the ferry for the year 1961-62 for public auction under s.8 of the Act. At the auction, Tulsi Singh, the first respondent, gave a bid for Rs. 4,200/-,\n\none Indra Deo Singh for Rs. 4,050/- and Phukan Chandra Gobain, the second respondent for Rs. 3,000/-. The Executive Engineer then made the following Order :-\n\n\"Sold to Shri Phukan Chandra Gohain at Rs. 3,000/. (Rupees Three thousand) only es the two other highest bidders fall in special List.\"\n\nUnder Rule 19(a), the acceptance of the bid by the\n\nSt•te of .Assam\n\nTulsi Singh\n\niyarJ.\n\nS1at1 of Assam\n\nTu/Ji SU1gh\n\nA(1ar J,\n\nconducting Offioer is subject to the approval of the Chief Engineer, and Rule W(b) provides tho.tho must, in doing so, \"consider among others whother the Officer conducting the sale has taken into account and considered a.II the factors m!'ntioned in Rule 19 above.\" The Chief Engineer approved of the decision of tho executive Engineer dated January 23, 1961, and the sale totbe second respondent was confirmed. Thereupon, on February 6,1!161, t.he first respondent applied to the Chief Engineer for accepting his bid and Rettling the ferry on him.\n\nBy his Order dated April i, l!lfil, the Chief Engineer rejected this petition.\n\nOn .\\fay 9, 1961, the first respondent filtd in the High Court of Assam a writ Petition uwler Ar-t. :!26 attacking the Order of the Executive Engineer datecl .January 2;1, 1961, settling the lease in favour of tho second respondent as contrary to the Act and the Rules, and praying that it might be Hett.led on him. The learned Judges accepted this l'oritention aml set aside the settlement in favour of the soeond respondent as violative of s.8 and Rule 19, and further declared that the first respondent was untitled to the settlement under R:ile 19 as the highest bidder. It is against this Judgment that this appeal by special leave is directed.\n\nThe power of tho Executive Enginncr to settle public ferries is derived from s.8 of the Act and the\n\nH.ule~ framed thereundn, and it has theroforo to be exercised in accordance therewith. Under Rule! 9, the sale should genera.Hy be by auction to the highest bidder 9-ml under this provHaficr the appeal Court creatl\"d the m; i.ttcr as a rcfer('ne hrfore the R(\"venue Boar provision\n\nundr the Act or the Rules which re4uired the authorifies concerned to gini imy h\"aring to tlw person executing the documtmt.\n\nThe appeal cour1, therefore hels muny as eleven iSBues which were the subject-matter of refer ence.\n\nThe main point howev<>r on which the parties differed was whether in determining the wage-structure etc. of thl' chemical works which is a constituent unit of the Delhi Cloth and General Mills Limited (hereirtafter called the Company), the over-all position of the Company should be ta ken into account or only the poition of this one unit, namely, the chemical works.\n\nThe respondents contended that the chemical works was an integral part of the Company and therllforo the over-all position of the Company should be taken into acoount and the wage-structure etc. fixed accordingly; in particular it was pointed out that there were difforonces in wage-structure etc.· between the various units which were controlled and ow1wd by tho Company and which wore all situate in the same area in Delhi and that thPso differences should be eliminated and all the enterprises in Delhi controlled by the Company should be treated on the same footing. On the other hand the oontentio11 of lie\n\n3 s.b.k.\n\nSUPREME COURT Ril:PORTS 519\n\nappellant was that though the chemical works was one unit of a large number of industries controlled by the Company, some of which were situate in the same area in Delhi, the various units were independent industries and each unit had to be considered on its own and the wage-structure etc. fixed on the basis of the financial position of each unit ; in particular, it was urged that two of the main units in Delhi were the textile mills run by the Company and the claim of the respondents that the ch!lmical works should in all matters be treated on a par with the textile units was untenable, on the ground, among others, that it would be against the principle of industry-cum-region. Before therefore we take up the particular matters raised in the two appeals before us, we shall first have to consider whether the claim of the respondents that the overaU position of the Company should be taken into account in fixing the wage-structure etc.· of the chemical works is sound ; for if that position is accepted, the award may have to be set aside as the tribunal has held tha.t in the circumstances of this case the chemical works should be treated as an independent unit and that the wage-structure etc. therein cannot be fixed on the basis of the over-all position of the Company.\n\nIn order to appreciate the various contentions put forward by the parties on this question it may be useful to look into the history of the Company and how it has grown.\n\nThe Company came into existence in 1889 with a modest capital of about Rs. 10 lacs. It seems that the policy of those in control of the Company was to plough back a substantial part of the profits into the industry itself and to create a reserve for that purpose. Originally the Company started with a textile mill but in course of time with the help of ploughed back profits and also with the aid of further capital, the Company set up a large number of other industrial\n\n11lanag1rruntofthe D.C.M. Chemic.arrying on, usually take place with the consent of the employees concerned.\n\nFurther each unit bas got its own separate wa.ges and separate dearne88 allowanco and other different allowancell and bonus is also paid differrntly in e11eb concern.\n\nFurther even where eales take place from one unit to anothl'f tht1y take place at market rate and not at cost price and are adjusted on this basis in the books of account.\n\nLastly though there is a common board of directors and a common managing agency of tho Company. each unit has its own separate management as it is hound t-0 be for tho businc..'18 carried on by ditr'erent units is in many cases utterly different.\n\nIt is on theso facts that we have to seo whether the chemical works can he said to bo so integrated with the other units of the Company as to justify the conclusion that it is part of the samo business, and the entire business carried on the Company is one establishment, and therefore it would not be right to have different wagestructure, dear_ nese allowance, etc., in the same est'lbli!lhment•\n\n' I\n\nThis matter was considered by this Court in connection with lay-off in The Associated Cement Companies Limited, Chaibasa Cement Works, Jhinkpani v, Their Workmen(1), where tests were laid down for determining whether. a particular unit is pa.rt of a bigger establishment. These tests included geographical proximity, unity of ownership, management and control, unity of employment and conditions of service, functional integrality and general unity of purpose. But it was pointed out that it is was impossible to )1, y down any one test as an absolute and invariable test for all cases and the real purpose of these tests was to find out the true relation between the parts, branches, units. If in ti:; ir true relation they constitute one integrated whole, then the establishment is one ; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved. Thus in one case the unity of ownership, management and control may be the important test, in another case, functional integrality or general unity may be. the important test; and in still another case, the important test may be the unity of employment.\n\nIt was pointed out that in a large number of cases several tests may fall for consfoleration at the same time and the difficulty of applying these tests arises because of the complexities of modern industrial organisation. The matter was considered again by this Court in Pratap Press etc. v. Workmen ( 2 ), Pakshiraj Studios v. Workmen( 3), Hony. Secretary, South India Millowners' Association\n\nv. Secretary, District Coimbatore District Textile Workmen U nio.n (') and Fine Knitting Co. Lti/,. v. Industrial Court, Bombay('). In the case of Fine Knitting Co., this Court was considering one limited company but it was held in t.he . circumstances that even though there was unity of ownership, management and control the two parts of the same concern were\n\n(1) [1960] 1 s.c.R. 703.\n\n(2) [1960] l L.L. J. 497.\n\n(3) [1961] 2 L. L.J. 380.\n\n(4) C. A. 419 of 1960, decided on 1-2-62.\n\n(5) C.A. S06 of 1961, decided on 15-2-1962.\n\nM anagemmt of thd\n\nD.C. u. Chemical\n\nWorks\n\nThei.r Workmen\n\nWanchoo J.\n\nllltil\n\n/Jl cinogm:ent of tht- D .C.M. Ct..mical\n\nWor.i:s\n\nY, Their ff'orkmm\n\nWane/Joo J.\n\ndiffrrcnt uuits as th<'re waR no functional integrnlity between them. It is on the basis of these tests that we havti to consider whether the tribunal WM right in its conclus10n that the ohcmical works has to be treated as an independent unit.\n\nThe common features which have been emphasised on behalf of t.ho respondents are in our opinion clearly capable of Pxplanation on tho ground that the Company is a limited concern and carries on different kinds of business.\n\nBut as in law under the Companies Act, the Company being a limited concern is one legal entity, the Common features on which the respondPnts rely follow from that one single cirrumetancc, namely, that the\n\nCompany is a limited concern governed by the Company Law. It would thorefore in our opinion be not right to emphasise these common features and to hold on their basis only that the various buRinesses carried on by the Company have to be treated as one integrated whole for the purposes of\n\nwaµe-Rtrncturc etc. The outstanding fact in the present case is that though a large number of businesses is being carried on by the Company their nature in many caaes is utterly different and one has generally speaking nothing to do with tho other. The three main lines of business whioh the Company is carrying on are Rugar, textiles and chemicals. It is obvious that there is nothing common between these threedifferent lines of business and there can be 110 question of one depending upon the other and there cannot be functional integrality generally speakin!! between these three lines of\n\nbusiness.\n\nThere might be some connection speaking between the nhcmieal works and the textile mills of the Compa11y inasmuch as some of the chemicals might be used in the textile mills; but the evidence shows that a very small proportion of tho chemicalR produced in the chemical works is used in the textile mills and that most of the production is sold in the open market. It cannot therefore be eaid that the ohemical worka 88 it now\n\nexists is therefor the purposes of the textile mills and is thus integrated with the textile mills. Even in the matter of employment. the evidence is that there is separate recruitment of labour for the different units and each unit has separate muster rolls of employees and this is quite natural considering that different skill is required for the three lines of business carried on by the Company. It cannot also be said that there is any essential dependence of the chemical works on the textile units or that one cannot be operated without the other. Further the way in which the Company has been dealing with different units in the past also shows that they have been treated as independent units. Each unit has its own separate labour union and separate agreements are entered into between the Company and its unions with respect to the conditions of service which are also different for different Units. Even in thematter of bonus there are differnnces between the different units and these differences sometimes arose out of different agreements between the various units and their unions. It appears that even in the case of units carrying ori the same business, as for example, textile, the workmen themselves contended in an earlier adjudication that the Delhi Cloth Mills and the Swatantra Bharat Mills were two distinct and separate units of the Company. In any case whatever may be said as to the units in the same line of business it is in our opinion perfectly clear that there is no nexus of integration between different lines of business carried on by the Company on the facts which have been proved in this case. We are of opinion therefore that the ratio of the decision in the Fine Knitting Co.'s case(') applies to the facts of this case and it must be held that the chemical works is an independent unit and therefore in fixing the wage structure etc. we have to look to the position 9f the chemical works only and cannot\n\n(o) C.i\\. 306 ofl961, decided on 15-2-1962.\n\nManagement ofche D.C.M. Chtmital\n\nWork•\n\n•• Their Workmen\n\nWanchoo J.\n\n}if 1114.('tmtnl qi llk /J. ',\\!. Chtve given them t.l1e same wrms and conditions of ervice n.s are enjoyed by other workmen of the concern ;\n\n(iv} The tribunal hould have awarded rurther bonus to the workmen.\n\nRe. ( i).\n\nThe contention on behalf of the respondents in this respe<:t is thatthere are no incremental scales in this concern and the tribunal should have at any rate made a beginning by fixing some inoromental scales for the workmen. The tribunal however baa refused to fix incremental scales on the g-round that the concern htts neither financial ability nor stability to justify the fixing of inercme11ta.I scale, a at the resent tie. It is not in dispute that throughou~\n\nthe course of its existence the chemical works has made profits only in two years and that. for the rest of the time it has been making lossos which had to be met by the Company out of the profits of other units. Reliance in this <:onnection has been placed on behalf of the respondents on certain observations in the Tariff. Commission Report and on a book called \"Fertilisers Statistics in India\" to show that the chemical industry has a very prosperous future in front of it. Reliance has also been placed on a communication addressed by the appellant to the respondents in which it has been said that judging from sound business principles the chemical works had not yet turned the corner of losses, but the position appeared brighter, and it was hoped that with the co-operation of labour the chemical works would be an asset to the D. C. M. family. Our attention has also been drawn to various annual reports in which an optimistic picture has been painted by the directors for the benefit of the shareholders. We agree however with the tribunal that in spite of the possibility that in time to come the . chemical works might acquire stability and prove a source of increasing profit to the. Company, the fact remains that upto now the chemical works has been running at a loss except for two years and\n\none cannot be certain that it will start earning pro .. fits soon. In these circumstances it seems to us that the tribunal was justified in not framing rm incremental scale of wages at the present juncture\n\nas that would put a heavy strain on the finances on the chemical works which has yet to attain financial stability. At the present moment the losses incurred in this unit have to be met from the profits earned in other units of the Company and in this situation we do not think that the tribunal was wrong in refusing to frame incremental scales.\n\nIt is however urged on behalf of the respondents that if in the corse of the last twenty years the capital invested +n tl!e ce!llical worJ-s bas urea.seq\n\n196!\n\nM ant1gemmt of lh e D.C.M. Chemical\n\nWorkr\n\nTheir Workmen\n\nWanchoo J.\n\n19~1\n\nM anag\"\"\"\" of th1 D.C • .\\f. Chemical\n\nWork4\n\n•• Their Workmen\n\nWanchoo J.\n\ntremendously as compared to the modest amount with which it was started in 1942 and if the Company can find capital for the purpose of expansion, it should be able to pn.y incremental scales of wages by dipping into tho same source from which it has ben able to find ca.pit.al.\n\nIn effect this argument means that even though the concern may be making losers year after year it should find money for p:iying the labour force higher wageR in spite of tho circumstance that that may load it into incurring further losses.\n\nThe argument seems to ho that even though there may be losses the concern must pay higher wages to the workmon and if necessary pay them out of what may be called capital. Now this argument would in our opinion bo unanswerable if the cla.im was for what is called mumnum wage: (Seo Messrs Ctown Alu.miniwn Works v. '/'heir Workmen ('). If tho wages paid by tho appellant in the present case were below tho minimum wage t.ha.t the tribunal would eertainly be justified in ordering it to pay the minimum wage, for no industry can have a right to exist if it cannot pay wages at the bare subsistence level. Where\n\nit is a case of payment of minimum wago, the tribunal can insist on the same being found, if necessary, even out of. ca.pita!.\n\nBut this is not a case of hare minimum wage and we are dealing with a case of fair wage which is above the bare minimum wage.\n\nIt is not even the case of the respondents that they are not getting the bare minimum wage. !'heir case is that they should he given a fair wage, and that the present wage~, though above the bare minimum wage, arc still not fair cnou!h and therefore should b\"e increased and an incri; mental scale should be fixed.\n\nIn such a situation we are of opinion that the present financial condition of the concern and its Rtability are both necessary to be considernd before an irwr<'ased fair wage can be given. Both tho present capacity of\n\n(I) [1958] S.C, R. 651.\n\nof the employer to pay the increased rates of incremental wages and its future capacity have to be taken into account in determining an increased level of fair wages based on an incremental scale. Thus both financial ability at present and financial stability in the near future must be there to justify fixation of an increased fair wage on an incremental scale.\n\nWe do not think it will be right to insist on an increased fair wage on an incremental scale in a case where the financial capacity and the financial stability as judged by business principles are both lacking. Nor would it in our opinion be right to compel the employer to bear the burden of an increased fair wage on an incremental scale and tell him to find money from what may in effect be capital, for such a situation in ordinary cases can lead only to one result, namely, the closure of the business concern, which may be more detrimental to the workmen.\n\nTherefore carr,, ying on with the present scale of fair wages and hoping that the financial ability and stability of the concern will improve, with the result that increased fair wage on an incremental basis may be fixed in future is the only alternative at present even in the interest of the workmen employed in this concern.\n\nWe therefore agree with the tribunal that in the circumstances no case has been made for fixing an incremental scale of wages at the present juncture. The contention on this head must therefore be rejected.\n\nRe. (ii).\n\nAs to the canteen workmen, it appears that the canteen is run by the appellant departmentally on a no-profit-no-loss basis.\n\nThe workmen employed in the canteen are the workmen of the appellant and their number is sixteen or seventeen. The minimum basic wage for unskilled workmen in this concern at the relevant time was Rs. 38.plus Rs. 55 i.e. Rs. 93; but. the workmen. in the .canteen get consolidated wages and all of them (except one) get\n\nManagement pf the D.C.M. Chtmical\n\nWorks • v.\n\nTheir Workmen\n\nWanchoo J.\n\nManagttnt11i of the D C.M. Chemirfl/\n\nWorks\n\nThftr W orknwi\n\nW411thoa J,\n\n530 SUPREME COURT REPORTS (1962] SuPP.\n\nmuch lesa than the minimum, the figures vuying from Rs. 50 to Rs. 78.\n\nThe tribunal ha.a held that there is no reason why the conditions of surviec of the workmen in the oa.nteen should not b., brought on a. par with tho conditions of service of the rest of tho workmen. It therefore ordered tha.t the workmen in the can teen wou Id be en titled to the samo facilities relating to leave, provident fund, bonus, and gratuity etc. a.s are available to the other workmen in the chemical works ; but so far a.s wages and dearness allowance are concerned, it has not given them cve.n the minimum as indica.ted a.hove. '1:he case of the the appellant was tha.t oven if the minimum was paid to the workmen in the canteen the price of the various food-stuffs supplied by the canteen to the workmen would go up substantially and it wa.s on tha.t ground that the appellant resisted the increase in the wages of those workmen in the canteen who a.re getting less than the minimum of Rs. 93.\n\nThe tribunal ha.a hehl-a.nd we think rightly-that the fa.et that the bettering of the conditions of service of the workmen in the canteen may lead to a. rise in the price of things sold there is no reason for refusing the demand of the workmen ; but it has not carried into effect fully the implications of this observation. It has ordered thatsamc conditions as to leave facilities etc. should be extended to the canteen workmen but has stopped short of giving them the sa.me wagos a.nd dearness allowance. The reason why the tribunal did not give the workmen the same wages and dearness allowance is that thero wa.a no satisfactory material before it to permit it to fix wages and dearness allowance for the workmen in the canteen.\n\nWe are of opinion tha.t there is no reason why the tribunal should not ha.ve at least granted the minimum which is pa.id to the other workmen in the ('.Once£n to those workmen in the canteen who are getting less than . the minimum.\n\nWe can see no reason for not giving them a.lso the\n\n1. -\n\nmimmum wages as indicated above. This will certainly result in bringing the fifteen workmen who are getting between Rs. 50 and Rs. 78 per mensem as consolidated wages into an equal position, for each will then get the minimum, namely, Rs. 38 plus Rs. 55 and may remove part of the discontent. In the circumstances that is all that can be done in the absence of the material to which the tribunal has referred. Therefore the wages of those fifteen workmen who are getting less than the minimum should be brought to the same level.\n\nThere is no reason why they should not get such benefits as may be due to them, by their wages being brought to the same minimum as the wages . of the other workmen in the concern. We therefore disagree with the tribunal with respect to the workmen employed in the canteen and order that the wages of those workmen who are getting less than the minimum paid to the other workmen in the concern should be brought to the same minimum level. The rest of the award on this head will stand. The minimum wages as above will be paid from the date the tribunal has ordered its award to come into force.\n\nRe. (iii).\n\nThe claim of the workmen in this connection was that there were 300 workmen employed in 1he civil. engineering department and that they should be made permanent. The tribunal however rejected this contention and pointed out that most of the workmen were.· temporarily engaged to carry on construction work which was of a temporary nature and therefore they could not be made permanent simply because the construction had Jasted for more than a year. This view of the tribunal is in our view correct in so far as the claim put forward with respect to all the three hundred workm,.n was concerned. It appears however that at the time when the tribunal recorded.\n\nManagemem of the D.C.M.. Chmical\n\nWorks v.\n\nTheir W orkmePI\n\nW dJJ&hoo J.\n\nAlan-.gtm1n1ojtht D C.M. CA, mical\n\nWorks\n\nv. 7 Am W ur/mun\n\nH'anthoo J.\n\n532 SUPREME COURT REPORTS [l!l62J suPP.\n\nevidence tho large majority of these 300 workmen had been discharged because they were no longer required and only about Ci5 remained in service.\n\nIt appears from th\" evidencc of thP Joint Works\n\n~Ianager that a skelt>ton strkmen have been given 2 1/2 months basic wages as bonus for tho years in dispuk, namely, 1!153-54 and 1954-55. They have claimed additional bonus. It is however conceded fairly\n\non behalf of the respondent that if the chemical works is treated as an independent uuit their case for additional bonus on the basis of the Full-Bench formula cannot succeed. The demand for additional bonus was rightly rejected by the tribunal, considering the chemical works as an independent unit. We may add that this case is distinguishable from the case of Hony. Secretary, South India Mill-oUJMrs Association, (1) for here the two lines of business are distinct and have nothing to d0 with each other.\n\nThis brings us to the appeal by the appelJant.\n\nFive points hiive been urged on behalf of the appellant. They are: (i) dearness allowance; (ii) uniforms, (iii) acid and gas allowance.\n\n(iv) leave facilities, and (v) gratuity. We shall deal with them one by one.\n\nRe. (i).\n\nSo far as dearness allowance is concerned, the tribunal has ordered that the dearness allowance in the chemical works shall be fixed at the same rate as it is in the power house which is a part of the chemical works. It may be m3ntioned that dearness allowance at the relevant tim11 in the chemical works was Rs. 55 per mensem while in the power house it was Rs. 66 per mensem. Tbe contention on behalf of the appellant in this connection is that the reason why there was this diffe- ,.. rence between the dearness allowance in the power house and in the rest of the chemical works is historical. It is further pointed out that though the difference in the two dearness allowances is H s. 11 the actual difference in the total wage packet was only Rs. 3 inasmuch as the minimum. basic wage in the power house was Rs. 30 while in the chemical works it was Rs. 38 at the relevant time.\n\nThus the minimum that an employee was getting in the power house was Rs. 96 while the minimum for the rest of the workmen was Rs. 93,. and it is - Pl C.A. 41U of I W 1, ICTION : Civil Appeal No. 437/60.\n\nAppeal by special le&ve from the and decree dated July 12, 1957, of the :sigh Court in Appeal No. 71 of 1956.\n\njudgment Bombay\n\nC. K. Da)lhtary, Soliciwr General of India, S. G. Patwardhan and Naunit Lal, for the appellant.\n\nA. V. Vi.rwanatha Sa.tri, N. P. NatJiwani and K. L. flat/ti, for respondent No. I.\n\n1962. ;\\farch 2. The Judgment of the Court was delivered by\n\nKAPUR. J.-This is an appeal against the judgment and decree of the High Court of Bombay con firming the decree passed in its original juris diction.\n\nThe appPllant. who waA the plaintiff in the suit, was trading under the name and style of\n\nMessrs.\n\nPratapray Manmohandas as a bnllion merchant and trader in Bombay. He was a member of the Bombay Bullion Association Ltd., which was defen<:lant No. 1 in the suit and is respondent No. l in the appeal.\n\nRespondents 2 to 7 were defendants 2 to 7 and at all material times were members of the Clearing House Committee appointed under the Bye-laws of the lst respondent. The appellant had also added as parties in the suit defendants 8 to 12 but they are no longer parties as their names were struck off in the trial court.\n\nThe appellant entered into certain forward transactions with defendants 8 to 12 during the period from May 30, 1949 to June 30, l94!l.\n\nOn June 13, 1949, the Hawala rate of these transactions was fixed and on June 14, 1949, the appellant \"admitted a clearance sheet under bye-law 131 of the bye-laws of lst respondent in which outstanding transactions for the Valan day\" (settlement) wern entered. They included the transactions which had been entered into with defendants 8 to 12.\n\nAll these transactions were Rajued (tallied) on the following day. According to the bye-laws of the respondent Association the balance sheet had to be submitted and money Kiplis (vouchers) had to be given. In this balance sheet which was submitted the appellant did not include the amounts which were due to defendants Nos. 8 to 1 :l or the transactions he had entered into on the ground that he disputed the transactions entered into with those defendants as they were fictitious and illega.L On June 21, 194!J, which was the .\n\nValan day (settlement day). the appellant claimed reference to arbitration in regard to those items under byelaw 38. On that day defendants 8 to 12 oomplained to the respondent Association that the appellant had not issued the necessary kapli8 (vouchers). At 3 Pm. on the same day the appellant received a notice from the Clearing House\n\nPraeapray Manmohanfias ...\n\nBombay Bullion Association Ltd.\n\nKapur J.\n\nPrtapray ;\\l anmollandtu ..\n\nBombC!)'.Bulli.n Aasociotion [, td\n\nKapur J.\n\nCommittee, respondents 2 to 7 calling upon him to appear before them. The appellant appeared with his solicitor and counsel and his cont<:ntion before the Clea.ring House Committee was that it had no jurisdiction to p1 occcd with the ma.ttor because he was claiming arbitru.tion and tho dispute betwe, J.\n\nThat clause requires that in the event of default of submission of a kapli the Clearing House Committee shall call the dofa.ultor and demand an explanation and thereafter, if such kapli is not submitted, doclare him a defaulter. It was contended that the meaning of this is that first the C!earring House Committeo is to demand au explanation and after such an explanation is given, time has to be given for the purpose of enabling the person not giving the kapli to submit his kaplis. In our opinion the intorpretation of the learned Chief Justice of tho High Court is in consonance with the language used. i. e. first the explanatian is called and aft; di Subb<1 Rtw v . • Voony l'eeraju, [. L. R. 1952\n\nfad. 264, approved.\n\nlleld, further that upon a proper construction of cl. 14 of the agreement the appellant; were entitled to damages at the rate of Rs. 6,000 per month only.\n\nThe words \"not le n.npelliint a.pp lied for a. certificate under Art.\n\nI !l3(l )la) of the Con•titution. The ju :lgment of the High Court in appeal was in affirma.nco of the judgment of the learned single , Judge dismissing the\n\nppellant's suit. for qamages and therefore, it wa~\n\n3 S.C.R. SUPREME COURT REPORTS 551\n\nnecessary for the appellant to establish that a substantial question of law was involved in the appeal.\n\nOn behalf of the appellant it was contended that the question raised concerned the interpretation to be placed on certain clauses of the mrmaging agency agreement upon which their claim in the suit was founded and that as the interpretation placed by the appeal court on those clauses was erroneous and thus deprived them of the claim to a substantial amount the matter deserved to be certified by the High Court under Art. 133(l)(a) of the Constitution.\n\nThe learned Judges, dismissed the 11.pplication without a judgment apparently following their previous decision in KaikhushrooPirojsha Ghaira v. C.P. Syndicate Ltd. (1).\n\nThe appellants, therefore, moved this Court under Art. 136 of the Constitution for grant of special leave which was granted. In the application for special leave the appellant had raised a specific contention to the effect that the view taken by the High Court with regard to the application for certificate under Art. 133 (1) (a) of the Constitution was wrong, that the appellant was entitled to appeal to this Court as a matter of right and that while considering the appeal this question should also be decided.\n\nThe appellant pointed out that tho view taken by the Bombay High Court on the point as to what is a substantial question of law runs contrary to the decision of the Privy Council in Raghunath Prasad Singh v. Deputy Commissioner of Partabgarh (2) and the decision of some High Courts\n\nin India and that therefore, it is desirable that this Court should pron0unce upon the question in this appeal and set the matter at rest. We think that it is eminently desirable that the point should be considered in this appeal.\n\nIt is not dijputed before us that the question raised by the appellant in the appeal is one of Jaw because wh11t the appellant is challenging is the interpretation placed upon cert, ain clauses of the\n\n(1) (\\948) L. Born. LR. 744.\n\n(2) (1927) 54 I.A. 126, 12&, . . '\n\nSir Chunilal V. Mehta cf! Sons,\n\nLtd.\n\nThe Century Spinning\n\n& Manufacturing\n\nCo, Ltd.\n\nMud speoial leave to the appellant ai1d while granting it ma.do the follow. ing observation in their judgment:\n\n\"Admittedly here the decision of the Court affirmed tho decision of tho Court immedia.tely below, and, thert>foro, the whole question turns upon whether there is a substantial question of law.\n\nThero seems to have been somo doubt, at any rato in the old Court of Oudh, to which the present Court succeeded, as to whether a. substantial questinn of law meant a. question of genera.I importance. Their J, ordshi ps think it is quite clear and indeed it was conceded by !\\fr. De Gruyther t.ha.t that fS not the meaning, but that \"substantiai\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 553\n\nquestion of law\" is a substantial question of law as between the parties in the case involved.\" Then their Lordships observed that as the case had occupied the High Court for a very long time and on whieh a very elaborate judgment was delivered the appeal on its face raised as between the parties a substantial question of law. This case is reported in Raghunath Prashad Singh v. Deputy Commissioner of Partabgarh(l). What is a substantial question of law as between the parties would certainly depend upon the facts and circumstances of every case.\n\nThus for instance, if a question of law had been settled by the highest court of the country the question of law however important or diffi<'ult it may have been regarded in the past and however much it may affect any of the parties would cease to be a substantial question of law. Nor again, would a question of law which is palpably absurd be a subsLantial question of law as between the p1rties. The Bombay High Court, however, in their earlier decision already adverted to have not properly appreciated the test laid down by the Privy Council for ascertaining what is a substantial question of law. Apparently the judgment of the Privy Council was brought to their notice though they do not make a direct reference to it, they have observed as follows:\n\n\"The only guidance that we have had from the Privy Council is that. substantial question is not necessarily a question which is of public importance. It must be a substantial question of law as between the parties in the case involved. But here again it must not be forgotten that what is contemplated is not a question of law alone ; it must be a substantial question. One can define it nega- . tively. For instance, if there is a well established principle of law aIJq that principle i~ (I) (1927) 54!. A. 1261 12a.\n\nSir' Chunilal V. MtAta & Sons,\n\nLtd\n\n•• TAe C1ritur1 Spinning\n\nch Manufacturing Co., Ltd.\n\nMudholkar J.\n\nSir Chunil~ V. MtlUtJ &, Soru,\n\nLtd.\n\n•• r,,_ C.nM.1 Spio•;,, g\n\n<6 Monufocturing\n\nCn., Ltd.\n\n.\\fudholk1r J,\n\n554 SUPREME COURT REPORTS [1962] SUPP.\n\napplied to a. given set of fa.ots, tha.t would certainly not be a substantial question of la.w.\n\nWhere tho que8tion of law is not well settled or where there is some doubt as to the principle of law involved, it certainly would ra.ise a substantial question of la.w which would require a final adjudication by the highest\n\nCourt.\"\n\nOne of the. points which the learned judges of the Bombay High Court had to consider in this case was whether the question of construction to be placed upon a. decree was a substantial question of law.\n\nThe learned Judges said in their judgment that the decree was undoubtedly of a complicated cha.racte r but even so they refused to grant a certificate under s. I IO of the Code of Civil Procedure for appeal to the Federal Court because the construction which the Court was called upon to place on the decree did not raiAe substantial question of law. Thny have obRerved tllat even though a decree may be of a complicated character what the Court ha.a to SpiNrin g\n\nth, Jlarrufaeluring 1- Co., /Jd.\n\nclos<· of any y<'ar it shall be found that tho total remunerat.ion of the firm receivf'd in such year shall have been less than IO per cent of the gross profits of thtJ Company for such year the Company shall pay to the Firm in respect of uch year such additional sum by way of remuneration as will make the total sum received by the Firm in and in respect of such year equal to I 0 per cent of tho groSB profits of the Company in that year. The first payment of such remuneration shall bf,\n\nmade on the first day of August 19:l3.\n\nM, dholkar J.\n\n\"12. The said monthly remuneration or Hillary shall accrue due from day to day but shall be payable by the company to tho l•'irm.\n\nmonthly, on the first day of the month immediatdy ucceeding tho month in which it shall have been earned.\"\n\nTho learned trial judge upon the interpretation placed by him on cl. 14 awarded to the appellant a sum of Rs. 2,:W, OCO/., calculating the amount at Ha. (),000/- p.m. for the unexpired period of the term of the Managing Agency agreement and also awarded interest thereon. Kow according t-0 l\\Ir.\n\nPalkhivala for the appellants, the interpretation placed upon cl. 14 by the trial judge and the appeal Court is erroneous in that it makes the words \"not less than\" in cl. 14 redundant. Learned counsel contends that on a proper construction of cl. 14 the appellants are entitled to compensation computed on the basis of the total estimated remuneration under cl. l 0 for the unexpired period. Under that clause, he contends, the appellants are entitled to 10% of the profits of the <:ompany subject to a minimum of Rs. 6,0UO/- p.m.\n\nAlternatively learned counsel contends that cl. 14 is not exhaustive of the appellant's right to compensation and the right to be compensated in respect of contingent remunera-\n\n3 s.c.k.\n\nSUPREME COURT REPORTS 56l\n\ntion based oa 10% of profits is left untouched by that clause.\n\nA perusal of cl. 14. clearly shows that the parties have themselves provided for the precise amount of damages that would be payable by the Company t::> the Managing Agents if the Managing Agency agreement was terminated before the expiry of the period for which it was made. The clause clearly states that the Managing Agent shall receive from the Company as compensation or liquidated damages for the loss of appointment a sum equal to the aggregate amount of the monthly salary of not less than !ts. 6,000/- for and during the whole of the unexpired portion of the term of Agency.\n\nNow, when parties name a sum of money to be paid as liquidated damages they must be deemed to exclude the right to claim an unascertaiued sum of money as damages. The contention of learned counsel is that the words \"not less than\" appearing before \"Rs. 6,000/-\" in cl. 14 clearly bring in cl. 10 and, therefore, entitle the appellant to claim 10% of the estimated profits for the unexpired period by way of damages. But if we accept the interpretation, it would mean that the parties intended to confer on the Managing Agents what is in fact a right conferred by s. 73 of the Contract Act and the entire cfause . would be rendered otiose.\n\nAgain the right to claim liquidated damages is enforceable under s. 74 of the Contract Act and where such a right is found to exist no question of ascertaining damages . really arises. Where the parties have deliberately specified the amount of liquidated damages there can be no presumption that they, at the same time, intended to allow the party who has suffered by the breach to give a go-by to the sum specified and claim instead a sum of money which was not ascertained or ascertainable at the date of the breach. Learned counsel contends that upon this view the words \"not less than\" would be rendered otiose. Inour opinion\n\n196>\n\nSir Chunilal' V.\n\nM1hta &! Sons, Ltd.\n\n•• The Century Spinfting\n\n& Manufaclur inV\n\n1 Co. Ltd.\n\nfl1udholkar J.\n\nSir Chunilal V.\n\nMehta~ Sons, Ltd. v.\n\nTht Century Spinnint klanufacturinl Co.\n\nLid\n\nMudhollwJ.\n\n662 SUPREME COURT REPORTs [1962) SUPP. •\n\nthee wordR, as rightly-pointed out hy the High Court, were intended only to emphasise the fact that compensation will be computable at an amount not less than Rs. fi,000 p.m.\n\nApparently, they thought it desirable to emphasise the point that the amount of lts. 6,000 p.m. was regarded by them as reasonable and intended that it should not be reduced by the court in its discretion.\n\nMr. Palkhivah argued that what the appellants were entitled to was remuneration aud remuneration meant nothing but salal'y. The two words, according to him, have been used intorchangeahly in the various clauses of the agreement. If, therr.forc, salary in\n\ncl. 14 is the same as remunerat.ion, which according to him it is, then as indieated in el. JO it would mean 10% of the gross profits of the Company subject to a minimum of Rs. 6,00P/-p.m.\n\nJn support of the argument that the two words wherever used in the agreement mean one and the same thing learned counsel relies on cl.12 which says that the monthly remuneration or salary shall accrue due from day to day. Then undoubtedly the two words clearly mean the same thing. But from a perusal of the clause it would a.ppear that remuneration there could mean nothing other than Rs.6,000/p.m.\n\nFor, that clause provides that the amount shall accure from day to day and be payable at the end of the month immediately succeeding the month in which it had been earned. Now, whether a company had made profits or not and if so what is the extent of the profits is determinable only at the end of its accounting year. To say, therefore, that the remuneration of 10% of the gross profits accrues from day to day and is' payable every month would be to ignore the nature of this kind of remuneration.\n\nTherefore in our opinion, when the remuneration and salary were equated in cl. 12 nothing else was meant but Rs.u, OOOf-and when tho word salary was\n\nused in cl. 14 we have no doubt that only that\n\n1 '\n\nas.a.&. sU:PR:EM:E cou&r REPORTS 563\n\namount was meant and no other. It may be that under cl. 10 the appellant was entitled to additional remuneration in case the profits were high upto a limit of 10% of the gross. profits. That was a right to claim something over and above Rs.6,000/-and could be characterised properly as additional remuneration and not fixed or normal remuneration which alone was apparently in the minds of the parties when they drew up cl. 14. In our opinion, therefore, the High Court was right in the construction placed by it upon the clause.\n\nComing to the alternative argument of Mr.\n\nPalkhivala, we appreciate that the right which the appellant had of claiming 10% of profits was a valuable right and that but for cl. 14 he would have been entitled in a suit to claim damages estimated at 10% of the gross profits. We also appreciate his argument that a party in breach should not be allowed to gain by that breach and escape liability to pay damages amounting to a very much larger sum than the compensation payable under cl. 14 and that we should so interpret cl. 14 as to keep alive that right of the appellants. Even so, it is difficult, upon any reasonable construction of cl. 14, to hold that this right of the appellants were intended by the parties to he kept alive. If such were the intentions of the parties clearly there was no need whatsoever of providing for compensation in\n\ncl. 14. If that clause had not been there the appellant would indeed have been entitled to claim damages at the rate of 10% for the entire period aubject to minimum of Rs. 6,000/- p.m. On the other hand it seems to us that the intention of the parties was that if the appellants were relieved of the duty to work as Managing Agent and to put in their own money for arrying on the duties of managing agents they should not be entitled to get anything more than Rs. 6,000/- p.m. by way of compensation.\n\nClause 14 as it stands deals with one subject only\n\nSir Chunilol V.\n\nM1hla &t Sons, Ltd.\n\nVo The Centu, y Spinning\n\n&: M anuJacturing\n\nCo., Ltd.\n\nMudholkar J.\n\ni962\n\nSir Cl11111il4l V.\n\nM1hla 41 Sons1 Ud.\n\nTiu Ct11t111y Spinning\n\n4' M\"\"\"fact,,.ing\n\nC.. Lid.\n\nM ui!rol /w J.\n\nIHI\n\nMorch 6t>\n\n. , . . . . . . . ' ,.\n\nSUPREME OOURT REPOR1'S [1962] SUPP.\n\nand that is compenation. It does not expreBBly or by necessary implication keep alive the right tu claim damages under the general law. By providing for compensation in express terms the right tu claim damages under the general law is neceBSarily\n\necluded and, therefore, in the face of that clause it is not open to tho appellant to oontend that that right is left unaffected. Thero is thus nu substance in the alternative contention put forward by the learned counsel.\n\nAccordingly we affirm the decree of the High Com t and dismiss the appeal with cost.a.\n\nAppe, al di, siniS&li.\n\nKRISli.J.'i\"A PRASAD AND .OTHER~\n\nGAURI KUMAR! D.EVl\n\n(P. B. GA.JK'.SDRAGADKAR, A. K. SARKAR and K. N. w AN CHOO, JJ.)\n\nBxecution-l'eroonal decree against mortgagor-Mortgaged e•late ieBting in t!.t State-Bjject on claim pendiny-Bihar Land Reform• Act, 19W(Acl 30 oj 1950), s. 4(d).\n\nThe appcllan t obtaine\n\n. , . . . . . . . ' ,.\n\nSUPREME OOURT REPOR1'S [1962] SUPP.\n\nand that is compenation. It does not expreBBly or by necessary implication keep alive the right tu claim damages under the general law. By providing for compensation in express terms the right tu claim damages under the general law is neceBSarily\n\necluded and, therefore, in the face of that clause it is not open to tho appellant to oontend that that right is left unaffected. Thero is thus nu substance in the alternative contention put forward by the learned counsel.\n\nAccordingly we affirm the decree of the High Com t and dismiss the appeal with cost.a.\n\nAppe, al di, siniS&li.\n\nKRISli.J.'i\"A PRASAD AND .OTHER~\n\nGAURI KUMAR! D.EVl\n\n(P. B. GA.JK'.SDRAGADKAR, A. K. SARKAR and K. N. w AN CHOO, JJ.)\n\nBxecution-l'eroonal decree against mortgagor-Mortgaged e•late ieBting in t!.t State-Bjject on claim pendiny-Bihar Land Reform• Act, 19W(Acl 30 oj 1950), s. 4(d).\n\nThe appcllan t obtainent proceedings, makes the position quite clear. Tho learned Judge directed that for the satisfaction of the decretal amount, the mortgaged properties would be charged prelimin'1ry and he added that if the decretal amount is not fully satisfied from them, thon the appellants would be entitled to proceed against t.hti respondent personally. In othn words, tlie decree clearly and unambiguously provides that the appellants would be justified in executing tho personal decree against the respondent only if and after they have exhausted thcir remedy against the mortgaged properties and have not been abfo tP recover the whole of the decrotal amount by that pro<'ess.\n\nThat is tho second material fact which has to be borne in mind.\n\nThen the third fact to which reference must be made is that after the precribed notification was issued and the mortgaged properties belonging to the respondent harl vosted in t be Sta, te of Bihar, the a.ppellants appliml undr Aet entered in anr\n\n1902\n\nKrishna Prasad v, Gauri Kumari Devi\n\nGajendragadkar J.\n\n, J95Z\n\n1'1ishu Prasad\n\n•• Gaw' E111141i Devi\n\n572 SUPREME OOURT REPORTS [1962] SUPP\n\nregister and a share in or of an estate. It is common ground that the mortgaged properties with which we are concerned in the present appeal are an estate under section 2{i).\n\nSimilarly, it is common ground that tho respondent is a proprietor as defined in s. 2 (o).\n\nSection 3 enables the State Government to declare from time to time by notification that the estates or tenures of a proprietor or tenure-holder, specified in the notification, have passed to and become vested in the State. Tho notification contemplated by s. 3 (I) h&a been issued in respect of the estate in question. Section 4 proscribes the consequences of vesting of an estate or tenure in the State. Broadly stated, the effect of s. 4(a) is that an estate in respect of which a notification has been iS!med shall; with effect from the date of vesting, vest absolutely in the State free from all incumbrances and the proprietor of the said estate shall cease to havP any interests in such estate, other than tho interest expreHsly saved by or under the provisions of tho Act.\n\nThat takes us to section 4(d) which provides thi>.\n\ncle11.rly uggest that the policy of the Act, int, er alia, is to give relief to the debtors whoso estates ha vc by operation of the law vested in the State .\n\nSection J 7 providts for an appeal a!(ainst the decision of the 1Claimo Officer to a Board whose constftution is prescribed by section 18( J).\n\nSection 18(3) lays down that the decision of the Board and, where no appeal has been preferred to the Board, the decision of the Claims Officer shall be final.\n\nSo, the scheme of Chapter IV which consists of sections 14 to 18 clearly is that all claims based on mortgages relating to estates have to be submitted to the ClaimR Officer and tho amounts duo to the creditors have to be determined in accordance with the principll's laid down by the Act.\n\nWhere the whole of the property mortgaged is an estate, there can be no doubt that the prooedure prescribed by Chapter IV has to be followed in order that the amount due to the creditor should he determined by the Claims Officer.\n\nThe decision of the Claims Officer or tht1 Board has been made final by the Act.\n\nChapter V deals with the problem of the asses;; ment of compensation. Section 24 provides for the rates of compensation. Section 24(5} lays down, inter 11lia, that in tho case where the interest of a proprietor is subject to a mortgage, or chiirge, the compellllation shall first be payable to the creditor holding such mortgage or charge and tho balance, if ariy, shall be payable to the proprietor.\n\nIt adds that the amount of compensation payable to a.. creditor shall be the amount determined under Chaptor IV which, notwithstanding anything contained in any law for the time being in force, shall not in any case exceed the amount of compansation payable in respect of the eHtato or portion thereof which is subjcet to such mortgage, and where there are two or more such creditors, the compensation shall be payable to\n\nthem in the order determined under the said Chapter. This provision is, in a sense, consequential and it provides for the payment of the amount already detrirmined to be justly and legally due to the creditor and so. a claim which is made under section 14 would be determined under section 16 and the amount so determined will be paid under s. 24( 5).\n\nChapter VI deals with the payment of compensation, and section 32 provides for the manner of its payment. Thus, the seheme of Chapters IV, V & VI is clear. The provisions in the said Chapters constitute an integrated and self-sufficient Code for the determination of the amount due to the creditors in .question and for their payments, and e. section 35 which occurs in Chiipter VIII prescribes a bar to the jurisdiction of Civil Courts in the matters included in it. lJnder this section, no suit shall be brought in any Civil Court in respect of any entry in or omission from a Compensation Assessment Roll or in respect of any order passed under Chapters II to VI or concerning any matter which is or has already been the subject of any application made or proceedings taken under the said Chapters. There can, therefore, be no doubt that the scheme of the Act postulates that where the provisions of the Act apply, claims of creditors have to be submitted before the ()!aims Officer, the claimants have to follow the procedure prescribed by the Act and cannot avail of any remedy outside the Act by instituting a suit or any other proceedings in the court of ordinary civil jurisdiction .\n\n. It is in the light of this scheme of the Act that we must revert to section 4(b) and determine what its true scope and effect are. Mr. Jha contends that in construing the words of Section 4(d) it would be necessary to bear in mind the object of the Act which was merely to provide for the transference to\n\n1962 '\n\nKrishna Prasad v.\n\nGauri Kumari Devi\n\nGajendragadkar J.\n\n. 1968\n\nK rU/tM Prasad\n\nv. auri Kumivi J)evi\n\nOajtndrogadl; tw J,\n\n~76 SUPREME COURT REPORTS (1962J StJi>P.\n\nthe 3tatc of the interests of thll proprietors and tenure holders in land and of tho mortgagees and lessees of such interesw. lt was not the object of the Act, says Mr. Jha, to extinguish debts due by tho proprietors or tenure hoklers and so, it would be reasonable to confine the operation of s. 4{d) only to tho claims made against the est.ates which have vested in tho State and no others. In our opinion, this argil.mont proceeds on an imperfect view of the aim and object of the Act.\n\nIt is true that one of the objects of the Act was to provide for the transference to the State of the estates as specified.\n\nBut as we have already seen, the provisions containnd in section 16 in regard to the Sl'aling down of the debts duo by the proprietors and tenure-holders clearly indicate that another object which tho Act waated to achiove was to give some redress to the dJfitors whose estates have beon taken away from thorn by the notifications issued under section 3.\n\nTherefore, in construing s. 4(d), it would not be right to assume that the interests of the debtors affected by the provisions of the Act do not fall within the protection of the Act.\n\nMr. Jha fairly conceded that if the words used in s. 4(d) are literally construed and they are given their natural grammatical meaning, it would not be easy to limit the operation of s. 4(d) to execution proceedings where relief is claimed against the properties which have ve,; ted in the Stato.\n\nThe relevant clause in section 'i(d) provides that all suits and proceedings for the rcoovcry of any such money which may be pending on the dato of the vesting shall be dropped; and these words are wide enough to include within their sweep exocution prncecdiugs,, even though the recovery of the amount due may have been claimed by the decreo.holder from properities other than those which have vested in the State. The only limitation imposed by the clauee is that the execution proceedings should be for the recovery of any such money meaning any money due from the\n\nproprietor on the strength of a mortgage executed by him in respect of an estate. We have already emphasised that in the present case, the whole of the mortgaged property is an estate and, therefore, it is unnecessary for us to consider what would be the effect of the provisions of s. 4( d) in cases where part of the mortgaged property is an estate and part is not. It is also unnecessary to consider whether s.4( d) would create a bar even in cases where the compensation amount payable to the mortgagor is insufficient to satisfy the mortgagee decreeholder's claim even to the extent of the amounts scaled down under section 16.\n\nMr. Jha, however, suggested that rules of grammer should not be allowed to have an overriding effect if it is shown that putting a literal and grammatical construction on the relevant words would lead to unreasonable or anomalous results and in support of this argument, he has invited our attention to the observations made by Brett, M. R. in the case of the Lion Insurance Association LU. v.\n\nTucker.(!) ''When you construe a statute or document\"\n\nobserved Brett, M. R., \"you do not construe it, according to the mc:re ordinary general meaning of the words, but according to the ordinary meaning of the words as applied to the subject-matter with regard to which they are used, unless there is something what obliges you to 'read them in a sense which is not their ordinary sense in the English language as so applied. That, I take it,.is the cardinal rule.\". We do not see how this principle can assist Mr. Jha in the present case.\n\nThe scheme of the relevant provisions of the Act to which we have already referred unambiguously suggests that where the whole of the mortgaged property is an estate, certain consequences follow. The decree-holder has to make a claim; the claim has to be enquired into by the Claims Officer; the amount due to the decreeholder has to be determined by the Claims Officer\n\n(I) (1883) 12 Q.B.D. 176, 166.\n\n1B62\n\nKri•hna Pr11s4tl\n\nG'auri Kumori Dea_\\\n\nKrisMa PrqsaJ\n\nOawi Kumeri l)tvi\n\nOa_itntlragodkttr J.\n\nand the amount so determined has to be paid to the deorec-holder from out of the componsation money payable to the judgment-debtor. Having regard to the said M:heme, it is difficult to conliiw the application of s. 4(d) only to execution proceed ings in which the decree-holder seeks to proceed against the estate of tho debtor. In fact, an exccu tion proceeding to recover the decretal amount from the. estate which has already vested in the State, would be incompetent because the said estate\n\nno longer belong to the judgment-debtor. That being so, we are Hatisfied that on the facts of this case, the High Court was right in holding that the application made by the appellants to execute the decree against the respondent by proceeding against her non-mortgagee! properties is incompetent at the present stage. The amount duo to the appellants under the decreli in question has been already determined by tho Claims Officer and tbe appellants must first seek to recover that amount as provided by the relevant provisions of the Act before they proceed to exe<:ute the personal decree.\n\nThis conclusion follows even on the terms of the decree itseif. We h11vo already socn that the direction issued by the trial Court is explicit and elea.r.\n\nThe said direction which is consistent with the provisions of 0. 34 R. 6 would enable the appellants to proceed personally against the respondent only if it is shown that the decreta.l a.mount is not fully satisfied from the prooeeds of the mortgaged property. In the present case, the mortgaged pro\n\nperty cannot be sold because it has vested in tho State free of incumbrance; but in lieu of the mortgaged property, the respondent has become entitled to certain compensation amount and tho appellants are given the statutory right to reoeive the a.mount due to them fr<:m the said compensation a.mount under section 2<(5). This provision is some what similar to tho provision of section 73(2) of the\n\nTransfer of Property Act which provides, inter alia that where the mortgaged property is acquired under the Land Acquisition Act, or any other enactment for the time being in force providing for thd compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of the amount due to the mortgagor as compensation. In a sense, the compensation amount payable to the respondent may prima facie be treated to be like a security substituted in the place of the original mortgaged property under section 73(~) of the Transfer uf Property Act. However that may be, the terms of the decree require that the appellants must first seek their remedy from the said compensation amount before they can proceed against the non-mortgaged property of the respondent. The relevant directions in the decree 'do not justify the appellants' contention that because the mortgaged property has vested in the State, they are entitled to execute the personal decree wHhout taking recourse to the remedy available to them under section 24(5) of the Act.\n\nIt now remains to refer to some decisions of the Patna High Court to which our attention was drawn during the hearing of this appeal.\n\nIn Raghubir v. Basudevanand, (1) the High Court has held that section 4( d) of the Act is_ not applicable to a case where money is secured by a mortgage or charge on estates, some of which are notified under section 3 of the Act and the others are not notified.\n\nIn such a ca, se, according to the High Court s. 4 ( d) will be a bar to the suit or execution proceedings so far as the vested estates a.re conmirned, but the creditor will be entitled to prosecute the suit or execution proceedings as regards the estates or portions of estates which are not vested in the State. Since we are dealing with a case where the whole of the mortgaged property is an estate, it\n\n(1) (1953) I.LR. 32, 581.\n\n1962 ---- Kri1hna Pr•sd\n\nGauri Kumari Dt11 1\n\nGajendratadkaf' J ,\n\nv. ' G®ri Kurnwi Dec~;\n\nis unnecessary for ue to consider whether the view taken by the Patna High Court in this caso is corr ect or not.\n\nIn 1llahanth S'llkltdcu IJrJS v.\n\nKashi Prasad 'l'iwari ( ') the full Bench of the High Court had occasion to consider whether a mortgagee decreeholder of the interest of the proprietor whose estate has vested in the State, is entitled to pro eecd against the Bakasht lands of the proprietor comprised in the said estate for recovery of the amount due to him under the mortgage decree, and it was held that in such a case, the mortgagee can not be forced to seek his remedy under section 14 and to satisfy his mortgage debt out of the compensation payable under the Act, It appears that the Full Bench was inclined to take the view that the interost of the judgmontdebtor in the bakasht land was one of the interests saved by section 6 and that, in consequence, the bakasht lands continued to remain in tho possession of the ex-proprie tor not in the character of ba.kasht lands but as raiyati lands; and 8incc these lands were a part of the security offered by the mortgage-deed, the decree-holder was entitled to proceed against them without ta.king his remedy undor section 14 of the Act.\n\nThis conclusion was based on the view that the effect of s. 4(d) read with sections 3 and 6 oC the Act was not to destroy the mortgage in its entirety but only with respect. to that part of the estate which had vested absolutely in the State and no interest therein is left with the mortgagor proprietor or tenure-holder. It is conceded by Mr.\n\nJba that this decision also proceeds on the assump tion that the mortgage security consists of an estate which has vested in tho State and of bakasht lands which did not, in substance, vest in tho State but continued with the mortgagor as raiyati lands. Therefore, it is not necessary for us to examine the merits of the conclusion reached by\n\n(I) A.I.R. 1958, Pat. 630.\n\nthe Full Bench in this case. It may, however, be not out of place to add incidentally that Mr. Sarjoo Prasad for the respondent has suggested that the assumption made by the Full Bench about the character of the bakasht lands by virtue of the provisions of section 6 is inconsistent with the decisions of this Court in Rana Shoo Anwar Singh v.\n\nThe Allahabad Banlc Ltd. (1).\n\nHis argument is that the provisions of section 6 of the Act correspond to the provisions of section 18 of the U. P. Zamindari Abolition and Land Reforms Act (I of 1951), and that what this Court has said about the effect of the provisions of section 18, has shaken the validity of the conclusion of the Full Bench in regard to the effect of section 6 of the Act. We do n.ot think it necessary to consider this point as well in the present appeal. In any case, both the decisions on which Mr. Jha has relied afford no assistance to us in dealing with the point with which we are concerned in the present appeal.\n\nThe result is, the order passed by the High Court is confirmed and the appeal is dismissed with costs.\n\nAppeal dismissed.\n\n(I) (1962]2. S.C.R. 441.\n\n196Z\n\nKrishna Prasad. '' .., Gauri Kumari Bevi\n\nGajendragam 1!148 to 1957. It may be mantioncd that in 1 fl!i9 when profits went up again the appellant has paid one month's pay S\\8 closing bonus. Taking therefore all the circumstances into account it appears that closing bonqs 4as\n\n38.C.R.\n\nSUPREME COUR'i: REPORTS 589\n\nbeen paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year. In the .oircumstances it cannot be held that one month's pay as closing bonus is payable as an implied condition of service irrespective of the profit made by the appellant. It seems to have been of the nature of profit bonus, even though it may have been paid at a uniform rate for ten years.\n\nWe therefore allow the appeal, set aside the order of the tribunal and reject the claim of the. workmen for any closing bonus over and above that paid by the appellant for the year 1958.\n\nIn the circumstances we order the parties to bear their own costs.\n\nAppeal aUowed.\n\nTHE MANAGEMENT OF INDIAN CABLE CO.,\n\nLTD., CALCUTTA\n\nITS WORKMEN\n\n(B. P. SINHA, C.J., K. SuBBA Rao, N. Ra.r.AGOPA.LA\n\nAYYANGAR, J. R. MuDHOLKAR and T. L.\n\nVENK.AT.AR.AM.A AIY.AR, JJ.) Industrial Dispute-Closure of branch-Retrenchment of workmen-Right to be absorbed in other branches-Branch if an industrial establishment-Individual dispute and industrial dispute-DiBtinction-Dispute raised by majority of workmen if an industrial dispute-Competence of State Government t~ make reference-\"lndustrial dispute\" \"industrial establishment\", meaning of-Industrial Dispute. Act, 1947 (14 of 1947), ss. 2(k), 10, 25G.\n\nSection 25-G of the Industrial Disputes Act, 1947 provided : \"Where any workman in an industrial csta: blishment •... is to be retrenched and he belongs to a\n\nJardine ilendersen '\n\nLit.\n\nV, The W 011'mtn\n\nWonchoo J.\n\n1961 ·-- March 6.", "total_entities": 7, "entities": [{"text": "LTD.\n\n?!.\n\nTHE WORKMEN AND ANOTHEii", "label": "RESPONDENT", "start_char": 74, "end_char": 109, "source": "metadata", "metadata": {"canonical_name": "THE WORKMEN AND ANOTHER", "offset_not_found": false}}, {"text": "A. K. SARKAR", "label": "JUDGE", "start_char": 138, "end_char": 150, "source": "metadata", "metadata": {"canonical_name": "A.K. SARKAR", "offset_not_found": false}}, {"text": "s11", "label": "PROVISION", "start_char": 1368, "end_char": 1371, "source": "regex", "metadata": {"statute": null}}, {"text": "[1960] 1 S.C.R. 24", "label": "CASE_CITATION", "start_char": 7958, "end_char": 7976, "source": "regex", "metadata": {}}, {"text": "ss. 2(k), 10, 25G", "label": "PROVISION", "start_char": 15378, "end_char": 15395, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 25", "label": "PROVISION", "start_char": 15398, "end_char": 15408, "source": "regex", "metadata": {"statute": null}}, {"text": "Industrial Disputes Act, 1947", "label": "STATUTE", "start_char": 15418, "end_char": 15447, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}]} {"document_id": "1962_3_589_613_EN", "year": 1962, "text": "38.C.R.\n\nSUPREME COUR'i: REPORTS 589\n\nbeen paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year. In the .oircumstances it cannot be held that one month's pay as closing bonus is payable as an implied condition of service irrespective of the profit made by the appellant. It seems to have been of the nature of profit bonus, even though it may have been paid at a uniform rate for ten years.\n\nWe therefore allow the appeal, set aside the order of the tribunal and reject the claim of the. workmen for any closing bonus over and above that paid by the appellant for the year 1958.\n\nIn the circumstances we order the parties to bear their own costs.\n\nAppeal aUowed.\n\nTHE MANAGEMENT OF INDIAN CABLE CO.,\n\nLTD., CALCUTTA\n\nITS WORKMEN\n\n(B. P. SINHA, C.J., K. SuBBA Rao, N. Ra.r.AGOPA.LA\n\nAYYANGAR, J. R. MuDHOLKAR and T. L.\n\nVENK.AT.AR.AM.A AIY.AR, JJ.) Industrial Dispute-Closure of branch-Retrenchment of workmen-Right to be absorbed in other branches-Branch if an industrial establishment-Individual dispute and industrial dispute-DiBtinction-Dispute raised by majority of workmen if an industrial dispute-Competence of State Government t~ make reference-\"lndustrial dispute\" \"industrial establishment\", meaning of-Industrial Dispute. Act, 1947 (14 of 1947), ss. 2(k), 10, 25G.\n\nSection 25-G of the Industrial Disputes Act, 1947 provided : \"Where any workman in an industrial csta: blishment •... is to be retrenched and he belongs to a\n\nJardine ilendersen '\n\nLit.\n\nV, The W 011'mtn\n\nWonchoo J.\n\n1961 ·-- March 6.\n\nTiu M augnn1nl of\n\nlndiata Cabl1 C..,\n\nlid. a a/cull•\n\nv. 111 Wor.bntn\n\n590 SUPREME <; JOURT REPORTS [1962] SUPP.\n\nparticular category of workmen in that establishment .... the employer shall orclinariJy retrench the \\\\orkrnan who was the last to be employed in that category .... \"\n\nThe appellant company which was carrying on business in the 1nanufacture and sale of electric cables, wires etc., had a nurnber of branch(:; iucluding Arn!Jala all over India. ta registered office was at Calcutta.\n\nThe business of the Ambala branch consisted, apart from the sale of goods manufactured by the appellaut, in the execution of cc1 tain contracts with the Government. After the contracts were completed the appellant considered that, having regard to the volume of its own busi.ness in that area, the 1naintcnancc of a branch at Arnbala was unrcmunerativc, and decided to close it.\n\nAccordingly on May 8, 1958, the appellant terminated the , erviees of all its workmen at 1\\mbala, numb, ering 11 in all, paid them their salaries etc., and wound up the branch.\n\nOn a repre!entation made by six of the workmen who had hem discharged that the closure of the branch \\Vas unjustified, that all the branches of the company formed 'one unit the retrenchment should be done according to All-India scnioritr basis, and that the workmen had a legal right to get employment in the other branches, the Punjab Government referred the matter for adjudication to the Industrial Tribunal, Punjab, on the questions whether the retrenchment was justified and legal under s. 25-G of the Industrial Disputes Act, !947, and whether the seniority of workmen in all the branches of the company should be pooled for the purpose of effecting retrenchment. By an order dated February 11, 1960, the Tribunal directed the appellant company to take back the six workmen in their employment with effect from May 8, 1958, so that there was no break in the continuity of service of any of them.\n\nThe appellant challenged the legality of the order on the grounds, inter alia, (I) that after the closure of the branch at Ambala it had no place of business on the State of Punjab and that, in consequence, the Government of Pu?jab had no jurisdiction to make the reference, (2) that the disputes of the workmen were individual disputes and not industrial disputes as defined in the Act and that, therefore, the Governme.nt had no power to refer the same for adjudication, and (3) that, in any case, the branch at Ambala wa'i an industrial establish ment within s. 25G of the Act and that having been ciosed no relief cou!d be granted to the \\\\'Orkrncii under that section. After theGovernment of Punjab had made the reference, the Delhi Union and the Union of Kanpur branch appeared before the Tribunal and supported the cause of the six workmen.\n\nThe\n\n\nevidence in this case showed (I) that though all the employees of the company were treated alike in the matter of provident fund, bonus and similar benefits, the rules relating to the category of workmen and their scales of wages for the various branches w81 e different, (2) that each branch had its own labour union, maintained its own accounts and had its own banking accounts, and (3) that the workmen when recruited for the particular branch were to be employed only there.\n\nHeld, (I) that in coming to a decision on the question whether a particular branch of company is an industrial establiShment under s. 25 G of the Industrial Disputes Act, 1947, the decisive elements are the location of the esiablishmen'I: and the functional integrality i.e., the. existence of one code relat .. ing to the categories of workmen \"and their scales of wages, and that, as in the present case, the branches Were located in different places and there was also a lack of functional integrality, the Ambala branch was a separate industrial establishment.\n\nAssociated Cement Companies v. Their Workmen, (1960) I S.C .R. 703, relied on.\n\nIndia Tyre and Rubber Co. v. Their Workmen,(1957)2 L.Il.J. 506 and Tulsidas Khimji v. F. Jeejeebhoy, (1960) 19 F.J.R. 396, approved. The question whether a branch or a department is in itself an industrial establishment within s. 25 G of the Act is one of mixed fact and law, and the correct inference to be drawp from the facts established is one of law open to con• sideration by the Court.\n\n(2) that what imparts to the dispute of a workman the\n\n1 character of industrial dispute is that it affects the rights of the workmen as a class, so that where the dispute of a workmen is sponsored by a Union or by a considerable number of workmen it becomes an industrial dispute withiH s, 2(k) of the Act.\n\nIn order that an individual dispute can validly become an industrial dispute by being supported by a Union or by a considerable number of workmen such support must precede the reference. ·\n\nCentral Provinces Transport Services Ltd. v. RaghuntUh Gopal Patwardhan, (1956) S.C.R. 956, The newspapers Ltd.\n\nv. The State Industrial Tribunal, U.P., (1957) S.C.R. 754 and Bombay Union of Journalists v. \"Hindu'', Bombay, (1961) 2 L.L.J. 436, relied on.\n\nThe Management of Indian Cable Co.,\n\nLid. Calculla\n\nv. lta Workmen\n\n1'62\n\n'Thi ?J ano11ment of\n\n\"lndt4n c.blt Ce.,\n\nLtd.; Caktllla v.\n\nI ts-Workmen\n\nli92 SUPRE.ME COUR'i. REPORTS [1962] SUP!'.\n\n(3) that in considering whether the Punjab Goverhment \\\\'as cotnpctcnt t~ n1ake die order of reference, the principle that a court or tribunal \\'lould have jurisdiction if the parties reside v..ithin ju1is.•r J.\n\n594 SUPREME COURT REPORTS [1962] SUPP.\n\n:lfay 8, 19;!8, sent a representation to the managemont complaining th>tt the closL1re of tho branch was\n\nunjL1stilied, that as all the branchos of tho Company\n\nformed one unit, tho retrenchment should be done\n\naccording to \"All India soniority basis\" and that the workmen. had a legal right to get employment in the other branches. A copy of this representation\n\nwas sent to the Punjab Government, which issued a notification on .February :!, 1959, referring the dispute for adjudication to the Indus'trial Tribunal.\n\nPunjab, under s. (I )(d) of the Industrial Disputes Act, J 947, hereinafU-r referrrd to as \"the Act.\" The\n\nreference was in these terms :-\n\n\"Whether the retrenchment of the following workmen of Ambala Branch of the Indian Cable Company Ltd., is justified and legal under the provisions of section 25 G of the Industrial Disputes Act, 1947, and whether the soniority of workmen in all the branches of the company was pooled for tho purpose of effecting retrenchment? If not, to what relief are the following workmen entitled ?\n\nThen follow the names of the six workmen.\n\nBofore the Tribunal, the appellant raised certain preliminary objections to the maintriinability\n\nof the referedce. By its order dated August Ii, 1959, the Tribunal overruled these objections. Then the matter was heard on the merits, and on February II, 1960, the Tribunal pronounced its award directing tho appellant to take back the \"six workmen in thoir employment with effect from 8-5·1958 so that there is no break in tho continuity of service of any of them\" and to pay them \"their full wages from 8-5-1958 till the date they are absorbed\". It is against this a.\\l'ard that the present appeal by special leave has beon brought.\n\n:...\n\nThe appellant has urged the following contentions in support .of this appeal:- ( 1) The Tribunal was not competeµt to entertain or adjudicate on the reference.\n\n(2) The Punjab Government was not competent to make the order of reference dated February 2, 1959.\n\n(3) The disputes of the workmen were individual disputes and not industrial dispputes as defined in the Act and that, in consequence the Government had no power to refer the same for adjudication.\n\n(4) The branch at Ambala was an industrial establishment within s. 25G and that having been closed no relief could be granted to the workmen under that section. ( 1) The question' as to the competence of the Tribunal to entrtain or adjudicate on the reference could shortly be disposed of as it is covered by our decisions in The Atlas Cycle Industries Ltd. v. Their Workmen (I) and M/s. Dalmia Dadri Cement Ltd. v.\n\nBhri A.N. Gujral and others(') with whioh the present appeal was heard. The material facts bearing on this question are that Shri A.N. Gujral was appointed to the Industrial Tribunal on April 28, 1953, when he was over sixty years of age. The validity of his appointment is impugned on the ground that it is not in accordance withs. 7(3)(c) of the Act.\n\nThen, on April 9, 1957, Shri A. N. 'Gujral was appointed as presiding officer of a new Tribunal constituted under s. 70 of the Act. The validity of this appointment is attacked on the ground that as his appointment as Tribunal on April 28, 1953, was invalid he was not qualified to be appointed under s. 7A(3)(b) of the Act.\n\nThen again, under s.7C(-b), Shri A. N. Gujral would have had to retire on June 4, 1957, when he would have attained the age of\n\n(1) C.A. No. 18B of 1961 decided on February 8, 1963.\n\n(2) C.A. No. 375 of 1960 decided on Februaty 12, 1962.\n\nJ96:1\n\nThe JL ana, nn&il oJ\n\nIndian C•ble c,, .. ,\n\nLtd., CtJlcuttd\n\nIts Workmen\n\nAi}iar J.\n\nllMI\n\nTM M 411•tt\"\"111 of\n\nlnJian C\"blt Co.,\n\nLtd. Calctltta\n\n•• Ila Workmen\n\nA.iymJ.\n\n596 SUPREME COURT REPORTS [1962] SuPP.\n\nsixty-file.\n\nBut the Punjab Log!slature then enacted Act 8 of 1957 raising tho ago of retirement under s. iC (b) from sixty-fivo to sixty-seven.\n\nThis law, it is said, is repugnunt to Art. 14 of the Constitution as its object was to benefit one individual Shri A. N.\n\nGujml am! tho notifications under the Act extending his term of office from time to time am in opera.ti ve.\n\nThe present reference which was made to him on February :l, 1959, is said to he invalid on the ground that Sbri Gujra.l was not validly in office. On June 4, 1959, the term of office of Shri A. N. Gujral expired, and Shri Passey, retired .Judge of the Punjab High Court was appointed as Tribunal in his place. The present reference came up before him and resulted in the award dated February 11, l!J60, which is the subject matter of the present appeal It is said that a.s the reference was not validly pending before Shri A. N. Gujral, Shri Passey Wll.B not seized of it as his successor and that as there was no fresh reference to him, the proceedings are without jurisdiction and void.\n\nWe have held in our Judgments in The Atl.as Cycle Industries case. (1) and M /s Dalmia Dudri Cement case(') tha.t the notification Jated April 28, 1953, appointing Shri A. ~- Gujral as Tribunal under s 7(3) of the Act and the notification dated April 19, 1957, appointing him as the Presiding Officer under s .. 7C are valid, that the Punjab Act 8 of 1957 is not unconstitutional, and the notifications extending the tenure of office of Sbri A. N. Gujral till , Juno 4, 1959, are intra iires. 1<, ollowing the8e decisions, we must overrule this contention.\n\n(2) We shall nox:t consider the question as to the competence of the Punjab Government to make the order of reference dated February 2, 1959.\n\nThe contention of tho appellant is that after the closure of the branch at Ambala 011 May 8, 1958, it had no place of business in the State of Punjab,\n\n(1) C.A No. IBB of 1''61 decided OD February S, 1962.\n\n(2) C.A. No. 375 of 1960 decided OD February 12, 1962.\n\nand that, in consequence, on February 2, 1959, the Government of Punjab had no jurisdiction to make the reference. Section 10 of the Act provides that when an industrial dispute exists or is apprehended the appropriate Government may refer it to a Tribunal for adjudication. Section 2 (a) defines appropriate Government as meaning the Central Government in relation to certain classes of disputes and State Government in relation to other industrial disputes. It is common ground that the dispute with which we are concerned is not one falling within the jurisdiction of the Central Government and that it is only the State Govern ment that has the competence to make the refer. ence. The point in controversy is as to which of the States has jurisdiction to do so.\n\nThe Act contains no provisions bearing on this question, which must, consequently, be decided on the principles governing the jurisdiction of Courts to entertain actions or proceedings. Dealing with a similar question under the provisions of the Bombay Industrial Relations Act, 1946, Chagla, C. J. observed in Lalbhai Tricumlal. Mills Ltd, v.\n\nVin and other (1):\n\n\"But what we are concerned with to decide is : where did the dispute substantially arise? Now, the Act does not deal with th'e\n\ncause of action, nor does it indicate what factors will confer jurisdiction upon the Labour Court.\n\nBut applying the well-known tests of jurisdiction, a court or tribunal would have jurisdiction if the parties reside within jurisdiction or if the subject matter of the dispute substantially arises within jurisdiction .. -In onr o'pinion, these principles are applicable for deciding which of the States has juris diction to make a reference under s. 10 of the Act.\n\n(I) [1955]1.L, L.J. 557,558.\n\nThe M (lnagem1nl of 1 ndiaii COO/I Co., ·\n\nLtd. Calcutta\n\n'v, lit Workmen\n\nAYar J.\n\nTiu JI\"\"\"'\"\"'\"' •f I ru/icn Cblt C..,\n\nLtd. Cd-u11• ..\n\nIts Workmt\"\n\nSUPREM~ COURT REPORTS [1962] SUPP.\n\nDiscussing the question on the principles stated above, it is not m dispute that the appellant was not carrying on business anywhere in Punjab\n\non the date of the reference. The Punjab Government would, therefore have jurisdiction to make the reference only if the ca.use of action had arisen wholly or in part within the State. If the validity of the closure of the br which affects workmen as a clas~.\n\nIn this veiw, we shall have now to consider whether the dispute of tho respondents was taken up by a Union, or by a largo number of workmen. The Ambala branch had a Union of the workmen of the appellant company, and that has not moved in the matter. The Delhi branch of the appellant has its own union, and it wrote to the Con'cilation Officer.\n\nDelhi, on December IO, I 958, to intervene in the dispute, but he replied on December Ii, 1958 that ho had no jurisdiction in the matter. Thereupon the union withdrew its application. According to the respondents the Commercial Elll ployees' Union in Delhi was also moved hy them to take up their ca ust• and it did so, hut this is not established. for1•over as it is admitted that no other employees of the appPllant company were members of this Union, it would have had, un the decision of this Court in Hombay Union of Journali'.sts v. \"Ilindn\", Bombay('), 110 locus standi to take up the dispute.\n\nAfter the Government of Punjab had made tho reference on February\n\n2, 1959, the Delhi Union appeared before the Tribllllal in Mareh 19ii9, and so did the Union of the Kanpur branch in April 19.59, and both of them supported the respondents. It is argued that this was sufficient to clothe the disputes of the respondents with the character of indurtrial dispute. But if a reference can validly be made only if an industrial dispute exists or is apprehondcd, and if an individual dispute becomes an industrial di8pute only when it is supported by a Union or hy a considerable number of workmen, that support mtrnt necessarily precede the reference and from the foundation for it. The intervention, therefore, of tho Delhi Union\n\n(1) [1960] 3. S.C, R. 157.\n\n(2) [1961] 2 L. L. J. 436,\n\nin March, 195.9 and of the Kanpur Union in April, 1959, cannot give vali W ., kmen\n\nAi]or J,\n\n604 SUPRE~IE COURT REPORTS [1962] SuPP.\n\nand that on th:1t footing the rospondentA from a\n\nmajority of the workmen hPing Rix out of eleven. ft is manifest that the st11, nd t11, ken hy both the parties on tho question whether the ground of s1irpl11sage the rule tha.t the List t1dc and to the c; itogory to which the retrenched workmen belong. It is these two factors that are determin11, tive of the true scipe of the section.\n\now what is an industrinl establishment ?\n\nThen is a definition of it given in the Explanation\n\nto s. 2:3 A(:!} but that is limited to ss. 2;>C, :!5D 'lnd\n\n2.~E. There being no definition of th() expression in thn.t Act applicable to s. '.!.5Q, w\" must construct it in its ordinary sonRe, guideci by such indir, ations as th\" context might furnish. [n Prai:at Kumar ](ar\n\nv. W.'J'.C. Parker ('), Harries, C .• T., observed that the words \"indu&rial establishment\" meant tho place at which the workmen were employed, and that accordingly s. 2;{ of the Act which impo, cs 11 prohibition 11gain\"t strikes by any \"workman who i~ employed,\n\nin anv industrial establishment.\", \"could n'lt cover a case Zlf workmen in Bombay strikiug against an employer with whom employees in Calcutta hav~ a\n\n(I) 1949] J.F.J.R. 245.\n\ndispute.\" According to this view, it is of the essence of the concept of an industrial establishment that it.is local in its set-up. This is also implicit in the Explanation to the definition of \"layoff\" in s.2(kkk) of the Act, that \"every workman whose name is borne on the muster rolls of the industrial establish ment and who presents himself for work at the establishment at the time appointed for the purpose during normal working hours on any day and is not given employment by the employer within two hours of his so presenting himself shall be deemed to have been laid-off for that day within the meaning , of this clause.\"\n\nIf this be the correct connotation of thll words \"industrial establishment\", then the branches of a company located in different places must be held to be distinct \"industrial establishments\", for purposes of s. 25G.\n\nThis question came up directly for decision before ohe Madras High Court in I ndi.a\n\nTyre and Rubber Co. v. Their workmen('). In that case, a company whose business was to manufacture and sell tyres had its head office in Bombay and a branch office at Madras. There were sub-depots at Ernakulam, Bangalore and Vijawada within the jurisdiction of the Madras Branch. The company retrenched some of the workmen at the Madras office as surplus, and on that a dispute was raised by them that as the retrenchment had been made without pooling all tbe depots as one unit, s. 25G had been infringed. The Tribunal accepted that contention and held that the retrenchment was bad. The correctness of this decision having been questioned in a petition under Art. 226, the Madras High Court held on an examination of the scheine of the Act and on a review of the authorities, that if an industry had establishments located in different places, each of them would be a separate industrial establishment within s. 25G of the Act, and that accordingly the office at Madras was one industrial establishment\n\n(1) [1957] 2 L.L.J. 506.\n\nThe M tmgettwnt of\n\nI nd; on Cable Co.,\n\nLtd. calcUlli2\n\nV,· Its Wolkintn ·\n\nAiyar J.\n\n196?\n\n\"fh1 .If \"\"'fl••\"\"' of Indian Cablt Co.,\n\nLu. C.lcu114\n\nIi. Werkmrn\n\n006 SUPREME COURT REPORTS [1962] SUPP.\n\nand that the sub-depots in the different States were separate industrial establishments.\n\nOn the factf1, this decision is very near the present case and is strongly relied on for the appellant.\n\nWe should, in this connection, refer also to s. lO(lA) of the Act, wherein it is provided\" that when the dispute relates to industrial establishmonts in more than one State, tho Central Government might refer it for adjudicat10n to a National Tribunal.\n\nThis provision is based on the notion that the industrial establishments of a concern situated in different States are distinct establishments.\n\nThen again on the terms of s. 250, the relief provided therein is to be granted within the category of workmen who are proposed to be discharged. This posits that there is one code governing the grades of workmen anear on the service conditions of the workmen.\n\nDealing with tho former, the Tribunal finds that it is the company with its registered office at Calcutta that controls and runs all the branches, that it is the company that employs the workmen and dismisses them, thqt the six respondents were appointed not by tho Ambala branch but by the company and that they were discharged on May 8, 1958, by the company, that the branches do not prepare each its own individual annual balance sheet but that it is only the company that prepares its annual balance sheet including therein the accounts of all the branches and that. it is the company that meets the financial requirements of the br, mches.\n\nThese facts, it is 11a.id, show that the brn.nches have no separate existence of their own.\n\nWe are\n\n0of the opinion that the facts stated above do not support the conclusion of tho Tribunal that all tho branches from one unit of industrial establishmunt. If a Company establishes several branches, the control of these branches must necessarily vest in it, and under thEl provisions of the Indian Companies Act, there can be only one annual balance sheet for the whole company. Un this point R. W. I gave the following evidonco :-\n\n\"My duty consists of amalgamation of all the accounts of the various branches of the Co., and to get them audited. The audited account.8 are forwarded to the head office at Calcutta,\n\n3 S.C.R.\n\nSUPREME couRT REP01ii's 609\n\nunder my signatures and they are later incorporated in the Company's accounts. The branches prepare their own accounts and forward them to me.\n\nI then make a consolidated statement and get the accounts audited and send them to the head office.\" It is therefore dear that while the branches have their own separate accounts the company has its own consolidated annual balance sheet as required by the provision of the Companies Act. In mir opinion, the facts stated above do not necessarily lead to the conclusion that the head office and the branches must all be regarded as forming one industrial establishment. On the reasoning of the Tribunal, where the industry has a head office, and branches in other places,-it may be, even in different States-all of them will have to be regarded as forming one establishment. Such a conclusion would in our opinion, be wholly erroneous.\n\nTurning next to the facts relating to service conditions of the workmen, the finding is that the rules of the company relating to provident fund, gratuity and bonus and service conditions in general are applicable to the employees of the company in all its branches. But this again appears to us to be not of much consequence. It only signifies that all the employees of the company were treated alike in the matter of provident fund, bonus and similar benefits. It does not lead to the inference that all the branches were treated as one. What is material for the purpose of the present discussipn is whether the same rules relating to the category of workmen and their scales of wages are in force in all the branches. It is only then that the s. 25G could be applied.\n\nOn that the uncontradicted evidence of R. W. 1 is that \"the I. C. C. has different scale of pay for different branches\".· On this evidence, there can be no question of integrating workmen trenched in one branch in another branch and, in\n\nThe Jlanazanen.t ti\n\nIndian Ga6le Co.,\n\nLtd Calcutto\n\nv. /tJ :workmen\n\nAfvarJ.\n\nI IM 11.._1 of\n\nIndian CMJ. Co.,\n\nltd., Cakullc\n\nv, ruwor....,,,\n\n\"'\"\" J.\n\nBIO\n\nSUPREJ.IE COURT REPORTS [1962) SUPP.\n\nconsequence, the establishment in each branch must be treated as a separate entity. An attempt was made on behalf of tho rni' pondentd to get over this evidence by showing that transfors from one branch to another were uoual. R W. l denied that there was any provision in the rulos for transfor of the employees from one brancfi to another, and cross.examined with reference to the transfer of some of the employees from Bombay to Delhi, he\n\nstated:\n\n\"The Delhi branch wanted a typist very very urgently and we sent Mr. l\\Iamm from Bombay. After doing his work at Delhi, he was reverted to Bomhay. The same was the cai; e with regard to l\\Ir. Tamboowala.\n\nMr. Tamboowala was d by\n\nKAPl'H, J.-This is ~.n appeal by special leave against the judgment and order of the High Court of the Punjab and raises tho constitutionality of s.l lliA of the Sc:1 Customs Act, 18iS (Act 8 of 1871'), which ha.H bellfi held by this Court to be constitutional in the Colleclor of Custom.~, Jfa.dra.~ v.\n\nN at!u:lla Sarnpa.tl:n Chcll.1f ( 1).\n\nAt the time of arguments before us further point was raised that in order that s. J 78A of the\n\nea Customs Ac:t may become applicable, the prosecution must. further prove that the goods which wcrn sought to h\" affeckd by the order of the Customs Offirer 1rnre goocls of foreign origin and them\n\nmust be evidence in Rupport of the reasonablcnes of thl' belief of thP Customs Officer that the goods were &mugglcd goods. The question now 8011ght. to he raised was not agitated in any of thn courts below.\n\nThe nppcllant on .February I I, I 958, whm1 he wa\" sitting in a th ire! class compartment of the Amritsa Kalka train tanding on Platform No. ii of\n\nthe .Amrsar n~.ilway Rta t.ion, Wall searched hy a Customs Offidal anci' S(•mc b3rn of gold were fm; nd tied round his waist.\n\nTheHe gold bars were sPized and a recovery memo was prepared. Out oftheRe gold\n\n(!) [1%2~ 3. S.C..R. 786,\n\nbars four were of base metal and the rest were of pure gold some bearing the stamp of Johmon Mathey & Co. Ltd., 999-10 tolas and 2-1/4 bars bore marks of N.M. Rothschild & Sons 10 tolas (990-0). No permit from the the Reserve Bank to import this gold was produced by the appellant. Under the Foreign Exchange Regulation Act, 11:147, the importation of gold witho11t such permit is prohibited and such contravention is punishable under s.23-A of the said Act read with s.167 (81) of the Sea Customs Act.\n\nThe app\"llant was prosecuted under.s.23A of the Foreign Exchange Regulation Act and 167( 81) of the Sea Customs Act and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting. The Additional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one year's rigorous imprisonment. An appeal to the Sessions Judge 'resulted in the reduction of the sentence to 8 months' rigorous imprisonment. On revision to the High Court the sentence was reduced to six months' rigorous imprisonment. The appellant has come in appeal by special leave.\n\nThe trial court accepted the testimony of the Customs Officials and held that the defence of the appellant was false and that gold worth Rs. 14,000/-\n\nwas found in his possession. The learned Sessions Judge in appeal also accepted the testimony of the Cu; toms Officials and hld the defence to be false and canie to the conclusion that the gold was found in possession of the appellant. In the High Court the same plea was taken and was rejected.\n\nFor the first time in t.his Court it is contendod that before the presumption under s.178A can be made applicable, it must be proved by the prosecution that the goods were of foreign origin, i.e. had beeH\n\nKewal Eris/tan\n\nStol• of Punjab\n\nKapur J.\n\nl~I\n\nKewol Kri1hcn\n\n•• St•le of Punjei\n\n616 SUPREME COURT REPORTS [1962] SUPP.\n\ni mpoited from abroad and only then does the presumption under s. l i8A arise which relates only to tho question of Customs duty having been paid. In other words tho contention comes to this that th~ prosecution must first prove that the goods in dispute in a particular case have been imported from a foreign country and once that is proved the onus then will be on the person in whoso possession tho goods :ire found that he had paid the Customs duty. Apart from the fact that this question has never been raised, that is not the effect of s.178A of the Sea Customs Act which provides:-\n\n\" l 78A. (1) Where any g1; ods to which this section applies ar<> seized under thiR Act in the reasonable belief that they are smuggled goods, th.) burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.\n\n(2) This section shall apply to gold, gold manufactures, diamonds and other precious\n\nstons, cigaretters and cosmetics and any other goods which th\" Central Government may, by notification in the Official Gazette,\n\nsperify in this behalf.\n\n(3) Every notification isgued under sub. section (2) shall he laid before both Houses of Parliament as soon as may be after it is iRBued\".\n\nTwo Customs officers appeared a.s witnesses, Inspector Satnam Singh and Deputy Superintendent A.N.\n\nKapur, the former is an Inspector of Land Customs and the latter a Deputy Superintendent of Customs.\n\nThere is nothing to indicate in their cross-examination that the officern did not have a reasonable\n\nbelief that the goodH werti smuggled goodR and tho question that the officers di1! not have reaimna.- hle belief is not suggested either from the crossll; amina.tion of these witnesses of from the findings\n\nof the courts below.\n\nEven in his statement of case it is contended that the mere existence of stamp of foreign companies on gold does not necessarily prove that the gold is of foreign origin. It might be put on spurious gold which may be of Indian origin. In our opinion .apart from the fact that this question has not been raised, it is quite clear that what s. l 78A of the Sea Customs Act provides is that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized. The onus is on him to show that the goods are not smuggled; that is, not of foreign origin on which duty is not paid. The onus is not on the prosecution to Ehow that the goods are not of Indian origin. That appears to be the view taken in the Collector of OuBtoms, Madras v. Nathella Sampathu Ohetty (1) where at the learned Judges observed : - -\n\n\"We are therefore of opinion (1) that section l 78A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of a notification under section 8(1) of the Foreign Exchanges Regulation Act 1947 by virtue of its being deemed to be a contravention of a notification on under section l9 of the Sea Customs Act, ( 3) that the preliminary requirement of section l 78A that the officer seizing should entertain \"a reasonable belief that the goods seized were smuggled\" was satisfied in the present case.\" . I~ or opinion there is no merit in this appeal and it is d1sm1ssed.\n\nThe appellant will surrender to his bail-bonds.\n\nAppeal dismissed,.\n\n(!) [19G2] 3 S.C.R, 78~.\n\nKewal Krish1.1n\n\n•• S ta/.1 of Punjab\n\nKapurJ.", "total_entities": 20, "entities": [{"text": "s. 25G", "label": "PROVISION", "start_char": 72, "end_char": 78, "source": "regex", "metadata": {"statute": null}}, {"text": "STATE OF PUN.JAB", "label": "RESPONDENT", "start_char": 414, "end_char": 430, "source": "metadata", "metadata": {"canonical_name": "STATE OF PUNJAB", "offset_not_found": false}}, {"text": "L. KAPUR", "label": "JUDGE", "start_char": 436, "end_char": 444, "source": "metadata", "metadata": {"canonical_name": "J.L. KAPUR", "offset_not_found": false}}, {"text": "P. B. GAJENDRAGADKAR", "label": "JUDGE", "start_char": 446, "end_char": 466, "source": "metadata", "metadata": {"canonical_name": "P.B. GAJENDRAGADKAR", "offset_not_found": false}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 1202, "end_char": 1213, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Sea Customs Act, 1878", "label": "STATUTE", "start_char": 1303, "end_char": 1324, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 1416, "end_char": 1427, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 2509, "end_char": 2520, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s.23", "label": "PROVISION", "start_char": 4006, "end_char": 4010, "source": "regex", "metadata": {"statute": null}}, {"text": "s.167", "label": "PROVISION", "start_char": 4039, "end_char": 4044, "source": "regex", "metadata": {"statute": null}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 4061, "end_char": 4072, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s.23A", "label": "PROVISION", "start_char": 4110, "end_char": 4115, "source": "regex", "metadata": {"statute": null}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 4179, "end_char": 4190, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s.178A", "label": "PROVISION", "start_char": 5319, "end_char": 5325, "source": "regex", "metadata": {"statute": null}}, {"text": "s.178A", "label": "PROVISION", "start_char": 6106, "end_char": 6112, "source": "regex", "metadata": {"statute": null}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 6124, "end_char": 6135, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 7693, "end_char": 7704, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "section 8(1)", "label": "PROVISION", "start_char": 8470, "end_char": 8482, "source": "regex", "metadata": {"statute": null}}, {"text": "Foreign Exchanges Regulation Act 1947", "label": "STATUTE", "start_char": 8490, "end_char": 8527, "source": "regex", "metadata": {}}, {"text": "Customs Act", "label": "STATUTE", "start_char": 8629, "end_char": 8640, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}]} {"document_id": "1962_3_618_632_EN", "year": 1962, "text": "J962\n\n}r! arch 6\n\n618 SUPRE!IIE COURT REPORTS [Hl62] SUPP.\n\nSTRAWBOARD MANUFACTURING CO.\n\nGO BIND\n\n(P. B. GAJElWRAGADKAR, A. K. SAHKaR, and\n\nK. N. \\VANCHOO, JJ.)\n\nIndustrial Dispute-Autliority of emplovcr to dismiss employee before appro1:a./ of Tribunal-Rule of 111-lerpr(; fation of stalute-['niteil Provincspondcnt on February' l, I 960.\n\nAs however. two disput-0s were pending between t.he appullant and its workmen one before the Industrial Tribunal\n\nNo. 3. at Allahabad and the o\\her before the Labour Court at Meerut, the appellant sent applications by post on the same day to the two authorities for approval of the action taken, namely, the dismissal of the respondent. It appears that the tribunal at Allahabad approved of the action on March 22,\n\n1960. When however the same matter came before the labour court at Meerut on April 29, 1960, it refused to approve the action taken, even though the order pas3ed by the tribunal at Allahabad already was brought to its notice. The labour court at Meerut held that the appellant was not motivated by victimisation. It further held that in the inquiry held by the appellant, prima f acie case had been made out rufthe dismissal of the respondent ; but the labour court said that though ordinarily the application of the appellant should have been granted in these circumstances it refused to approve the dismissal on the ground that the application for approval had been made after the respondent had already been dimissed; therefore it held that the application was not bona fide and in the circumstances the prayer that the order of dismissal should be approved was not granted. It was of the view that the proviso to s. 6E(2)(b) required that the application for approval should be made before the dismissal of the workmen concerned, and failure to do so amounted to contravention of the terms of the section. Therefore as the application in this case was made after the dismissal, approval could not be granted and on this narrow ground the la.hour court refused to approve of the dismissal of the respondent. Thereupon the appellant obtained special leave from this Court and that is how the matter has come up before us.\n\nThe question thus raised depends upon the interpretation of the terms . of s. 6E (2) which as we have said already correspond word for word with the provisions of s. 33 (2) of the Act. We shall\n\nStrawboard Manufacturing Co.\n\nGobind •\n\nWonchoo J.\n\nStrawboard Manufacturing Co.\n\nOobind\n\nJ.t'anchoo J.\n\n622 SUPREME COURT REPORTS [1962] SUPP\n\ntherefore set out the provisions of s. 33 (2) which reads as below :-\n\n\"(2) Durin!! the pcnde11c:y of any Ruch procceding in respect of an industrial dlRputc, the employer may, in 11ccordanc(J with the standing orders applicablo to a workman concerned in such dispute-\n\n( a)\n\n\"(b) for any misconduct not <:onnected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman;\n\nProvided that no such workman shall Le discharged or dismissed, unless he has been paid wages for one month and an application has been ma.do by the employer to the authority before which the proceeding is pending for approval of the ac:tion taken by the em ployer.\"\n\nWe aro concerned in the present appeal with the interpretation of the proviso to cl. (b) which says that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application haH been made by thn employer to the authority before which the proceeding is pending for approval of the action taken by the employer. It is unnecessary to consider in the present case whether applications have to be made, where more than one dispute is pending before more than one tribunal, to all the tribune.ls where the disputes are pending or whether an application to oniy ono of them would be enough. In the present case disputes were pending before two authorities and applications were made to both of them, though curiously the result has been rather unfortunate for the appellant, for one tribunal has approved of the action while the other has not.\n\nBefore however we turn to the interpretation of the proviso we may refer to the circumstances in which s. 33( 2) came to be enacted. Originally there was no such provision like s. 33(2) in the Act and the only provision to be found therein corresponded to the present section 33( 1 ).\n\nThe objAct behind enacting s. 33 as it was before the' amendment of 1956 was to allow continuance of industrial proceedings pending before any authority prescribed by the Act in a calm and peaceful atmosphere undisturbed by any other industrial dispute. The plain objeii\n\nof course the words are absolutely clear, as tr.f require that the employer must first obtain approval of the tribunal where a dispute may be pending before passing the order of discharge or dfismissal of a workman, for on this interpretaticfn there will be no difference between s. 33 (1 }' (b) and s. 33(2)(b) and the purpose of the amerndment of 1956 may be lost. / Then we come to sub-s. (3) whch provides that notwithstanding anything contained n sub-s. (2) certain workmen who are called protected workmen shall not be dealt with except with the e)i:press permission in writing of the authority before\\which the proceeding is pending. Thus the freedom which was given to the employer under sub-s. (2) jth respect to conditions of service unconnected with the dispute or with respect to discharge or punishment of workmen on the ground of matters unconnected with .the dispute was cut down by sub-s.(3) with respect to a small class of workmen, even though the action of the employer may be unconnected ' with any matter in dispute before the tribunal. The explanation to sub-s. (3) defines who is a protected workmen and sub-s. ( 4) makes consequential provisions with respect to him.\n\nGobind\n\nWonchoo .1,\n\nStrawloard MtttrUjacturing Cu.\n\nGo; i1ui\n\nWanchoo J. \\ \\ \\ \\ \\ ' •\n\n!i26 SUPREME COURT REPORTS [1962] SUPP.\n\nLastly we come to sub-s. (5) which lays down that where an employer makos an application under the proviso to Bubs. (2) for approval of thu action taken by him, the authority concerned shall without delay hear such application and pass as expeditiously as possibl<' such order in relation thereto as it deems fit.\n\nLet us now turn to the words of the vroviso in the background of what we have said above. The proviso lays down that no workman shall be discharged or dismissed unless he has been paid wages for one month and an application has been mad~ by the employer to the authority before which the p.r?ceeding is pending for approval of the action ta.ken by the employer. It will be clear that two kinds 1-:>f punishment are subject to the conditions of the pr1oviso, namely, discharge or dismissal. Any other ki.µd of punishment is not within the proviso.\n\nFnrther \\ the proviso lays down two conditions, namely (f,) payment of wages for one month and (ii} making o'f an -application by the employer to the authority lleforc which the proceeding is pending for approval of the action taken. It is not disputed before us tht when the proviso lays down tho condition as t<;> payment of one month's wages, a.II that the employer is required to do in order to carry out that condition is to tender the wages to the l'mployeo. 1 But if the employee chooses not to accept the wages, he canot come forward and say that there has been no payment of wages to him by tho employer. Therefore, though s. 33 speaks of payment of one month's wages it can only moan that the employer has tendered the wages and that would amount, for payment, for otherwise a work man could always make the section unworkable by refusing to take the wages.\n\nSo far as the second condition about the making of the application is concerned, the proviso requires that the application should be ma.de for approval of the action taken by tho employer. It has been urged on behalf of the\n\n' ..\n\n3 s.c.Ji.\n\nSUPREMlli COURT REPORTS 627\n\nrespondent that the words \"action taken\" in this part of the proviso mean the action proposed to be taken and therefore all that the employer can do is to make an application to the tribun11, l asking it to approve the action proposed to be taken by it and it is only after the approval that the employer\n\ncan proceed to dismiss or discharge the workman.\n\nWe are however of opinion that on this interpl'etation there would really be no dilference between sub-s.(2) and subs. (I) of s.33 and the intention of the legislature in making the amendment in 1956 would be rendered nugatory.\n\nMoreover, it is against the rules of interpretation to add words to a provision, when the provision, as it stands, is capable of a reasonable meaning which will give effect to the intention of the legislature even on the words as they stand. On the plain meaning of the proviso, it is clear that it gives the employer the power to discharge or dismiss the employee before obtaining the approval of the tribunal concerned; but at the same time the protection afforded to the employee by the proviso has to remain effective. It seems to us therefore that when the proviso speaks of an application for approval of the action taken, the action taken there is the order of actual discharge or dismissal made by the employer and it is for the approval of this order that the application . is to be made. This is borne out by form 'K' under r. 60 of the Rules framed under the Act which corresponds to form XV under r. 31 of the U.P. Rules. Further the use of the word \"approval\" in the proviso also suggests that something has been done by the employer who seeks approval of that from the tribunal. If the intention was that in view of. the proviso the employer could not pass the order of dismissal or discharge without first obtaining the approval of the tr\\ bunal, we see no reason whv the words in the proviso should not have been similar to those sub-ss. (I) and (3), namely, that no workmen shall be discharged or dismissed without the express permission\n\n.Strawbrtl Jlt111uJacturfrig Co\n\n•• Gob ind\n\nWanckoo J.\n\nSIYouboard Al .nufatturing Co •\n\n•• Golit1d\n\n628 ::H.:PHEME COUl~T ltEPURTS [19ti2] SUPP.\n\nwriting of the authority concerned. The change therefore in the la111mage used in the proviso to u b-s. 2\n\n(b) clearly. shows in our opinion that the lngislat?re intended that the employer would have the nght to pass an order of discharge or dismiseal subject to two conditions, namely, (i) paymnt of wages for one month and (ii) ma.king of an appli oatic:in to the authority concerned for approval of the action taken. The use of the word \"approval\" also suggests that what has to be approved has already taken place, though sometimes approval ma.y also be sought of a proposed action.\n\nBut it seems to us in the context that the approval here is of something r from the us\" of tho word \"approval\" in the proviso that. the legislature intended that such an applicatio11 should bu made a.fter the action had been takon. The High Court\n\nhaR pointecl out that there is 1ippara.nt conflict betwt>cn the first and last part of the proviso and the view it took was with the object of harmonising the two parts.• 'fhiR view has been followed by the Gujarat High Court in Indian E:rtraction-< Prii:al.e LimifR; J, v. A. V. Vyan, Conciliation Offic£r(') though with some hesitation. With respect we foe] t, hat it is not necessary to read tho words \"action taken•• in tho proviso as \"qual to \"action proposed to be takon\", as the Bombay High Court has done and that the apparent conflict between tho two parts of the proviso can be harmonised, as we ha.ve indicated above, leaving it open to the employer to dismiss or discharge the employee and at tho same time pay him the ncecssary wages and\n\n(ll f.LR. [1960] Born. 289.\n\n(2) A.J.R, 1961 Guj. 22.\n\nmake an application to the authority concerned for approval of the action taken. The c.mtrary view has been taken by the Calcutta High Court in Metal Press Works Limit'!, f], v. Dib (ll.R.)(') where it has been held that payment of wages and the making of the application should be simultaneous with the order of discharge or dismissal. It has further been pointed out that the word \"simultaneously\" must of course be taken reasonably and a notion of splitsecond timing should not be imported. It should be done at once and without delay\", and it will depend upon the facts of each case whether the application has been made at once or without delay. This, we think, is the correct view to take.\n\nLet us therefore see what has happened in this case, The appellant-concern is situate at Saharanpur while one tribunal was at Meerut and the othe-r at Allahabad. What the appellant did was to pass an order of dismissal on February I,\n\n1960. On the same day he sent two applications by post addressed to the two tribunals. The application at Meerut was received on February 3 and the application at Allahabad on February 4, 1960.\n\nIn these circumstances we are of opinion that the appellant had made the application to the tribunal simultaneously and without delay on its passing the order of dismissal and its action was thnefore in accordance with the proviso. The view taken by the labour court that the application must be made before dismissing the responII as the R<.'serve Bank of India Act, prriodically inspected the Palai Bank. These ins- P\"ctionH were ruade in J!li)J, July l!l53, February- )1arch ]!)56, Mar<\"h 1958 and January-February, l 9(i0.\n\nEvery time, the Reserve Bank found itre.\n\n3 S.C.R.\n\nSUPREME COURT REPORTci. 637\n\ngularities which were pointed out to the Bank, and special directions were iHsued. The main defects were that the advances made by the Palai Bank were not sound that the bulk of the advances were either irrecoverable or \"sticky\" (which means, not easily recoverable), that the income taken into account represented to a great extent unrealised interest on these advances, that large advances were made to the Directors, their relations and Companies, in which they were interested, on no security or inadequate security, and that the Bank was declaring dividends on the basis of profits which were computed without making provision for bad and doubtful debt and by using up the reserves at an alarming rate, while the deposits were going down.\n\nIn the beginning, the Reserve Bank contended itself, by prohibiting further advances to Directors, their relations and individuals, firms or companies, in which the Directors were interested, advising the Palai Bank to reduce clean advances and to regularise others, warning the Bank that the Reserve Bank considered that the business of the Bank was being conducted in the manner detrimental to the interests of its depositors, and that if the directions were not carried out, action under the first proviso to sub-s. (2) of s. 22 of the Banking Companies Act would be ta.ken by issuing a notice that a licence could not be granted to the Bank.\n\nFrom theoorrespondence which has been filed in this case, it does appear that the l{eserve Bank was not satisfied at each following inspection that . the position had improved; rather it apprehended that it h'1d worsened, and that the directions had not been carried out. This was denied on behalf of the Bank, but nothing depends upon who is right and who is wrong, because no charge of nwla fide conduct is now made against the Reserve .Bank. As a result of the inspection in February- March, 1956, the Reserve Bank avers, it was found\n\n196!\n\n/oseph Kuruvilla\n\nVellukunnel\n\nThe Reserve Bank of India\n\nHidavatu/lah J\n\nJ962\n\nJ oseplr J{'u1ut1lla\n\nVeJlukWU1rl\n\nTht! Resen-t Bank\n\nof India\n\nH kl ayatuU oh J.\n\nfi38 SUPREME COURT REPORTs [1962] SUPi>.\n\nthat on December 31, 1955, the .advances stood at Ha, 355·02 lakha, of which llti. 171 ·\"27 lakha were irrncoverable, and that the deposits of tho Bank had been impairer:! by Rs. l:)!JI3 lakhs. The Roservo Bank also avers that the Bank did not satisfy the requirements of the Banking Companies Act, particularly s. 11, about the minimum paidup capital and reserve6, and ss. 22(3) (a) and (b) about the ability of tho Bank to pay its depositors, present and future, in full or conducting its affair in a manner not detrimental to tho interesta of the d\"positors, and did not satisfy the require mentJaid that tho Reserve Bank itself thought well of the Palai Bank, because in tho year 19!i4, it allowed the opening of a new Branch at Madurai, and evcn in itH last letter of July 21, 1960,\n\n-\"'\n\n3 s.c.R.\n\nSUPREME COuRT REPORTS 643\n\nit gave the Palai Bank one yea.r to improve matters, and 30 days to show cause against the inspection reports, but took a hasty action before even the 30 days had expired. The action of the Reserve Bank was undoubtedly taken during the period of grace; but after July 21, the situation had altered so radically that delay might have defeated the very purpose of the law, under which action was taken. ·\n\nFinally, it was contended that the Palai Bank began by being a rural Bank, which was making advances on the security of land, and such security, though \"sticky\" was capable of being realised.\n\nReference was made to the Report of the Travancore Cochin Banking Enquiry Commission, which was appointed in 1956, where, in making a survey of banking in Travancore-Cochin State, it was pointed out that the Banks were\n\n\"spread out into the rural interior of the State\", and the main business of these banks was \"to finance the rural people engaged in a small business-crop raising, produce processing, transporting, vending, etc.\" It was argued that to a rural Bank of this kind the standards of a commercial bank could not be applied and that the Reserve Bank should have made allowances in respect of the realisability of the advances, the worse of which belonged to a period prior to the extension of the Reserve Bank of India Act to this area. These advances given time, could have been cleared, and an attempt was, in fact, being earnestly made with the assistance of Mr. J. A.\n\nFrost, a retired senior grade Officer of the Imperial Bank of India, who was appointed an adviser. It was pointed out that 3 accounts were closed, 26 were sued upon, and in 13, substantial remittances were received. All this. may be true; but it is useless for us to speculate as to_ what would have happened if the depositors did not take a ' hand in the affairs by making a run; and the a?tion of the Reserve Bank was precipitated\n\n1962 .\n\nJ osejh KwuvUlo ~..,, _.,.\n\nV ellutunnel . ··\n\n' The Reserve Bank\n\noj India\n\nHitiayatu/lall J.\n\n1961.\n\n...\n\nThi -R•Jer11 Bak\n\nOf lndiJ' I\n\n64! SUPREME COUHT REPORTS [1962] SUPP.\n\nhy the exigencies of the situation, which had arisen.\n\nThose who wade a run for their money, were not going to wait till the Bank acquired sufficient funds to pay them afLer recovcrin~ its advance.\n\nThose advances, as conceded, could not so easily be realised as tho advance made by a commercial bank on security other than that of land. If this rural bank began to arrange its business like a commercial bank it must necessarily be judged by the same standard,\n\nand the affairs of the Palai Bank, in our opinion, had long left behind the rural character, and had emerged into those of a modern commercial bank.\n\nWhat we have said above is sufficient to show that then.> was not e110ugh material on which the action of the Heservc Bank could strictly be charactcri8tld as mc1lu fide.\n\nIndeed, the forbearance with which the Reservo Bank acted (and it proved unwise) has completely demonstrated the futility of granting time, and we are not surprised that the answering respondents in the High Court and tho appellant in this Court have not chosen to raise any iBBue about the honesty of the action.\n\nWe are thus concerned with the contention that ss. 38(1) and (:i)(b)(iii) arc void, being a breach of Arts. 14 and 19 of the Constitution, and uUra vires being in conflict with Art. 30 I. Tho arguments anent\n\nArts. 14 and 19 are based on tho same reasoning, but that under Art. 19 takes a few more facts into account.\n\nShortly stated, the argument is that ss.38\n\n(l) and (3)(b)(iii) make the Reserve Bank the sole judge to decide whether the affairs or a banking. company are being so conducted as to be prejudicial to the interests of the depositors, and the Court has no option but to pass an order winding up the . banking company, when the application is ma.de Section 38 lays down : .\n\n\"38(1 ), Xot.withsta.nding anything contained in sectfon 391, section '192, section 433 1md section\n\n3 S.C.R.\n\nSUPREME COUR'r REPOl\\TS 645\n\n583 of the Companies Act, 1956, but without prejudice to its powers under sub-section(l) of section 37 of this Act, the High Court shall order the 'Yinding up of a banking company--\n\n( a) if the banking company is unable to pay its debts ; or\n\n(b) if an application for its winding up has been made by the Reserve Bank under section 37 or this section.\n\n(2) The Reserve Bank shall make an application under tbis section for the winding up of a banking company if it is directed so to do by an order under clause (b) of sub-section ·\n\n( 4) of section 35.\n\n(3) The Reserve Bank may make an application under this section for the winding up pf a banking company- * * *\n\n(b) if in the opinion of the Reserve Bank- * * (iii) the continuance of the banking company is prejudicial to the interests of its depositors.\n\nIt is said that the word \"shall\" in the first sub-section is mandatory, and compels the High Court to pass an order winding up a banking company when ever the Reserve Bank chooses to make an application. It is further pointed out that these powers exclude the operation of s. 433 of the Companies Act, under which companies are wound up.\n\nThe power conferred ou the Reserve Bank by the section is said to be bad under .\".rt. 14, because it enables a discrimination between a banking company and any other company by prescribing different laws for their respective winding up, and is . . ; .\n\n'c\"\"1/16B\n\nJuaep~ Irunwilla\n\n VetlUkunn.1\n\nv~ The Ri'Urff Bani:\n\nof_ltitfia\n\n196t\n\n' ./stph Kruuvilla\n\nVt//ukunnel\n\n•• 'Tiu ReJtrDt Bank\n\nOf lndia\n\nHkl•Jalul/:th ./,\n\n646 SUPREME COURT REPORTS [ 1962] SUPP.\n\nbad under Arts. 19(1 )(f} and (g} aa amounting to an unreasonable restriction on the holding of-property\n\nand the right to carry on business ns a banking company. To amplify the first, it is_argued thats. 4:a\n\nof the CompaniPs Act, when an application is made to wind up a company, the High Court has to be satisfied after n fair trial that an order to wind up the company is called for, and tho , Tuduc, who is indcpcnde:•t of executive control, is completely free to rPach a decision after the Company has shown cause, and there is a right of appeal against the•· derision, if adverse to tho company.\n\nBut under the procedure laid down in s. :is of the Banking Companies Act, the banking company proceeded against has no opportunity to show cause either before or after the winding up order, the Reserve Bank records no reaons in writing or communicates them, there is no access to Court aud no hearing b\"fore the Court to dct<-nnino whether the proposed action is justified, and 110 rrdress if a mistake wero made.\n\nUnder the exercise oi that power, it is said, any hanking company can be supprc\"sed by thn Hcscrve lfank or by the Central Government and the Courts are powerless, since the opinion of the Hcserve Bank and/or the central Government is not justiciable and there is no appeal against tho decision of thn Rcsen•e Bank or of the Court acting on the application oft he Reserve Bank.\n\nIt. is said that the umeasonablenel!s of the law arises further from the fact that t.he Reser\\'o Bank\n\nis not an independent or impartial judg<>, the members of the .Central and Local Boards whereof, being all nominees of Govnnment with no security of tenure, such as is enjoyed by the High Court Judges.\n\nThe Res••rve Bank is subject to directions from tho Central Government, and even if the Reserve Bank be of a contrary opinion, it has to filo an application (or the winding up of a banking company, if directed to do so bv the Central Government. It is further argued that. this drastic power under a law which is\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 647\n\ncharacterised as 'Draoonic' is 'uncanalised', 'uncon- J96f trolled' and 'despotic', and in its exercise, every prin- J .. eph Kumill• ciple of natural justice is set at nought, and the very V1ttukrumt1 fundamental conception of it, namely, resort to Court The Re.;:;., 8 .. 11: is completely absent. Such a law, it is said, is so ' of lntlia patently, unreasonable as to be a gross violation of Hidayatu/lah J. all fundamental rights. Lastly, it is contended that in giving the Reserve Bank the power to elect to pro\n\nceed under the Companies Act or under the Banking Companies Act, there is fort.her room for discrimina- . ., tion. It is thus contended thats. 38(1) of the Banking Companies Act cannot be upheld as a valid law on any principle.\n\nThe learned Attorney-General appearing for the answering respondents contends that the action of the Reserve Bank was fully supported and justified by the facts. According to him, the Palai Bank was inspected frequently for ten . years and the reports of the inspecting officers were made available to the Palai Bank not only for information but also for explanation and compliance. The action, says he, drastic though it may seem, was taken after numerous opportunities to the Palai -'Bank to mend matters, that even as late as 1960 the Reserve Bank gave a year's time for improvement, but immediate action had to be taken in view of the loss of confidence a.mong the depositors, a large number of whom made a run for their money. The learned Attorney-General thus says that there were many person who were of the opinion that the Reserve Bank should have acted earlier and that perhaps the Reserve Bank could be blamed for delaying the action but not for taking a precipitat(; action. He urgues that the Reserve Bank and not the Court was in a position to take prompt action bc- 9ause the Reserve Bank already possessed all the necessary information. He contends that the position of the Reserve Bank and its statue as a responsible body make it the proper authority to make such an important decision requiring immediate action ancrv~ Ba.nk could be charged with dbhonest.v (which is n')t the case) the aotion of tho\n\nReserve Bank not only eannot he questionod, hut should not bo open to doulit. Accordincr to him, banking companies are in a class by thm selve8, and special law dealing with their winding up cannot be descrihod as discriminatory.\n\nHe contends !.hat the law is noithor discriminatory nor unreasonable, and that a prior judicial determination of :in issue of this kind is not a condition precedent to the making of a winding up order against a\n\nhank.\n\nHe therefore, says that the appeal and the petition should be dismiSBed.\n\nBefore we consider the arguments of the two sides in detail, we wish to say a fow words about the poition of tho lkserve Bank in the financial affairs of India and also about its place in the scheme of tho law.\n\nThe Reserve Bank of India was establibhed on April I, 1935, by the Reserve Bank of India Act, UJ34.\n\nEven before the establishment of the Reserve Bank, suggestions were made that there should be a cent.ral bank in India, and the Royal Commission on Indian Currency and Fi1iance had recommended in 1926 that the eurrcncy and credit of he country could only be put on a firm foundation, if a contra! bank was ostablished. The first Bill introduerd in Hl27 by Sir Basil Blaekett was dropped.\n\nThe Indian Central Banking Inquiiy Committee, however, reported in rn:n that thcro was a need for a contra.I banking institution in India \"for s<.>curing the de1•elopment of tho Indian banking and credit system on a sound and proper basis.\" The Committeo pointed out that Homo of the Provincial Committoes had also RUl!gested the eRtahlishmcnt of the Rernrve Hank.\n\nThe Committ<'e ended by saying :\n\n\"Wri accordingly consider it to be a p1<1tt,, r of supreme importance from the point\n\n3 S.C.R.\n\nSUPREME COURT B.EPORTS _649\n\nof view of the development of banking facilities in India, and of her economic advancement generally, that a Central or Heserve Bank should be created at the earliest possi, ble date. The establishment of such a bai1k would by mobilization of the banking and currency reserves of India in one hand tend to increase the volume of eredit available for trade, industry and agriculture and to mitigate the evils of fluctuating and high charges for the use of such credit caused by seasonal stringency.\" (Vol. I, Part I. Chap. XXII,\n\npara, 605) The White Paper on Indian Constitutional Reforms also recommended the establishment of a Reserve Bank 'free from political influence'. As a result of these findings, when a fresh Bill was introduced by Sit' George Schuster on September 8, 1933, it was ac:i::pted and received the assent of the Governor-\n\nGewral on March 6, 1934.\n\nThe functions of the Reserve Ba.nk were generally indicated in the preamble as the regulation of the issue of the Bank notes and the keeping the re3erl'es with a view to securing monetary stability in India and generally to operate 'the currency and credit systf'm of the country to its nd vantage. But to enable the Reserve Bank to function in this manner, it had to be given other powers, so that it may function effectively as .a C3utrnl bank. To this end, the Reserve Bank was given the right to hold the cash balances of important comm affairs of thH particular bank am not being conducted in a manner detrimental to the int., rests of its depositors. The Reserve Bank has further the power to prohibit any scheduled bank from rec:civing, after\n\n~ week, any fresh deposits.\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 651\n\nThe above analysis of some of the provisions of the Reserve Bank of India Act show that the Reserve Bank of India has been created as a cen tral bank with powers of supervision, ad vice and inspection, over banks, particularly those desiring that they be included in the Second Schedule or those scheduled already. The Reserve Bank thus safoguards the economy aud the financial stability of the country. No doubt, the Board is composed of nominated members ; but from the nature of things, it could not be otherwise. Neither election nor competitive examinations can effectively take the place of nominations, if the Board is to be com posed of men of proved worth and standing, and there is no other method which can even be contemplated. No doubt, the members of the Board are subject to removal, but neither integrity nor efficie ncy is secured only by such guarantee, and we have no reason to think that the Reserve Bank acted in this case, or acts in other cases under pressnre or from oblique motives.\n\nAs was pointed out in another connection by this Court in All lnflia Bmik Employee.<' Association v. National Industrial Tribu nal (').\n\n\"If it was not the Reserve Bank of India, the only other authorit.} that could be entrusted with the function would be the Finance Ministry of the Government of India and that department would necessarily be guided by the Reserve Bank having regard to the intimate knowledge which .the Reserve Bank has of the banking structure of the count! y as a whole and of the affairs of each ba, nk in particular.\"\n\nThe position of the Reserve Bank being such as we have stated from the Reserve Bank of India Act, the next thing to enqnire is its powers under\n\n(1) [1962] 3 S.C.R. 269, 299,\n\nJoseph Kuruvilla\n\nV ellukurinel ,\n\n.v.\n\nThe R\"\"\" B•k of In4io\n\nHidaya/u/1\"11 J.\n\n196B\n\nJ os•Ph K111ul!ill• vtu u trvtn, / ' . v Tit, Beanr Bank ... ..; ..• ! lridi•\n\n·~\n\n652 SUPREME COURT REPORTS [1962] SUPP.\n\nthe Banking Companies Act.\n\nThe Banking Companies Act, in its present form, is the product of many legislative enactrnents. The Banks' Liquidation Proceedings Committee ( l\\Jfl:!) correctly described it as \"m:J.dc up of shred• and patche~.\" We wore taken through the entire evolutionary process by th~ le.i.rnd Att.irney.GinDr.i.I; but we d'J not consider it necessary to trace the various strests of the depositors.\" It must not he forgotten that the Indian Companies Act, 1913, was concerned primarily with safeguarding the interes!s of the stoC'khoMers, whereas in a hanking company, thr in- 1; erests of the depositors are invariably many times\n\n3 s.c.R.\n\nSUPREME COURT REPORTS\n\n• '1 653\n\nthose of the stockholders, if those interests can be said tu be represented by the monies invested respectively. In 1946, an Ordinance was promulgated consisting of only six: sections, of which the operative sections were the last four.\n\nSection 3 enabled the Central Government to direct the Reserve Bank to cause an inspection to be made of any banking company and its books and accounts and to make a report to the Central Government; Section 4 provided the machinery and the procedure to implements. 3. i:iection 5 empowered Government to prohibit a bank from receiving fresh deposits or to direct the Reserve Bank not to include a particular bank in the Second Schedule, or to exclude it_, if already included. Sub-section\n\n(2) provided for certain penalties, and s. 6 authorised the Central Government to publish, after reasonable notice to the banking company' concerned, any report or parts thereof. This was an attempt to ensure the depositors a certain measure of safety in regard to their money.\n\nThis Ordinance was followed by the .Banking Companies (Restriction of Branches) Act, 1946, which, as its name shows, put, a curb on the indiscriminate opening of branches by some banks.\n\nThe 'evil of indiscriminate advances and loans was then sought to be met by an Ordinance promulgated in 1948 intituled \"The Banking Companies\n\nControl Ordinance\" (XXV of 194~).\n\nIn that Ordinance, it was provided that the Court shall appoint the Reserve Bank as the Official Liquidator of a banking company on the application of the Reserve Bank in that behalf. The Reserv\"l Bank of India Act was also amended to enable the 'Reserve Bank to give a loan or loans to a banking company with a first charge on the assets, if wound up.\n\nA large number of banking companies had failed during the years, 1947, 1.948 and 1949.' Between 1926 and 1937, 23 Banks had suspended payment. In 1938 and 1939, 46 Banks':\n\nJoseph KurU; iua\n\nVelluknmri.;- ·\n\n\\'. ·, The Beservi _Bank\n\nof indi4' ·\n\nHid•.Ytu/lah J,\n\nJost!J~ KutWil/a\n\nV1t1ukunntl\n\n•• Thi R tstr~ BW\n\n•! l•dio\n\nBid•Jolulleh J.\n\nSUPREME COURT REPORTS (1962) SUPP.\n\nfailed, from 1940 to 1946, 93 B1mks were involved.\n\nBut, in 194 7, lll48 and l!l49 there were as many as 123 failures involving outside liabilities of Rs. 82 crorcB !\n\nThe largest number was in Calcutta. with 83 Ranks.\n\nIn the winding up proceeding that followed, many unsat.isfactory features were notioed. It was noticed that the realisations were insignificant, while the costs were great, and enormous expenditure of time took place.\n\nThe winding up of any company, be it a banking company or any other, requir&s an investigation of the affairs, the recovery and realisation of assets and distribution of what is realised. While these mattors can, of course, bt> carried on without undue hurry, the decision whether there should be a winding up or not, cannot be unduly deferred in the case of a banking company, if the interests of tho depositors are to be safeguarded. To achieve solidarity in banking operations and also to preserve the rights of the depositors while a bank continues and more so when it cannot, the Banking Companies Act was the logical, and indeed, the only answers.\n\nWe have seen that the Heserve Bank was already functioning as a central bank with a certain meure of control over the other banks, aoheduled or unscheduled.\n\nThis control was tightened in the Hanking Companies Act by making provisions which were intended to protect the interests of the depositors.\n\nDifferences notices hie between the Banking Companies Act, on the one hand and tho Companies Act, on the other, which have been characterised as discriminatory, are thus explainable on the basis of the object to be achieved. We aha.II soon illustrate this by a reference to the sections them6elves.\n\nFor the present we only wish to emphasise that banking companiea cannot be compared with other companies.\n\nThe ordinary companies deal with the money of the stockholders, who own a share in the assets,\n\n3 s.c.k. suP:REME cotJR± REPokrs 655\n\nwho appoint their own Directors, for better or for worse, and whose liability is also limited. The banking companies are in an entirely different class, as they deal with the money of the depositors, who have no security except the solvency of the banking company and its sound dealings with their money. Ex facie, the bankinir companies must he regulated somewhat differentls, and the .interests of the depositors must be paramount and the winding up of such companies depends upon other considerations, chief among which is the desire to pay off the creditors as far as possible in full or at least equitably. The action is thus dictated not from any abrstract consideration of a long-range view of the future ability of a bank to pay its creditors but its ability to pay them at any given time. In this connection, the Reserve Bank has been given by the Banking Companies Act the power and invesed with the duty of watching the affairs of every banking company with a view to ensuring the safety of the depositors' money. There is thus, at the very start, a reasonable classification, which is also a very just, and practical classification, to achieve the avowed purpose.\n\nIt is hardly necessary to examine each and every provision of the Banking Companies Act.\n\nWhen the Banking Companies Act was originally enacted, the main objects were to prescrible minimum capital standards, to prohibits the non-banking companies to accept deposits repayable on demand and to limit dividends payable. But included in the Act was a comprehensive scheme fur licensing of banks and a conferral on the Reserve Bank of power to call for periodical returns and balance sheets and to inspect books and accounts of banking companies. The Act also empowered the Central Government to take action against banks conducting their affairs in a manner detrimental to the interests of the depositors, a.nd\n\nJos.ph K.,..;111\n\nVtllukurwl . ., v •.\n\nThe Reser1J1 Bani:\n\nof Indi4\n\nHii1y1tull•h J,\n\n1962 --··-\n\nJ •f'.,~!n\"\"':f'\"\n\n• ,\"1 v. ' The Rtserui JJ ...\n\nof rrldto\n\nHid1JG1idlolz J.\n\nfJ5tl SUPREME COURT REPORTS [1962] 8rP\n\nprovided for a quicker procedure for winding up banking companies.\n\nWhen the Banking Companies Act was paser to take action or not, while withdrawals were being made at the rate of Iis. 7 lakhs per day. The emergency of the situations which may arise, is itself the justification for the procedure open under the Act and taken in this case.\n\nIn our opinion, these grounds cannot be entertained. It is difficult to imagine that the Reserve Bank would a.ct differently in another case.\n\nThe ma.in ground of attack is the way ss. 38( I ) and (3)(b)(iii) make it mand\"tory for the High Court to pass <\\D ordar winding up a banking company whenever the Reserve Bank under its powers or under an order of the Central Government makes an application for ihc winding up of a banking company. It is argued that suoh a power to the Reserve Bank is an uncontrolled and despotic power and to crown all, access to Courts is not poRSible because the Court itself must pass an order without deciding whether the affairs of the banking\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 661\n\ncompany are being conducted in a manner detrimental to the interests of the depositors-a fact capable of being proved like any other fact. It is argued as a matter of principle that any law which bars a decision by the Court is itself unreasonable without more. Mr. Pathak, in supplementing the above contentions of Mr. Nambiar, also contends that by the law in question a judicial process has been converted into an executive action, and subjective determination has taken the place of judicial determination.\n\nHe also contends that the Reserve Bank accuses a banking company, and then tries the issue to the complete exclusion of Courts.\n\nIt must not be overlooked that the winding up of a banking company takes place before the High Court and under the process of law. The judicial process is excluded only in respect of the momentous decision whether a winding up order should be made or not. This opinion is left to the .Reserve Bank, and the Court merely passes an order according to the Reserve Bank's opinion, and then proceeds to wind up the banking company according to law. The narrow question is whether in leaving this decision to the Reserve Bank the law offends the principles of natural justice, and becomes so unreasonable, viewed in the light of Art. l~, as to become void. This is the point on which the respective parties joined issue and had much to say, and this is the crucial point in this case.\n\nIn support of this contention, reliance on behalf of the appellant is placed upon certain cases of this Court, anci we shall begin by noticing them in brief. The first case relied upon is A. K. Gopa/, an\n\nv. The State('). In that case, the validity of ss. 3, 7, !0-14 of the Preventive Detention Act, 1950, was challenged on a petition under Art. 32 of the Constitution for a writ of habeas corpns. Certain\n\nobservations of Kania, C.J., and Faz! Ali, J., were\n\n(IJ [1950J s.c.R. aa.\n\n' ..\n\n1962 - Joseph Euruiiilla\n\nVi //rllr.u,...I ·\n\nThe Re1'r~ Bank of\n\n/ndfa\n\nH iday•lul/ph J.\n\n196!\n\n.latt/J~ Kurur; illo -:\n\ni, aukwmel\n\nv. 1e Rt'\"°' Ba~ of~\n\n1nii•\n\n662 SUPREME COURT REPORTS [1962] SUPP.\n\nrelied upon to show that the right to be heard and tried is tho very basis of tho rule of law. :Paz! Ali, J., observed that there is a fundn, montal principle that a person whose rights are affected must be heard. '.rbc learned Judge referred to several cases in which the maxim, rw
  • ii:EM:E COURT REPORTS 669\n\na Commissioner, .who is, by appointment a judicial officer.\n\n(2) The procedure is, as far as may be, the same as that in the trial of suits.\n\n( il) There is a preliminary enquiry by the Assistant Commissioner.\n\n(4) There is an appeal to the High Court.\" ·\n\n. This was a departurefrom the insistence on the intervention of a judicial tribunal. It was considered enough if the person was a judicial officer and the procedure was that of the trial of suits, as laid down in the Civil Procedure Code. The Court still went further when it dealt with the earlier schemes which might have been framed by (a) an executive officer and (b) in pursuance of procedure prescribed by the Executive Government. The Court said that \"this was merely a theoretical possibility\".\n\nThe absence of a preliminary enquiry in No. (3) was not considered a serious point. The order of the executive officer in No. (1) was held.not of importance, as the.Commissioner was a Subordinate Judge of the Orissa Judicial Service. The question of procedure (No: 2) was also not considered important, because the procedure prescribed by rules resembled that of trial of suits. As regards the right of appeal, s. 79A gave a right in all decided cases, and that was considered enough; but whether it was invoked or not in all cases does not appear to have been ascertained. It would appear from the'se three decisions that the gist of reasonableness was held to be not so much in the label of the officer as in a judicial approach to the question to be decided according to a\n\nprocedure which gave an adequate hearing.\n\nThat the Commissioner was a judicial officer of the rank of\n\nllfJZ\n\nJoseph ¥ uruttilla\n\nVolinkuitn.t\n\n•• The Reserve Bank of\n\nIndia\n\nHidoyatuZlah J,\n\n19/HI\n\nJ oie/JA Kwutoilla\n\nVillu.!wvu I\n\n•• .:- The Rt11rve Bank of Indio\n\nHiioy1llvllah J.\n\n670 SUPRElIE COURT REPORTS [1962) SiJi>P.\n\na Subordinate Judge was considered enough for up\n\nholding his adion as reasonable.\n\nThat every decision should be by the Court was thus not the proposition laid down. In fact, the case showH that it is not the sine qw1 n62\n\nJoieph'/Curuoil/o\n\n Vellukunnel v.\n\nTlie•Reserve.Bank\n\nIndia\n\n 1 Hid/Jyalultah J.\n\nJ o,.plt K \"\"\"1illa\n\nVdlaNlnrl\n\n•• Tli1R•s1tf11Bo11k. of\n\nliidi•\n\nlribyolwlloh J.\n\n672 SUPREME COURT REPORTS (1962] SUPP.\n\ninterest of those unfortunate depositors, whose money is still involved. Tho Ueserv-e Bank has not y•it told ns all that it has found.\n\nIt will all ho found in the winding up proceedings.\n\nBut this seems certain that the action would not be taken without scrutinising all the evidence and checking and rechecking all the findings. It is impossible to say that observations in tho cases discussod above ean apply to the facts here.\n\nThe learned Attorney.-General, on the other side, drew our attention to Virendra v. 1'he State of Pm1jab (1), where it has boon pointed out that in\n\njudiring the reasonableness of any particular law \"the surrounding circumstances in which the impugned law came to be enacted, tlw underlying purpose of the enactment and the extent and urgenoy of tho evil sought to be remedied\" must also be considerr.d. That case concerned the freedom of speech and its alleged curtailment by the Punjab Special Powers (Press) Act, 1956. In judging the reasonableness of the law from the angle o°f the exclusion of Courts, this Court observed:\n\n\"Legislature had to ask itself the question : who will be the appropriate authority to determine at any given point of time as to whether the prevailing circumstances roquire some restriction to be placed on the right to freedom of speech and expression and the right to cany on any occupation, trade or bussiness and to what extent ? The answer waa obvious, namely, that as the State Government was oharged with the preservation of law an order in the State, as it alone was in possession of all material facts it would be the best authority to investigate the circumstances and a88088 the urgency of the situation that might arise and to make up its mind whether any and, if so, what anticipatory action must\n\n(I) [1958] S.C.R. 308.\n\n' I\n\n3 S.C.lt.\n\n. ' ,. ) ' ., ~\\ . ' _'\n\nSUPREME COURT REPORTS 673\n\nb~ taken for the prevention of the threatened or anticipated breach of the peace. The•court is wholly unsuited to gauge the seriousness of the situation, for it cannot be in possession of\n\nmateriafa which are available only to the executive Government. Therefore, the determination of the time when and the extent to which restrictions should be imposed on the Press must of necessity be left to the judg-' ment and discretion of the State Government and that is exactly what the legislature did by passing the statute ... ; ..... Quick decision and swift and effective action must be of the essence of these powers and the exercise of it must, therefore, be left to the subjective satisfaction of the Government ...... To make the exercise of these powers justiciable and subject to the judicial scruti; ny will defeat the very purpose of the enactment.'.' These observations lay down clearly that there may be occasions and situations in which the legislature may, with reason, think that the determination of an issue may be left to an expert executive like the Reserve Bank ratheu than to Courts without incurring the penalty of having the law declared void. The law thus made is justified on the ground. of expediency arising from the respective opportunities for action.\n\nOf course, the exclusion of Courts is not lightly to be inferred nor lightly to be conceded.\n\nThe reasonableness of such a law in the total circumstances will, if challenged, have to be made out to the ultimate satisfaction of this Court, and it is only when this Court considers that it is reasonable in the individual circumstance that the\n\nlaw will be upheld.\n\nIn the present case, in view of the history of the establishment of the Reserve Bank as a central\n\nbnk or; India, it~ position as a Banker's Bank, its\n\nJOseph Kuffl'l'illa\n\nVellukuiiMI\n\nThe ReserVe Ba•k\n\nof India\n\nHidayatullah J.\n\nJo#pla Kllf'tmU/a\n\nYelMrmnel\n\nT/i, R,,....,. Bank\n\nof IN/ia\n\nHldq, at•llah J.\n\n674 SUPREME COuRT HEPORTS (1962] SUPP.\n\ncontrol over banking companies and banking in India., its position as the issuing bank, its power to license ba.nking companies and cancel their licences and the numerous other powers, it is unanswerable that between the Court and the Reserve Bank, the momentous decision to wind up a tottering or un safe banking cow pa.ny in the inti)rests of the deposi tors, may reasonably be left to the Reserve Bank. No doubt, the Court can a)so, given the time, perform this task. But the decision haA to be taken without delay, 11nd the Reserve Bank already knows intimately the affairs of banking companies and has had access to their books and accounts. If the Court wore oallod upon to take immediate action, it would almot always be guided by the opinion of tho Reserve Bank. It would be impossible for the Court to reach a conclusion unguided by the Re\n\neerve Bank if immediate action was demanded.\n\nBut the law which gives the same position to the opinion of the leeerve Bank is challenj?ed as unreasonable. In our opinion, such a challenge has no force.\n\nThe situation that a.rose in this case is typical of the occasions on which this extraordi nary power would normally be exercised, and, aA\n\nwe have said alrea.dy, if the power is abused by tho Reserve Bank, what will ho struck down would be the action of the Heserve Bank but not the law.\n\nAn appeal against the Reserve Bank's action or a. provision for an ex post facw finding by the Court is hardly necessary. An appeal to the Central Govern mcnt will be only an a.ppeid from Caesar to Caesar, because th'e Reserve Bank would hardly act without the concu.rrence of the Central Government and the finding by the Court would mean, to borrow the macabre phrase of Raman Nayar, J., a. postmortem examination of the corpse of the banking company.\n\nIt io a matter of not a little interest that a. procedure for winding up other banks and institu tions to the exclusion of the Companies Act is to be\n\n' ' 3 s.c.R. ~75\n\nfound in other statutes. The co-operative Societies, the State Financial Corporations, the State Bank of lndia, the Industrial Finance Corporation, the Life Insurance Corporation and finally, the Reserve Bank itself are to be liquidated under special laws to the exclsion of the Companies Act, under the statutes creatmg them.\n\nIn view of what we have said above, it is not necessary to refer to American and Japanese precedents. However, if these laws are examined, they show that even in the United States of America and Japan, the closure of bai; iks an~ also their liquidation proceed_ from executive action. Under the Banking Law of Japan( Law No. 21, March 30,1929), Arts. 22, 23, 24 and 27 provide that the competent Minister would decide such issues. Article 22 mey be read in this connection :\n\n\"If the competent Minister finds it neces- Ba!iJ}'. so to do in view of the affairs of a bank or the conditions of its property, he may order it to suspend business, deposit property with official depository, or issue any such order as may be necessary.\" (Japanese Laws Rela ting to BanksEibun-Horei-Sha, Inc. Tokyo Japan, p. VI (BA 4).\n\nIt is also interesting to note that Arts. 22 and 29 of the Japanese Constitution guarantee to the people the freedom to own property and choose occupa tions, much as has been done under our Constitution.\n\nIn the United States of America, Banks are regarded as proper subject of legislative regulation under the police power (Corpus Juris Secundum, Vol. IX. paras 4 and 5, p. 32), and this power is not subject to the limitations arising from the Fourteenth Amendment, except that it must be reasol).ably exercised. The Ba11-ks in the United States being\n\nJostph KUruvil/a\n\nVellufr.uunet\n\nThe Reserve Bank of India\n\nHida_Jr, tullah J.\n\nJouph Xutuflillo\n\nVellnkutmtl\n\n•• 'I1I< Rmne Bank of\n\nIndia\n\nHiUJoJullaA J.\n\n:fi'!'\n\n676 SUPREME CoURT REPoRTs [1962] SUPP . • either National or State Banks, different laws have been framed to deal with the winding up of insolvent Banks. In almost all the States statutes provide spacial proceedings for the 'affairs of insolvent State Banks, and the National Bank Act also makes special provision in respect of National Banks. The closing of the doors of a National Bank by the Comptroller of Currency on account of its insolvency and the appointment of a receiver do not amount to a breach of the due process clause.\n\nAs stated in Corpus Juris Secundum, Vol. IX, para 419, p. 835 :\n\n \"The courts have generally upheld the validity of statutes providing for the liquidati'ltn of state banks, including tho control • and administration .of the assets by state officials or by receivers or liquidators appointed by them, the determination of the bank's\n\nsolvency, claims against the bank ... \".\n\nThe power is thus conferred on the Comptroller of Currency by the l'iational Bank Act and by the State law upon the superintendents of Bauks.\n\nUnder somo statutes of the States, banking officials have no power to liquidate iusolvent Banks independently of the judiciary. But in others, this power is specifically conferred.\n\nThese propositions were cited to us from American Jurisprudence Vol. 7, Vols. IX, XIII and XVIA of Corpus Juris Socundum and from tho Law Reports, particularly Title Guaranty and Surety Co. v. Idaho Ex Rel.\n\nAllen ('), Bushnell v. Leland (), Ex parte.\n\nChetwood (') and some others.\n\nMr. Nambiar, however, joined issue on the ueo of the American precedents on the grounds that banking in Amcrca is. by gra?o. of legislture, and is either a francb1so or a pr1v1legc, which has no place in our Constitution.\n\nHe added that the\n\n. (l)(l!ll6l240)'C.S.130:60L. cd.!'166.\n\n(2) (1697 16' U.S. 684, 41L.ed.598.\n\n(3) (1897) lfS U.S.443,41L. ed. 782.\n\n- a s.c.R.\n\nSUPREME COURT REPORTS 677\n\ncarrying on of business is not one of the provisions of the American Bill of Rights, nor a fundamental right, as we understand it, though by judicial construction the individual right has been brought within the Fourteenth Amendment. He, therefore, contended that American cases and American laws should not be used. In our opinion, no useful purpose will be served by trying to establish the similarities or discrepancies between the American Constitution and b:tnking laws, on the one hand, and our Constitution and our banking laws, on the other, and we do not wish to rest our decision on the American and Japanese analogies.\n\nWe do not also agree that the impugned section amounts to an encroachment on the judicial power by the legislature. The statute book is full of instances in which the Courts of Civil Judicature guide themselves by the decision of an outside agency .. The Arbikation Act itself affords a readily available instance. Under that Act the Court passes its.decree on an award of almost any one the parties may choose. Nor is the posibility ofa mistake by the Reserve Bank of such vital consequence. If the Reserve Bank acts in good fa.ith and with circumspection, there is as 'much or as little chance of error as before a Court of law.\n\nLastly, we do not think that this was a case in\n\nwhih some lesser acti?n like moratorium or amalgamat10n or reconstruct10n would have been feasible The difficulty of the Palai Bank was the nature of it~\n\nadvances, which were either not recoverable or not easily recoverable. A moratorium v. ith the limitation of ime involved in it would not have been an adequate mPasure, and amalgamation and reconstruction were out of question at the stage which had been reached.\n\nWe are thus satisfied that ss. 38(1) and (3)(b )(iii) of the Banking Companies Act are neither - . - . . '\n\n. J .. eph Kld'uvill•\n\nVellukunne/\n\n•• The Reseroe Bank\n\nof India\n\nHid a ya tu/lab I.\n\nJoseph Kur\"\"iUa\n\nVtllukunnel\n\nTiit R1sttVt Bank of\n\nIndio\n\nHido)\"aJull o/a J.\n\nKt1pur .!.\n\n678 SUPREME COURT REPORTS [1962] SUPP.\n\ndiscriminatory nor unreasonable, and cannot be declared void und11r Arts. 14 and 19 of the Constitution. Since the provisions are manifestly in the public interest, they cannot also be declared ultra vires under Art. 30 I, because they are protec. ted by Art. 30l of the Constitution.\n\nThe appeal and the petition thus fail, and arc dismissed with costs one set only.\n\nKAruR, J.-Thc facts of this•case have been set. out in the judgment of our learned brother Hidayatullah, J., and it is not necessary to restate them.\n\nThe main question for decision is whether the provisions of s. 38(3)(b)(iii) of the Banking Companies Act (Act X of 1948) are 1dtm vires of the Constitution as being unreasonable restriction which infringe the petitioners' right under Art. 14 and Art. 19 ( l)(f) and (g) of the Constitution.\n\nUnder s. 38(3)(b)(iii) of the Banking Companies Act the winding up petition was filed •by the Reserve Bank of India against the Palai Bank Ltd., in the Kerala High Court on August 8, 1960. On the same day an application for the appointment of a Provisional Liquidator was also made and a Provisional Liquidator was appointed. On behalf of the Directors an objection was taken in the High Court that s. 38(3) (b) (iii) was invalid and unconstitutio1ml because it contravenes Arts. 14 and 19 of the Constitution and that the petition was mala fide.\n\nAfter the appointment of the liquidator four scheme of arrangement under s. 44B of the .Banking Companies Act were presented to the Court. On October 6, 1960, the Court ordered the Reserve Bank to examine the work ability and effinaey of the schemes. l'he Reservo Bank of India filed its report on October 22, l!lGO, to the effect that prim.£1 f acie the schemes weriy on representation nmde to it or on its own motion, modify or cancel any direction issm'd under subsection(!) and in so modifying or cancelling any direction may imposo such conditions as it thinks fit,.subj., ct to which th\" modification or canccllntion shall ha\\'C offect.\"\n\nSection 36 defines further powern and functions of the Reservo Ua.nk. It has power t.o caution or to prohibit a banking company from entering into any particular transact, ion or class of tran8aetions, to assist any proposal for amalgllmation of companiREME cotJRT REPORTS .685.\n\nto depute one or more of its officers, to watch proceedings at any meeting of the board of directors, to appoint one or more of its officers to observe the manner in which the affairs of the banking company are conducted or to require the banking company to make such changes in the management as Reserve bank may consider necessary.\n\nPart III deals with suspension of business and winding up of banking companies. Section 37 provides that on the application of a banking company the High Court may stay commencement or continuance of all actions against a banking company and may impose a moratorium; but the application is not maintainable unless it is accompanied by a report of the Reserve Bank indicating that in the opinion of tbe Reserve Bank the banking company will be able to pay its debts if the application is granted, provided that the High Court may for sufficient reason grant relief under this section even if the application is not accompanied by such report.\n\nIn that case the High Court shall call for a report from t~ Reserve Bank on the affairs of the banking company and pass such order as may be proper in the circumstances. Under sub-section 3 the High Court can appoint a special offi\\ler to take into custody or control all assets, boo)l:s and documents of the banking company and shall exercise such other powers as it thinks fit having regard to the interests of the depositors of the banking company. Under sub-s. 4 if the Reserve Bank is satisfied that a banking company in respect of which an order has been so made conducts its affairs in a manner detrimental to the interests of its depositors it can make an application to the High Court for the winding up of the company and where such an application is made the High Court shall not make\" any order extending the\n\nJ01eph KuYuvilla.\n\nVel/ukwmel ' v.\n\nThe Reserve Bank of India\n\nKapurJ.\n\nJosth KuruVilla\n\nYellukunntl ·\n\nv. •e !l, snce Bank of Indio\n\nKapw J.\n\n686 SUPREME COURT REPoRTS [1962] SUPP.\n\nperiod.\n\nThe impugned provision of section 38 which deals with winding up reads : -\n\nS. 38 (l) \"Notwithstanding anything contained in section 391, section 392, Rection 433 and section 583 of tho Companies Act, 1956 but without prejudice tu its powers under sub sect ion ( l) of section 3i of this Act the High Court shall order the winding up of a banking company -\n\n(a) if the banking company is unable to pay its debts ; or\n\n(b) if an application for its winding up has been made by the Reserve Rank under section 37 or this section.\n\n(2) The Heserve Rank shall make an application under this section for tho winding up of a banking company if it is directed so to do by an order under clause (b) of sub sec. tion (4) of section 35.\n\n(3) The Reserve Bank may ke an application under this section for the winding up of a banking company -\n\n(a) if the banking company -\n\n(i) has failed to comply with the requirC>ments specified in section 11 ; or (ii) has by reason of the provisions of section 22 become disentitled tt> carry on banking business \"in India; or (iii) has been prohibited from receiving fresh deposits by an order under clause (1) of sub-section (4) of section 35 or under clause (b) of sub-section :l(A) of section 42 of the Heserve Bank of India Aot, I 934 or;\n\n3 S.C.R.\n\nSUPRME COURT REPJRTS\n\n(iv) having failed to comply with any requirement of this Act other than the requirements laid down in section 11, has continued such failure, or having contravened any provision of this Act has continued such contravention beyond such period or periods as may be specified in that behalf by the Reserve Bank from time to time after notice in writing of such failure or contravention has been con veyed to the banking company ; or\n\n(b) if in the opinion of the Reserve Bank- ( i) a compromise or arrange ment sanctioned by a Court in res pect of the banking company cannot be worked satisfactorily with or with out modifications ; or\n\n. (ii) the returns, statements or information furnished to it under or in pursuance of the provisions of this Act disclose that the banking com pany is unable. to pay its debts ; or\n\n(iii) the continuance of the banking company is prejudicial to the interests of its depositors.\n\n( 4) Without prejudice to the provisions contained in section 434 of the Companies Act 1956, a banking company shall be deemed to be unable to pay its debts if it has refused to meet any lawful demand made at any of its offices or branches within two working days if such demand is made at a place where there is an office, branch or agency of the Reserve Bank or within five working days, if such demand is made elsewhere, and if the Reserve\n\nJos'e/ih K'U1'Uvilla\n\nVellukunrul ..\n\nThe Reserve Bank '\n\nof lndfr;\n\nKapur J,\n\n•• •\n\nJouph Kurutilla.\n\nV tllu.lww I\n\nTiu R~,, lit Bank:.\n\nnj India\n\n~ , . ' ,\n\n688 SUPREME COURT REPORTS (1962] SGPP.\n\nBank certifies in writing that the banking company is unable to pay its debts.\n\n(5) A copy of every application made by the Reserve Bank under su b-suotion (l) shall be sent by the Iteserve Bank to the registrar.\" Section 44A lays down the procedure for amalgamation of banking com panics and s. 44 B for restriction on tho powers of the High Court to sanction compromise or arrangement between a banking company and its creditors unless compromise or arrangement is certified by the H.escrve Bank as being capable of being worked as not being detrimental to the interest of tho depositors.\n\nSection 45 giv1s to the Reserve Bank the power to apply to the Central Government for an order of moratorium in respect of banking company which the Central Government may order and it also gives to the Reserve Bank the power to prepare a scheme for reconstitution or amalgamation. Sub-section (I) and\n\n(2) of s. 45 are as follows :-\n\nS. 45( I) \"Notwithstauding anything contained in the forngoing provisions of this Part or in any other law or any agreement or other instrument for the time being in force, where it apprars to the Hcserve Bank that there is good reason so to do the Reserve Bank may apply to the Central Government for an order of moratorium in respect of a banking com\n\npany. (2) The Central Government, after considerng tho application made by tho Reserve Bank under sub-section (I) may make an order of moiatorium staying the commencement or eontinuance of all action and proceedings against the company., for a fixed period of time on such terms and conditions as it think fit and proper' and may from .time to time\n\n3 S.C.R. sbPR~ME COURT REPORTS 6s9\n\nextend the period so however that the total period of moratorium shall not exceed six\n\nmonths.\" It will thus be seen that the Banking Companies Act gives very extensive powers to the Reserve Bank in regard to hanking companies. It gives to the Reserve Bank the power to license existing banking companies or the banking companies, which want to commence business, and for that purpose it can inspect the books of the banking company in order to determine whether it is or will be able to p11.y its depositors. It can cancel a licence in certain circumstances but after giving to the hanking company, an opportunity to be heard. A banking companies is required to keep a portion of its assets in a liquid form the Reserve Bank can order inspection of any banking company at any time it thinks proper and Central Government can order the Reserve Bank to make an inspection of any banking company and on that report drastic steps against the <:>ompany may follow.\n\nThe Reserve Bank can give directions as to how the business of a banking company shall be conducted. It can appoint observers and give directions to the directors of a banking company as to what they should do or should not do. Moratorium can be imposed by the High Court at the instance of a banking company but the Reserve Bank may have that order varied and set aside if the order is not in the interest of the depositors and if the Reserve Bank thinks that the continuance of a banking company is not in the interest of the depositors it may apply to the High Court for winding up of the banking company. In regard to amalgamation of banking companies through scheme of compromise and arrangement the Reserve Bank has a great deal of control and power.\n\nThe Reserve Bank may apply to the Government to impose a moratorium on any banking company and if an application is so made the\n\nJoseph Kuruvilla\n\nVellukUnn•I\n\n•• The Reserve Battle\n\nOf india\n\n!fopur J.\n\n19~2\n\nJos1ph Kurouil a\n\nV ellulrunntl\n\n•• Tiu H1sert>e Bartk\n\no/ l•tUa\n\nKa/I\"' J.\n\n690 SUPREMR CotJRT REroRTs [1962] SUPP.\n\nCovernment may make such an order.\n\nBut who.- it comes to winding up prnvisions tho Reserve Ban'. has precmptory powers, in that if it applies fm\n\nthe winding up of a banking company the Court\n\nis bound to order winding up because the words used are \"the High Court shall\" order the winding up.\n\nMoreover the Government can direct the Reserve Bank to make such an application so that the Executive Government can take any banking company into liquidation. The power given in su'b-s. (3}(b}(iii) of s. 38 is still more drastic because if the Heserve Bank is of the opinion that the continuance of a banking company is prejudicial to the interest of tho depositors it may apply for winding up; in other words on its subjective satisfaction it may apply and if it docs so the High Court has no option but to order the winding up it is t.his provision to which strong objection has been taken by the appellant and is assailed by him.\n\nThis provision was sought to be supported on behalf of the Iteserve Bank by tho learned Attorney-General who first drew our attention to the facts of the present case and to the various opportunities which were given to the Palai Bank since 1952 to carry out certain directions and on different occasions the Palai Bank had made representations anJ.t tbo authority shall not take into account any amount as such reserve and such certificate shall be final. All that this case laid down was that such a provisi\"On balanced t.he interests of the parties and the delicate fabric of the credit structure of the country. RC8ides that provision relates to production and inspection of documents and relates to what facts can be taken into consideration by an Industrial Tribunal or whether a eertifir.at.e by the bank is proof of a particular fact or not. Again what is applicable to a quasijudioial authority like an Industrial Tribunal adjudicating upon industrial disputes seeking to do .\n\nsocil justice may be inapplicable to Courts of law adjudicating upon the rights of a citizen to carry\n\non his trade and avocation or not.\n\nNext case cited was Sajjan Rank v. Reserve Bank (1).\n\nThat was a case whero the validity of s. 22 of the Banking Compani11s Act was chall('nged on the ground of Art. 19( I) of the Constitution and it was held not to be 11/tra m'.res on the ground that power of licensing is not vested with a mere officer of the bank and the standard for exercise of power ha8\n\nbeen laid down in the section itself and the power granted to the Reserve Bank is not an arbitrary one.\n\nThe vital question for decision is whether a law which requires th6 High Court to ordnr winding up because the Reserve Rank is of th\" opinion that a banking company should be wound up is constitutional.\n\nIn other words can a st'.1tute which takes away the power of tho Court to proceed in a normal judicial manner t.o determine a question submitt<.>d to it for its deeision on tho\n\n(I} [1959] 2 M L . .I. 455.\n\n3 s.o.R.\n\nSUPREME COURT REPORTS 7oi\n\nmaterials proved before it anrl requires it to decide it merely in accordance with the subjective satisfaction of one party to the dispute and without giving the other party the right to be heard at any stage of the proceeding 11-nd prove its defence be called a reasonable restriction under Art. 19( 1 )(f) and (g) of the Constitution. Will the law which excludes the . application of the judicial process, and compels the Court to merely carry out the behests of one of the :r; iarties by giving effect to that party's subjective satisfaction and thus to abdicate its judgment to the opii:J.ion of a suitor be valid. Dealing with emergence of judicial power Griffith, C. J., in Waterside Workers' Federation of Australia v. J. W.\n\nAlexander Ltd. (1) said that as soon as man emerged from the savage state and formed settled commu- • nities it became necessary to have rules to regulate conduct for the enforcement of which provision was made and this power vested in some person or authority representing the community. Hence arose law givers and Judges and as civilisation advanced distinction began to be drawn between the diverse functions of the community and these functions were called \"the judicial power\" as distinguished from the legislative and executive powers.\n\nThe lea.rped Chief Justice then defined what \"Judicial power\" is.\n\nHe said : \"Without attempting an exhaustive definition of the term \"judicial power,\" it may be said that it includes the power to compel the appearance of person before the tribunal in which it is vested, to adjudicate between adverse parties as to legal claims, rights, and obligations whether their origin, and to order right to be done in the matter.\" Lord Macnaghten in Lapointe v. L' Association de Bienfaisance et de Retraite de la Police de Montrial (') condemned in the case of persons, other than, judges performing judicial functions,\n\n(1) (1918) 25 C.L.R. 434, 442.\n\n(2) (1906) A.C. 535, 539.\n\nJoseph Kuruvilla\n\nVellukunnel\n\nv. 'The R eseT'!Je Bank of\n\nlnriia\n\nKapur J.\n\nJ ostph Kuruvilla\n\nVrllukwmtl\n\nThe Rtstrvt Bonk of India\n\nKapur J.\n\n'702 SUPRE~IE COURT REPORTs [1962] SUP!'.\n\nfollowing a procedure \"contrary to t.he rules of the society and , iiwv(' all contrary \"to the clcmenta.ry principles of justices,\"\n\nThe importance of tlw judicial proCl'AlB was emphasised bv Patanjali SaRtri,.C. , J. in Rmn Pra.ml'.lllM\n\n•f Intli the saving section s. 192 provided that aH rates, taxes anrovincial Leislatur(J\n\nRama Kri.shna\n\nRamanath v.\n\nThe J anpad Sabha,\n\nGandia\n\nAyyangar J.\n\nRama Krishna\n\nRama11ath\n\nY. ?'he Ja11paJ Sabf.a,\n\nGondi:J\n\nSUPREME COURT REPORTS (1962] SUPP.\n\ncould not thereafter freshly impose such a tax under its legislativo power.\n\nBy reason of the pro vision however of s. 143 (2) of the Government of India Act, 1935, extracted Parlier, the local authority continued to retain the authority to levy and collect the 8aid tax and tho tax continued to be collected by the District Council even after April I,\n\nHJ37 when Part III of the Government of India Act came into force.\n\nWhile so, the Central Provinces :ind Berar Local Self Government Act, 1920, was repealed and was replaced by tho Central Provinces and Berar Local Government Act, 1948, which came into force on June 11, 1948. District CouncilH which were the units of local government a, however, continuing the levy and the Provincial Legislature sought to put the matter beyond doubt by an amending Act of 1949 by which cl. (b) of the proviso to s. Hl2 was replaced by a new clause reading :\n\n\"All rules and byclaws and orders made, notifications and notices issued, licences and pcrmiti:i granted, taxes imposed or assessed, cc88cs (other than additional cesses imposed in accordance with section 49 of the said Act), fees, tolls or rates levied, contracts entered int-0 and suits instituted and proceedings taken under the said Act and in force immediately before the commencement of this Act shall continue to be in force and in so for as they n.re not inconsistent with thiR Act, they shall ho deome'1011gar J.\n\n~~ SUPREME COVRT REPOR'l's [l!i62] SUPP.\n\ncourse of that business they export bid is to various places outside the territo1 ial limits of the , Janpad Sabha, Gondia.\n\nThe .Jar1p:id abha, Gondia demanded and collected taxes whrn th<' c'xport took place' from railway stations within its territorial jurisdirtion. Botwi:en January 2ti, 1950, and , Juno 30, I 95:!, the respoudrnt 8abha had collected tax totalling Rs. 3,81S!l5/3, the appellant concern contending that from the date of the coming into force of the Constitution the imposition and collection of the terminal tax by the respondent Sabha was illegal, because the right to levy terminal taxes was vested exclusively in the government. of the Union under entrv 89 in the l?irst List to the 7th Schedule to the Constitution and sought tho refund of this sum of tax from the respondent Sabha and also required that it should desist from continuing the imposition and leTy of this tax, and when the request was not needed, served not.ice on the Sabha.\n\nIn consequence of this notice though the Sabha discontinued the collection of the tax, it refused to refund the tax already collected.\n\nThereupon the appellant instituti>d a civil suit in the court of the Civil , Judge at Gondia pr..aying for a decree for the sum of l:ts. :~.818; 15/3 and costs.\n\nThe suit was resisted and thereafter this alongwith several similar suits ineluding three by the appellants in the other three appeals were all withdrawn to the High Court undor Art. '228 of the Constitution for deciding the substantial question of law as to the interpretation of the Constitution and of tho Government of India Act as to whether the levy of the tax by the respondent Sabha was lawful or not.\n\nThese suits were consolidated and were disposed of by a common judgment dated April la, 1955, by which all the suits were dismissed but a certific,1t.c was granted under Art. 132 of the Constitution.\n\nOn the strength of tho certificate four of the agi,; rieved plaintiffs filed appeals to tho Courts and that is how the matter is before us.\n\nBefore considering the submissions made to us by the learned Attorney-General for the appellant it would be convenient to state the exact factual position relating to the levy of the impugned tax :\n\n(1) The tax being one on goods exported out of the local area by rail would answer the description of a terminal tax falling within the exclusive iurisdiction of the Central Legislature under the Government of India Act, 1935. The position has continued to be the same under the distribution of legislative power in relation to taxes under the Constitution. The result would, therefore, be that but for the saving contained in s. 143(2) of the Government of India Act, 1935 it would not have been legally competent for the local authority . to continue to levy the tax after the Government of India Act came into force ; similarly but for Art. 277 that levy could not have been continued beyond January 26, 1950. On the facts stated earlier it would be seen that the right of the local authority to levy the tax would be ultimately dependent on the same being authorised by s. 149(2) of the Government of India Act.\n\n(2) The tax that was sought to be levied by the respondent-Sabhas and which was challenged as unauthorised and illegal was identical in the incidence as the tax which the District Council of Bhandara lawfully levied just prior to the commencement of Part III of the Go; vernment of India Act, 1935. By incidence we mean the subjectmatter of the tax, the taxable event as well as the rate of the duty. In other words, the tax now sought to be levied and that which was lawfully imposed 1md collected prior to April 1, 1937 were exactly identical in their effect and operation.\n\nSimilarly there was no controversy as regards either the identity of the area in aid of .whose local administration the tax was now sought to be collected, nor as regards the purposes for which they\n\n196Z\n\nRamo Kri•hna\n\nRaman, th\n\nv. rhe J anpad s ablia,\n\nGondia\n\nAyya11gar J.\n\nI9C2\n\nRama K, i1hna\n\nRamtlflath\n\n•• The J anpad Sabha,\n\nGomlia\n\nAyY1ngar J,\n\nSUPREME COURT REPORTS [1962) SUPP.\n\nwere utilised as compared with what prevailed on April I, 1937.\n\nThe principal contention however, raised on behalf of the appellant before the High Court was based upon a denial of the identity of the authorities-three .Janpad Sabhas with the District Council, Bhandara which levied and collected the tax\\.prior to April l, 1937.\n\nThe learned Judges of the High Court rejected I.his contention and held that tho throe Jan pad Sa bhas which replaced the District Council of Bhandara were in subHtance identical with the latter principally for the reason that the aroa covered by the three newly created Janpads was the same as that for which the District Council functioned and that the purposes for which the tax collected would be utilized which arc the criteria specified in s. 143(2)-werc exactlv the same, Just as it could not be disputed \"that if there were any ehango in the composition of the District Council the identity of a. local authority would not be altered for the purposes of s. 14:l(2}, tile mere splitting up of that local area for being administered by a plurality of Local Government Units would not effect any change mau, rial for the purposes of the continued exigibility of the tax under s. 143(2). The learned Attorney-General therefore very properly did not press before us this point based upon the disappearance of the District Council and its being replaced by the respondent-Sabhas as any ground for denying to tho respondent-Sabhas the right to levy the tax.\n\nThe only point that was urged before UB in challenge of the right of the respondent-Sabhas to continue the levy of this terminal tax may be formulatecl thus: The Prov incia.l Legislature of Central Provinces & Berar in exercise of it~ legislative power under item 13 of the Provincial Legislative List enacted the Local Government Act,\n\n1948 and validly repealed the Act of 1920 under which this tax was levied. As part of the same legislation and taking effect at the same time it was open to that Legislature to have continued the provisions of the repealed Act of 1920 under which the impugned tax was levied so as to enable the newly created Janpad Sabhas to exercise the fiscal powers of the District Councils which they . replaced, thus so to speak modifying or qualifying the repeal. Such a continuance could be provided by a saving clause couched in appropriate phraseology to effectuate such an intention. If this had been done the source of legal authority to levy the tax would, even after the Act of 1948 came into force, have been the repealed Act of 1920 which to the extent of the saving would be deemed to have continued in force.\n\nBut tl)is was not done.\n\nThere was, no doubt, a saving under the proviso to s. 192 )Jut the saving in respect of the taxes which was contained in sub-cl. ( c) to the proviso was confined to the recovery of taxes which had accrued due on the date of the repeal but which still remained uncollected and the purpose of the sub-clause was to effect a distribution of those assets, viz., of the accrued arrears among the several Jan pad Sabhas which replaced each District Council, so that when on June 11, 1948, the Act of 1948 came into force, the effect of it was that the repeal of the Act of 1!120 was for all purposes relevant to the matter now in controversy complete and with it the power to levy the tax in future stood extinguished, save only as regards the right to collect the arrears which had accrued due to the District Councils before that date. No doubt, the Provincial Legislature effected an amendment to s. 192 in 1949 py which the saving was extended to include the right of the Jan pad Sabhas to continue to levy the impugned tax and this amendment was given retrospective effect as from June 11, 1948, but\n\n196!\n\nRama Krishna Ramanath\n\nThe Janpad Sabha, Gondia\n\nA11'1/on(Jar J.\n\nRama K1ishna\n\nRamanalh\n\nThe Janpad Sabha,\n\nGandia\n\nA.yyanuar J.\n\n8:! SUPREME COURT REPORTS [1962) SUPP.\n\nthis amendment was beyond the legislative com\n\npetence of the Provincial Lagislature since in pith and substance it was virtually a legisla\\ion ex pressly conferring upon the Jan pad Rabhns H~ right to levy 11. t{lrminal tax-a right which thnv did not possess b., fore that date and unless the Lcgis lature was competent to enact a law in relation to such a tax it could not vnlidly confer upon the local. authority whnt in legal effect should he considered to be a fresh right to levy the tax.\n\nThe argument wa.s also preonted in a slightly diff crcnt form by snying that on the terms of s. 143(2) of the Government of India Act thcro was a provision only for tho r.ontimiance of the tax and that when once that continuitv was broken by a v1ili1! piccr. of legislation finch as took place in this ci>se when the Local flelf Con>rnment Act I !l20 wcs repealrd without a prnperly draftPd saving clause enabling the continiH'd levy of the tax, tho disccmtinnity created thereby crmld nrJt thereafter be repnired and the gap filled by further legislation even though it purported to be with rcstrospccti ,.e effect.\n\nMr. 811.nval-karned Additionnl Solieitor- General who appeared for the respondent.-Sabhas submitted several nnswors to suHWJ.in the valirlity of the continued imposition of tho tnx. He first urgod th:1t the effect of s. 14:l(2) of the Government. of India Act, I !l:-15 was in effect to vest in Provincial Legislat.urns IL plennry power to legis lat\" in rospect of every tax which was being 111.w fully levied by locnl authorities etr:. in thn Provine!'\n\nprior to the commencement of Part ITT of the GoTernmont of India Act sn much so thctt even if tho amendment cf!'ected to s. lv2 hy the Local Government (Amendment) Act of 1949 be !rented as itself a fresh imposition of tho tax its validity could not be challenged.\n\nWe must express our inability to accept thiH extreme conkntio11.\n\nSection 143 (:!) which is a saving clause nnd\n\nobviously designed to prevent a dislocation of the finances of Local Governments and of local authorities by reason of the coming in to force of the provisions of the Government of India Act distributing heads of taxation on Jines different from those which prevailed before that date, cannot be construed as one conferring a. plenary power to legislate on those topics till such time as the Central Legislature intervened. Such a -construction would necessarily involve a power in the Provincial Legishture to enhance the rates of taxation-a result we Il\\UBt say from which Mr. Sanyal did not shrink, but having regard to the language of the section providing for a mere continuity and its manifest purpose this construction must bfl rejected.\n\nThe next point urged by Mr. Sanyal was based on the construction which he sought to put on cl.( c) of the proviso to s. 192 of the Local Government Act of J 948.\n\nHe submitted that the words \"due to the District Council\" were wide and apt enough to include not merely the taxes that had accrued due on_ the date of the repeal of the Act of 1920 but even the amounts which accrued later and becanie payable subsequent to that date-\"Due\" he said meant \"payable\" and as the words of the sub-section did not specifically limit the period when the cess became payable to some time anterior to the repeal of the Act of 1920, it ought to be read as including those amounts which accrued due and became payable even thereafter. We find it difficult to accept this submiseion either. The difficulty in accepting it is created only in part by the use of the expression \"due\" but the main hurdle in the way of the respondent is that what is saved by the sub-clause (and is distributed among the Janpad Sabhas which replaced the District Councils), is specified as a cess, rate etc. du(' to a District Council.\n\nThe rate, cess or duty due to a District Council could obviously be only that which\n\n196!\n\nRama K'l'ishna\n\nRamanath v.\n\nThe Janpad Sabha,\n\nGondia\n\nAyyangar J.\n\n196Z\n\nRama K tishna\n\nRama11al-h\n\n\" Tht J an}Md Sabha,\n\nUrmdia\n\nAyyangar J.\n\n84 SCPREl\\IE CO\"CRT REPORTS [I 06~] SUPP.\n\nhad accurcd due to a District Council while that bodv waA in existeno<> and \"it h the extinct i\"n of the Ditrict Councils by the rcpc; Ll of thP Act of\n\nl!'l20 there could b,, no question ofony further sums being clue to such a body. :\\Ir. Sanyal howe>er 8ought to got over this situati:m by suggr, ting that the words \"due to a District Council\" were merelv descriptivr' of the nature of the tax and did not pre dioatc that it was an amount due to a part.icular body on the d1tte when it became due.\n\nIn our opinion this is not an interpretation which the words could reasornihl.v bear and we have, therefore, no hesitation in rejecting this argumrnt.\n\nIt waA then submitt.ed that e\\en if the words of cl. (c) of the rwoviso would not or s l><•\n\nned as nhat hA.s been tnrmcd \"a parli:tmcntary\n\ne:xpoition\" of the obscure phraeology. It.i~ hardly\n\n.., -\n\nnecessary to discuss the permissible limits of this mode of construction for the purpose of-the present case, because the prime conditions for invoking that rule are absent here-there is no obscurity or\n\namiguity in the words of cl. (c) and secondly if the learned Attorney-General is right, the Provincial Legislature had no legislative capacity to enact the Amending Act of 1949-and this must include legislation either by way of explanation or exposition, and of course by positive enactment. If there is incapacity to enact retrospective legislation on the matter, the position is not rendered different by viewing it as parliamentary exposition. The validity of the amendment effected by the Act of 1949 must be judged independently and on its own merits and its terms cannot be used as a guide to the interpretation of what the legislature in enacting s. 192 of the Act 1948 intended by the words in cl. (c).\n\nThe next submission was that as the Act of 1949 amended the terms of s. 192 so as to save the power of the Janpad Sabhas to levy the cess with retros pective effect from the date when the Act of 1920 stood repealed, there was in the eye of the law a continuity in the levy of the cess or rate and so no hiatus or period of discontinuity existed such as had been suggested by the learned Attorney-General and the existence of which was the entire foundation of his argument. It must, however, be mentioned that the learned Attornev-General was not oblivious of this feature of the legislation of 1949, viz., that it purported to operate as it were to close the gap, but his submission was that if, in fact, the gap existed and there was factually a period of discontinuity, the legislature which had no authority to enact positive leiislation with reference to the topic in May 1949 was incompetent to pass an enactment with retrospective effect.\n\nIn our opinion, this argument of Mr. Sanyal requires serious consideration and the answer wouF\n\nRar1.a Krishnrr\n\nRamanath v.\n\nThe J anpad Sabha,\n\nGondia\n\nAyyangar J.\n\nHG2\n\nRnma K, ialna\n\nRllfrlalud1'\n\nThe J anpi:u/ Sabha,\n\nOcmdia\n\nA.yvangar J,\n\n86 SUPRE~1E COUH.T REPOHTS [l!l62J SU!'P.\n\nturn on the proper construction of the terms uf . s. 143(2) of the Go\\'erument uf India Act. The first\n\nmatter tu bo considered would be the source of tho legislative power tu enact the Local Government [Act of l!J4~. In so far as the constitution of local • l authorities, their territorial di8tributiou, the endowl ing them with puwcrn, jW\"isdictiun and authority in general are concerned, the legislative power therefore is to be found in entrv 13 of the P10vincial Legislative List II to Sch. V H uf th ti Gu.vemment of India Act, l!l35 reading :\n\n'Luca! Government, that is to 8\"Y' the constitution and powers of municival co'rporations, improvement trusts, district boards,\n\nminii1g settlement authorities illld other local authorities for the purpose of local self. government on village administration\".\n\nIt must howevn be observed that merely bt'cause the legislature is empowered under this entry to constitute local authorities and vest them with powers and jurisdiction it would not follow that these local bodies could be vested with authority to levy any and every tax for tho purporn of raising re,...nuo for the pi:rposes of local administration.\n\nThey could be validly authorised to raisu only those taxes which tho Province could raise under and by virtue of the relevant. entries in the Provincial Legislative List.\n\nThi~ is on the principle that the Province cou Id not lll'poscs of the Provincial Government.\n\nNow come11 the question whether the Provincial Legislature was competent, by legislation, tp discontinue the levy of the tax by effecting a ropeal of the taxing provision contained in the Local Self Government Act of 1920. There is no doubt that the general principle is that the power of a legislative body to repeal a law is co-extensive with its power to enact such a law, as would he seen from\n\nthe following passage in the judgment by Lord \\Vatson in AttorneyGeneral for Ont, ario v. Attorney- General for the Dominion(1) :\n\n\"Neither the Parliament of Canada nor the provincial legislatures have authority to repeal statutes which they could not directly\n\nenact.\" But obviously its application in particular instances would be controlled by express constitutional provision modifying the same. We have such provision in the case on hand in s. 14i1(2} of the Government of India Act, HJ35.\n\nIn the context the rele vant words of the sub-section could only mean\n\n\"May continue to be levied if so desired by the Pro vincial Legislature\" which is indicated by or is implicit in the use of the expression \"May\" in the clause \"may be continued until provision to the contrary is made by the Federal Legislature.\" This would therefore posit a limited legislative power in the Province to indicate or express a desire to continue or-not to continue the levy. If in the exercise of this limited power the Province desires to discontinue the tax and effects a repeal of the relevant statute the repeal would be effective. Of course, in the absence of legislation indicating a desire to discontinue the tax, the effect of the provision of the Constitution would be to enable the continuance of the power to levy the tax but . this does not alter the fact that the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy subject to the overriding power of the Central Legislature to put an end to its continuance and it is on the basis of the existence of this limited legislative power that the right of the Provincial Legislature to repeal the taxation provision under the Act of 1920 could be rested. Suppose for instance, a Provincial Legislature desires the continuance of the tax but considers the rate too High and\n\n(I) (1896] A. C. 348, 366.\n\nRama Krishna\n\nRamauath\n\nThe Janpad Sabha, Gondia\n\nAyyangarJ.\n\nllama KriF!rna\n\nRar'l'/auath , .. n .. J anp, d s ubha,\n\nOondia\n\nA; Jllllf, O, J.\n\nSUPREME COURT REPORTS [I 062] SUPP.\n\nwishes it to le reduced and pnsses an enactmPnt for that purpose, it cannot b\" that the legislation is incompetent and that the Statt> GovernmPnt must permit the local authority to levy tax at the same rate as prevailed on April I, J ll3i if the latter dosircd the continuance of the tax. If surh a lgisla tiou were e:1acted to achieve a r<'duction of tlw rate of the duty, its lgislathe competence must obviously be traceable to the power contained in words \"m:.y continue to be levied\" in s. 14:l(2) of the Goverrnnem of India Act. If we nm right so far it woulc.l follow thnt in the cxercist' of this limited legislative power tho l'ro\\•ineial Legislature would also have a right to legislate for the eontinuanco of the tax provided, if of c:ourse, the other conditions of s. ,4; Jp!) a.re satiefiecl, viz., (I) that the tax was one which was lawfully levid by a local authority for the purposes of a local arl'a nt the commencement. of Part III of the Govemml'nt\n\nof India Act.., (2) that. the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilisation i:i to t; ike place continue to be the same and (~1) the rate of tho tax is not enhanced nor it; i\n\nincidence in any manneralterod, so that it continues to be same tax. If as we have held earlier thero is a limited legislative power in the Province to enact a law with reference to the tax levy iiu as to continue it, tho validity of th(' Act of I \\J4\\! which manifested the legislative intent to Continue the tax . without any break, the legal continuity hl, ing\n\nestablished by the retrospective operation of tlw\n\nprovision, has to be upheld.\n\nThe appeals therefore fail and are dismissed with costs-one set of hearing fee~.\n\nAppeals dismissed.", "total_entities": 59, "entities": [{"text": "RA:IIA KRISHNA RAMANA", "label": "PETITIONER", "start_char": 354, "end_char": 375, "source": "metadata", "metadata": {"canonical_name": "RAMA KRISHNA RAMANATH", "offset_not_found": false}}, {"text": "H\n\nTHE .JANPAD SABHA, GONDIA", "label": "RESPONDENT", "start_char": 378, "end_char": 406, "source": "metadata", "metadata": {"canonical_name": "THE .JANPAD SABHA, GONDIA", "offset_not_found": false}}, {"text": "Berar Local Self Government Act 1920", "label": "STATUTE", "start_char": 1090, "end_char": 1126, "source": "regex", "metadata": {}}, {"text": "s. 143", "label": "PROVISION", "start_char": 1374, "end_char": 1380, "source": "regex", "metadata": {"linked_statute_text": "Berar Local Self Government Act 1920", "statute": "Berar Local Self Government Act 1920"}}, {"text": "Berar Local Government Act, 1948", "label": "STATUTE", "start_char": 1680, "end_char": 1712, "source": "regex", "metadata": {}}, {"text": "s. 192", "label": "PROVISION", "start_char": 1882, "end_char": 1888, "source": "regex", "metadata": {"linked_statute_text": "Berar Local Government Act, 1948", "statute": "Berar Local Government Act, 1948"}}, {"text": "s. 192", "label": "PROVISION", "start_char": 2122, "end_char": 2128, "source": "regex", "metadata": {"linked_statute_text": "Berar Local Government Act, 1948", "statute": "Berar Local Government Act, 1948"}}, {"text": "s. 143", "label": "PROVISION", "start_char": 2653, "end_char": 2659, "source": "regex", "metadata": {"linked_statute_text": "Berar Local Government Act, 1948", "statute": "Berar Local Government Act, 1948"}}, {"text": "Government of India Act, 1935", "label": "STATUTE", "start_char": 2671, "end_char": 2700, "source": "regex", "metadata": {}}, {"text": "s. 192", "label": "PROVISION", "start_char": 2871, "end_char": 2877, "source": "regex", "metadata": {"linked_statute_text": "the Government of India Act, 1935", "statute": "the Government of India Act, 1935"}}, {"text": "s. 192", "label": "PROVISION", "start_char": 3151, "end_char": 3157, "source": "regex", "metadata": {"linked_statute_text": "the Government of India Act, 1935", "statute": "the Government of India Act, 1935"}}, {"text": "Section 143", "label": "PROVISION", "start_char": 3172, "end_char": 3183, "source": "regex", "metadata": {"linked_statute_text": "the Government of India Act, 1935", "statute": "the Government of India Act, 1935"}}, {"text": "Government of India Act, 1935", "label": "STATUTE", "start_char": 3195, "end_char": 3224, "source": "regex", "metadata": {}}, {"text": "s. 192", "label": "PROVISION", "start_char": 3901, "end_char": 3907, "source": "regex", "metadata": {"linked_statute_text": "the Government of India Act, 1935", "statute": "the Government of India Act, 1935"}}, {"text": "S11", "label": "PROVISION", "start_char": 5080, "end_char": 5083, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 143(2)", "label": "PROVISION", "start_char": 5516, "end_char": 5530, "source": "regex", "metadata": {"statute": null}}, {"text": "Part HI of this Act", "label": "STATUTE", "start_char": 5669, "end_char": 5688, "source": "regex", "metadata": {}}, {"text": "Art. 132", "label": "PROVISION", "start_char": 6513, "end_char": 6521, "source": "regex", "metadata": {"linked_statute_text": "Part HI of this Act", "statute": "Part HI of this Act"}}, {"text": "Section 51", "label": "PROVISION", "start_char": 6599, "end_char": 6609, "source": "regex", "metadata": {"linked_statute_text": "Part HI of this Act", "statute": "Part HI of this Act"}}, {"text": "Central Provinces and Bcrar Local Self Government Act, 1920", "label": "STATUTE", "start_char": 6617, "end_char": 6676, "source": "regex", "metadata": {}}, {"text": "sections 24, 48, 49", "label": "PROVISION", "start_char": 6996, "end_char": 7015, "source": "regex", "metadata": {"linked_statute_text": "the Central Provinces and Bcrar Local Self Government Act, 1920", "statute": "the Central Provinces and Bcrar Local Self Government Act, 1920"}}, {"text": "s. 79", "label": "PROVISION", "start_char": 7610, "end_char": 7615, "source": "regex", "metadata": {"linked_statute_text": "the Central Provinces and Bcrar Local Self Government Act, 1920", "statute": "the Central Provinces and Bcrar Local Self Government Act, 1920"}}, {"text": "Part III of the Government of India Act", "label": "STATUTE", "start_char": 7721, "end_char": 7760, "source": "regex", "metadata": {}}, {"text": "Seventh Schedule", "label": "PROVISION", "start_char": 7956, "end_char": 7972, "source": "regex", "metadata": {"linked_statute_text": "Part III of the Government of India Act", "statute": "Part III of the Government of India Act"}}, {"text": "s. 143", "label": "PROVISION", "start_char": 8407, "end_char": 8413, "source": "regex", "metadata": {"linked_statute_text": "Part III of the Government of India Act", "statute": "Part III of the Government of India Act"}}, {"text": "Government of India Act, 1935", "label": "STATUTE", "start_char": 8425, "end_char": 8454, "source": "regex", "metadata": {}}, {"text": "Part III of the Government of India Act", "label": "STATUTE", "start_char": 8655, "end_char": 8694, "source": "regex", "metadata": {}}, {"text": "Berar Local Self Government Act, 1920", "label": "STATUTE", "start_char": 8750, "end_char": 8787, "source": "regex", "metadata": {}}, {"text": "Central Provinces and Berar Local Government Act, 1948", "label": "STATUTE", "start_char": 8826, "end_char": 8880, "source": "regex", "metadata": {}}, {"text": "Act of the Provincial Legislature to the said Act shall be read as if made to this Act", "label": "STATUTE", "start_char": 10669, "end_char": 10755, "source": "regex", "metadata": {}}, {"text": "Self Government Act", "label": "STATUTE", "start_char": 10985, "end_char": 11004, "source": "regex", "metadata": {}}, {"text": "s. 192", "label": "PROVISION", "start_char": 12151, "end_char": 12157, "source": "regex", "metadata": {"statute": null}}, {"text": "section 49", "label": "PROVISION", "start_char": 12972, "end_char": 12982, "source": "regex", "metadata": {"statute": null}}, {"text": "Constitution came into force nothwithstanding the repeal of the Government of India Act", "label": "STATUTE", "start_char": 14077, "end_char": 14164, "source": "regex", "metadata": {}}, {"text": "Art. 277", "label": "PROVISION", "start_char": 14319, "end_char": 14327, "source": "regex", "metadata": {"linked_statute_text": "Constitution came into force nothwithstanding the repeal of the Government of India Act", "statute": "Constitution came into force nothwithstanding the repeal of the Government of India Act"}}, {"text": "s. 192", "label": "PROVISION", "start_char": 15118, "end_char": 15124, "source": "regex", "metadata": {"linked_statute_text": "Constitution came into force nothwithstanding the repeal of the Government of India Act", "statute": "Constitution came into force nothwithstanding the repeal of the Government of India Act"}}, {"text": "s. 192", "label": "PROVISION", "start_char": 15196, "end_char": 15202, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 132", "label": "PROVISION", "start_char": 17739, "end_char": 17747, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 143(2)", "label": "PROVISION", "start_char": 18537, "end_char": 18546, "source": "regex", "metadata": {"statute": null}}, {"text": "Government of India Act, 1935", "label": "STATUTE", "start_char": 18554, "end_char": 18583, "source": "regex", "metadata": {}}, {"text": "Art. 277", "label": "PROVISION", "start_char": 18749, "end_char": 18757, "source": "regex", "metadata": {"linked_statute_text": "the Government of India Act, 1935", "statute": "the Government of India Act, 1935"}}, {"text": "s. 149(2)", "label": "PROVISION", "start_char": 18984, "end_char": 18993, "source": "regex", "metadata": {"linked_statute_text": "the Government of India Act, 1935", "statute": "the Government of India Act, 1935"}}, {"text": "India Act, 1935", "label": "STATUTE", "start_char": 19309, "end_char": 19324, "source": "regex", "metadata": {}}, {"text": "s. 143(2)", "label": "PROVISION", "start_char": 20773, "end_char": 20782, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 20989, "end_char": 20994, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 143(2)", "label": "PROVISION", "start_char": 21208, "end_char": 21217, "source": "regex", "metadata": {"statute": null}}, {"text": "Provincial Legislative List enacted the Local Government Act", "label": "STATUTE", "start_char": 21761, "end_char": 21821, "source": "regex", "metadata": {}}, {"text": "s. 192", "label": "PROVISION", "start_char": 22711, "end_char": 22717, "source": "regex", "metadata": {"linked_statute_text": "the Provincial Legislative List enacted the Local Government Act,\n\n1948", "statute": "the Provincial Legislative List enacted the Local Government Act,\n\n1948"}}, {"text": "s. 192", "label": "PROVISION", "start_char": 23554, "end_char": 23560, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 143(2)", "label": "PROVISION", "start_char": 24526, "end_char": 24535, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 25268, "end_char": 25273, "source": "regex", "metadata": {"statute": null}}, {"text": "Part ITT of the GoTernmont of India Act", "label": "STATUTE", "start_char": 25535, "end_char": 25574, "source": "regex", "metadata": {}}, {"text": "Section 143", "label": "PROVISION", "start_char": 25838, "end_char": 25849, "source": "regex", "metadata": {"linked_statute_text": "Part ITT of the GoTernmont of India Act", "statute": "Part ITT of the GoTernmont of India Act"}}, {"text": "s. 192", "label": "PROVISION", "start_char": 26748, "end_char": 26754, "source": "regex", "metadata": {"linked_statute_text": "Local Governments and of local authorities by reason of the coming in to force of the provisions of the Government of India Act", "statute": "Local Governments and of local authorities by reason of the coming in to force of the provisions of the Government of India Act"}}, {"text": "s. 192", "label": "PROVISION", "start_char": 30961, "end_char": 30967, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 192", "label": "PROVISION", "start_char": 31088, "end_char": 31094, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 143(2)", "label": "PROVISION", "start_char": 32304, "end_char": 32313, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 34636, "end_char": 34641, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 36772, "end_char": 36777, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_3_713_724_EN", "year": 1962, "text": "3 s.c.R.\n\nSUPREME COURT REPORTS 713\n\nBACHHITTAR SINGH\n\nTHE STATE OF PUNJAB\n\n(B. P. SINHA, c. J., K. SUBBA RAO, N. RAJAGOPALA\n\nAYYANGAB, J. R. MUDHOLKAB and\n\nT. L. VENKATARAMA AIYAB, JJ.)\n\nPublic Servant-Disciplinary Proceeding-Dismissal- Appeal--Minister passing order on file-Order not communicated-Whether binding-If order can be varied-Oh.ief Minister passing .final order-Validity-Rules of Business of Punjab Government, rr. 4, 8, 25, 28-0onstitution of India Arts. 166, 311.\n\nThe appellant was appointed a qanungo in Pepsu and latter as Assistant Consolidation Officer.\n\nComplaints having been received against him, an enquiry was held as a result of which he was dismissed by the Revenue Secretary. Against this order he preferred an appeal to the State Government.\n\nThe Revenue Minister Pepsu wrote on the file that dismissal would be too hard and instead he should be reverted as qanungo but no written order to that effect was served upon the appellant. After merger of. Pepsu with Punjab, the Revenue Minister Punjab sent up the file to the ChiefMinister with the remarks \"C.M. may kindly advise\". The Chief Minister passed the order confirming the dismissal. and the order was duly communicated to the appellant.\n\nThe appellant challenged the order of the Chief 'Minister Punjab on the grounrl that the Chief Minister Punjab could not sit in review on the order of the Revenue Minister Pepsu and that the Chief Minister was not competent to deal with the matter as it pertained to the portfolio of the Revenue Minister.\n\nHeld, that the order of the Revenue Minister Pepsu could not amount to an order by the State Government unless it was expressed in the name of Rajpramukh as required by Art. 166(1) of the Constitution and was then communicated to the appellant.\n\nUntil the order was so communicated it was only of a provisional character and could be reconsidered over and 8Ver again.\n\nBefore communication the order was binding neither on the appellant nor on the State Government.\n\nState of Punjab v. Sodhi Sukdev Singh A.l.R. (1961) f S.C.R~ 371, referred to.\n\nBoehhiuar Singh\n\n•• Thr Slalr of Punjab\n\n1tt111iholk1t .T.\n\n714 SUPREME COURT REPORTS (1962] SUPP.\n\nHeld, further, that the Chief Minister Punjab wa' competent to deal with the appeal and to pass the order which he did. Under r. 25 of the Rules of Business of the Punjab Government the matter undoubtedly related to the portfolio of the Revenue Minister, But since under r. 28(1 )(ii) and I xix) which provide that cases involving questions \\ of policy and cases of administrat.ivc importance and such other cases or classes of cases as the t!:hief Minister may consider necessary shall be referred to the Chief Minister, the case wa• properly referred to the Chief Minister.\n\nUnder r. 4 the order passed by the Chief :Vlinistor, r.ve11 though it pertained to the portfolio of the Revenue Minister, would be dcen1cd to be an order of tlic Council of i\\:finistcrs.\n\nIt would be the Chief Ministers advice to the Governor, for which the Council of finistcrs \\\\'Ottlrl be collectively responsible and action taken thereon v.otild be the action of the Government.\n\n'~ Departmental proceedings cannot be dividerl into t\\vo parts : (i) enquiry and (ii) taking Of acdon ; there is one con ti nuous proceeding though there are tvo stages.\n\nAny action decided to he taken a!lainst a public servant found guilty e misconduct is a judicial order and as such it cannot be varierlf\n\nat the will of the authority.\n\nCrvrr, Arrm.r, ATE JumsnICTION : Civil Appeal 1'\\o. 155 of 1961.\n\nAppeal by the special Ieavo from t.ht~ judgment and order dated JamH\\r.I' 5, 1959, of tl:e PunjBb High Court in Civil \\Vrit Application No. 4fi0 of 1957.\n\nI. M. !Ail, and M. L. Armarwal, for the appellant.\n\nS. M. Sikri, AdvocateG'eneral }or the State of Punjab, N. S. Bindra and P. D. Menon, for the respondents.\n\n1!162. ;\\farch 7. The Judgment of the Court was delivered by\n\nMenHOLKAH, .J.-This i;: an appeal by special leave against tho judgment of the Punjab High Court 1lismissing the appellant's petition under Art. 226 of the Constitution.\n\nThe appellant was appointed a qanungo in the former Stato of PEPSU in the year 1950. On December l, 1953 he was appointed Assistant Consolidation Officer. Certain complaints having been received regarding tampering with official records he was suspended and an enquiry was held against him by the Revenue Secretary of PEPSU Government. As a result of that enquiry the Revenue Secretary dismissed him by order dated August 30,\n\n1956; on the ground that the appellant was not above board and was not fit to be retained in service. This order was duly communicated to the appellant.\n\nThereupon the appellant preferred an appeal before the State Government.\n\nIt would appear that he had submitted an advance copy of his appeal to the Revenue Minister of PEPSU who called for the records of the case immediately. After perusing them he wrote on the file that the charges against the apptillant were serious and that they were proved. He also observed that it was necessary to stop the evil with a strong hand. He, however, expressed the opinion that as the appellant was a refugee and had a large family to snpport. his dismissal would be too hard and that instead of dismissing him outright he should be reverted to his original post of qanungo and warned that if he does not behave properly in future he will be dealt with severely. On the next day the State of PEPSU merged in the State of Punjab.\n\nAccording to the appellant the aforesaid remarks amount to an order of the State Government and that they were orally communicated to him by the Hevenue Minister. This is denied on behalf of the State. It is, however, common ground that the aforesaid remarks or order, whatever they be, were never comwunicated officially to the appellant.\n\nAfter the merger of PEPSU with the State of\n\nBachhittrir Singh\n\nThe State of Punjab\n\nM u:P.\n\nregarded as bound by what was stated in tho file.\n\nAa along as the matter rosted withhim the Revenue Minister could well sooro out his remarks o; minutes on the file and write fresh ones.\n\nThe business of State is a complicated one and has necessarily to be conducted th1\\mgh the agency of a large number of officials and authorities. The constitution, therefore, . requires and so did the Rules of Ilusiness framed by the Rajpramukh of PEPSU provide, that the action must be taken by the authority concerned in the name of the Rajpramukh. It is not till this formality is observed that tho action can lie regarded as that of the State\n\nor here, by tho Rajpramukh.\n\nWe may further observe thiit, constitutionally speaking, the Minister is no more than an adviser and that the head of the State, the Governor or Rajpramukh, * is to act with\n\nthl'I aid and advil'e of his Council of Mir.1isters. Therefore, until such adviee is accepted by the Govemor whatever the Minister or tho Council of .\\Iinisters may say in regard to a particular matter does not become the action of the State until the advice of the Council of Ministern is accepted or deemed to be a.cct>pted by the Head of the State. Indeed, it is possible that after exprc88ing one opinion a.bout a\n\nparticular matter at a particular stage a Minister or the Council of Ministers mi>y express quite a different opinion, one which may be completely opposed to the earlier opinion. Whioh of them can be regarded as the 'order' of the tate Government? Therefore to make the opinion amount to a decision of tbe Government it must be communicated to tho person concerned. In this connection we may quote the following from the judgment of this Court in the SW.re of Punjab v. Sodhi Snkhdev Singh ( ')-\n\n\"}Ir. Gopal Singh attempted to argue that before the final order was passed the Council\n\n•Till the abolition of that office by the Amendment of the C.Onstitutioo in 1956. '\n\n(I) [1961] 2 S.C.R. 371. 4-09.\n\nof Ministers had decided to accept the respondent's representation and to reinstate him, and that, according to him, the respondent seeks .to prove by calling the two original orders. We are unable to understand this argument. Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communicated to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent.\" Thus it is of the essence that the order has to be communicated to the person who would be affected by that order before the State and that person can be bound by that order. For, until the order is communicated to the person affected by it, it would be open to the Council of . Ministers to consider the matter over and over agin and, therefore, till its communication the order cannot be regarded as anything more than provisional in character.\n\nWe are, therefore, of the opinion that the remarks or the order of the Revenue Minister,\n\nPEPSU are of no avail to the appellant.\n\nNow as regards the next contention,· Learned counsel for the appellant contends that since his appeal was not decided by the Revenue Minister of Punjab, Mr. Darbara Singh but by the Chief Minister Mr. Pratap Singh Kairon, who had no jurisdiction to deal with it, the appeal must be deemed to he still pending. In this conneetion he relied upon r. 18 of the Rules of Business framed by the Governor of Punjab which corresponds to r. 25 of the PEPSU rules, which reads thus:\n\n\"Except as otherwise provided by any other Rule, cases shall ordinarlly be disposed\n\nBachhittar Yin:h .. .\n\nThe State of Panj•b\n\nMudhoikor J.\n\n1962 ~- Baclihillar Sin1h\n\nThe StaU of PunjaS\n\nMudlwtbr J.\n\n722 SUPREllIB COURT REPORTS [1962] SUPP.\n\nof by or under the authority of the Ministerin-chargo who may, by means of standing orders, give such directions as ho thinks fit for the dispos:>l of cases in the Department. Copies of such standing ordern shall be sent to the Chief ;\\Iinister and the Governor.\" .!\\ow, unquestionably the matter here did pertain to the portfolio of the Revenue Minister.\n\nBut it was he himself who, aft-Or seeing the fi!<., submitted it to the Chief '.\\Iinister for advice.\n\nLeiirned counsel, however, contends that tho Chief Minister could, therefore, only give him advice and not usurp tho jurisdiction of the Revenue Minister and decide the case himself.\n\nBut this argument ignores r .28 (I) of the Punjab Rules of Business, the relevant portions of which run thus:\n\n\"28 (I) The following classes of cases shill I be submitted to the Chief Minister before tho issue of orders :-\n\n(ii)\n\n(vii)\n\nx x x Cases raising questions of policy and\n\ncases of administrative importance not alroady covored by the Schedulo.\n\nx x x Proposals for the prosecutions, dismissal, removal or compulsory retirement of any gazetted officer.\n\nX, x\n\n(xix) Such other cases or classes of cases\n\nas the chief Minister may consider necessary.\n\nThe learned Advocate-General contends that the\n\ncase would be covered by every one of these clauses.\n\nIn our opinion, cl.( vii) cannot assist him because it is not the contention of the State that the appellant is a gazetted officer.\n\nWe, however, think that\n\n3 S.C.R.\n\nSUPR:F!ME CODRT REPORTS 723\n\ncl. (ii) would certainly entitle the Chief Minister to pass an order of the kind which he has made here.\n\nThe question to be considered was whether though grave charges had been proved against an official he should be removed from service forthwith or merely reduced in rank. That unquestionably raises a question of policy which would affect many cases all and the departments of the State.The Chief Minister would, therefore, have been within his rights to call up the file of his own accord and pass\n\norders thereon. Of course, the rule does riot say that the Chief Minister would be entitled to pass orders but when it says that he is entitled to call for the file before the issue of orders it clearly implies that he has a right to interfere and make such order as he thinks appropriate. Finally there is cl.\n\n(xix) which confers a wide discretion upon the Chief Minister to call for an}' file and deal with it himself.\n\nApart from that we may refer to r. 4 of the Rules of Business of the Punjab Government, which reads thus:\n\n\"The Council shall be collectively responsible for all executive orders issued in the name of the Governor in accordance with these Rules whether such orders are authorised by an individual Minater on a matter pertaining to his portfolio or as the result of discussion at a meeting of the Council, or howsoever otherwise.\"\n\nThus the order passed by the Chief Minister, even though it is on a m.atter pertaining to the portfolio of the Revenue Minister, will be deemed to be an order of the Council of Ministers. So deemed its contents would be the Chief Minister's advice to the Governor, for which the Council of Ministers would be collectively responsible, The action taken thereon in pursuance of r. 8 of the Rules of Business made by the Governor under Art. 166(3) of the Constitution\n\nBacHitlaf' Sinth\n\nThe SIGe of Punjab\n\nMrdhoJkar J.\n\nBochliit14r Sfogh\n\nTru Stak of Punjab\n\n.M udholkat J.\n\nMarch 7.\n\n724 SUPREME COURT REPORTs [l96ZJ SUPP.\n\nwould then be the action of the Government. Horo one of the Under Secretaries to the Government of Punjab informed the appellant by his letter dated !\\fay, 1, 1957 that his representation '•had been considered 1tnd rejected\", evidently by the State Government.\n\nThh; would show that appropriate action had been taken under the relevant rule.\n\nTho appeal is thus without substance and is dismissed. In view of the fact that the appellant is a displaced person with heavy responsibilities and with limited or possibly hardly any means we diroct that the costs shall be borntl by the parties concerned.\n\nBHAURAY\n\nB. BAIJNATH SINGH\n\n(P. B.\n\nGAJB!'!DltAGADKAR, A. K. SARKAR, K. N.\n\nWANCHOO, K. C. DAS GUP'l'A and N. RAJA\n\nGOl'ALA AYYANGAR, JJ.)\n\nPre-eniption-Stalt1tes entitling neighbours, co-sharera et.c. to pre-empt-C . the vendor will exclude the more remote.\n\nThere were prov1s1ons in the Act for giving notice of an intended sale . to .persons having a right of pre.emption, for the loss of die ~1ght of pie-emption in case no action \\vas taken on the notice and for fixation of a fair price by the Courl. It was contended", "total_entities": 17, "entities": [{"text": "713\n\nBACHHITTAR SINGH", "label": "PETITIONER", "start_char": 32, "end_char": 53, "source": "metadata", "metadata": {"canonical_name": "BACHHITTAR SINGH", "offset_not_found": false}}, {"text": "THE STATE OF PUNJAB", "label": "RESPONDENT", "start_char": 55, "end_char": 74, "source": "metadata", "metadata": {"canonical_name": "THE STATE OF PUNJAB", "offset_not_found": false}}, {"text": "B. P. SINHA", "label": "JUDGE", "start_char": 77, "end_char": 88, "source": "metadata", "metadata": {"canonical_name": "BHUVNESHWAR PRASAD SINHA", "offset_not_found": false}}, {"text": "K. SUBBA RAO", "label": "JUDGE", "start_char": 97, "end_char": 109, "source": "metadata", "metadata": {"canonical_name": "K. SUBBA RAO", "offset_not_found": false}}, {"text": "Arts. 166, 311", "label": "PROVISION", "start_char": 464, "end_char": 478, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 166(1)", "label": "PROVISION", "start_char": 1701, "end_char": 1712, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 4062, "end_char": 4070, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 226", "label": "PROVISION", "start_char": 7090, "end_char": 7098, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 311", "label": "PROVISION", "start_char": 9631, "end_char": 9639, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 166( I)", "label": "PROVISION", "start_char": 11067, "end_char": 11079, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 166", "label": "PROVISION", "start_char": 11230, "end_char": 11238, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 166", "label": "PROVISION", "start_char": 13416, "end_char": 13424, "source": "regex", "metadata": {"statute": null}}, {"text": "[1961] 2 S.C.R. 371", "label": "CASE_CITATION", "start_char": 15744, "end_char": 15763, "source": "regex", "metadata": {}}, {"text": "Art. 166(3)", "label": "PROVISION", "start_char": 20968, "end_char": 20979, "source": "regex", "metadata": {"statute": null}}, {"text": "Pre-emption Act, 1913", "label": "STATUTE", "start_char": 22094, "end_char": 22115, "source": "regex", "metadata": {}}, {"text": "Berar Land Revenue Code", "label": "STATUTE", "start_char": 22141, "end_char": 22164, "source": "regex", "metadata": {}}, {"text": "s. 10", "label": "PROVISION", "start_char": 22373, "end_char": 22378, "source": "regex", "metadata": {"linked_statute_text": "Berar Land Revenue Code", "statute": "Berar Land Revenue Code"}}]} {"document_id": "1962_3_724_768_EN", "year": 1962, "text": "Bochliit14r Sfogh\n\nTru Stak of Punjab\n\n.M udholkat J.\n\nMarch 7.\n\n724 SUPREME COURT REPORTs [l96ZJ SUPP.\n\nwould then be the action of the Government. Horo one of the Under Secretaries to the Government of Punjab informed the appellant by his letter dated !\\fay, 1, 1957 that his representation '•had been considered 1tnd rejected\", evidently by the State Government.\n\nThh; would show that appropriate action had been taken under the relevant rule.\n\nTho appeal is thus without substance and is dismissed. In view of the fact that the appellant is a displaced person with heavy responsibilities and with limited or possibly hardly any means we diroct that the costs shall be borntl by the parties concerned.\n\nBHAURAY\n\nB. BAIJNATH SINGH\n\n(P. B.\n\nGAJB!'!DltAGADKAR, A. K. SARKAR, K. N.\n\nWANCHOO, K. C. DAS GUP'l'A and N. RAJA\n\nGOl'ALA AYYANGAR, JJ.)\n\nPre-eniption-Stalt1tes entitling neighbours, co-sharera et.c. to pre-empt-C . the vendor will exclude the more remote.\n\nThere were prov1s1ons in the Act for giving notice of an intended sale . to .persons having a right of pre.emption, for the loss of die ~1ght of pie-emption in case no action \\vas taken on the notice and for fixation of a fair price by the Courl. It was contended\n\nthats. IO offended Art. 19(1)(f) of the Constitution and was 1161 void.\n\nSection 16 of the Punjab Pre•emption Act, 1913, as applied to Delhi, provided for pre-emption on six grounds, the first, third, fourth and sixth grounds being in favour of co. sharers, owners of common staircases, owners of common entrance from a street and owners of contiguous property.\n\nBy s. 7 the operation of the Act was limited to localities where the custom of pre-emption was prevalent.\n\nThere were provisions in the Act for giving of notice etc. as in lhe Rewa Act.\n\nSection 5 exempted agricultural property, shops, serai, katra,\n\ndharmsala, moaque and other similar building from the purview of the Act. It was contended that s. 16 offended Art. 19(1)(f) and that the Act contravened Art. 14.\n\nChapter 14 of the Berar Land Revenue Code, 1928, created a right of pre-emption in the holder of an interest in a survey-number when any person having an interest in any land in that survey-number sold it to a stranger provided that the interest sold was in unalienated land held for agricultural purposes. It was contended that this law of pre-emption was inconsistent with Art. 19(I)(f).\n\n..-, z Held, (per Gajendragadkar, Wanchoo and Ayyangar, JJ., Sarkar and Das Gupta, JJ., Contra) that s. IO of the Rewa Act which provided for pre-emption on the ground of vicinage imposed unreasonable restrictions on the right to acquire, hold or dispose of property guaranteed by Art.19(1) (f) of the Constitution and was void.\n\nIt placed restrictions on the right of the vendor to sell his property to a purchaer of his choice at a price settled between them ; it exposed the purchaser to litigation even after the requisite notices had been given by the vendor. There was no advantage to the general public from such a law. The real reason behind a Jaw of pre emption on the basis of vicinage was to prevent strangers i.e. people belonging to different religion, race or caste, from , acquiring property in any area populated by a particular fraternity or class of people. This could not be considered reasonable in view of the prohibition under Art. 15 of the C0nstitution of discrimination only on grounds of religion, race, caste, etc.\n\nShri Audh Behari Singh v. Gajadltar Jaipuria, (1955) I. S.C.R. 70; Ibrahim Saib v. Muni Mir Udim Saib, (1870) 6 Mad. H.C.R. 26and1ffohomed Beg Amin v. Narayan Meghaji Patil, ( 1916) I.L.R. 40 Born. 358, referred to.\n\nPer Sarkar and Das Gupta, JJ. Section 10 of the Rew'\n\ni . . . . . • . .\n\nBhauRam\n\n•• B. Baijnoth Singh\n\n19GZ\n\nBhauRam\n\nB. BlliJn•lh SU., A\n\n726 SUPREME OOURT REPORTS [1962] SUPP.\n\nAct did not offend Art. 19(l)(f) and was valid.\n\nThe right of pre-en1ption was not frequently exerci!>ed and the restric .. tions imposed by it did not affect many persons.\n\nJn a lage part of the country there \\Vas customary !aw of pre-emption which had been found to be reasonable before the Constitution came into force ; nothing had happened since to make it unreasonable. The provisions regarding notice etc. relaxed the severity of the restriction.\n\nThe law imposed two restrictions on the vendor-first that he may be prevented from selling property at any price he liked and secondly, that he could not sell it to anyone of his choice. fhe first restriction was clearly reasonable a• it prevented the vendor from selling at exorbitant prices and the rich from amassing property The second was not a great deprivation. The law placed the restriction on the purchaser that he could not acquire a particular property if the adjoining owner wanted it.\n\nIn view of the Indian \\\\\"ay of life to live in compact communities this was a reasonable restriction.\n\nIt would also avoid disputes that may arise if a stranger were allO\\\\'ed to come in.\n\nThe reasons for upholding pre-emption on the ground of being co-sharers were equally applicable to pre-emption on the ground of vicinage. The proviso to s. IO which laid down that a person nearer in relationship to the vendor shall have a preferential right was not bad ; it did not create a right of pre-emption but it merely solved a problem arising out of a valid right of pre-emption arising in favour bf more then one person.\n\nSardha Ram v. Haji Abdul, A.IR. (1960) Punj. lll5 and' Ramc/1andrn Kri,, hnaji Dhaga/e v. Janardan Krishna7>pa Jfancrir, A.I.R. (1955) Nag. 225, approved.\n\nPunch Gujar Gaur Brahmins v. Amarsingh, A.J.R. (1954) Raj. 100, Babula/ v. Gowardhandas, A.J.R. (1956) M.B.J. i'!Pu:al.\n\nAND Civil Appeal No. 59:i of 1960.\n\nAppeal from the judgment and order dated October 29, 1957, of the Punjab High Court in Civil Revision Application No. 518 D of 1956.\n\nL, K. Jha. R. Patnaik and A.D. Mathur, for the appellant (in C.A. No. 270 of 1955).\n\nD. N. Mukherjee, for respondent No. I.\n\nS. K: Kapur and P. D. Menmi, for the Inter vener.\n\nA. V. Viswanatha Sastri and A. G, Ratnaparkhi, for th!l appellants in (C.A. No. 430 of 1958).\n\nS. A. Sohoni and Ganpat Rai. 'for the respon dent{!, ·\n\nR. S. N1trnla, for the appellant (in C. A. No. 595/fiO).\n\nS. K. Kap11r and Ganpat Rai, for the respon dent.\n\n1962. March 7.\n\nThe Judgment of Gajendra gadkar, Wanchoo aud Ayyanga.r JJ., was delivered by W:mchoo .J.\n\nThe , Judgment of Sarkar and Das Gupta, , J, J., was delivered by Sarkar, J.\n\nWA:>CHOO, J.-These three appeals which have been heard together raise the constitutionality of cort'1in provisions of the pre-emption laws pre vailing in tho States of Madhya Pradesh (Rewa-3tate area), l'elhi and Maharashtra (Berar-aroa). Three suits for pre.emption wore brought by pre-emptors which were decreed, and the present appeals are by purcha{!ers. Though the appeals were heard together J'S some of the points involved wore common, i~ . . .\n\n3 S.C.R.\n\nSUPREME <; JOURT REPORTS 729\n\nwould be convenient to deal with each appeal separately because the Jaw involved in each case is different.\n\nWe shall begin with C.A. 207 of 1955. This is eoncerned with the Rewa State Pre-emption Act, l\\J46 (hereinafter called the Rewa Act), and particularly with s.10 thereof, which is in these terms:-\n\n\"Classes of pre-emptors :-Persons of the following classes shall have a right of preemption:--\n\n( 1) Any person who is a co-sharer or partner in the property sold and foreclosed.•:\n\n~ .\n\n(2) Any person who. owns arty immovable property adjoining the property sold or foreclosed or in case of transfer of tenancy rights, the land which is the subject of such rights.\n\nProvided that among the above mentioned classes the first in order will exclude the second and among persons of the same class, the nearer in relationship to the person whose property is sold or foreclosed will exclude the more remote.\"\n\nWe are in the present case concerned with the second clause by which a person owning immovable property adjoining the property sold or foreclosed is entitled to pre-empt subject to the order provided in the proviso. In this case, both the purchaser and the pre-emptors hold property adjoining the. property sold, but as the pre-emptors were related to the vendor, while the purchaser was not, the suit was decreed irt favour of the pre-emptors in view of the proviso.\n\nThe question therefore that arises is whether a right of pre-emption by vicinage offends 4rt. I9(l)(f). There has beeµ divergence of opinion\n\nBhau Ram v.\n\nB. Baijnath Singh\n\nWanchoo J.\n\nB. Baijnath Singh\n\nW11nchoo J.\n\n730 SUPREME COUR'I'. REPORTS [l!lu2] SUPP.\n\nbetween various High Courts on this qm'stion. The High Courts of lfajasthan, Madhya Bharat and Hyderabad and the Judicial Commissioner, Vindhya\n\nPradesh have taken the view that such a right of pre-emption offends Art. 19( l)(f) whilo the High Court of Punjab has held otherwise. Before, h\"owever, we deal with the main points urged in this case\n\nwe may notice the argument based on the decision of this Court in Shri Audh Behari Singh \\\". Ga_jad!tar Jaipuria, where it was held that the law of preemption creates a right which attaches to the property and on that footing only it can be enforced against the purchaser~ The argument is that since the righ.t of pro-emption attaches to the property sold it ls an incident of property, and thernfore cannot be held to be a restriction on the right to acquin', hold and dispose of property. On the other hand it is urged that if the law of pro-empt.ion creates a right which is an incident of lJroperty, even so it would bPa restriction ereatcd by law on the fundamental right guarnnteed undor Art. I !J( I)( f) of the Constitution. We are of opinion that even if the law of pre-emption creates a right which att11ches to property it would be creating a restriction so far as the acquiring, holding or disposing of property is concerned which was not them before the law of pre-empt.ion was enacted. Therefore, even if the liability attaches to the property, it will still amount to a restriction on the right guaranteed\n\nby Art. 19(1 )(f), when it attaches to the property by the law of pre-emption.\n\nArticle 19 (i) (f) gives a fundamental right to a citizen to acquire, hold and dispose of property and cl. ( 5) of that Article permits reasonable restrictions to be imposed by law on thio right in t.bo\n\ninterests of thr gcmmil public. There can hen~ r]oubt that a law of pre-empt.ion docs impose restriction\n\nn the fundamental right guara!lteed -qnder :Art.\n\n~ !J\n\n(i) (f) and the question is whether the restriction imposed in the ttewa case is reasonable and in the interests of the general public. Section 1(1 of the Rewa Act applies to all kinds of property, whether urban or rural, and whether agricultural land or houee property, and it is in that context that its reasonableness will have to be judged. There is nothing to show in this case that there was any preexisting custom of a similar nature prevalent in any part of the area to which the Rewa Act applies; and even if any custom was prevalent in any area, there is nothing to show what precisely that custom was. In any case evsn if any custom was prevalent in this area before the Rewa Act came into force and it was held reasonable by courts, that would not in our opinion be a decisive factor in considering whether the restrictions imposed by the Rewa Act are reasonable or not. We have to judge the reasonableness of the law in the context of the fundamental rights which were for the first time conferred by the Constitution on the people of this country and which were not there when the courts might have considered the reasonableness of the custom, if any, in the context of things then prevalent.\n\nNc.r do we think that the fact that the right of preemption may not be actually exercised in the case of even a large number of sales can have any bearing on the question whether the law imposing the restriction is reasonable or not.\n\nLet us therefore see what the Rewa Act provides. Section 10, as we have pointed out, gives a right of pre-emption first to co-sharers and secondly to owners of adjoining property to which we shall refer hereafter as preemption by vicinage. We are not concermid in the present appeal with the case of co-sharers, with which we shall deal in a later part of the judgment. Ordinarily, if there was no Jaw of pre.emption a vendor would be entitled to sell his property to anybody for any price that may\n\npe 11ettled between him and the purchaser, '.!'hi~\n\n' f•\n\nBhau Rom v.\n\nB. Baijnath Singh\n\nWanehoo J.\n\nRhau Ram\n\nB. Ra1j1Jath Singh\n\nJY111uhoo J,\n\n732 SUPREME COURT REPORTS (1962) SUPP.\n\nright is clearly restricted by the law of pre-emption\n\nwhich may in many ca.sos result in a depression of the price which the vendor may otherwise be ablo to ge~ for his property. Further the Act provides that if the vendor and the vendee desire that there may be no suit for pre-empt.ion tho vendor can give notice to possible pre-omptors of the price at which the vendor is rilling to sell such property. This notice is given through the court within the local limits of whose jurisdiction the property is situate.\n\nOn such notices being given to possible pre-emptors. the pre-emptor will lose the right of pre-emption unless with.in one month frodl the date of service of such notice, he or his agent pays or tenders the price to the vendor: see ss. 12 and I 3.\n\nFurther. s. 15 shows that even where such a notice has been given and the pr:ice has not been paid or tendered, a suit for pre-emption can be filed after tho sale\n\nin spite of s.13 on the ground that the price stated in the notice was not fixed in good faith. The court then decides whether tho price stated in the notice id the proper price, and if it comes to tho conclnion\n\nthat it is not it has the power to fix such price as 11ppears to it to be the fair market price of the property sold. Clearly, therefore, th ore is a restriction on tho right of the vendor to sell the property at any price to which the purchaser has agreed and\n\na suit for pre-emption can be filed even where a preemptor is not prepared to pay the agreed price and can have it reduced. The notice therefore providfd in s. 12 and the failure of the pre-emptor to comply with it under s, 13 are really of not such value, for thl• pre-emptor can always get over the provisions of s.13 by alleging that t-he price entered in thn notice\n\nwas not fixed in gooJ faith. In effect, therefore, \"very sale will be open to pre-emption and the law Qf pro-emption thus provides a crop of litigation for the vendor and the vendce. This is the first result of tho law of pm-emption.\n\nFurt}\\er we \"All !19\n\nreason to think that the law of pre-emption prevents the sale of property at an unconscionable price for if a vendor is demanding an unconscionable price he will not be able to find a vendee. In any case the price is always settled by agreement between the vendor and the vendee and there is no reason to hold that such an agreed price would b;; an unconscionable price. Nor do we think that the la.w of pre-emption in intended to provide for fixation of reasonable price by courts ; therefore that can hardly be a reason to hold that it is a reasonable restriction in the interests of the general public on the right of the vendor under Art. 19 ( 1 )(f).\n\nWe do not think that the restrictions placed by the law of pre-emption in .a case based on vicinage have any effect on prices being reasonably fixed, and the main effect we can see is that the law may give rise to a crop of litigation. We cannot therefore see any advantage to the general public by such a law of pre-emption and in any case the dis,\n\nadvantage certainly overweighs the advantage that may result to a small section of the public.\n\nNow let us look at the matter from the point of view of the vendee. He comes to an agreement with the vendor to purchase the property at a cerbin agreed price. Let us also assume that the vendor has given notice under s.12 and no action has been taken by the pre-emptor under s.13. Ther.eafter the vendee purchases the property and would be entitled to hope that as the price was not paid or tendered under s.13, he would be able to hold and enjoy the property without any further trouble, But as we have pointed out already even though ss.12 and 13 are there it is always open to a preemptor to file a suit for pre-emption after having failed to. take action under s.13 by merely alleging that the price stated in the notice given to him was not fixed in good faith. So the vendee who may have purchased he property after action being taken under ss.12 and 13 is forced into litigation on the\n\nBhau Ram v.\n\nB. Baijnath Singh\n\nWanchoo J.\n\nBll•ciRam\n\n•• B, Baijnath Singh\n\nWacAooJ.\n\n734 SUPREME COURT REPORTS [1962] SUPP.\n\nground that th(l price agreed is presumably too high. Thus there is clearly a rostl'iction on his right to hold propert.v, and even though the vende(l may eventually succeed on the footmg that the price :tgroed is not above the market value he is compelled to go through litigtition in order to hold the property. Such a restriction would thus appear to be unreasonablo for it allows the pre-emptor to go to court evcm after ss.12 and 13 have beon complied with.\n\nLet us further look to the broader aspects of the provisions rel:iting to pre-emption by vi<:inage.\n\nIt .may be stated that the right. of pre-emption was not recognised under the Hindu law and is not enforced in large parts of this <'ountry to tho south of the Vindhyas. It Cl'me to be enforced after the advent of i\\Iohomedan rule as based on custom which was accepted by courts, particularly in\n\northern India. While in )/orthern India the courts enforced the right of pre-emption based on custom, even where there was no statutory law of preemption holding that it wa, s in accordance with justice, equity and good conscience, in Southern India the view taken was that it was opposed to principles of justice, equity and good consecnce: (see Ibrahim Saib v. 11funi Mir Udin Saib and (1)\n\nMohmned Beg Amin Bert v. Narayan Me, ghaji Patil)(').\n\nThe reasonableness of a custom is, however, not a. co.nstant factor and what is reasonable at one stage of tho progress of society may not be so at l\\nothcr stage. It is in this context that we have to judge the law of pre-emption as it was later put into various statutes. Before the Constitution came into force, the statutes if they were passed by competent authority, eould not be challenged; but we have now to judge the reason ablene88 of these statutes in the light of the fundamental rights guaranteed to the citizens of this country by the Constitution. In\n\n(I) (1870' 6. Mad. H.C.R. 26.\n\n(2) (1916) I.L.R. 40 Bom. 358.\n\n. .. , .. s.c.R. StrPR:FlME COURT REPORTS\n\na society where certain classes were privileged and preferred to live in groups and there were discriminations, on grounds of religion, race and caste, there may have been some utility in allowing persons to 'prevent a stranger :f'rom acquiring property in an area which had been populated by a particular fraternity of class of people and in those tirµes a right of preemption which would oust a stranger from the neighbourhood may have been tolerable or reasonable, But the Constitution now prohibits dis.criminatiou <1gainst any citizen on grounds only of religion, r .ce, caste, sex, place of birth or any of them under Art. 15 and guarantees a right to every citizen to acquire, hold and dispose of property, subject only to restrictions which may be reasonable and in the interests of the general public.\n\nThough therefore the ostensible reason for preemption may be vicinage, the real reason behind the law was to prevent a stranger from acquiring property in any area which had been populated by a particular fraternity or class of people. In effect, therefore, the law of pre.emption based on vicinage was really meant to prevent strangers i.e. peo]Jle belonging to different religion, race or caste, from acquiring property. Such division of society now into groups and exclusion of strangers fro,'\n\nany locality cannot be considered reasonable, and the main reason therefore which sustained the law of pre.emption based on vicinage in previous times can have no force now and the law must be held to impose an unreasonable.restriction on the right to acquire, hold and dispose of property as now guranteed under Art. 19(l)(f), for it is impossible to see such restrictions as reasonable and in the interests of the general public in the st!lte of society m the present day.•\n\nIt is urged, however, that at any rate, in the case of agricultural properties, pre-emption by vicinage results in consolidation of agricultural lands, and that at any rate is an advantage. How far the\n\nBhau Ram . v.\n\nB. Baijnath Siugh\n\nWanchoo J,\n\nBhau Ram v.\n\nB. Baijnalh Singh\n\nrv a\"'hoo J.\n\n~.16 SUPREME COURT REPoRTS (1962] SUPP.\n\nargument of consolidation can be availed of now when we find that in most :Statos laws are being\n\npased which are putting ceilings on agricultural holdings is a matter which it is unnece!lB&ry to consider in the prrsnt emm, for the Rewa Act applies not only to agricultural holdings but also to burn property including house property. There is no quostii>n of any advantage arising out of consolidation whore one is dealing with urban property or house property.\n\nThe matter of consolidation might have had some hearing if the RewaAct was appli<; able to agricultural lando only.\n\nBut as it applies to urban lands as woll as house property where no quostion of consolidation of holdinf; ls arises, the impugned provision cannot be held to be a. reasonable re8trietion in the interests of the general public on the ground that it leads to eo!lsolidation of agricultural holdings. There is no way of severing the application of the law so far as it relates to agricultural holdings from its application to urban or house property and therefore the entire provision as to vicinage must\n\nfall, even if somet.hing could be said in it.a favour with respect to agricult1Jre holding on the ground of consolidation. We are therefore of opinion that the second clause of s. IO imposes an W1reaeonable restriction on the right to acquire, hold or dispose of property guaranteed under Art. 19(1) (f) of the Constitution and must be struck down.\n\nSo far as the proviso is concerned it applies both to the first . and the second clause and it will survive for the\n\npurp<>Bo uf tho firHt clause only, which is not in dispute Lefore us.\n\nIn this view of the matter C. A. 270 of 1955 must suc.ceed.\n\nWe next come to C.A. 595 of 1960.\n\nThis relates the Punjab Pre-emption Act, l9l 3(Punj. I of 1913), (hereinafter referred to as the Punjab Act), as applied to tho city of old Delhi. W are\n\nconcerned with s. 16 of the Punjab Act, which deals with urban immovable property and is in these terms :-\n\n\"The right of pre-emption in respect of urban immovable property shall vest, • ·\n\nfirstly, in the co-shares in such property, if any; secondly, where the sale is of the site of the building or other structure, in the owners of such building or structure ;\n\nthirdly, where the sale is of a property having a staircase common to other properties, in the owners of such properties ;\n\n\"fourthly, where the sale is of a property having a common entrance from the street with other properties, in the owners of such properties ; fifthly, where the sale ia of a servient, property in the owners of the dominant property, and vice versa ;\n\nsixthly, in the persons who own immovable property contiguous to the property sold.\"\n\nThe suit was brought by Nanak Singh respondent who claimed pre-emption with respect to a sale in favour of the appellant of a house and was rested on the first, third, fourth and sixth grounds in the section.\n\nThe question whether s. 16 of the Punjab Act was ultra vires the Constitution was tried as a preliminary issue.\n\nThe subordinate judge held in favour of the respondent. Thereupon the appellant went in revision to the High Court. The High Court held that the. first, third and fourth grounds in s.16 did not offend Art. 19 (ll (f); it further held that the sixth ground offended\n\nBhau Ram\n\n••• B. Baijhc.th 8ingA\n\nWanchoo J.\n\nJ96Z\n\nBh:P.\n\nArt. 19 (l) (f). Thia IRl!t view was apparently in conflict with the earlir Full Bouch decision of that Court in UUam Singh v. Kartar Singh (I). Lator tho High Court held in Sardlia Ram v. Haji Abdul Maji, d Mohd. Amir Kltan {') by a five-Judgo Bench that the provisions contained in clause \"sixthly\" of s. 16 were not ultm vire.s the provisions of the Constitution inasmuch as the restrictions imposed were not unreasonable. The appellant thereupon came to this Court on a. certificate granted by the High Court challenging the view of the High Court that the first, third and fourth grounds were Cons-· titutional.\n\nFurther, in view of the five-Judge decision in 1960 which has shaken the view taken in the judgment under appeal on the sixth grounds, the appellant has urged that that decision is correct.\n\nIt may be noted that under e. 7 of the Punjab Act, s. 16 only applies to a. town sub-division of a. town when a custom of pre-emption is proved to have been in existence in such town or sub-division at the time of the commencement of the Aot and not otherwise. [tis not disputed thats. 16 applies to that area of old Delhi in '\\\\' hich the property is situate. The fa.ct however that such a custom was prevalent in this area. before 1!113 when the Punjab Act ca.me into force is not a decisive factor in holding that the provisions of s. 16 of the Punjab Act a.re necessarily reasonable. We have already dealt with this aspect of the matter when dealing with the Rowa Act, and need not add anything more.\n\nWe have also doalt with the question a.s to the right of pre-emption based on vicinago when doaling with the ltewa Act, and for the reasons given ea..rlier we hold that pre:eption based. on vicinage 1s an unreasonable restnct10n on the right\n\nto hold, acquire or dispose of property conferred by Art. l\\J (l) (f). Wo may however briefly notice the grounds on which the two Punjab cases of l!l54 and\n\n(I) A, l.R. 1954 Pun. 55.\n\n(2) A.l.R. I 96 0 P\"n. I Sf•\n\n3 .· ··.·\n\nS.C.R.\n\n' 1960 have held otherwise. In the 1954 case both ss. 15 and 16 of the Punjab Act were dealt with together. We are not here concerned with s. 15 and express no opinion with respect to it. As to s.16, the reasons which impelled the learp.ed Judges to hold that the provisions of s. 16 were constitutional were \"to reduce the changes of litigation and friction and to promote public order and domestic comfort, and to promote private and public decency and convenience\". We are not able to understand how providing pre-emption on the ground of vicinage would carry out these objects, assuming their promotion is in the interests of the ge11eral public.\n\nPerhaps the reasons why these grounds were given in the 1954 case may be that the learned Judges were considering not merely pre-emption. by vicinage but also with other grounds provided in s. 16.\n\nWhatever may be said about these' reasons so far as other grounds, of pre-emption contained in s. 16 are concerned, these reasons have in our opinion no validity so far as pre-emption by vicinage is concerned. Turning now to the case of Sardha Ram, (') we may note that the learned Judges observed that \"pre-emption imposes restrictions on the right of the vendee to acquire and hold property and the right of the vendor to dispose of property.\n\nIt limits the power of the vendor to sell his property to whomsoever he may please or prevents him from showing preference to anyone to whom he may wish to sell ........ .it is a clog on the freedom on sale and tends to diminish the market .value of the property.\" They were also conscious of the trials and tribulations of a vendor whose property is governed by the law of pre-emption. But they seem to have upheld the constitutionality of the sixth ground main\\y for two reasons, namely (i) that it had already been upheld in Uttam Singh's case (') and (ii) that \"what is reasonable in any particular (1/ A.J.R. 1960 Pun. 196.\n\n(2) A.I.R. 1954 Pun. 55.\n\nBhau Rom\n\nB. Baijnath Singh\n\nW1,1r.choo J.\n\n19GZ\n\nBh .. Rom\n\nB. Baijnath Singh\n\nW anekoo .'.\n\n740 SUPREME COURT REPoRTS [1!)62] SUPP.\n\ncase is difficult of ascertainment;\" that the choioo of measures is for the legislature, that the legislatures\n\na.re presumed to have investigatod the subject and to havo acted with reason, that an Act of the legislature should be sustained unless it violates constitutional limitations beyond roasonable question\".\n\nThe last Punjab case therefore does not add any further roaaon is support of the reasonableness of the restriction placed by the law of pre-emption relating to viclnage, and if anything, the observations mentioned earlier show how unreasonable the restriction can be, and in the circumstances we must hold that the sixth ground in 11. 16 is unconstitutional for reasons already indicated when dealing with the Rewa Act.\n\nThis brings us to the consideration of the first ground which gives a right of pre-emption to a cosharcr in the property sold. The question as to tho conRt, itutionality of a law of pre-emption in favour of a co-sharer has been considered by a number of High Courts and the constitutionality hllll been uniformly upheld. We have no doubt that a law giving such a right imposes a reasonable restriction which is in the interest o( the general public. If an outsider is introduced is a co-sharer in a property it will make common management oxtremoly difficult and destroy the .benefits of ownership in common. The result of the law of pre-emption in favour of a cosharer is that if sales take place the proporty may eventually come into the hands of one co-sharer as full owner and that would naturally be a great advantage the advantage is a.II the greater in the case\n\nof a residential house and s. 16 is concerned with urban property; for tho introduction of an outsider in a residential house would lead to all kinds of complications. The advantages arising from such a law of pre-emption are clea1 .,, nd in our opinion outweigh the disadvantages which the vendor may\n\nsuffer on account of his inability to sell the property to whomsoever he pleases. The vendee also cannot be said to suffer much by .such a law because he is merely deprived of the right of owning an undivided share of the property. On the whole it seems to us that a right of pre-emption based on oo-sharership is a reasonable restriction on the right to acquire, hold and dispose of property and is in the interests of the general public.\n\nThe same reasoning in our opil)iiln will apply to the third ground, ~'where the sale is of a property having a staircase common to other properties, in the owners of such properties\". This ground stands on the same footing practically as the . first ground relating to co-sharers, and for the same reason we hold that it is a reasonable restriction, and is in the interest of general public.\n\nTurning now to the fourth ground, \"where the sale is of a property having a common entrance from the street with other properties, in the owners of such properties\", this ground is in our opinion similar to the third ground, the only difference being that in one case there is a common staircase while in the other case there is a common private passage from the street. The idea behind this ground seems to be that the buildings are in a common compound and perhaps were originally put up by members of one family or one group with a common priv11te passage from the public street. In such a case the ownew of the buildings would stand more or less in the position of co. sharers, though actually there may be no cosharership in the house sold. But .as we have said this case would approximate to cases of a common staircase and co-sharer; thereforo, for reasons given in the case of co-sharers we uphold the right of pre-emption covered by the fourth 15round in s. 16.\n\nThe ease falling under the fourth\n\nBhau Ram\n\n•• B. Ba.ijnath. Singh\n\nW.anchoo J.\n\n8\"4u R..,,\n\n•• R. B.\n\non tho right to acquire property ii! unreasonable. Is it unreasonablo to say that one ahall not acquire a particular propert1 if the adjoining owner wants it?\n\nIt is not as if the purchaser is prevented from acquiring any property. There must be many other properties more or less equally good which he is free to acquire. As we have earlier pointed out, there wouling would help to maintain the homogeneity, eomfort and peace of the people. It is common human experience that property leads to disputes concerning boundaries, easement and concerning divers other rights connected with it. .Also\n\ndisrutrs ari1c llcause Gf diffe1ent ways of Jiving.\n\nNow most of these disputes would be with the adjoining owners. The right of pre-emption based on te ground of vicinage would help to itvoid these disputes coming into existence. Again, it wo?-1'.1 be a great discomfort for a number of people hvmg together for years to have to accept among themselves an outsider who may not be able to fit himself into that community or may even be an undesirable person. Furthermore, if a person is given preference in acquiring neighbouring property it would help him better to manage his properties. Privacy of the home would be better maintained. Against all these advantages the only disadvantage that the purchaser suffers is that he cannot acquire a parti\n\ncular property. It will often be possible for him to get another equally good property. It cannot be said that if between to such competing persons the law favour one who owns neighbouring property, the law is putting unreasonable restriction on the other person.\n\nIn none. of the reported cases has it yet been held that the right of pre-emption given to a cosharer imposes an unreable restriction on the purchaser. It seems to us that it would be impossible to take that view. A co-sharer increases his holding if he is given the preference to buy the land.\n\nHe of course also prevants an outsider being thrust into joint ownership with him and this is the only difference between his case and the case of an adjoining owner. The difference is not such as would in principle lead to different conclusions as to the reasonableness of the restriction in the two cases. A co-sharer ii he does not like his new co-sharer can always separate his share. It has not however been held that for this reason a law giving a co-sharer a right of pre-emption puts an unreasonable restriction on an other persons right to acquire property.\n\nWe think, therefore, on the same principle it has to be held that a law giving a right of pre-emption on .\n\nJ962\n\nBhouRam\n\nB. Baijnath ingh\n\nSarkar _J.\n\nBhau Ram\n\n•• B. Baij11a1h Singh\n\nBarkaf' J.\n\n756 SUPREME COURT REPORTS [1962) SUi>P.\n\nthe ground of vicinage also imposes a restriction whir.h is reasonable.\n\nOne of the advantages of the law of pre emption based on vioinage earlier noticed is the preservation of the privacy of homeR.\n\nIn regard to this, it was said that purdah system has disappeared and therefore there is no need to protect it. It may be that purdah has disappeared but it cannot be said that the privacy of the home is a thing which\n\nis of no value nowadays. It is this that the 1!1w of pre.emption will protect and therefore be of advantage to.the community. We think it wrong to imagine that privacy of a home is of value only to the people observing purdah.\n\nThen it is said that living in compact communities has also disappeared and people now live in flats. But wo do not think that it can be suggested that living in communities has not its advantages or living in flats is an ideal system. There are therefore no arguments against the view that living in compact and homogeneous communities is still desirable and has still its advantages which perhaps will always remain.\n\nIt is also said that the restriction imposed by the law of pre-emption is unreasonable because it encourages discrimination on the ground of religion, race and caste and this is what Art. 15 of the Constitution forbids. We do not think that it is a reasonable reading of. the Constitution to say that it forbids people of one race, religion or caste from living together.\n\nFurthermore, compact communities are not always of the same race, religion or caste. The advantage is not due to identity of caste etc. but to the identity of thought and way of living and tics generated by long familiarity with each other and the families of each other. For all these reasons a restriction imposed by the law of pre-emption based on vicinagc is, in our view, a\n\nreasonable restriction on the right to acquire and dispose of property.\n\nThen it was argued that when a property is purchased in exercise of the right of pre-emption, it will often happen that that property will be let out to a stranger and so the objective of living in compact communities will not be attained in many cases.\n\nThis may be so in some cases but the landlord when the occasion arises, can choose that stranger. He further has some control over the tenant. He will have no property dispute with the tena~1t except such as might arise out oftenancy laws. If the tenant is found to be undesirable, he can be removed. All that this contention comes to is that the law of pre-emption may not completely guarantee the advantages which it is designed to create, but there is no doubt that it does guarantee a very large part of it and it would be incorrect . to say that it guarantees none.\n\nA further question remains in this case. It is said that s. 10 of the Rewa Act is bad in that it gives a preferential right to pre-empt on the basis of relationship. This however does not seem to us to be a correct way of reading the statue. What it aims at is to give a right of pre-emption on the ground of vicinage and the other ground. mentioned in the section.\n\nBut then it is unavoidable that there may be various persons entitled as co-owners or owners of adjoining properties to the right of pre-emption under the section. It has to be remembered that we are now proceeding on the basis that the right imposes a reasonable restriction. In order therefore that a statute legally made giving the right of pre-emption may not be rendered infructuous in certain circumstances, an order of prefrrence among the would be pre-emptors has to be devised. l'his is done by the proviso to s-. IO of the Eewll\n\n/ . . ' .\n\n196t\n\nBhauRam v.\n\nB.Baijnalh 'Sin:·\n\nSarkaf'J.\n\n. .\n\nBh .. R\"\"' ..\n\nB. Baij11a11' Sfnth\n\nSUPREME COURT REPORTS [1962] SUPP.\n\nAct by laying down that a person nearer in relationship to the vendor will have a preferential right of pre-emption over others.\n\nThe proviso does not purport to create a right of pre-emption only on the ground of relationship. It solves a problem arising out of a right of pre-emption legitimately granted on the ground of co-ownership or vicinago. It is a corollary to the main right. If the main right is good, a provision enacted to prevent its being defeated would equally be good. ' The result is thats. IO of the Rewa Act whioh gives the right\" of pre-emption on the ground of vicinage must be declared to be a perfectly valid statutory provision which docs not offend Art.\n\nI 9( I )(f) of tho Constitution and so is the proviso to that section which is really a pa.rt of it.\n\nThat disposes of Civil Appeal No. 270 of 1955. We W<:uld theroforc dismiss the appeal.\n\nWe next come to Civil Appeal No. 595 of 1960 which concerns tho Punjab Pre-emption Act of 1913.\n\nThe property involved in this case is a house situated in the city of Old Delhi.\n\nSection i6 of the Punjab Act which govorns the property in dispute, is in these terms :\n\nS 16.\n\nThe right of pre-emption in respect o'f urban immovable property shall vest,-\n\nfirstly, in the co-sharers in such property, if any; secondly; where tho sale is of the site of tho building or other structure, in the owners of such building or structure ;\n\nthirdly, where the sale is of a property having a staircase common to other properties, in the owners of such properties ;\n\nfourthly, where the sale is of property\n\navin~ a common entrance from t)lo $reet\n\nwith other properties, in the owners of such properties ;\n\nfifthly, where the sa]e is of a servient property, in the owners of the dominant property, and vice versa ;\n\nsixthly, in the persons who own immovable property contiguous to the property sold.\n\nThe Punjab Act, like the Rewa Act, contains provisions for giving notice of an intended sale to the person having a right of pre-emption, for loss of right of pre-emption when action is not taken to purchase in terms of the notice and for fixation of a fair price by the court : see ss. 19, 20, 22, 25 and 27 of the Punjab Pre-emption Act.\n\nAs we have said in the Rewa case, provisions of this kind help to relax the severity of the restriction imposed on the seller.\n\nThe pre-emptor in this case based his claim on the first, third, fourth and sixth grounds mentioned in the section. The High Court held that the section did not offend Art. l9(l)(f) with regard to the first, third and fourth grounds but did so with reg-ard to the sixth ground. The judgment of the High Court\n\nis reported in A.LR. (1958) Punj. 44.\n\nThe view there taken in so far as it concerns the sixth ground in the section is against the Full Bench decision of the same High Court in Uttam Singh v. Kartar Singh (l) and Sardharam v. Haji Abdul (2) the latter of which expressly overruled that view ..\n\nIt is interesting to note that under s. 7 of the Punjab Act a right of pre-emption in respect of urban immovable property in any town, that is, the right contemplated bys. 16, shall exist if a custom of pre-emption had existed in such town at the commencement of the Act and not otherwise.\n\n(1) A I.It. (1~54) Punj. 55. . . .\n\nB.Baijnath Singh\n\nSarkar J.\n\nBhau Rom\n\nR. B aljnalh Singh\n\nSarkar J.\n\n760 SUPREME COURT REPORTS (1962] SUPP.\n\nIt ia plain that in the city of Delhi the custom of pre-emption had so prevailed; if it had not, then of course the point would h:we boen ta.ken and the case thereupon decided against the pre-emptor.\n\nCustom is a question of fa.ct and on the state of the records in this case we must proceed on the ha.sis that a custom of pre-emption had existed in Delhi.\n\nNow that custom, if it had prevailed must have done so because it was considered to be a reasonable rule inspite of the restriction that it imposed on the vendor or the purchaser. We have earlier s:i.id that tho existence of a customary right of pre-emption indicates that the restriction imposed by it is reasonable. That view itpplies moro strongly to the pres:mt case becausi; here in the very areit with which we are concerned that custom did exist.\n\nThe right of preemption based on vicinage mentioned in the sixth ground in e. 16 has itlrea.dy been doalt with by us in the Rewa case. l<'or tho reasons stated, there, we hold this provision in s. 16 to be a valid piece of le>gislation.\n\nWe hitvo now to dea.l with the other grounds in s. lfi referred to earlier. Tho first confers a. right of pre.emption on a co-sharer in it property. Wo feel no doubt that a law giving such a right imposes a reasonable restriction on the right conferred by Art. 19( I )(f). If an outsider is introduced a.R a cosharer in a property, that is likely to ma.ke com mon management inconvenient and thereby destroy the bcnPfits of ownership of the property to a large extent. Property cannot be managed profitably unJegs one policy is followed. If there arc more than one owner of a propnrty, it is nssential for the profitable enjoyment of it that they should be alc to work in •mison. ThArefore if by tho op1ira.t10n of the law of prc-omption based on co-ownership the property eventually comes to mi vested in a single hand that would be a grea.t advantage to the ownor. Such a law being for the benofit of ~11\n\nowners would surely !:; e in the interest.s of the general public. Till the property comes to be vested in one owner it would have remained in the\n\nhands of two or more people who have been owning it for years and have been getting on with each other smoothly, for otherwise they would have partitioned it. In such a case if one of the joint owners goes out and in his place the remaining joint owner or owners have to accept astranger, a good deal of irritation and mismarnigement may be reasonably apprehended. If the property owned is a residential house-and s.16 will be largely concerned with such properties-the introduction of a stranger into it would lead to an undesirable situation and often and in disaster. These are the advantages arising from a law of pre-emption based on coownership. The disadvantages are that the selling co-owner cannot sell it to anyone he likes or for an extortionate price, and the purchaser is deprived of owning an undivided share in property. Neither of these seems to us to be a great deprivation. In neither case is the disadvantage suffered great as compared to the advantage accruing to the remaining joint owner.\n\nTherefore, it seems to us that the restriction imposed on the right to dispose of or acquire properties imposed by the first ground under s. 16 of thc> Punjab Act is a reasonable restriction.\n\nThe right based on the third and fourth grounds mentioned. in the section also seems to ns unobjectionable. The third ground gives to the owner of property a right of pre-emption when another property having a common staircase with his is sold. If a number of properties have a common staircase and one is sold, it would be most inconvenient and greatly disadTantageous to the owners of the unsold properties if they cannot prevent a 8tranger from acquiring the portion sold and thereby obtaining a right to the common user of tqe tairoase with them. 'fhat would in a lare\n\n. . ~\n\nI9•t\n\nBhau Ram v.\n\nB. Ba, jn-, th Singh\n\nSarkar J.\n\nIY6t\n\nBhau Ram\n\nB. Batjnalh Singh\n\nSorkar J.\n\n762 SUPREME COURT REPORTS (1962] SUPP.\n\nnumber of cases be more or less admitting a Rtran. ger into their houses.\n\nThe disadvantage arising from such & state of affairs is clearly much more than the advantage that would arise to the purchaser by the acquisition of the property. The fourth ground gives a right of pre-emption when one of several properties having a common entrance from the street is sold. 'Jhe street is of course the public street which is common to all. In order that this ground may apply, there has to be a common entrance from such a street to a numbN of properties.\n\nThis ground apparently contemplates a rase of a\n\npassage leading from a public street which is common to all the owners of properticH sitnate on th1it passage. This ground therefore deals with owners of properties who have to share a common passage.\n\nPeople living in these hl'USPS would naturally from a very compact community. Indeed very often they would be living like relatives or members of a family.\n\nA law which ives them a right to buy one of these properties when it is sold to a etranger cannot be said to impose an unreasonable restriction on anyone.\n\nAH in the last case, the atfrantago accruing from such a law to the porson desiring to pre-empt would far outweigh the disad1antage occasioned either to tlw vendor or the purchaser.\n\nThe learned counsel for the appellant referred to various Acts which have gradually abolished the right of pre-emption. He pointer:! out that by Act X of 1960 of the Punjab Legislature s. !(l has in faet been repealed as a whole anrl has bP-en substituted by a provision creating a right only in a tenant to pre-empt the property held by him when the landlord desires to sell it.\n\nPunjab Act X of 1960 however has not been extended to Delhi rind here the Punjab Prcemption Act of 1913, the Act with which we arc ooncerned, still applies. All that these subsequent pieces of legislation show is that the Legislature has thought it fit to abolish ccrtai11\n\nrihts of rro-emption ill various cases. But ~\n\noannot be used as an argument to contend that the Legislature considers that the . la~ of pre-em1_>tion imposes an. unreasonable restrioton on the r1ghs mentioned in Art. 19(l)(f). lf it were so, then 1t has to be said that in so far as the Legislature has not thought it fit to repeal the law of pre-emption as it exists in Delhi, it does not consider that law to impose an unreasonable restriction. Arguments of this kind do not lead us anywhere. Furthermore, we have to decide the question of the reasonableness of the restriction for ourselves and whatever opinion a legislature expresses on the matter is not of much relevance for this purpose.\n\nLastly, we have to deal with the point that s. 16 of the Act offends Art. 14 of the Constitution.\n\nIt was said that it offended that article because there was no right of pre-emption in regard to agriculture land and the law was not available outside urban areas of Delhi and that it exempted from its operation shops and katras. Now with regard €o agricultural land, it clearly forms a distinct class by itself and so do properties outside urban areas.\n\nProperties in urban areas have their own pPculiar problems. Futhermore, there is not likely to be much agricultural land within the Union territories of Delhi. With regard to shops and katras, no doubts. 5 of the Act exempts them from its operation. But these also form a class by themselves different from other properties.\n\nA shop of course is essentially a. bussines premises.\n\nWhat a katra is, in not defined in the Act, But it would appear that the primary meaning of katra is an enclosure and the secondary meaning is market: see Karim Ahmed v. Rehmat Alahi (').\n\nIt would therefore be safe to proceed on the basis that a katra is principally a business premises within an enclosure though no dou bt, it also contains residential accommodation. It can be assumed that tpe\n\n(IJ A. I. R. (1946) Lall. 433. .\n\nBhau Ram v.\n\nB. Boijnath Sinth\n\nSarkar J.\n\nBhau 84111\n\nv. 8, Daijnolla Singh\n\nSark1.TJ.\n\ns., u, J.\n\n764 SUPREME COURT REPORTS [1962] SUPP.\n\nresidential accommodation provided is for persons working in the shops in thn katra.\n\nNow clearly in business one hs to work and mix with strangers.\n\nOne has to welcom1• :md associate with, romple. tely unknown persons who d0 not live with the\n\npersons doing the business. In order that business premises may cater to tho needs of the community for which they <•xist, t.hey havo to he open to all.\n\nTo such premises no quetion of any advantage flowing from community living arises.\n\nThey are genPrally properties of great value. It. seems to us that they ran therefore he put in 11 epnratc class. They do not rn'ed the protection of the law of pre-emption in the same way as other properties w0uld do.\n\nFor these rcwons we clo not think that s. 16 can be said to viohtte Art. 14 of tho Consti. tution.\n\nIn the result we hold that the first, third, fourth anOR'i'S 765\n\nin a Survey Number proposes to sell the whole or any portion of his interest to a stranger and the right is given to other occupants in the same Survey.Number: s. 176 ands. 18::. Now a Survey-\n\nNumber is defined as a portion of land recognised as such at the revenue survey in respect of which the area and land revenue payable are separately entered under an indicative number in the land records : s. 2 ( 13).\n\nSub-division of a surveynumber means portion of a survey-number in respect of which the area and the land revenue payably are separately entered in the land records under an indicative number subordinate to that of the survey-number of which it is the portion : s.2(12). Section 184 provides that when an occupant in a survey-number exchanges his interest in it for land elsewhere, then this exchnge would not create any right of pre-emption in favour of the other persons interested in the survey-number, part of or interest in, which is exchanged. The substance of the matter therefore is that the Berar Code creates a right of pre-emption in the holder of interest in a survey-number only when anybody having an interests in any land in that survey-number sells it for a money consideration to a stranger provided that the interest sold is in unalienated land held for agriculture purpose.\n\nIn the present case, the vendor owned subdivision No. 1 in survey-number 285 and the respondents jointly owned sub-division No. 2 in the same survey-number and in that right claimed to pre-empt the sale by the vendor. There is further no controvery that the lands were unalienated land held for agriculture purpose.\n\nMr. Sovani appearing for the respondents said that under the Berar Code of 1928 and under the previous land laws which it replaced, an occupant is one who obtains land from the Government on the terms mentioned in the Code and that it is\n\nlb62\n\nBhau Ram\n\n8. Baijnath Sir1th,\n\nSarkar J,\n\nBhau Ram\n\nB. Raijnotlt Singh\n\nS.rkarJ.\n\n'6~\n\nSUPREME COURT REPORTS (1962) SUPP.\n\nonly against such an occupant that a right of preemption is created by that Code.\n\nHe therefore contended that the right to property being created on the term that it would be liable to pre-emption, it was not a case of restriction but one of the nature of the property itself and therefore no question of infringement of Art.. 19( I )(f) arises by the exercise of that right.\n\nAs in our opinion the respondents should succeed in this appeal for the reasons to be presently discussed, we think it unnecessary to pronounce on this contention of Mr. Sovani. We have besides no materials to show as to when the right of ownership in tho proP, Crty im•olvcd in this case was first creat€d.\n\nIt may have been created under a law. other than the Code or its predeccssorn.\n\nIn that case ;\\Jr.\n\nSovani's argument would lose its principle force.\n\nFurther we have not all the earlier land laws of Berar before us.\n\nJt would not be right on the materials now before. us to investigate and pronounce on the question raised by Mr. Sovani.\n\nIt is clear from what we have earlier stated that the lands included in one survey-number arc contiguous. It is only when an interest in such lands is sold that under the Berar Code a right of pre-emption arises. It would follow inevitably that the result of the exercise of this right would he to effect a consolidation of holdings. Such\n\n11, consolidation would undoubtedly be of a great benefit to the agriculturist and to the oommunit.y as a whole.\n\nThe evils of fregmentation of agricultural holdings in our country are too well known to need detailed discussion.\n\nShortly put it would help an agriculturist greatly if he could extend his holdings thereby making agricultural operation economical and more productive with the resultant benefit to the country.\n\nA law which therefore tends towards consolidation has groat advantages.\n\n3 8.C.R.\n\nSUPREME cotJ:R'i' REPORTS 761\n\n. Ramvhandra Krishnaji Dhagale v. Janardhan K rishrw.ppa llfarwar(l) was a case concerning preemption under the Berar Code and was heard by a Full Bench of the Nagpur High Court.\n\nThe Bench presided over by the present Chief Justice of this Court found no difficulty in upholding thB validity of the provisions in that Code creating the right of pre-emption. With regard to the question of consolidation, Kaushalendra Rao J. observed at p. 232.\n\n\"It is not without significance that while in a part of the State the Central Provincesspecial legislation had to be undertaken for checking the evil of fragmentation by enacting a measure like the Central Provinces Consolidation of the Holdings Act (Act VIII. 1928) no such necessity has so far been felt in Berar presumably because of the operation of the law of pre-empt.ion.'' This observation undoubtedly is of gre'lt authority coming from a Judge of eminence familiar with the conditions in Berar. It has not even been suggested that the observation was not justified. But it was said that the present tendency of legislaon is fix ll. ceiling as to land that can be held by a person and that this shows that consolidation of holdings is no longer considered desirable. We are entirely unable to agree with this view.\n\nThe idea behind fixing a ceiling for holding of land is to make an equit.-ible distribution of the available land possible.\n\nBut this is subject to the idea that each holding should be economical. In other words, the law as to ceiling does not discourage consolidation of holdings but is intended only to prevent undue grabbing of lands by persons with the necessary means to do the same. Section 184 by providing that no right of pre emption wonld arise on the exchange of lands clearly indicates that the object of the Berar Cod\n\n(1) A.I.R. (1955) Nag 225.\n\nBhouRam\n\n•• B, Baijnoth Singh\n\nSa'r/eor J.\n\n19H\n\nBliau Ram\n\nB .. Baijnalh Sin git\n\nSa'1<0r J,\n\n768 SUPREME COURT REPoRTS [1962] SUPP.\n\nin providing for the right of prc-omption is to achieve consolidation of holdings.\n\nW c foci no dou ht that the benefits to :irise out of consolid:ition far outweigh the disadvantages caused by the restriction put by it on the right to property guaranteed by Art. 19( l )(f).\n\nWe, therefore, come to tho conclusion that the provisions in Chapter 14 of the Herar Land Revenue Code creating a right of pre-emption on the sale of land :ire valid and fully within the Constitution.\n\nThis appeal therefore must also foil and we would dismiRs it with coHts.\n\nBY Comrr : In accord:incc with the opinion of the majority Civil Appeal No. 270 of 1955 is allowed ; no order as to costs.\n\nC. A. No. 27 of 1955 ullou:P.d. C. A. No. 430 of 1958 and C. A. No. 595 of 1960 dismissed .", "total_entities": 126, "entities": [{"text": "B. 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{"statute": null}}, {"text": "s. 5", "label": "PROVISION", "start_char": 36546, "end_char": 36550, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 5", "label": "PROVISION", "start_char": 37249, "end_char": 37253, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 37520, "end_char": 37525, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 14", "label": "PROVISION", "start_char": 37549, "end_char": 37556, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 5", "label": "PROVISION", "start_char": 37593, "end_char": 37597, "source": "regex", "metadata": {"statute": null}}, {"text": "XIV of the Berar Land Revenue Code, 1928", "label": "STATUTE", "start_char": 37955, "end_char": 37995, "source": "regex", "metadata": {}}, {"text": "s. 174", "label": "PROVISION", "start_char": 38155, "end_char": 38161, "source": "regex", "metadata": {"linked_statute_text": "XIV of the Berar Land Revenue Code, 1928", "statute": "XIV of the Berar Land Revenue Code, 1928"}}, {"text": "Section 17", "label": "PROVISION", "start_char": 38176, "end_char": 38186, "source": "regex", "metadata": {"linked_statute_text": "XIV of the Berar Land Revenue Code, 1928", "statute": "XIV of the Berar Land Revenue Code, 1928"}}, {"text": "s. 173", "label": "PROVISION", "start_char": 38467, "end_char": 38473, "source": "regex", "metadata": {"linked_statute_text": "XIV of the Berar Land Revenue Code, 1928", "statute": "XIV of the Berar Land Revenue Code, 1928"}}, {"text": "s. 174", "label": "PROVISION", "start_char": 38965, "end_char": 38971, "source": "regex", "metadata": {"linked_statute_text": "XIV of the Berar Land Revenue Code, 1928", "statute": "XIV of the Berar Land Revenue Code, 1928"}}, {"text": "Art. 19", "label": "PROVISION", "start_char": 39085, "end_char": 39092, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19", "label": "PROVISION", "start_char": 39360, "end_char": 39367, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 88", "label": "PROVISION", "start_char": 41208, "end_char": 41213, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 132", "label": "PROVISION", "start_char": 41601, "end_char": 41607, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 174", "label": "PROVISION", "start_char": 43144, "end_char": 43150, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 184", "label": "PROVISION", "start_char": 43400, "end_char": 43406, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19(1 )(f)", "label": "PROVISION", "start_char": 45450, "end_char": 45464, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 14", "label": "PROVISION", "start_char": 45577, "end_char": 45584, "source": "regex", "metadata": {"statute": null}}, {"text": "That is concerned with the Rewa State Preemption Act, 1946", "label": "STATUTE", "start_char": 46226, "end_char": 46284, "source": "regex", "metadata": {}}, {"text": "s. 10", "label": "PROVISION", "start_char": 46314, "end_char": 46319, "source": "regex", "metadata": {"linked_statute_text": "That is concerned with the Rewa State Preemption Act, 1946", "statute": "That is concerned with the Rewa State Preemption Act, 1946"}}, {"text": "s.10", "label": "PROVISION", "start_char": 47192, "end_char": 47196, "source": "regex", "metadata": {"linked_statute_text": "That is concerned with the Rewa State Preemption Act, 1946", "statute": "That is concerned with the Rewa State Preemption Act, 1946"}}, {"text": "Art. 19(l)", "label": "PROVISION", "start_char": 49908, "end_char": 49918, "source": "regex", "metadata": {"statute": null}}, {"text": "Article 19", "label": "PROVISION", "start_char": 49924, "end_char": 49934, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19", "label": "PROVISION", "start_char": 52960, "end_char": 52967, "source": "regex", "metadata": {"statute": null}}, {"text": "Now the Rewa Act", "label": "STATUTE", "start_char": 54453, "end_char": 54469, "source": "regex", "metadata": {}}, {"text": "Section 13", "label": "PROVISION", "start_char": 54732, "end_char": 54742, "source": "regex", "metadata": {"linked_statute_text": "Now the Rewa Act", "statute": "Now the Rewa Act"}}, {"text": "So far as the Rewa Act", "label": "STATUTE", "start_char": 58750, "end_char": 58772, "source": "regex", "metadata": {}}, {"text": "s. 4(i)", "label": "PROVISION", "start_char": 58787, "end_char": 58794, "source": "regex", "metadata": {"linked_statute_text": "So far as the Rewa Act", "statute": "So far as the Rewa Act"}}, {"text": "Tho Rewa Act", "label": "STATUTE", "start_char": 60518, "end_char": 60530, "source": "regex", "metadata": {}}, {"text": "Art. 15", "label": "PROVISION", "start_char": 64761, "end_char": 64768, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 10", "label": "PROVISION", "start_char": 66288, "end_char": 66293, "source": "regex", "metadata": {"statute": 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{"statute": null}}, {"text": "s.16", "label": "PROVISION", "start_char": 73168, "end_char": 73172, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 16", "label": "PROVISION", "start_char": 73904, "end_char": 73909, "source": "regex", "metadata": {"statute": null}}, {"text": "Punjab Act X of 1960", "label": "STATUTE", "start_char": 76357, "end_char": 76377, "source": "regex", "metadata": {}}, {"text": "Delhi rind here the Punjab Prcemption Act", "label": "STATUTE", "start_char": 76411, "end_char": 76452, "source": "regex", "metadata": {}}, {"text": "Art. 19(l)(f)", "label": "PROVISION", "start_char": 76844, "end_char": 76857, "source": "regex", "metadata": {"linked_statute_text": "Delhi rind here the Punjab Prcemption Act", "statute": "Delhi rind here the Punjab Prcemption Act"}}, {"text": "s. 16", "label": "PROVISION", "start_char": 77373, "end_char": 77378, "source": "regex", "metadata": {"linked_statute_text": "Delhi rind here the Punjab Prcemption Act", "statute": "Delhi rind here the Punjab Prcemption Act"}}, {"text": "Art. 14", "label": "PROVISION", "start_char": 77398, "end_char": 77405, "source": "regex", "metadata": {"linked_statute_text": "Delhi rind here the Punjab Prcemption Act", "statute": "Delhi rind here the Punjab Prcemption Act"}}, {"text": "s. 16", "label": "PROVISION", "start_char": 79479, "end_char": 79484, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 14", "label": "PROVISION", "start_char": 79508, "end_char": 79515, "source": "regex", "metadata": {"statute": null}}, {"text": "ss. 173 to 187", "label": "PROVISION", "start_char": 80024, "end_char": 80038, "source": "regex", "metadata": {"statute": null}}, {"text": "ss. 176, 180 and 182", "label": "PROVISION", "start_char": 80294, "end_char": 80314, "source": "regex", "metadata": {"statute": null}}, {"text": "S 765", "label": "PROVISION", "start_char": 80653, "end_char": 80658, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 176", "label": "PROVISION", "start_char": 80820, "end_char": 80826, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 2", "label": "PROVISION", "start_char": 81060, "end_char": 81064, "source": "regex", "metadata": {"statute": null}}, {"text": "s.2(12)", "label": "PROVISION", "start_char": 81335, "end_char": 81342, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 184", "label": "PROVISION", "start_char": 81344, "end_char": 81355, "source": "regex", "metadata": {"statute": null}}, {"text": "Sovani appearing for the respondents said that under the Berar Code", "label": "STATUTE", "start_char": 82288, "end_char": 82355, "source": "regex", "metadata": {}}, {"text": "Section 184", "label": "PROVISION", "start_char": 86218, "end_char": 86229, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19( l )(f)", "label": "PROVISION", "start_char": 86783, "end_char": 86798, "source": "regex", "metadata": {"statute": null}}]} {"document_id": "1962_3_769_794_EN", "year": 1962, "text": "iJ S.C.R.\n\nSUPREME COUR'l' REPoRTS\n\nDHARAM SINGH AND OTHERS\n\nTHE STATE OJJ' UTTAR PRADESH\n\n(J. L. KAPUR, K. C. DAS GUPTA and\n\nRAGHUBAR DAYAL, JJ.)\n\nCriminal Trial-Conviction by Sessions Judge-Appeal to High Court-Dif!ere1'Ce between Judges hearing appeal- Reference to third Judge-Duty of third Judge-If rtoust treat opinion of acquitting Judge as judgment of acguittal-Code of Criminal Procedure, 1898 (Act V of 1898) s. 429.\n\nThe appellants were convicted of offences under s. 302 read with s. 34 and s. 201 read with s. 34 Indian Penal Code\n\nby the Sessions Judge. On appeal to the High Court there was a difference of opinion between the two Judges who heard it and the case was referred under s. 429 Code of Criminal Procedure 'to a third Judge. The third Judge upheld the. convictions. The appellants contended that where a case was referred under s. 429, the opinion of the Judge acquitting the accused had to be treated as a judgment of acquittal and that the third Judge must consider all the reasonsgiven by the acquitting judge and his judgment should indicate the reasons for disagreeing with the opiniOn of'the acquitting Judge. The appCllailts further contended that there were certain circumstances proved by tne evidence on the record which s bowed that the eye-witnesses co!Jld not be relied upon.\n\nHeld, that there was nothing in s. 429 which required the third Judge to whom the reference was made to act as though he was sitting in appeal against acquittal.\n\nHe had to consider the opinion of the two differing Judges and to give his own opinion.\n\nHehl, further (per Kapur and Das Gupta JJ. Dayal J. contra) that the judgment of the High Court suffered from such, infirmitie_s,. as placing the. ontis of proof of certain facts on the appellants and using of inadmissible evidence.\n\nThe case was ftill Of 110 many inCons.iste:nces 'and improbilities and peculiarities that it made it difficult to rely upon the testimony of the eye-witnesses and to hold that the case against the appellants was established beyond reasonable doubt.\n\nPer Dayal J. The circumstances urged by the appellant did not make out a case for interference with the findings of facts 'of the High Court.\n\nMarch 9\n\n198t\n\nDhr.ram sr,, gh\n\n•• Tl.~ Sbte nf Utt41' Pradrh\n\nI. . ' ' . 770 SOl'REME COURT REPORTS [Hl62] SUPP.\n\nCRDtrNAL APPELLA'fll Ju&ISDIG'l'ION: Criminal Appeal N'o. :!:2-! of 1!159.\n\nAppeal by special leave from the judgment aml orer cla.te~ I 959. :May 5 of the Allahabad High Court m Cnmmal Appeal N'o. 1049 of 1958 and Government Appeal No. 1766 of 1958 .\n\n.Jai Gopal Sethi, C. L. Sareen and R. L. Kohli for the Appellants.\n\nG. C. Math'Ur and C, P. Lal for the Respondent.\n\n_ l!W2. March 9. The Judgment of Kapur and Das Gupta, JJ. was delivered by Kapur, J. Dayal, J., delivered a separate Judgment.\n\nKAPl:R, J.-The appellants and Prithviraj Singh were tried by the 8essions Judgt', Hamirpur, tho former for offences under s. 302 read withs. 149 and 8. ~Ol rea-0. withs. 149 and of them some under s. 147 and othurs under s. 148 and the latter under s. 201 read with s. 149 of the Indian Penal Code.\n\nFrom amongst the accused persons Nathu Singh was acquitted and so was Prithviraj Singh but ten others were convicted under s. 302 read with s. 149 ands. 201 read with s. 149 and two of them were convicted undor s. l4i and others under a. 148.\n\nThe Sessions J udgc sentenced the convictd persons to imprisonment for life under s. 302 read with s. 149, to three years' rigorous imprisonment under s. 201 read with ~. 149, two of them to two years' rigorouH imprisonment under s. 14 7 and others to three yoars' rigorous imprisonment under s. 148 but all the sentences were concurrent. Against that order the convicted persona took an appeal to the High Court at llahabad and te 8tate appealed against the acquittal of Nathu Smgh and also applied for enhimcement of sentences against the convicted persons. The High Court dismissed the appeal of the convicted persons and allowed tho :ippeal against N'athu Singh.\n\nThus H persons wre convicted and sentenced to 1mprisolllllent for life\n\nand to other concurrent sentences and they have appealed to this court by special leave.\n\nThe appellants a.nd Prithviraj Singh are residents of village Kharela and they were on terms of enmity with the deceased Baja Ram Singh. On July 28, 1957, at about 3-30 p.m. thii appellants collected in front of the house of Kali Charan appellant, two of them armed with lathis, two with pharsas and seven of them had spears. Dharam Singh appellant asked Raja Ham Singh as to why he had been abusing him to which the reply given by Rajaram Singh was that he was not in the habit of abusing any body at his back and if he felt like abusing imy body he would do so to his face and he fixed his spear in the ground and stood there. Appellant Dharam Singh threw away the spear, rushed towards Rajaram Singh, caught hold of him by the waist and asked his ten companions to beat the enemy. Rajaram Singh was thereupon attacked with various weapons as a result or which he fell down severely injured. He was still alive when appellants Sheo Rattan Singh and Gulab Singh struck on his neck with pharsas and partially severed it.\n\nAt the instance of nharam Singh, his cart was brought by others and Prith viraj Singh also arrived at the spot. Dharam Singh asked him to go home and bring his (Dharam Singh's) gun which Prithviraj Singh did and handed over the gun and the bandolier of cartridges to Dharam Singh who loaded the gun, put the dead body of the deceased on the bullock cart and the ten accused persons then took away the dead body from the village and it is alleged that they left it in a nullah near village Jataura.\n\nThere is a poiice post in the village of which Head Constable 6hivsewak Singh is incharge and. there is also an armed gimrd there. At 345 p.m.\n\nShyam Lal who is the brother-in-law (wife's bro-. ther) of Rajaram Singh made a report at the police\n\nD/11wam Singh\n\nTheSte'e of Vtiar Pradesl\n\nK\"pur J\n\nlllaatam ingh\n\nv. 1 J,, Stall•!\n\nUttar Protl1sli\n\nKo/JUI' J.\n\n772 SLJP.REME.COU.RT BEPOR:fs (1962] SUPP.\n\npost and at 7 30 p.m. he made a report at tho police station Muske.rs .which is 8 miles a\\\\ay from village Kharela.\n\nThis occurrence was witneSBed b.v five persons P. W. Babu Singh.\n\nP. W.\n\nShivnath Singh, P. W. Ram Narain, P. W.\n\nMulain Singh and P. W. .Brij Rani.\n\nWhile the corpse was being taken in the bullock cart three witnesses deposed to having seen it being carried in the cart. The>y are Ram Nath P. W. 21, Tiji\\\\a P. W. 22 and Jurhan P. W. 23.\n\nIn the High Court the appeal was heared in the first instance by Cak and Verma JJ. There was a difference of opinion between the learned judges and the matter was referred under s. 429, Criminal Procedure Codo to Desai J., who agreeing with Cak J., upheld the conviction of the ten app ellants who were eonvioted by the Sessions Judge and set aside the acquittal of Nathu Singh. Thus 11 persons were convicted and they have appealed to this court by Special Leave.\n\nIt W!Ml contended on behalf of the appellan~ that under s. 429, Criminal procedure Code, where tli.ore is difierm;1co of opinioµ botween the judges\n\nconstitutng .a Divisio, n Bench and the mattr is referred to a third judge the opinion of the Judge acquiting the acoqsec; l has t• • be treated in the samo\n\nmne, r as the judgo; iept of acquittal by the trial con.rt and evfn though it may not be no.ceSBary to find compelling reasons for disagreeing with the opinion of the e.cquiting judgo it is necessary that the judgment should show that all the findings and the reasons give, ll ii:i the opinion of the acquitting judge are mon tioned in the opinio1;1 oft.he third judge and the judgment should indicate the reasons for disagreeing with the opinion of the aoquitting Judge. We ca.n see no warrant for this contention.\n\nSection 429 of the Criminal Procedure Code Provides:\n\n\"When the Judges coillposing the Coutt of appeal are equally divided in opinion, the case, with •their opinions thereon, shall be laid before another judge of the •same Court, and such Judge, after suoh•hearing (if any) as he thinks fit, shall deliver his opinion, and the judgment or order shall follow such opinion\" .\n\n.All it says is that the opinion of the two judges who disagree shall be laid before another judge who after giving such hearing, if any, as he thinks fit, shall deliver his opinion and the judgment or order should be in accordance with such opinion. Now it is obvious that when the opinions of the two Judges are placed before a third Judge he would consider those two opinions and. give his . own opm10n and the judgment has to follow the opinion of the third judge.\n\nConsequently on that opinion is based the judgment of .the court.\n\nFor all practical purposes the third Judge must consider the opinions of his two colleagues and then give his own opinion but to equate the requirements with appeals against acquittalR is not jnstified by provisions of s. 429 or by principle or precedent.\n\nDesai J., was of the opinion that the eye witnesses had seen the occurrence and their eviden-ce must be accepted but there are certain circumstances proved by the evidence on the record which when considered materially affect the force of the finding in regard to oral evidence and which have to be considered in order to adjudicate on the correctness or otherwiB'e of the prosecution case. The first point is whether the murder was committed in the village as is submitted by the prosecution? .According to the prosecution tho murder was committed in the village at 3-30 p.m. in the month of July in broad daylight on a public road and: the number of injuries caused to Rajaram Singh are such that th'er~ !l\\JlSt\n\nD\"\"\"~'Sinth\n\n\"' Th~ sf ate of Ultar 'Pradetli\n\nKapur J,\n\n195!\n\nOhmen Singh\n\nThi StaJ• of U tiar ProJ1sh\n\nKapur J,\n\n774 SUPREME COURT REPORTS (1962] SUPP.\n\nhave been a fi.ir amount of blood spilt at the place. According to the prosecution evidence after the murder was committed Dha.ra.m Singh sent for his bullock cart which must necessarily have ta.ken a. little time. Meanwhile Babu Singh P.W. went and informed Shyam La.I who went tu make a report at the police post in the village. It is stated to be about 4 furlongs away. [t is contended by the appellants that if the murder bad taken pla<>e as stated and them wstimouy of those witnesses which the learned Judge does not seem to hav<' considered it is difficult to place any reliance on their evidence.\n\n' I\n\n3 s.c.k.\n\nSUPREME dotJRT REl?oR.i's 7s3\n\n-The whole case is full so many inconsistencies and improbabilities and peculiarities that it must be said that the case has not been estabilished against the appellants beyond reasonable doubt.\n\nWe are opinion that the High Court's failure to consider the important circumstances disclosed by the evidence, and the error in wrongly placing onus on the accused has resulted in miscarriage of justice. The case therefore falls within the rule laid down in Pritam Singh v. Stat, e (1) and calls for our interference .\n\nIn these circumstances the conviction of the appellants must be set aside and the appeal must be allowed. The appellants are acquited & must be released forthwith unless required in some other case.\n\ni962\n\nDhoram Singh\n\nThe Slate of Utt1r Prodtsh _.,..\n\nKopur J.\n\nRAGHUBAR DAYAL, J.-l have had the ad van• Boghubor Dt; Y:I , tage of perusing the judgment prepared by my learned brother Kapur, J.\n\nI agree with the interpretation of s.429, Cr.P.C.\n\nI am, however, of opinion that the circumstances urged for the appellants do not justify interference with the verdict of the High Court on questions of fact.\n\nThey have all been considered by Desai J., in forming his opinion. He has relied on the statements of the eye-witnesses. -\n\nIt is argued for the appellants that the 0ircumstances tend to throw doubt on the correctness of the prosecution story that the incident took place insidn the village abadi and that therefore the appellants' conviction should be set aside.\n\nThe first circumstance is that the incident took place at 3.30 p. m., information about it reached the police outpost four furlongs away at 3.45 p.m., the armed guard at the outpost then proceeded to the spot and yet it is said that the\n\nc11 [lil50J s.c.R. 453.\n\n19H\n\nD\"-'•m Singh\n\nThe Stott of Ullar-Prodt•h\n\nRaghub<-r LO.JOI J.\n\n784 SuPREME COURT REPORTS [1962) SUPP.\n\nacused \"ould rmove the dead bcdy fr0m the spot\n\npnor to the arnval of the armed guard. The getting of the bullock cart and the loading of the corpse would have taken sufficient time and the arrival of th<; armed guard could have been within that time.\n\nIn this cnnnection, it is to be noticed that Babu Singh, P. W. I, an eye-witness, left the spot after the body had been removed on the cart. It was he who informed Shyam Lal about the incident. Thereafter, Sh yarn Lal left for the police outpost. Babu Singh states :\n\n\"After the cart left. I ran to the house of Raja !tam Singh. There we met Shyam Lal. ..\n\nI told hyam Lal all what I witnessed. He went to tho police outpost to mako a report and I went home.\"\n\n'I he first information report was lodged at the thana at 7-30 p.m.\n\nIt mentions the fact of the dead body being taken away on the cart. In view of this fact it is clear that the armed guard could not have reached the spot in time to prevent the removal of tJie corpse.\n\nAnother fact against the circumstance urged is that tlic incident did not take place at 3.30 p. m., which was really the time when Babu Singh informed Shyam Lal. Shyam Lal dictated i.t1 the first information report :·\n\n\"At about :l.30 p.m., Babu Singh.\".. came to my house and informed me as follows ... \".\n\nThe incident therefore must have started much earlier, say at about 3 CYolook and the body must have b{,>en removed by about 3.25 p.m . • The other circumstance urged is that no bloodstained earth was found at the spot and that therefore this throws doubt on the incident having taken\n\nplace at the spot alleged. It is in the prosecution evidence the.t some of the accused washed the\n\nground where blood . had fallen and plastered it.\n\nAccording to the SubInspector, P. W. 27, bloodstained earth was taken in possession from the door of the accused Kalicharan Singh, which really means, from the front of his house. Siya Ram,\n\nP.W. 26, stated that a few places in the Cha.butra where blood stains were detected were scraped and that the stains were on the walls of the Chabutra.\n\nThe recovery list Ex. K-29 mentions :\n\n\"blood stained earth was scraped from in front of the house of Sri Kali Charan, son of Bhan Singh, Thakur, and from . the 'Chabntra' (platform), whereon there appeared to be some stains of blood.\"\n\nBlood stained earth from the place where the dead .body was recovered was also taken in possession.\n\nThe two samples of earth so taken in possession were sent in different packets to the Chemical Exa.miner who found them stained with blood. The Serologist could not determine the nature of the blood due to disintegration. In view of this evidence, it cannot be said that no bloodstained earth was found at the alleged spot.\n\nFurther, Raziuddin, P.W. 17, who went with the armed guard to the spot stated ;\n\n\"When at first I visited the house of Kali Charan I had noted that in front of his house there were indications of the waohing of the ground at places. It appeared that somebody had removed things from that place with hands and legs by spreading water at\n\ndifferent places.\"\n\nThis supports the statement of the other witnesses a.bout the washing and plastering of the spot.\n\nSub-Inspector Basudeo, P.W. 27, stated that when he reached the house of Kali Charn at about 11 p.m., he noticed that outside it some water\n\n190:!\n\nDharam Singh\n\nThe State of l'ttar Pradesh\n\nRaghubor J?ayal J.\n\n. 6t\n\nDlu6om Singh\n\nTht Stalt of Uttar PrtJtltJ.'i\n\nRag/, ubar Datal J.\n\n186 SUPREME COURT REPORTS (1962] SOPP.\n\nappeared to be lying and at places it appeared that the ground had been washed with hand and water.\n\nIt is true that the night was dark and he did not carry out the local inspection due to want of a suit able light.\n\nBut these facts can hardly affect his testimony. He could not have mistaken the nature of the witneBB and should have been able to distinguish whether it was from water or from blood. The witneBB of the ground is not to be doubted even though about 8 hours had elapsed since the washing took place.\n\nRaziuddin has deposed that there had been rain-fall two days earlier. The incident had taken place on the 28th of , July. The ground could have been wet from before and fresh washing could have wetted it more. In fact, the more the spilling of blood, the more would have been the water used to wash it away.\n\nAnother circumstance urged is that no trail of blood was noticed betweon the village and the actual place where the dead body was recovered, a distance of over six miles.\n\nThe corpse was laid on the planks of the cart, They got blood-stained.\n\nAny dropping of the blood from the cart on the track would have depended on the extent of the flow of blood and on the openings between the planks. It is not expected that blood would have fallen in a continuous stream. Some drops could have fallen down at places. They could be easily pressed upon by the accused's feet, some of whom would have been walking behind the cart. The armed guard and others who followed the cart in pursuit were more concerned wit, h the following of the marks left by the cart than with noticing some minute drops of blood which might have fallen here and there on the track.\n\nAbsence of blood on the paSBage, therefore, cannot discredit the prosecution case.\n\n3 S.C.R.\n\nSUPREME OOURT REPORTS 7s1 ·\n\nWhen the cart was produced in Court, it had one of the bullocks used at the time when the corpse was removed and another bullock substituted for the other one. Much has been made of this change in the other bullock. The Sub-Inspector has stated in his evidence. \"I had entrusted the recovered bullockii and carts to the custody of Binda Lodh.i of village Kharedi. One bullock which is white iu colour could not be brought here as it is suf(ering from small-pox.\"\n\nThe questions put to tbe accused mentioned the allegation about the other bullock suffering from small-pox and in their replies this fact was not denied. The police was not in charge of the cart and the bullock and explanation has been given for . not producing the other bullock in Court. This circumstance too cannot therefore affect the correctness of the prosecution case.\n\nIt has also been urged that the carts and bullocks found near the dead body were not put up for identification by witnesses. Desai, J., has rightly observed that when witnesses could recognize the cart and bullocks there could be no point in having the cart and bullocks formally identified before a Magistrate. Only such articles and accused are put up for a test identification as are not known to the witnesses. Those known are never put up for identification. The statements of the witnesses who recognized them are judged from other circumstances.\n\nFurther, the evidence about thP. ownership of the cart was only by way of corroborating the statements of the prosecution witnesses.\n\nAny cart which could be available to the accused could be used for the purpose of transporting the dead brn; ly.\n\nTijwa, P. W. 22, stated that Arjun Singh, accused, stopped the cart about a mile from the village abadi when he was returning home from his\n\n196t\n\nDharam Singh\n\nTht. State of Uttar Pradesh\n\nlioghubat Dayal J,\n\nDliaram Singh\n\n•• Th< St.11 of Utlt11 ProtlesA\n\nRo.r; huhar Dtf'°' J •\n\n788 SUPREME coun:r REPORTs (1962] SUPP.\n\nfields and replaced the yoke of the cart with that of Tijwa's as the former had brokPn. It is urged that the absence of c\\ideuco with rnspect to what happened to the broken yoke and how the cart' of Tijwa reached the village, import:tnt circumstances, had not been noticed by the High Court in its judgment.\n\nThese circumstances cannot. he said to be important.\n\nIn fact, they were very remotely relevant to test the veracity of Tijwa. Tijwa was not cross-examined about it. He stated that the broken yoke wa.~ also taken away in tho cart of Arjun Singh. It should follow th; i.t Tijwa's cart remained on the\n\npassage till its owner i\\Iahadev Brahmin could have brought it bauk.\n\nIt may be mentioned that the recovery memo, Ex. K. 22, did not mention about tho finding of the l, Jroken yoke in the cart. The broken yoke is said to have been tied with a towel. It might have been that the accused had removed the towel and thrown away the broken pieces. '.j'he police party had no knowlodge about the broken yoke when the cart was recovered and could not therefore have looked for the broken parts. It may equally bo that the broken yoke was used hy Tijwa. His\n\ncart had to go a much smaller distance that the cart which took the dead body to the nah. When the accused starwd with the cart they expected the broken yoke to serve tho purpose of driving the cart to the nala and bac!,. It was just accident that they happened to meet Tijwa on the way 'and borrowed his yoke.\n\nHowever, I consider these matters very insignificant in a3sessing the correctneBB of the prosecution case.\n\nAnother matter severely commented upon for the appellants is the conduct of Sheo Sowak Singh, P. W. 20, Head Constable, Kbarcla Police\n\nOutpost, and the Investigating Officer, Basudeo, P. W. 27, mainly on account of the absence of entrica in the duty register of the outpost a bout\n\nSheo Sewak Singh's return there at about 4 p.m., and about the Sub'.Inspector's visit to it at about 11 p.m., on 28th July.· The Sub-Inspector has stated:\n\n\"It is not necessary to make any arrival and departure (entry) at police out-post Kharela, when I visit that p9st in the record of that outpost.\"\n\nThe statement is with reference to making an entry about his arrival and dparture. He further stated:\n\n\"I did not make any entry of my activities in the night between the 28th and 29th July 1957, in the record of police out-post at Kbarela nor it was necessary to note them there.''\n\nAnd again:\n\n\"Entries are made in the record at Kharela outpost about the duties allotted to the staff during duty hours.\"\n\nSheo Sewak Singh, P.W.20, deposed:\n\n\"I do make entries in the recordH at the police out-post Kharela about my arrival there and also about my dC'parture from that post.\n\nThese entries are made in the general diary by way of allotment of duty.\"\n\nSheo Nandan Singh, P.W.19, Constable at that outpost, stated:\n\n\"This (Ex.K-5) is not a general diary in which cases are registered and entered. It is a register in which duties that are allotted and the Amad and Rawangi of the police staff are noted. ·\n\nWhen the Sub-Inspector attached ., o Mus- )rara co:mes to the police out-post at Kbarela\n\n' ' , . \"'\n\nDharam Sirigh\n\ny, The St•le of UltarPrmksh\n\nRaghubar D•Jal J,\n\nDharam Singh v.\n\nThe S1alf. o/ Uttsr PraUsh\n\nllaghubar na_, al J.\n\n790 SUPREME COURT REPORTS (1962) SUPP.\n\nhP notes his arrival and departure in tho register kept at police outpost Kharcla. No entry of his arrival and departure is made in the register in the night between the 28th and 29th of July l!l5i.\"\n\nPolice officers do write their arrivals and departures in the general diary at the police station and may also be doing so at the out-post duty registers, if '3heo Nandan Singh's statement is to be preferred to the stat.Pmonts of tho Sub-Inspector and the Head Const.able.\n\nBut even then such C'ntrics arc usually made when the :trrival of an outside police\n\nofficer is in connection with some work at the outpost. A casual visit on his way to another spot\n\nmay not be required to Le noted. Similarly, the return of a member of the police force at t.he outpost would be' nl'ted when he finally returns to duty.\n\nHis mere return to his quarters at the outpost may not he noted. Any way, any omillfion to make an entry the duty register at the out-post is not to rliscredit the entire prosecution evidence about the incident. and the course of the investigation. .\n\nAfter the recovery of the clead body, i:'umera, Chowkidar, was sent. to Police Station Charkhari, in whose jurisdiction the dead body was founcl.\n\nHo lodged a report thne at 3 a.m., and stated in it wh; it lrnd taken place earlier.\n\nRt\\m Autar Dixit, P., V.14, the then second officer at Thana Charkhari, went to the spot, took in possession the dea is based on the evidence of Tijwa and .other witnesses and not on the omission of the accused to state as to whom they belonged.\n\nDesai, J., as certainly wrong in using a note in the site plan when. the subject matter of that note was not deposed to by any \\\\· it.ncss iu Court, hut this error with respect to the notn that thtJro were fresh marks of a cart in the cart enclosure of Dharam Singh had no signific:ant bearin!( on tho case. . '\n\n, I\n\nIn connection with Sumera's Report at Police Station Charkhari, Desai, J., observed in his judgment:\n\n\"Neither H.C. Sheo Sewak nor P.C. Raziuddin nor the armed guard had any interest in concocting a false case against the appellants on their own.\n\nTherefore, when the information was conveyed through Sumera Chaukidar that Kharela police had gone in search of the murderers, it must be accepted that information was received at the out-post at about 3-45 p.m. about the murder 'in the Abadi and that the out-post police went at once in search of the murderers.\n\nIn other words the murder must have been committed in the Abadi and in day time as deposed by the prosecution witnesses.\" Earlier, Desai. J., had said what Sumera had informed at th<'l Police Station. He said :\n\n\"Sumeri't reacµed the police station at 3 a.m., met the second officer and informed him that constables of police circle Muskara went to his house in Jataura. and told him that Raja Ram Singh was murdered in Khare la, that the murderers carried away his corpse in a bullock-cctcd thie contention and has held that no ovideacu had been adduced to prove such a malafide intontion on the part of the appellant.\n\nIt was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been curried on by utilising a substitute, 'lnoRTS [1962] SUPP.\n\nIt is also not in disp!Jfo that if the lay.off is\n\nmal1lido . in ihe sense that the employer has dcliboratcly and maliciously brought about a situation where laj off became nocl'ssary, then it would not bn a lay-off which is justified under s. :?(kkk) and the relief provided to the laid-off workmou under s. 25C would not be the only relief to which they are entitled. Malafidee of the employer in declaring a lay-off really mean that no lay-off, as contemplated by th1~ definition, has iu law taken place and so, a finding as t-0 malafides of the employer in declaring a lay-off naturally takes the\n\nlay-off out of ihe definition of s. 2(kkk) and as such s. 25C cannot be held to be applicable to it so as to confiw., the workmen's right to the compensation therein prescribtiran, in Bihar. The fir8t respondent is tho Assistant\n\nRegistrar, Co operative Societies, :\\Totihari Circle,\n\nlot!httri, in the Stat.c of Bihar; the sncond respon. dent is the Union of Co-operative Societies, and is registered unc;!er the Ribar and Orissa Co-operative Societies Act ( B. & O.\n\nAct VI of I !135) (to he referred to hereinaftl•r a~ the Act); the third respondent is the State of Bihar.\n\nOn August 14, 1961, respondent No. 2 made a reference under s.48 of the Act, against the appellant, claiming the sum of Rs. I,~0,809;'- odd, as commission and interest for supply of sug11rcane during the crushing season I 9ii\\J-fi0.\n\nThe said reference W'.!B registered by the first respondent as Award Caso Xo. IOI of l9fH, on August 17, 1961. otice of the said reference was issued to tho appellant. On Septcmbor 26, 19fil, the 1Lppellant took a pr .. liminary objoetion to the jurisdiction of the first respondent. to entert1iin the reference and to adjudicate upon it, and prayed that the reference be reject erl.\n\nThe fir8t respondent, following a decision nf the P:itna High Court, reported in Union of hulia v. Rertistmr, Co-operative Sor.ieries, Pril.na ('), overrule an.d clcfend suits, etc. under s. 15, a registered socioty shall rcceho deposits and Joano from members and non-members onlv to such extent and under such conditions as may be prcscribcict.ies and their memht'rs in thnir i with one m10thor.\n\nJt is only in exceptional casps of borrowing\n\n3 S.C.R.\n\nSUPREME COURT REPORTS\n\nSOJ\n\nby a registered society from non-members, in accordance with the rules and bye-laws prescribed by the comp)tont authority, or in case of loan to a non-member under the provisions of s. 16, that there could be dealings between registered societies and non-members, keeping aside the cases of sureties of members, who may be nonmembers, but who also come within the purview of dealings between a society and its members.\n\nSuch were the relevant provisions of the Act when it was amended by the Bihar Co-operative Societies (Amendment) Act, 1942, and the Bihar Co-operative Societies (Amendment) Act, 194!, enacted by the Governor of Bihar in exercise of the powers assumed to himself by the Proclamation dated November 3, 1939, issued by him under s. 93 of the Government of India Act, 1935.\n\nFor our purposes, it is only necessary to notice some of the amendments made by the amending Act of l 944 (Bihar Act X of 19H). By s. 2, cl. (c) of s. 2 of the Act of 1935 was substituted in these terms :\n\n\"(c) 'financing bank' means a registered society the main object of which is to make advances in cash or kind to other registered societies or to agriculturists who are. not members of registered societies or to both such societies and agriculturists.\"\n\nBys. 3, s. 16 of the Act of 1935 was amended by adding su b-s. (3) to s. 16, as under :\n\n\"(3) Where the Registrar has accorded sanction to a financing bank under the provisons _of sub-section (l), a registered society whwh 1s a member of such financing bank may, subject to the terms of the sanction and such other terms and conditions as may be prescribed by the R.egistrar, act as agent for the fi'; lancing bank and as such agent carry out, with or without any eomillission, al\\ or\n\nThe Sugauli SuglV IV or ks( Private( Ltd .\n\n•• The Asstl, Registr.1r, Co--operative Societie1.\n\nSinha C.J.\n\nThi Sug01'1i Su1cr w., qp,;,.,,) Lid.\n\nv. rne A•Jtt. R1gi.1tto1 Co-opertltiot Societies:\n\nSi,1ha C.J.\n\nany transactions oonnected with loans or advances made or to he made by the financing bank.\"\n\nA consequential change was made in s. 23 of tho Act of rn:J5, by inserting s. 2:J.A, so as to make a debt or an outstanding demand to a rocristorod society from a non-member a first charg; on the property of the non-member. The most import.ant amendment .was made bys. r., in s. 48 of the main Act as follows :\n\n\"6. In sub-section (I) of section 48 of the said Act-\n\n(a) after clause (d), the word \"shall be inserted and theroafter the following clause shall he inserted, namely :-\n\n\"(e) between a financing bank authorised under the provisions of sub-soetiou (I) of section 16 and a porson who is not. a member of a registered society;\" and\n\n(b) in Eplanation (1), after the words \"from a mcmher,\" t.he word \"non-member\" shall be inserted and after tho words \"of a deceased member\" t.he words \"or non-member\" shall be inserted .\n\n. It is not necessary to refer to the other consequential amendment3' made and the addition of a now chapter 7 A, relating to the manner of recovery.\n\nThe amendments effected by the amending Act of\n\n1944. had been enactd by the Governor of Bihar in exorcise of his spodal powers aforesaid. The pro visions of those amendmentR were re-enacted as Act XVf of 1948.\n\nWe would, therefore refer hereinafter to the amendments in q1wst.ion as the\n\namendment.~ of I !l48.\n\nAs already indicated, 1t Division Bench oft.hi Patna High Court bas laid it down, in the ease of\n\n3 S.C.R.\n\nSUPREME COURT REPORTS SU\n\nUnion of India v Registrar, Co-operative Societies.\n\nPatna (') that the Explanation to s. 48( l) of the Act covers a claim by a registered society for any debt or demand from a non-member, and that, therefore, the claim of a registered society against the railway company for compensation for short supply is a dispute within the ambit of s. 48 of the Act, and that, therefore, the AsBistant Registrar, Co-operative Societies, had jurisdiction to determine the dispute under s. 48{2) of the Act. Relying upon that decisi:on, the High Court dismissed the appellant's petition under arts. 226 and 227 of the Constitution, in limine.\n\nThe appellant has questioned the correctness of that decision. The question, therefore, is whether the High Court has taken a correct view of the provisions of s. 48, the relevant portions of which are as follows:\n\n\"48 ( 1) If any dispute touching the business of a registered society ... arises- ( a) amongst members .. past members, persons claiming through members, past 'members or deceased members, and sureties of members, past members or deceased members whether such sureties are members or non-members; or\n\n(b) between a member, past member, persons claiming thrflugh a member, past member or deceased member or sureties of members, past members or deceased members, whether such sureties are members or nonmembers, and the society, its managing committee or any officer, agent or servant of the society; or\n\n(c) ....................... .\n\n(d) ....................... . ( e) between a financing bank authorised under the provisions of sub-section (1) of \\!) (1961) I.L.R. 40Pat. 7.\n\nThe Sueauli Sugar Works (Private) Ltd, . ..\n\nThe Ass tt. Registrar Co-operative Societies.\n\nSinha C.J.\n\nJ96Z\n\n7h1 Suga\"H S11gar lfor1.t(Pri1 1olt) I.Id.\n\nTht Asltl. ll1gis11~'•\n\nJo.op1raJit't Socittits.\n\n1'-Jinha c .. J.\n\n812 SUPRR\\IE COURT REPORTS [1962] SUPP.\n\nsection 16 and a person who is not a member of a registered Hociety ; 811ch disputes sh!i-ll be referrrcl to tho Regis trar.\n\nExplanation I -A claim by a ro2ister<>d society for any debt or demand due to it from a member, non-membor, past member or the nominee, heir or legal representative of a deceased member or non-member or from sureties of members, past members or deceased members, whethersuch surctie~ aro members or non-members, shall be a dispute touching tho business of the society within the meaning of this sub-section even in case such debt or demand is admitted and the only point at issue is the ability to pay or tho manner of\n\nenforcement of payment . .. . . . . . . . . . . . . .\n\n(H) Save as expressly provided in this section, a decision, of the H.cgist.rar under this seotion, anrl subject to the orders of the Registrar on appeal of review, 11 dec:ision given in a nlarged the scope of the main s. 48( I) so as to make all kinds of disputes between a registered society and a non-mt>mber cognizable by the Hegistra.r. thue excluding the jurisdiction of the ordinary courts.\n\nIn the instant case, it is manifest that the disput-0 is between a registered society, the second respondent, and the appellant, a nonmember, in respect of the claim for commiBBion a.nd interest thee on for supply of sugarcane, and the appellant alleges that it has a counter-claim of a lakh and fifty thousand rupees for short and irregular supply of sugarcane against that respondent. These are matters which, in our view, are wholly beyond the purview of s. 48 of the Act, when it is remembered that the second respondent is not a financing bank\n\nand that the appellant is not an agriculturist to whom any advances in ca.h or kin Co. moved the High Court of Bombay at Nagpur by a writ petition under Art. 2'1li of the Constitution and it prayed that an appropriate writ should bu isAued re8training tho Commissioner from enforcing the relevant provisions of the Act against it.. This writ petition has been allowed and an appropriatt! writ has been issue.d as prayed for by the Co.\n\nIt. is against this order that the Regional Commissioner has comll to this Court with 'a cc>rtificate granted by tho High Court. For convenience, the Regional Provident Fund Commissioner would hereafter be referred a.~ the appellant and the i:-hreo Krishna l\\Ictal Manufacturing Co. would be called the Company.\n\nThe Oudh Sugar lllilb Ltd. which is respondent in C.A. No. 387 of i\\Jii\\l, is a public limited company registered under the Indian Companies Act. It carries on the business of manufacturing hydrogenated vegetable oil named \"Vanasada\"\n\nand its by-products, such as soap, oil.cakes, etc.\n\nThis business is carried on at Akola. under the name and style of 'Berar Oil Industries'. The Mills commenced manufacturing its products on the 11th October, 19~8. It also manufactures and .Markets vegetable oil after completing all the processes at Akola. The oil is then tinned in tin containers of certain sizes.\n\nThe said tin containers a.re fabricated by the mills in its own precincts of the oil factory. These tin containers a.re used only for the purpose of packing vegetable oil and for no other. They are not sold in the market nor aro tho customers of oil chargerl separate prico\n\nfor the tins. The \\\\ ork of fabricating these tiaH\n\nbegan on the 13th October, HHS. In this section of the Works only 31 workmen are engaged, while in the Mills 1roper 211 workers \\\\ere working on tLc ma11ufac1u1; e of vii a.1.d ita l .1 f, J c LUds c, J, tJ, c Jst of November, 1952. ·\n\n3 S.C.R. st:J:PREME COURT REPORTS 8Hl\n\nThe Central Government framed a scheme under 5 of the Act and this scheme came into force partly on 2.9.1952 and partly on 6.10.1952. Under this scheme, an employer is required to contribute 6-1/4% of the total wage bill every year as his contribution towards the Fund and 3% as the administrative charges on the total contribution of the employer and his employees.\n\nOn the 8th of August, 1955, the Regional Commissioner called upon the Mills to deposit its contribution and incidental charges as required by the scheme.\n\nThe amount thus required to be deposited was of the order of Rs. 34,000/-.\n\nThis deposit is required on the basis that the whole of the factory run by the Mills is a factory under s. 1(3)(a). The Mills declined to make the deposit on the ground that it was not a factory to which the Act applied. The Regional Commr. then threatened to take proceedings against the Mills for the recovery of the said amount under section 8 of the Act.\n\nAt that stage, the Mill moved the High Court of Bombay at Nagpur by a writ petition and its writ petition has been allowed by the High Court. In the result, a direction has been issued restraining the Regional Commissioner from enforcing the provisions of the Act against the Mills. It is against this order that the Regional Commr. has come to this Court with a certificate granted by the High Court.\n\nFor the sake of convenience, the Regional Commissioner will hereafter be called the appellant, whereas the Oudh Sugar Mills Ltd. will be described as the Mills.\n\nThe appellant contends that the High Court was in error in coming to the conclusions that the company and the Mills did.not constitute a factory as defined by s. 1(3}(a) of the Act.\n\nSection ,1 (3) at the relevant period read thus:\n\n\"Subject to the provisions contained in section 16, it (i.e., the Act) applies in the first\n\n196S\n\nThe RezionaZ Provident Fund\n\nCommitJinner,\n\nBomba7\n\n•• Shree Krishna Meta/,\n\n11 anufactraint Co.,\n\nBh1ntlara ' -- Gojendragodkor J.\n\nrll t'•iarcal\n\neni'Fzu:rl iJJions1, nnhay\n\nv. irhna Mttal Oc1uri111 Co. , •ndara\n\n1aga,!ar J.\n\ninstance to all factories engaged in any industry specified in Schedule I in which fifty or more pcrRons are employed, but tho Central Government may, after giving not less than two months' notice of its intention tto to do, by notification in the Ollicial Gazett-0, apply the provisions of thiH Act to all factories employing such number of persons less than fifty as may be specified in tho notification and engaged in any such industry.\"\n\nAs a result of the amendment made in 19ii6, section 1(3) has become 1(3)(a) and so, it is referred to as such.\n\nBefore construing thiR clause, it may be relevant to remember that tho Aot was passed to provide for the institution of provident funds for employees in factories and other establishments.\n\nThe object of the Act, broadly staged, is to bring into exist-enco a scheme to bo called \"Tht' Emploj ees' Provident, Funds Scheme\" for the establishment of provident funds under the Act for employees to whom its provisions apply.\n\nThis object is specified by s. 5 of the Act.\n\nSection 6 provides for the contributions to be made by the employers and s. 9 recognises the Fund constituted under the Act for the purpose of income-tax. Section 10 affords protection against attachment in rnspect of the amount standing to the credit of any member in the Fund and s.11 prescribes for priority of payment of contributious over other debts.\n\nIn other words, the provisions of tho Act constitut.. a welfare measure intended for the benefit of the workmen to whom the Act applies, and thiR beneficent purpose cf thu Act has to be borne in mind in construing the relevant clause with which we are concerned in the present appeals.,\n\nThe first question which calls for our dcoiRion is whether s. l(:i)(a) excludes oomposite factories\n\nf I '\n\nfrom its scope. It has been urged before us on behalf of the respondents that composite factories are not intended to be covered by s. 1 (3 )(a). It is only factories which are exclusively engaged in any\n\nindustry specified in Schedule I to which the Act applies, provided, of course, they satisfy the other test that there are 50 or more persons employed in them. This argument is based on the fact that when the Act was originally passed in March, 1913~, the Legislature had provided for only six industries in Schedule I.\n\nThe intention of the Legislature was to extend the benefits of the Act to the workmen industry-wise step by step. The Legislature wa.s conscious that the relevant provi sions 'of the Act imposed a burden on the employer and so, it took the precaution of confining the operation of tbe Act only to six important industries specified in Schedule I. Section l (3) (a) no doubt confers power on the Central Government to extend the provisions of the Act to other factories\n\nby issuing a notifications, as contemplated by it ; and so, whenever the Central Government comes to the conclusion that the benefits of the Act shC>uld be extended to workmen engaged in additional categories of factories, it could exercise its power in that behalf and by issuing a notification, bring within the scope of the Act such factories.\n\nBut this has to be done factory-wise in the sense that it has to be done by reference to the factories engaged in industdes included in Schedule I and that shows that. it is only factories exclusively engaged in the said industries that are included within the purview of s. J (3) (a).\n\nIn our opinion, this argument is not welt. founded.\n\nThe expression \"all factories engaged in any industry specified in Schedule I\" does not lend itseJf to the construction that it is confined to factories exclusively engaged in any industry specified in Schedule l.\n\nWhat exactly is meant by the\n\nThe Reg Provident\n\nCommiss,\n\nBomb v.\n\nShree Krishn\n\nM anuftJClut\n\nBhan\n\n196•\n\nTlk Regional Prot•ldtnt Fund\n\nCom111i1sio11er,\n\nBom6c1\n\n•• Slv11 Kris/ono .\\/tlal\n\nM.nu/octu1i11g Co.,\n\nBhaiara\n\n822 SUPI\\.EME COURT REPORTS [1962] SUPP.\n\nclause, we will have occasion to deal with later on.\n\nFor the present, it would be enough to sa.y tha.t when the Legislature has described factories as factories engaged in a.ny industry, it did not intend that the said factories should be exclusively engaged in the indusiry specified in Sohedule I. The construction for which the repondents contend requires that we should add tho word \"eil:dusively'' in tho clauJe and that clearly would not bo permissible.\n\nThe definition of th\" word \"factory\" prescribed ny s. ~(g) of the Act shows that a \"factory\" means any premises. including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power.\n\nThus, t.he word \"factory\" used ins. 1(3)(a) has a comprehensive meaning and it includes\n\npremiss in which any manufacturing process is being c.rried on a.s described in the definition. This definition of the wore! \"factory\" shows that the factory engaged in any industry specified in Schedule I •::mnot necnssarily mean a factory exclusively engaged in the pnrticular industry specified in the said Schedule.\n\nBesides, s.l(:l)(a), as it has been amended in 19;36, now referA to cvnry establishment which is a factory engaged in any industry specified in Schedule I a.ncl the introduction of the word \"establishment\" clearly shows that it may consis\\ of different factories clealing with different. industries and yet considered as one establishment, it may fall under section l(:l)(a), provided the other requirements of the said section a.re satisfied. Section 2A which has been added in the Act by the Amending Act 46 of 1961) makes it clear that an establishment mav consist of rlitTnrrmt departmcnt8 or 111ay h:we different branches, whether sit.uate in the same place or in cliffcrnnt placc8, and yet all such departments or hrancjies H!1all he treated as parts\n\n3 S.C.lt.\n\nSUPREME COURT REPORTS 823\n\nof the same establishment. Therefore, the concept of establishment being of such a comprehensive character, the insertion of the word \"establishment\" in s.l(3)(a) by the Amending Act of 1956 helps to negative the argument that the factory therein contemplated cannot be a composite factory.\n\nBesides, the explanation to Schedule I which has been added by Act 37 of l953 clearly shows that one of the industries originally included in Schedule Tin 1952 definitely suggests the idea of a composite factory and wou Id, thus, assist the inter\n\npretation of the word \"factory\" as including a composite factory under s.l(3)(a). The industry in question is electrical, mechanical or general engineering products and the explanation of this industry shows that it includes 25 different items, and so any factory carrying on the work of producing one or more of these items would. not be exclu sively engaged in producing one or the othf'f of those items and would be in the nature of a composite factory and yet it would definitely fall under s.1(3)(a). ThereforP, in our opinion, the argument that a composite factory carrying on different industrial opera1 ions is outside the purview of s.1 (3)( a) cannot be accepted. •\n\nThe next question which falls to be considered is whether the requirement that the workmen employed should be 50 or more, governs tho w:ird \"Industry\" or the word \"factor\" is under s. l (3)(a).\n\nT]).e respondents' contention is that tbis rmmcrica] test must be satisfied by t.he industry and not by the factory.\n\nIn other worcfa, even if a composite factory is included in s.1(3)(a), before the provisions of the Act can be applied to it. it must be shown that 50 or more persons are employed in that unit of the factory which iR ng•tged in the industry specified in :Schcdlllo I. If this is the true and correct position, neither the Mills nor the Company would fall within the mischief of thP Act. The\n\nJ9iM\n\nThi Regional Provident Fund\n\nOommis; ioner,\n\nBomba., v\n\nSlir1e_K1isJ.na Met11.\n\nM aun.fac'ttring c,.1\n\nBhantf14ra\n\nGajeridragadkar J,\n\nl!ldZ\n\nTii1 R, giufUJI ProtJid, nt Pim I\n\nCommissionrr,\n\nBomb•_p\n\nv. S\"'• Kriolno .If t14/ JI actruing Co.,\n\nBh111dar12.\n\nOtridr•fad.l:ar J.\n\nargumont in 811(lport of thiH construction jg that the pronoun \"which\" must under the ordinary rules of grammar qualify the noun immediately preceding it anment ns to the prescribed number qualifies the word \"factories\" and does not qualify the word \"industry\" ; that means the question to ask is : does the factory employ 50 or more persons ? The quest.ion is not : does the industry employ .~O or more persons ?\n\nThis conclusion is Rtrengthoned by the. provision contained in the latter part of s. \\(:{)(, i).\n\nThis latter clause empowers the CPntral Government .to brin\" within the purview of the A<'t other factories\n\nin the manner specified by it, .While referring to the factories which may thns be brought: within the purview of the Act, t.h? clause provides that these\n\nI J\n\nfactories must be such as employ such number of persons less than fifty as may be specified in the notification and they must be engaged in any such industry. In other words, this latter clause makes it clear that it is the factories which have to satiafy two tests-(i} that the number of their employees should not be less than 50 and (ii) that they must be engaged in any such industry as is specified in Schedule I,\n\nThis position has been placed beyond all doubt by the amended clause as It now stands as a proviso to s. 1(3)(a) and (b) after the amendment of\n\n1956. This proviso reads that the Central Government, may, after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette, apply the proisions of the Act to any establishment employing such number of persons less than fifty as may be specified in the notification. This proviso makes it absolutely clear that the requirement as to the number of the employees applies to the establishment and not to the industry. We may incidentally add that the requirement of fifty has now been reduced to twenty by the Amending Act 46 of 1960 .\n\n. There is yet another provision in the Act which supports the same conclusion.\n\nSection l 9A provides, inter alia, that if any difficulty arises in giving effect to the provisions of the Act, and in particular, if any doubt arises as to whether 50 or more persons are employed in a factory, the Central Government may. by order, make such provision or give such direction, not inconsistent with the provisions of the Act, as appears to it to be necessary or expedient for the removal of the doubt or difficulty; and the order of the Central Government, in such cases, Ahall be final.\n\nThis clause has been subsequently amended, but for our present purpose those amendments do not matter. The point about the provision is that the Central Qovernnient h\"s\n\nThe Regional Provident li'und Commissioner,\n\nB1mbay\n\nShree Krishna Met al Manufacturing Co.,\n\nBhandara\n\nGajendtagadkar J.\n\nTlie Rezionol ProvU/mt Fund\n\n<.Assio11e1,\n\nB1mbay\n\nShr11 Krish11~ Metal\n\njfGIUl.fatbtrinf! Co.,\n\nBlumdara\n\nbeen given powur to resolvo a doubt as to whether fifty or more persons are employed in a factory or in an establishment and that shows that the requirement as to tho number of employHes governs the factory or the establishment but not the industry.\n\nThat takfs us to the question as to the meaning of the expression \"engaged in any industry specified in Schedule I\", and this question no don bt,\n\npresents some difficulty. We have already reject<'d the argument that the composite factory is not included in s. 1(3Xa).\n\nThat means that the clause \"engaged in any industry\" does not mean \"exclusi vely engaged in any industry\". If that is so, what exactly is the meaning and significance of thig clause ? Two views are possible. It may be said that\n\neven if a factory is only partiall.v engaged in any industry specified in Schedule I, it would satisfy the test however small or insignificant may be the <>Xtent of its operation in the said industry. On this construction, it would follow that if a factory is engaged in several industrial operation one of ,,:hirh\n\nrelates to an industry specified in Schedule I, the factory would fall under s. 1(3)(a) even though its relevant a<:tivity in the specified industry may be of\n\na minor, incidental or subsidiary character. The other construction would be that tho oxprossion\n\n\"engaged in any industry\" means \"primarily or mainly engagod in any inclustry\". On this construe\n\ntion, if a factory is engaged in several industrial activities one of which relateH to tho industry ptl'i\n\nfied in Schedule I, it would he rieccs8ary to enquire whether the said specified activity is subsidiary or minor; if it is subsidiary, incidental or minor, tho factory cannot be said to be engaged in that industry.\n\nCases may occur where a factory is primarily or\n\nmainly engaged in other industrial activities ancl it is only for feeding one or more of such activit ics that the factory may undertake an activity in respect of the $pecified industry. But surh an undertaking is mornly for the purpose of feeding its\n\nmajor activity; it is subsidiary, incidental and minor. In that case, the factory cannot be said to be engaged in the industry specified in Schedule I.\n\nBoth constructions are possible and each one of them presents some 'lnomalies.\n\nOn the first construction, it would follow that even if half a dozen employees arc engaged by the factory in regard to.its activity in the industry specified in Schedule I, the provisions of the Act would apply to all the workmen engaged in the whole of the factory because the factory would be deemed to have satisfied the test that it is engaged in the industry specified in Schedule I and that, no doubt, looks anomalous. On the other hand, if the second construction is accepted, though more then 50 persons may be employed in the incidental and subsidiary activity relating to an industry specified in Schedule I, the provisions of the Act will not apply to such workmen because the factory, as a whole, does not satisfy the test that it is engaged in the said industry and that also is anomalous.\n\nIt is true that in dealing with the construction of a clause which is capable of two reasonably possible constructions, it is not easy to make a choice, particularly when bot.h constructions seem to lead to some anomalies. On the whole, however, we are inclined to take the view that the clause \"engaged in any industry specified in Schedule I'' should be interpreted to mean \"mainly engaged in any indn>tr, y specified in Schedule I\". If a fantory is engaged in two industrial activities one of which is itH primary, principal or dominant activity and the other is a purely subsidiary, incidental, minor or feeding activity, then it is the primary or the dominant activity which should determine the character of the factory under s. I (3) (a).\n\nThis view does not purport to add any word to the section; it merely interprets the relevant expression ••engaged in any industry specified in Schedule I\",\n\n'l'he Regional Provid111t Fund\n\nCommissioner, Bombay v.\n\nShree Krishna Metal\n\nManufacturing Co .•\n\nBhandMa\n\nG 'ljendragat!kar J,\n\nr ht Rtf]ionol Prtbidtnt Fund\n\nCommissioner,\n\nBomby\n\nShrtt Krishna .\\I eta/\n\nAfan11faclurint Co.,\n\n' llhandar•\n\nfJajtnriragadkf1r J.\n\n828 SUPRE~IE COGl~T REPORTS [1962] SUPP. I\n\n\\Vhen it is said that a person is engaged in any business, it usually means he is engaged mainly or . principally in that business; and the same wo:ilrl be tho position when the relevant clause refers to an establishment engaged in the specified industry.\n\nThat is the common-sense view which is consistent with tho current and accepted denotation of tho words \"engaged in\".\n\nOne of the tests which can sometimes be applied is whothcr the product of the incidt•ntal activity is intended for the market or exclusively for use by the factory in its other department only.\n\nIf the answ\"'r to this question is that the said product is sent out in the market for sale, then the activity in question cannot he treated as incidental.\n\nIn such a case, it may be said that thu factory is engaged in both thn activities and as such, it is\n\nengaged in the industry specified in Schedule I.\n\nBut tho test of sending the product in the market cannot ho treated as decisive or even very significant ht>cnuse tho definition of tho word \"manufacture'' given ins. 2(i)(a) shows that a commndity may be produced by the fa,.tory as much for sale, transport, delivery or disposal aH for its own use.\n\nTherefore, the fact that a commodity is prod in his favour on January 16, 11!48 should not be set aside under the power conforred upon the CollPctor by\n\n~. 4(h). Basant Narain submitted his objections and stated that the leased properti!'s were not covered by s. 4(b).\n\nBefore however this enquiry was completed, llasant !\\arain surrendered his leasehold interest to the assignee of the reversion, viz., the Trust, by a rcgibterc(titioncr filed petition under Art.32 of the Constitution challenging the valirlity of the two notifications as unreasonable restrictions and not falling within Art. 19(6) and that they .slwld be struck down as infringing Art. 19( 1) (g) of the Constttutton.\n\nHeld, that the './otification dated Januai:y l'i, 1958 and December 21, 1960 ore unconstitutional and void.\n\nSection 6( 1) of the Act is to make the employer liahlc only for a moiety of the provident fund and while the scheme of 1952 is \\vell designed to carrv out this intentions in ito;; application to \\\\'Orkrnen directly eployc, that it. is to be borne equally by the employer and the employee, and that the employer is to pay the whole of it, half on hiR account, and the other half on account of the employee, a.ncl he is to recoup himself by deducting it from the wages of the employee. Such deduction would he poosible only when the employer is the person who h1is to pay wages to t.he employee and that is why employees cmplo.\\'ed hy or through a contractor were inclmlcd in thB definition of \"excluded persons\" to whom under Para ~(i the 8cheme had no application. These cmploy\"c8 would bo paid hy the contmctor and the ble only for a moiety of the provident fund and while the Scheme of 1952 is well designed to carry out this intention, in its application to workmen directly employed, by reason of the combined operation of Paras 30 and 32, it breaks\n\ndown, in its extension to contract labour by reason of the inapplicability of Para 32. It operates unfairly and harshly on persons who employ contract labour and it further results in discrimination between those who employ contract labour and those who employ direct labour.- The Scheme therefore cannot\n\nOrissa Cement Ltd.\n\nUnion of India\n\nA{Var J.\n\nOrisso CtmmJ Lttl.\n\nUni0tt of lrutia\n\nAfyarJ.\n\n19&t\n\nMo1d114\n\nt ' r 848 SUl'l\\E.ME COlJRT l{EPORTS [Hlli2J SUPP.\n\nbe said to be reasonable and must be struck down as not falling within the protection afforded by Art. HJ (6).\n\nIn the result we hold that the notifiuat.iuns dated January I 5, 1958, and Dcocmbf)J' 2, 1960, are unconstitutional and void.\n\nThe petitioners are entitled to their costs.\n\nPetitWri allowed .\n\nMOHAN SINGH v.\n\nSTATE OF PUNJAB\n\n( B. P. Sr XHA, C. J., P. B. GAJE!WRAGADKAR, K. N.\n\nWANCHoo, N. RAJAGOl'ALA AYYANOAR and\n\n1'. L. V}; l\\KATARAMA An:AR, JJ.)\n\nCri1nit1al Liability-Members of u11/auful assembly- M aintainahility of conviclion-Cou11nou obejct and common i?ltention-Di•tinction-A/teration of w1.viction-lndian l!enal Code 1860 (Act 46 of 1860). ss. 302, 149, 34.\n\nThe two appellants, who were tried with three others, were convicted under s. 302 read withs. 149 ands. 147 of the h1dian Penal Code. Two of these five persons tried together were acquitted.\n\nIn the charge these five accused persons and none others wc:rc mentioned as forn1ing the unlawful assembly and the evidence led in the case was confined to them alone.\n\nThe facts proved in the case unmistakably showed that the two appellants and the other convicted person, who inflicted the fatal blow, were actuated by the common intention of fatally assulling the deceased. It was contended in this Court that the conviction of the appellants under s. 302 read with s. 149 of the Indian Penal Code was not sustainable in law in view of the acquittal of two of the five accused persons who were alleged to have formed the unlawful assembly.\n\nHeld, that the contention must prevail and the conviction altered to one under ' 302 read with s. 34 of the Indian Penal Code.\n\nSection 149 of Indian Penal Code prescribes vicarious or constructive criminal liability for members ofan unlawful", "total_entities": 38, "entities": [{"text": "S. ORISSA CEMEN'f LTD", "label": "PETITIONER", "start_char": 35, "end_char": 56, "source": "metadata", "metadata": {"canonical_name": "M/S. ORISSA CEMENT LTD", "offset_not_found": false}}, {"text": "UNION OF INDIA", "label": "RESPONDENT", "start_char": 59, "end_char": 73, "source": "metadata", "metadata": {"canonical_name": "UNION OF INDIA", "offset_not_found": false}}, {"text": "B. P. 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MUDHOLKAR", "offset_not_found": false}}, {"text": "ss. 5, 6, 7", "label": "PROVISION", "start_char": 328, "end_char": 339, "source": "regex", "metadata": {"linked_statute_text": "Provident Fund-Contract labour-Contribution to provident fund-If and when principal employer liahle-Providenl Fund Act, 1952", "statute": "Provident Fund-Contract labour-Contribution to provident fund-If and when principal employer liahle-Providenl Fund Act, 1952"}}, {"text": "s.5", "label": "PROVISION", "start_char": 535, "end_char": 538, "source": "regex", "metadata": {"linked_statute_text": "Provident Fund-Contract labour-Contribution to provident fund-If and when principal employer liahle-Providenl Fund Act, 1952", "statute": "Provident Fund-Contract labour-Contribution to provident fund-If and when principal employer liahle-Providenl Fund Act, 1952"}}, {"text": "Provident Funds Act, 1952", "label": "STATUTE", "start_char": 546, "end_char": 571, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "Section 6", "label": "PROVISION", "start_char": 771, "end_char": 780, "source": "regex", "metadata": {"linked_statute_text": "the Provident Funds Act, 1952", "statute": "the Provident Funds Act, 1952"}}, {"text": "s.6", "label": "PROVISION", "start_char": 911, "end_char": 914, "source": "regex", "metadata": {"linked_statute_text": "the Provident Funds Act, 1952", "statute": "the Provident Funds Act, 1952"}}, {"text": "Art.32", "label": "PROVISION", "start_char": 2454, "end_char": 2460, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19(6)", "label": "PROVISION", "start_char": 2584, "end_char": 2594, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19( 1)", "label": "PROVISION", "start_char": 2645, "end_char": 2656, "source": "regex", "metadata": {"statute": null}}, {"text": "Section 6( 1)", "label": "PROVISION", "start_char": 2792, "end_char": 2805, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 7(1)", "label": "PROVISION", "start_char": 4265, "end_char": 4272, "source": "regex", "metadata": {"statute": null}}, {"text": "Provident Funds Act", "label": "STATUTE", "start_char": 4292, "end_char": 4311, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}, {"text": "Section 5", "label": "PROVISION", "start_char": 4598, "end_char": 4607, "source": "regex", "metadata": {"linked_statute_text": "Provident Funds Act", "statute": "Provident Funds Act"}}, {"text": "Section 6( 1)", "label": "PROVISION", "start_char": 5402, "end_char": 5415, "source": "regex", "metadata": {"statute": null}}, {"text": "s.7", "label": "PROVISION", "start_char": 6377, "end_char": 6380, "source": "regex", "metadata": {"statute": null}}, {"text": "Section\n\n14", "label": "PROVISION", "start_char": 6510, "end_char": 6521, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 7( 1)", "label": "PROVISION", "start_char": 11929, "end_char": 11937, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 14", "label": "PROVISION", "start_char": 13320, "end_char": 13325, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19( I )(g)", "label": "PROVISION", "start_char": 13710, "end_char": 13725, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19(6)", "label": "PROVISION", "start_char": 14590, "end_char": 14600, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19(l)(g)", "label": "PROVISION", "start_char": 14741, "end_char": 14754, "source": "regex", "metadata": {"statute": null}}, {"text": "Art. 19(6)", "label": "PROVISION", "start_char": 15336, "end_char": 15346, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 69", "label": "PROVISION", "start_char": 19440, "end_char": 19445, "source": "regex", "metadata": {"statute": null}}, {"text": "ss. 302, 149, 34", "label": "PROVISION", "start_char": 21273, "end_char": 21289, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 302", "label": "PROVISION", "start_char": 21367, "end_char": 21373, "source": "regex", "metadata": {"statute": null}}, {"text": "Penal Code", "label": "STATUTE", "start_char": 21414, "end_char": 21424, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 302", "label": "PROVISION", "start_char": 21936, "end_char": 21942, "source": "regex", "metadata": {"statute": null}}, {"text": "s. 149", "label": "PROVISION", "start_char": 21953, "end_char": 21959, "source": "regex", "metadata": {"statute": null}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 21967, "end_char": 21984, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "s. 34", "label": "PROVISION", "start_char": 22223, "end_char": 22228, "source": "regex", "metadata": {"statute": null}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 22236, "end_char": 22253, "source": "gazetteer", "metadata": {"confirmed_by_regex": false, "gazetteer_score": 1.0}}, {"text": "Section 149", "label": "PROVISION", "start_char": 22256, "end_char": 22267, "source": "regex", "metadata": {"statute": null}}, {"text": "Indian Penal Code", "label": "STATUTE", "start_char": 22271, "end_char": 22288, "source": "regex", "metadata": {"confirmed_by_gazetteer": true}}]} {"document_id": "1962_3_848_865_EN", "year": 1962, "text": "Orisso CtmmJ Lttl.\n\nUni0tt of lrutia\n\nAfyarJ.\n\n19&t\n\nMo1d114\n\nt ' r 848 SUl'l\\E.ME COlJRT l{EPORTS [Hlli2J SUPP.\n\nbe said to be reasonable and must be struck down as not falling within the protection afforded by Art. HJ (6).\n\nIn the result we hold that the notifiuat.iuns dated January I 5, 1958, and Dcocmbf)J' 2, 1960, are unconstitutional and void.\n\nThe petitioners are entitled to their costs.\n\nPetitWri allowed .\n\nMOHAN SINGH v.\n\nSTATE OF PUNJAB\n\n( B. P. Sr XHA, C. J., P. B. GAJE!WRAGADKAR, K. N.\n\nWANCHoo, N. RAJAGOl'ALA AYYANOAR and\n\n1'. L. V}; l\\KATARAMA An:AR, JJ.)\n\nCri1nit1al Liability-Members of u11/auful assembly- M aintainahility of conviclion-Cou11nou obejct and common i?ltention-Di•tinction-A/teration of w1.viction-lndian l!enal Code 1860 (Act 46 of 1860). ss. 302, 149, 34.\n\nThe two appellants, who were tried with three others, were convicted under s. 302 read withs. 149 ands. 147 of the h1dian Penal Code. Two of these five persons tried together were acquitted.\n\nIn the charge these five accused persons and none others wc:rc mentioned as forn1ing the unlawful assembly and the evidence led in the case was confined to them alone.\n\nThe facts proved in the case unmistakably showed that the two appellants and the other convicted person, who inflicted the fatal blow, were actuated by the common intention of fatally assulling the deceased. It was contended in this Court that the conviction of the appellants under s. 302 read with s. 149 of the Indian Penal Code was not sustainable in law in view of the acquittal of two of the five accused persons who were alleged to have formed the unlawful assembly.\n\nHeld, that the contention must prevail and the conviction altered to one under ' 302 read with s. 34 of the Indian Penal Code.\n\nSection 149 of Indian Penal Code prescribes vicarious or constructive criminal liability for members ofan unlawful\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 84'.!i\n\nassembly which under s. 141 must consist of five or more persons. Consequently, as so.on as, in the present case, two of accused persons were acqmtted, s. 141 ceased to apply and s. 149 became inoperative.\n\nJn dealing with the applicability of s. 149 of the Indian Penal Code, one has to remember the several categories of cases that come up before the courts for decision thereunder.\n\nDalip Singh v. State f Pun.iab, [1954] S.C.R. 145 and Bl, iarwadMepa Dana v. Stale of Bombay, [1960] 2 S.C.R. 172, referred to.\n\n\nLikes. 149 of the Indian Penal Code, s, 34 of that Code also deals with cases of constructive liability.\n\nBut the essen .. tial constituent of the vicarious crhnin.al liability under s. 34 is the existence of common intention.\n\nBeing similar in so1ne ways, the two sections may in some cases overlap.\n\nNeverthe-· less, common intention on which s. 34 has its basis is different from the common object of unlawful assembly. Common intention denotes action in concert and necessarily pestuiatcs a pre-arranged plan, a prior meeting of minds and an element of participation in action. The acts may be different and vary in character but they must be actuated by the same common intention, common inteqtion is different from the same intention or similar intention.\n\nMahabub Shah v. King Emperor, ( 1945) L.R. 72 I.A. 148, referred to.\n\nCRIMINAL APPELLATE JuRISDIOTION: Criminal Appeal No. 186 of 1960.\n\nAppeal by special leave from the . judgment and order dated March 18, 1960, of the Punjab High Court in Crimin'11 Appeal No. 1040of1959.\n\nRaghubir Singh and R. S. Gheba, for the appe llants.\n\nN. S. Bindra and P. D. Menon, for the respondent.\n\n1962. March 15. The Judgment of the Court was delivered by\n\nGAJENDRAGADKAR, J.-This appeal by special leave arises out of a criminal case in which the\n\nJY6~\n\nM t1hon Singh v.\n\nStale of Punjab\n\n1 d1a1adkarJ.\n\nJ06Z\n\nJ\\foluzn Singh\n\n•• State of Punjab\n\nUojtntlrr1.r; adkar J.\n\n850 SUPREME COURT REi>ORTs [1962] SuPP.\n\nappellants Mohan Singh and Jagir Singh a.long with three others wen charged with h11.ving oommitted~\n\noffences under s.J.:18 and s.302 read with s.149, as 1 well as s.32a, read with s.14!l of the Indian Penal Code. The three olher pernnns who w1rc thus charged along with the two appellants werr. De.lip Singh and two Piam Singhs who were the sons of\n\nCjagar Singh and Bahadur Singh respectively. Of the five accusecl persons, JJalip Singh was also charged under H.:l02.\n\nThe case agai11Ht t.hese persons was tried by the II Additional Scssio11s Judge at Ferozepon\" He held that the charges framed against the two Piara Singhs had not been proved beyond reasonable cl'oubt. 80, giving them the benefit of tlon ht, he acquitted them.\n\nDalip Singh was convicted under sections ;{02 and 147 and\n\nthe two appellants were t:onvieted under s.302 read\n\nwith sections 149 and J.Ji.\n\nFor the major offence of murder, all of them were sentenced to imprisonmont for life and for the minor offeneti under s.147, each one of them was sentenced to sii.: months' rigorous imprisonment.\n\nThese sentences were orderod to run concurrently.\n\nThis order of conviction and sentence was challenged by the said three acoused persons by preferring an appeal before the Punjab High Court.\n\nThe High Court has accepted tho findings of the trial Judge and has confirmed the orders of conviction and sentence passed against them.\n\nThcrcaft~!r, the said three accused moved this Court for spcial leave.\n\nThe application for special leave filed by Da.lip Singh Wa8 dismissed, but that of the two appellants was grimted.. That is how the two appellants have come to this Court by special leave, and on their behalf, ~{r. Raghubir Singh has urged that the conviction of the appellants under s.302/149 iB unsustainable in l:iw, because as a result of thP acquitt; al of th<: two\n\nPiam Singhs, the provisions of s. l 4!l were inapplicable. '\n\n3 s.a.tt. SUPREME cotiRT REPoitrs 851\n\nBefore dealing with the merits of the contention thus raised by the appellants, it is necessary to state briefly the material facts leading to the prosecution of the appellants. The incident giving rise to the present case took place on the 9th May, 1959, at a village called Malsian. The prosecution case is that on the said day, the five accused persons named in the charge were members of an unlawful assembly and that in prosecution of the common object of the said assembly, they committed rioting and at that time were armed with deadly weapons. It has also alleged that in pursuance of the said common object, Gurdip Singh, was murdered and injuries were caused to Harnam Singh. That is the bases of the charge under s.148 I.P.C. The second charge was that since Dalip Singh, one of the accused, had inflicted a fatal injury on Gurdip Singh on his head in prosecution of the common object of the unlawful assembly, all the members of the assembly were guilty under s.302/149 of the Indian Penal Code for the murder of Gurdip Singh.\n\nDalip Singh was a)so charged under s.302 without reference to s.149. That is the substance of the charge based on the allegation that Gurdip Singh had been murdered in prosecution of the common object of the unlawful assembly. For the injury caused to Harnam Singh, an additional charge was framed under s.323/149.\n\nAs we have already pointed out, in the present appeal we are concerned with the conviction of the appellants under s.302 /l 49.\n\nIt appears that the appellants Mohan Singh and Jagir Singh are .1; mcle and nephew respectively, the latter being the son of Mohan Singh's brother Dalip Singh who was one of the accused in the present case. There was a third brother named Tara Singh who was married to Tej Kaur, the daughter of Gurdip Singh, the victim of the assault.\n\nTara Singh was murdered by some Muslims during\n\n' 1962\n\nMohan Singh\n\nState,,/ PunJab\n\n196~\n\nMchan Sir.1h\n\nv. .c-1't •f Punjb\n\n852 SUPREME OOlmT .REPoRTs (i962] SUPP.\n\nthe communal disturbances that raged in tho Punjab in the wako of the partition of the country in 1947.\n\nAs a result of the said commwia.l disturbances, the parties migrated from their homes in West Pakistan to the East Punjab aud in due course, wero allotted land in villago llfalsiau.\n\nAfter her husband's death, Tcj Kaur began..lil!. reside with her father Gurdip Singh in.village •Gmrndyala. Since Tej Kaur had left the ,;.village of her husband; Dalip Singh and Mohan)3ingh managed to get into possession of hor share of the Land. After the holdings in village Malsian had been consolidated, Toj Kaur obtained a separate holding of land as representing tho intorest of her deceased husband, Tara Singh.\n\nThereupon, llfohan Singh aud Dalip Si.ugh entered into posses8ion of the said land after oxecuting a 'patW.nama' in her favour. Haviug entered into possession of her land in this manner, they did not care to pay the share of the producu to Ttij Kaur regularly and in consequence, the amow1ts duo from them fell into arrears. Tej Kaur was thus compelled to appoint her father Gurdip t:iingh as an attorney in order to realise the arrear8 of rent and to take steps for evicting :\\lohan Si.ugh and Dalip Singh from her land.\n\nWhen the attorney instituted eviction proceedings, .'11ohan Singh and De.lip Singh paid up thll arrears, but even so, Tej Kaur succeeded in obtaining an order of eviction.\n\nThe said order was challenged by :llohan Singh and Dalip 8ingh by preferring an appeal, but the appeal failed and the order of eviction was confirmed. That naturally led to an application L>y Gurdip Singh for obtaining the execution of the said order. On this application, warrant8 for possession were issued. It is because Gurdip Singh\n\nwas thu6 effectively protecting the interest of his en to him, but that proved ineffective and he ultimatelv succumbed to hiR injuries in tho early hours uf tho next morning.\n\nHnrnam Singh received treatment and has recovered.\n\nIt is on these facts that the appollants and their companions were tried beforo the learned Additional Sessions Judge at Ferozeporc for having committed the offences as charged.\n\nAll the accused denied the said charges.\n\nThe loamed trial Judge considered the cvidencr given by the principal eye-witnesses Harnam Singh Phula, the Chuwkidar and Sandbura Singh, the Qanungo; he alRo examined the medical evidence and camo to tho conolusion that thn said evidence considered as a whole, proved the charge a11; ainst\n\nthe appellants under R. 302, read with 'I 14!l and 147 beyond a reasonablo doubt. Hn likewise held that the charge ag1dnst D.tlip Singh under s. :!02\n\nand 14 7 was satisfactorily provnd. Tn regard to the two Piara Singhs, howevor, h\" came tu the conclusion that the motive fur the commission of the offence on whi0h tho prosecution relied, was not available against them; that th,, ir names mentioned in the First Information Report did nut satisfactorily prove thoir identity and that on the probabilities, it looked vnry unlikely that the two l'iara Singhs by reason of their alleged remote role.ti on ship with the threo other accused or th<'ir friend ship with them, could have joined in making the assault on Gnrdip Singh and Harnam Singh. Ho qojd that t)je reasons given by the prosecution fur\n\n3 S.C.R.\n\nSUPitEME COURT REPORTS 855\n\ntheir joining in the assault appeared to him to be weak as so, he entertained a reasonable doubt as to whether they had really taken part in the assault at all. That is how he gave them the benefit of doubt and acquitted them. It appears from his judgment, however, that the learned Judge was satisfied that the large number of injuries inflicted on Harnam Singh and Gurclip Singh and the complete absence of injuries on the persons of the assailants would show that the odds were very uneven and that emphasised that tho assault must have been the work of more than 3 or 4 members. He also held that the direct evidence of disinterested witnesses indicated that there were five assailants and so, he had no doubt that the charges of unlawful assembly and rioting were brought home even though he was acquitting two of the accused persons.\n\nIn other words, accor- . dingto ths learned Judge, though two ofthefive persons, charged were acquitted, that still left five or more persons who were concerned with the assault and so, the charge under s. 147 was established. It is in the light of this finding that he convicted the appellants under s. 302/149.\n\nWhen the appeal was argued before the High Court on behalf of the appellants, the findings of the learned Judge un the merits were challenged and the High Court considered the said challenge by e:x:amining the evidence for itself. Ultimately, it was satisfied that the viBW taken by the trial Court was right. It appears that in respect 0f the charge under s. 149, the only contention raised before the High Court was that the said section did not apply because the incident which resulted in the death of Gurdip Singh was no more than a chance encounter. The High Court e:x:amin~ this argument and held that the assailants wore lying in wait for Gurdip Singh and so, the assault on Gurdip Singh was tile work of th.e membes \"of tqe\n\n• • •\n\n1962 -+- Mohan Singh\n\nState of Punjab\n\nGaJen, agadka1 J\n\nJlf ohczn Singh\n\nSt'1lt of Pruijab\n\nGojtndrgadkar J.\n\n856 SUPREME COURT REPORTS [I 962] SUPP.\n\nunlawful assembly as alleged by the prosecution.\n\nNo argument wall urged before the High Court\n\ntht the acquittal of the two Piara Singhs in Jaw renderer! sect.ion 14!l inapplicable to the case.\n\nMr. Raghubir Singh, however, contended that tho finding of tho trial Court about the presence of five asRailants even after ignoring the alleged presence of the. two Piara Singhs is not justified. Indeed. his case is that like the charge which specifies five named persons as the assailants, the whole of the evidence refors to the said five persons as the assailants nnd no one else.\n\nThis position is not disputed by Mr. Bindra who\n\nappears for the Stat-0 and so, we must pror, eed to deal with the merits of tho appeal on the assumption that both in tho chargo and in the' evidence, the prosecution calle in that five named persons wore the members of an unlawful assembly two of whom have been acquitted; and that mises the question all to whether. the acquittal of the two Piara Singhs leaves it open to the prosecution to rely upon section 149 ag:iinst the appellants.\n\nThe true legal poRition in regard to the essential ingredients of nn offence specified by s. 149\n\nae not in doubt.\n\nSection 149 prescribes for vicarious or ronstructive criminal liability for all members of an unlawful assembly where an offence is committed by any member of such an unlawful assrmbly in prosecution oft.ho common object of that 1188emhlv or such as the members of that nsscm bly knew to he likely to bn committed in prosecution of that object. It would thus be noticed that one of the essential ingredients of section 149 is that the offence must havo been committed by any member of an nnlawful assembly, nnd s. 141 makes it clear that it is only where five or more persons constituted an aseern hly that an unlawful a.ssemhly is born, provided, of\n\ncmrso; the othP-r requirements of the sairl sectjoq\n\n3 S.C.R.\n\n. SUPREME COURT REPORTS 857\n\nas to the common object of the persons composing that assembly are satisfied. In other words, it is an essential condition of an unlawful asRembly that its membership must be five or more. The argument, therefore, is that as soon as the two Piara Singhs were acquitted, the membership of the assembly was reduced from five to three and that made s. 141 inapplicable which inevitably leads to the result that s. 149 cannot be invoked against the appellants. In our opinio'n, on the facts of this case, this argument has to be upheld. We have already observed that the point raised by the appellants has to be dealt with on the assumption that only five persons were named in thf' charge as persons composing the unlawful assembly and evidence led in the course of the trial is confined only to the said five persons. If that be so, as soon as two of the five named persons are ac:quitted, the assembly must be deemed to have been composed of only three persons and that clearly cannot be regarded as an unlawful assembly.\n\nIn dealing with the question as to the applicability of s. 149 in such cases, it is necessary to bear in mind the several categories of cases which come before the Criminal Courts for their decision. If five or more persons are named in the charge as composing an unlawful assembly and evidence adduced by the prosecution proves that charge against alt of them, that is a very clear case where s. 149 can be invoked. It is, however, not necessary that five or more persons must be convicted before a charge under s. 149 can be successfully brought home to any members of the unlawful assembly. It may be that less than five persons may be charged and convicted under s. 302/149 if the charge is that the persons before the Court along with others named constituted an unlawful\n\n11sembl!; tlje other fersons so named wa; Y not he\n\nMohan Singh\n\nSlate of Punjab\n\nGajendragadkar .1.\n\nMohori Singh\n\nStall of P1mj•b\n\nGajtndrogadkar J.\n\n858 SUPREME COURT REPORTS [1962] SUPP.\n\navailable for trial aloug with their companions for the reason, for instance, that tlwv have absconded.\n\nIn such a case, the fact that Jess\" than fivo persons are before the Court cloes not make section 14() inapplicable fur the simple reason that both the\n\ncht\\rge and the evidence seek to prove that the persons before the court and others number more than five in all and as such, they together constitute an unlawful assembly.\n\nThcrfurn, in order to bring home a chaq!e undor s. 14fl it is not necesary that five or more persons must necessarily be brought before tho court and\n\nconvicted. Similarly, Jess than five persons may he charged under R. 14fl if the prosecution cuse is that the persons before thn Court and others numbering in all more than five composed rin unlawful assnmbly, these others being persons not identified and sn not named.\n\nIn Ruch a case, if evidence shows that the persons befom the Court along with unidentifiect and un-named assailants or members composed an unlawful assembly, those before the Court can be con v ictccl under section I 49 t.hough tho unnamed and 1111-irlent.ified pcrsonH an• not t.rar.-d :\\Ilfl charged. CasPs may also arise where in the ch:irgc, the prosecution names fivA or more persons and alleges that they constituted nn unlawful asRembly.\n\nIn such cases, if both the charge and the e, idenec\n\nare confined to t.ht' persons named in the charge and out of the persons so uamcd two or inore are aoquit.tcd leaving before the court less than five\n\npersons to be tried, thens. 149 cannot be invoked.\n\nEven in such caseH, it is poHsiblo that though the charge names five or more persons n.s composing an unlawful assembly, evidence mav nevertheless show that t.Jic un]awfui assembly consisted of SOlllf' other persons as well who were not identified and sn not nam<'d.\n\nIn Ruch crises, either tho trial c:ourt or even the High Court in appeal may be able to come to t, ho conclusion that the acquittal of so111e of tho\n\n3 S.C.R.\n\nSUPREME COURT REPORTS 859\n\npersons named in the charge and tried will not necessarily displace the charge under section 149 because along with the two or three persons convicted were others who composed the unlawful assembly but who have not been identified and so have not been named. In such cases, the acquittal of one or more persons named in the charge does not affect the validity of the charge under section 14fl because on the evidence the court of facts is able to reach the conclusion that the persons composing the unlawful assembly nevertheless were five or more than five. It is true that in the last cate6ory of cases, the court will have to be very careful in reaching the said conclusion. But there is no legal bar which prevents the court from reaching such a conclusion. The failure to refer in the charge to other members of the unlawful assembly un-named and unidentified may conceivably raise the point as to whether prejudice would be caused to tbe persons before the Court by reason of the fact that the charge did not indicate that un-named persons also were members of the unlawful assembly. But apart from the question of such prejudice which may have to be carefully considered, there is no legal ba.r preventing the court of facts fom 'holding that though the charge specified only five or more persons, the unlawful assembly in fact consisted of other persons who were not named and identified.\n\nThat appears to be the true legal position in respect of the several categories of cases which may fall to be\n\ntrid when a charge under section .149 is framed.\n\nIn this connection, we may refer to three representative decisions of this Court. In Dalip Singh v. State of Punjab (') this Court has held that before section !49 can be applied, the Conrt must l; e satisfied that there were at least five persons sharing the common object. It has nisei been held that this .does not moan that fivo persoµs mqst\n\n(I) (1954] S.C.R. 145.\n\n19~1\n\nMohan Singh\n\n•• State of Punjab\n\nGajuJdragadkar J.\n\nMohan Sinqh\n\nV St.Ii of Punjab\n\nOo, jt11drayadAar J.\n\n860 SUPREME COURT REPORTS [1962] SUPP.\n\nalways be convicted before s. 14!) can be applied.\n\nIf the .Judge concludPs that. five persons were unque.qtionably present and sharer! the common object, though the identity of some of them is in doubt, the co; iviction of the rest would be good. In that case, this Court took the view that the evidence adduced by the -prosecution did not satisfactorily prove the fact th11t the unlawful assembly was composed of five or more persons, and so, 8. 14!) was held to be inapplicable. In other words, on facts relevant for the purpose of applying s. 14!) this case is similar to the case with which we are concornerl in t.he present appeal.\n\nIn Bltarwarl Mepa Dana v.\n\nState of Bombay (') t.his Court was dealing with a case where twelve named persons were charged with having formed an unlawful assembly with the com. mon object of committing the murder of three persons, At the trial before the Sessions Judge, seven of the named persons were acquitted and five wnm . convicted under s. 3(12/149 and s. 302/34. On appeal, the High Court acquitted one of tho convict€d persons but _maintained the c01niction :md sen. tence passed on the rest. The validity of the said order of conviction and sentence was cballcnged bofore this Court on several grounds, one of which was that. s. 149 became inapplicable as soon as eight ont of the twelve persons named as mom bcrR of the unlawful assembly were acqnitted.\n\nIn rejecting t.his argums the possibility of other persous to be in the sai; KATARA)!A AJYA!t, JJ.)\n\nS1nugylr.rl Gold----St-izur(;-/)re.untpfion of icing s1wuyylcil -llea.sonalile l1elicf, tl'/1cn justifie:d-(,'onfi~cation-Lu.Jtlfily oj- If iniporter alone Z,:rz}; ff fn CJ)nfiscation of gold-Sea (Ju., toms Acf, JS7S (VIII of 1878), ss. !!!, /1;7(8), 178, 17SA-Foreiyn\n\n/;'xchange Reg7t/aiion Act, 19-17 ( 7 of J.'147). ss. 8(1), 23A.\n\nl'he appellant, a golds1nith, , vhilc tra\\'elling in a train fron1 Calcutta was searched and fou11cl to be in posscs:iiun of gold weighing 290.6 tolas val11ecl at Rs 2~,835. The gold was seized as it was reasonahly believed to be s1nuggled gold.\n\nAfter ervice of a ::.ho\\Y COluse notice and after due enquiry the Co\\lector passed an order for the confiscation of the goltl under s. 167(8) of the Sea Customs Act. The appellant contended that the pre:,111nption undtr s. I 78A of the Act could not be raised a5 on the facts of this case 1here could be no reasonable belief that the gold was smuggled gold, that the gold could not l>c confiscated as the appellant was not the importer thereof and that •- 167 (8) was n<1t applic•ble to the facts of the case.\n\nHeld, that the order of confiscation of the gold was validly and properly made.\n\nSection l 78A of the Act imposed the burden of proving that the gold was not smuggled gold on the appellant if it was seized untler the Act in the reaonablc belief that it wa1 smuggled gold. '!'hough the qustion \\Vhcther there was a reasonable belief or not v.as juticiable, the Court \\vas not sitting in appeal over the dcch.inn of the officer and all it could consider \\Va.\" whether there \\vere ground \\Vhich prima. facie justified the reasonable belief.\n\nThe facts that a large quantity of :; old v.as recovcrccl fro1n the appellant. that the authorities had precise inforn1atio11 ah<>11t the appellant a11cl\n\nthat he \\\\'as travelling \\\\'ithout a ticket -.vcrc sufficient to justify the reasonable brlief.\n\nSection 167(H) of the S•a Customs Act prodded for the confiscation of any goods th(: in1portation of \"hich \\vas prohibited or restricted if thrv \\vr:rc iiuµortcrl co11trary to the prohibitio1a or restriction.\n\nFr the collficatio11. of the guod~ it was not required that they sho~1ld he neccs.;; arily found With the person concerned. \\Vith their in1portation.\n\nUnder s. 8(1) of the Foreign Exchange Regulation Act, 1947, the Government of India issued a notification in 1948 which prohibited the bringing into India of gold from outside except with the general or special permission of the Reserve Bank. Section 23A of this Act provided that the lestrictions\n\nimposed under s.8 thereof shall be deemed to have been imposed uncle~ s.19 of the Sea Cutom~ Act. Thus the 1948 notification had the force of a notificat10n under s. 19 of the Sea Customs Act and gold imported in contravention thereof was liable to be seized under s.178 and rendered the gold liable for proceedings under s. 167(8) .. Since the gold was smuggled gold in view of the statutory presumption under s.178A it was properly confiscated under s. 167(8).\n\nCrvIL APPELLA'l'E JuRISDICUON : Civil Appeal No. 511 of 1960.\n\nAppeal from the judgment and order dated March 20, 1959, of the Bombay High Court at Nagpur in Special Civil Application No. 322 of 1958.\n\nA. S . .f3obde and Ganpat Rai, for the appellant.\n\nG, 0. Mathur and P. D. Menon, for the respondents.\n\n1962. March 15. The Judgment of the Court was delivered by\n\n196S\n\nPul:hraj\n\nI D, R Kohli\n\nGAJENDRAGADKAR, J.-On the 26th July, 1958, Gojendragadkor J, the Collector of Central Excise, Nagpur, pitssed an order directing absolute confiscation of five bars of gold weighing 290.6 Tolas found in the possession\n\nof the appellant Pukhraj and imposing upon him a personal penalty of Rs. 25,000/- under s. 167 (8) of the Sea Customs Act, 1878 read with s. 19 of the said Act and s. 23-A of the Foreign Exchange Regulation Act, 1947. Aggrieved by the said order, th.e appellant filed a writ petition in the High Court of.\n\nBombay at Nagpur under Art\". 226 and 227 of the Constitution on September 15, 1958. By this petition, the appellant claimed a writ of Certiorari or other appropriate writ or order quashing the impugned order. It was urged by him in support of his petition, inter alia, that s. l 78A of the Sea\n\n19~2\n\nPukhraj\n\nv. lJ. R. Kol.Ii\n\nUajet1drag•tlkor J.\n\n8U8\n\nSL'PREME COT, JRT HEPORTS [1962] SUP¥.\n\nCustoms Act was unconstitutional in that it infringed the appellant's fundamental right under Art. Ul (I) (r) and (g) of the Constitution. It was also urged that on the merits, the said impugned order waa nut justified by the relevant statutory provisions of the Sea Customs Act read with the .Foreign Exchange ItegulaLion Act.\n\nThe High Court rejected the appellant's challenge to the validity of s. l 78A and held that the order directing the confiscation of five bars of gold was valid.\n\nThe High Court, however, took the view that the direction issued by the Collector of Central Exciso imposing a personal penalty of P.s. 25,000/- on tho appellant was invalid and so, the said direction was set aside and a writ issued in that behalf.\n\nThe appellant then applied for and obt:i.ined a certificato from the said High Court and it is with the said certificate that he has come to this Court for challenging the correctness of the order passed by the High Court by which tho confiscation of gold in . question has been held to be valid.\n\nThe main point on which tho certificate was grant..ed by the High Court to the appellant was in regard to the constitutional validity of s. I 78A.\n\nThat question has, in the meanwhile, . been decided by this Court on September :!5, Hlfil, in Civil Appeals Nos. 408 tu 410 of 1960 and other companion appeals.\n\nThe judgment of the constitutional Bench dealing with those appeals has upheld tho validity of s. I 78A and so, the principal point which the appellant wanted to raise before this Court is now concluded against him.\n\nFor the appellant, Mr. Bubde has, however, urged three other contentions before us in support of hie case that the confiscation of gold is not justified.\n\nBeforn dealing with these cont.enLions, it is necessary to mention very briefly the relevant facts which led to the confiscation of gold. The appellant\n\nis a. goldsmith by profession and owns a gold and Rilver shop at Rajnandgaon in Madhya Pradesh.\n\nOn October 25, 1956, whilst he was travelling by the passenger train from Calcutta on the Calcuttacum-Nagpur route, he was searched at Raigarh railway station and found to be in possession of five pieces of gold bullion weighing 290.6 tolas valued at Rs. 29,835/- approximately. The said gold was then s•iized by the Officer concerned acting on a reasonable belief that it was smuggled gold, and notice was issued against the appellant on May 20, 1957, calling upon him to show cause why action should not be taken against him for having contravened the notification issued by the Government of India No. 12 ( 11 )-F.I/48 dated August 26, 1948 under the foreign Exchange Regulation Act, 1947 read with s.23A of the said Act and s.19 of the Sea Customs\n\nAct and punishable under item (8) of s.167 of the Sea Customs Act.\n\nThe appellant sent a reply and thereupon, the Collector of Central Excise held an enquiry. At the enquiry the appellant appeared by counsel and examined four witnesses in support of his plea that he was in possession of gold which belonged to him and which was not smuggled gold at all. Documentary evidence in the form of accountbooks was also produced by the appellant in sup port of his plea. The Collector of Central Excise disbelieved the evidence adduced by the appellant and came to the conclusion that the presumption arising under s.l 78 of the Sea Customs Act had not been rebutted by the appellant and so,.he proceeded to pass the impugned order confiscating gold and imposing on the appellant a personal penalty of\n\nRs.25,000-/. It is in the light of these facts that the three contentions raised by Mr.Bahde fall to be con. sidered in the present a ppea, J.\n\nThe first argument raised in suprort of the appeal is that the confiscation of g1 old is not justified under s.167(8) because it has be-in found by the\n\nPukhraj v.\n\nD.R. Kohli\n\nGajendra1atlkar J.\n\nl9Gf\n\nPukhraj\n\nD. ll. Kohli\n\nGtJjudragadlra,. J.\n\n870 SGPREME COURT REPORTS (1962] SUPP.\n\nHigh Court that the appellant is not a person concerned in the offence of importation of the said gold.\n\nIt appears that in dealing with the question as to whether}ltho pcr8onal penalty imposed upon the appellant is valid or not, the High Court has relied on two considerations. It has he Id that the jurisdiction of the officer to impose a personal penalty was confined to the imposition of a penalty only up to Rs. I 000/-and no more, and in support of this conclusion, the High Court relied 011 certain observations m1de by this Court in F.N.Roy v. Collector of C11stoms, Calcutta('). '!his question bas been recently consirlered Ly this Court in .M /s.\n\nRanchlwddas Atnuuain\n\nv. The Union of India(') and it has be<'.n held that the l:inguage in item (8) of s.167 iA clear and it permits the imposition of a penalty in exc<>, ss of Rs.1000/- and that must he given effect to whatever may have been the intention in other provisions. So, it is clear that the High Court was in error in taking the view that . under section lffi(8), it was not within the jurisdiction of the Collector of Central Excise to impose a penalty exceeding Rs.1000/·. The High Court has also held that the appellant Wll.s not shown to have been eonccrnml with the import.ation of tho smuggled gold, though he waM found in poession of it and this finding, according to the High Court, justified the concluAion t.hat a personal penalty could not be imposed on him. We are not callPd upon to consider in the present appeal the correctness or propriety of this conclusion because there is no appeal hy the respondent Collector of Central Excise challenging this part. of the High Court's order.\n\nBasing himself on the finding of tho High Court that the nppellnnt was not concerned in the importation of smuggled gol of the said Act and renders the person in possossion of tho sllid gold liable for proceedings under s. !fl7(8) of the said Act; !Lnd since the matter falls to be considered under tlw\n\nrelcvnnt provisions of the Sea Customs Act, s. l 78A is also applicable. This position is not disputed.\n\nNow s. I iSA places the burden of proving that the goods aro not smuggled goods on tho porson from whose possession the said goods are seized\n\nwhere it appears that tho said goods are seized under the provisions of the Sea Customs Act in the\n\nreasonable belief that. they are smuggled goods.\n\nOnce it is shown that the goods were seized in the\n\nmanner contemplated by the fir.t part of s. l 78A, it would he for the appellant to prove that the goods were not Rmugglcd goods; and since it has been hnld bv thi: Collector of Central Exci*~ that. the appellant had not URT REPORTS 873\n\nis that certain witnesses whose evidence was recorded by the Collector of Central Excise in the enqu\n\niry before him, were not produced for cross-examination by the appellant. In our opinion, there is no substance in this argument.\n\nThis complaint relates to the evidence of Anwar, Marotrao and his brother Rambhau. These three persons, it is alleged made their statements in the absence of the appel lant, It was, however, stated before the High Court by Mr. Abhyankar for the department that Anwar was, in fact, examined in the presence ofthll appellant's counsel and the appellant's counsel did not cross-examine him. This statement was accepted by Mr. Sorabji who 8.ppeared for the appellant and so, no valid complaint can be ma.de that Anwar gave evidence in the absence of the appellant and the appellant had no opportunity to cross-examine him. Then, as regards Marotrao and Ram bhau, their statements were intend'ed to show that the appellant's case that he had got the gold melted through them was not true. At the enquiry, the appellant gave up this stand and did not adhere to his earlier Tersion that the gold in question had been melted with the assistance of the said two witnesses. Since it became unnecessary to consider that plea because of the change of attitude adopted by the appellant, it was hardly necessary to allow the appellant to cross-examine the said two witnesses. Their version on the point was no longer inconsistent with the subsequent C'1Se set up by the appellant.\n\nTherefore there is no substance in the argument that the enquiry held by the Collector of Central Excise was oonducted unfairly and the procedure adpott>d at the said enquiry was inconsistent with the requirements of natural justice.\n\nThe last contention raised by Mr. Rohde was that there is nothing on record to show that the seizure of gold from the appellant had .been effected\n\nby the officer concerned acting on a reasonable be lief that the said gold was smuggled. It woul4 b11\n\n. I , ' . . ,\n\nPukh; aj\n\n•• D.R. Kohli\n\nGajenJragadkar J.\n\nNhraj\n\nD.R. Kohli\n\nGf#nulragadkar J,\n\n874 SUPREfE COURT REPORTS (1962] SUPP.\n\nrecalled thats. l 78A of the Sea. Customs Act requires that before ihe burden can be imposed on the appellant to show that the goods in question wern not smuggled, it has to be shown that the goods had been seized irnder the said Act and in the reasona hie belief that they are smuggled goods. The argument is that the question as to whether there was a reasonable belief or not is just iceablP, and since there is no material on the record to how that tho belief could have been reasonable, the statutory presumption cannot be raised.\n\nTn our opinion, this argument is not well-founded.\n\nThere are two broad features of this seizure whid1 cannot be ignored.\n\nThe first feature on which th'l offieer relied is supplied by the quantity of gold in question. It was found that the appellant was carrying on his person five pieces of gold 'bullion weighing its much as 290.6 tolas, This lar!?e quantity of gold valued at nearly Rs. 30,000/- itself justified a reasonable belief in the mind of the officer that the gold may be smuggled. In that connection, it may not bo irrelevant to remember that the said oflicer had received positive information in tho month of Sep wmber, 1!)56, rr this rule, the markot committee may levy fees by one method on one agricultural produce and by another method on another agricultural produce will not ho a ground of discrimination, for each commodity must bo treated as a class by itself.\n\nTurning now to the second contention, it is true that there is nothing in the rule expressly to\n\nprevent the market committee from using two of the modos prescribed therein for the purpose of levying fees on thv s1me agricultural produce. It must be rcmem bercd however that the rule is a. gt•neral provision for levying fees within the\n\nmaxima prescribed on the.agricultural produce by market committees in the market areas all over the State. Various methods of levying fees have been included in the rule, for we assume that the rule making authority kriew that there wore various ways in which things are brought into various market areas. The rule is meant to apply to .all situations that may arise in tho State and there . m; i.y be different ways in which things may be brought to the market areas in difforent parts of\n\nhe State. That is why the rule has a wide sweep and allows the market committee to levy fees either by cart load, or by value, or by weight or by containers. It may be that if for the same agricultural producii fees are levied subject to the maxima two different modes, the rates fixed may result in discrimination. It would however not be improin r to assume that in framing the bye-laws in whioh pee rates for any particular agricultural produce .thll be fixed the market committee shall pay due\n\nwigard to the prohibition against discrimination rentained in Art. 14 of the Constitution. The praccocal consequence of this is likely to be that for one tigricultural produce the market committee will fix ane rate only in one of the four modes: If that is oone no discrimination can be said to arise. It will dot also in our opinion be unreasonable to think nhat in issuing the notificathn the Government tproceeded on the assumption that for any particular agricultural produce one mode of fixing feeswhether according to cart load or according to value or according to weight or according to the number of containers-will be adopted. Nor would it be difficult if the rate is fixed in one of the modes, say according to cart load, to calculate the fees to be levied where the produce is brought in aey other manner, say in baskets, for then the proportional fee can bo charged on each basket on the basis of so many basket-fuls being equal to QIJ.e ca.rt loa.q.\n\nSiilarl~ wqere t4e b, Ye-lii.w fie~\n\nMohamm odbhai KhudabU< Chbipo\n\n•• The Stat' of Guj•rat\n\nWanchoo J.\n\nMoMmtnodbhoi Kllld.tux Chhipa .. 1hf: Stal1 of Gujarat\n\nW1nchon J,\n\n886 SUPREMECOURT REPORTS (1962] SUPP.\n\nthe fees according to containers and a dealer brings the produce in cart load, it will be possible to calculate the fco due on the basis of containers, by calculating how many containers would be equal to one cart load.\n\nWhere the fee is fixed by weight or value there w<1uld he no difliculty in any case.\n\nTherefore one may reasonably conclude that the market committee when acting under s. l l read with the notification will levy the fees on a single commodity in one only of the permitted modes. If that happens in actual practice there will be no question of any discrimination.\n\nBut assume that a market committee chooses to adopt two modes for levying fees on tho same agricultural produce, sny one according to cart load and another according to weight, In such a case a question may arise whether there is discrimination in the incidence of fees. That question may have to be considered if and when it arises and whether discrimination actually arises in such a case will depend upon the rates fixed by the market committee for levying of foes on the same agricultural produce in the two modes that it might choose. If the rates are RO fixed that the incidence is substantially the same whether the fees arc !•vied on the basiR of cart load or on the basis of weight, there will be no discrimination. On the other hand if the rates are so fixer! that the incidence works out substantially differently there will bo a case of discrimination and in such a ease it is the bye law that will have to il'. In sqc!J\n\na case it is not the notification which will have to be struck down but the actual bye-law if it prescribes rates of fees in two modes in such a way as to result in discrimination.\n\nTurning now to the facts of the present case we find that the bye-laws framed by the market committees have fixed only one mode of levying fees in these cages for one kind of produce. It is not the petitioners' case that the market committees with which we are concerned in the present cases have used more than one mode for levying fees on the same agricultural produce. There is therefore no case for discrimination made out on the basis of the actual bye-laws which have been framed by the market committees under the power conferred on them under s.ll read with the notifi cation. Iu these circumstances, the attack on the notiffoation on the ground of discrimination must fail.\n\nRe. (2).\n\nSub-section ( 1) of s.29'.B provides that in the case of a market area declared before the commencement of the Ordinance, a market for such market - area shall be deemed always to have been established for the purposes of the Act. with effect from the date on which a market yard for such market area was declared for the first time under the R.u!es or the Act and such market shall include and shall be deemed always to have inc>luded the said market yard. By this provision the defect that was pointed out in the .earlier judgm\\)nt with respect to the establishment of a market is intended to be validated. The sub -section further provides that any action taken or anything done by a market committee or any other authority after the establishment of a market therein as aforesaid but before the commencement of tbe Ordinance, which but for the provisions of this clause would have been\n\nivalid, shall be and shall be deemed alwa, YS to\n\nM Dhammadbhai Khudabwr Chhipa\n\n•• '/he State ofQujaral\n\nWanchoo J.\n\n19GZ\n\n.\"11hommadhhai Khudahux Chl, ip•\n\n- v.\n\nTh, Stott of GujGral\n\nJf ON(ht>O J •\n\nhave been valid ann shall not bo called in question\n\nmerely on the ground that no market w11s established for such market arna when uch action was taken or thing done. 8uh-scction (:!) then provides that any fees leviocl and r:nlle0td on agricultural\n\nproduc~ hought :ind sold in 11 market area before the commencementof the Ordinance by a market committee at the rates spc.cificd in its bye-laws shall be deemed to have been validly levied and collectod and such levy and collection shidl not ho called in question merely on the ground that at the time of such levy and collection no maxima were prescribed as required by s. l I. The intention of this provision is to cure the defoct which was noticed in the earlier judgment inll.Smuch as no maxima hd been prescribed under s.11 by the State Government.\n\nSub-seotion (3) finally provides that all licences issued to operate in a market area or any part thereof and fees charged therefor before the commencement of the Ordinance hy a market committee under the Hules and bye-laws and any action taken or thing done relating to li\"ensing of personR, or obtaining of a licence, to operate in the market area or any part thereof, taken or done hy a market\n\ncommittc\" or any other authority or p1raon nndor the Hules and bye-laws before t.ho commencement of the Ordinance hall be• and 11hall be deemed always to have been \\-alid and the validity thereof shall not be called in question merely on th~ ground that when such action wa11 taken or thing done, the power rio-ht or obligation therefor was not duly conferred\n\no; imposed by the Act on such market committee, authority or person.\n\nThis provision is intended to cure the defect arising from rr.(i!i and fi7 being declare the limit below which t)1ey cannot trade in the market yard and this c)Qarly\n\n:s.c.:R.\n\nSUPREME CoURT REPORTS 8!i3\n\nshows that the intention of the market committee\n\nwas not to control retail trade by the issue of licence to traders for the large proportion of retail trade may well be below 10 lbs. for each transaction. We cannot therefore accept the contention of the petitioners that thti bye-laws by providing for A class and B class traders are really providing for control of retail trade. It is clear that B class traders can only buy in the market yard but cannot sell there and as for sale, they will be entitled to sdl in retail wherever they like, for the Act does not control retail trade.\n\nAs for r. 64, it inerely provides for incidental powers ; n connection with the regulation of market yards and it has already been held valid in the earlier judgment. We see no reason to hold that that rule is invalid on the ground that the market committee is using that rule to control retail trade. We have already pointed out that the market committee cannot be said to control retail trade by providing for A and B class licences and there is no question therefore of r. 64 being used in a manner not intended thereunder.\n\nLastly, it seems that there is some dispute by some petitioners in Petitions Nos. 228 and 229 as to whether they hold certain shops in the market yard from the municipal committee or must be deemed to hold them from the market committee and what rights the market committee has over those petitioners in that connection. It appears that there have been suits in courts with respect to that dispute. That is a matter which in our opinion has to be decided by the courts where the suits are said to be pending and cannot be the subject of adjudication in a petition under Art. 32. In any case r. 64 cannot be declared bad because of any dispute between the mnrket committee, the municipal committee and stall holders as to their respective rights\n\n196Z\n\nM ohammadbhai Khudabux Chhipa\n\nThe State of Guja,0 1\n\nWanchooJ.\n\nMo\"4mmdbhai Kludobtu CllMH•\n\n•• Th4 State of .\n\nThis contS Act, HJ47, as in force before the commen cement. of the ludustrial Disputes (Amendment and '.\\Iiscellaneous Provisions) Act, l !J5ti,\n\nread with Section 30 of the latter Act and all other powNs enabliug him in this behalf the Governor of Punjab is pleased tu extend-\n\n(a) the period for which the Industrial Tribunal, Punjab, Jullundur, is const i 1,11 ted, and\n\n(h) the term of appointment of the Sole Member thereof.\n\nHJ> to the last day of October, I !J5i, or such date as the proceedings in relation to industrial disputes pending in the said\n\nTribunal immediately before the I 0th l\\farch, l!J57, are diaposPd of, whichever\n\nis earlier.\" To put it briefly, this Xotification extended tho life of the Tribunal constituted under the repealed s. 7, for the period spocifid therein, and it also continued the term of Shri A.N. Gujral, as a :\\Iember thereof, for the said period.\n\nThe contention of the appellant with reference to th is Notification is that s. ; lO of A ct 36 of\n\nl!:J5G does not authoritte tho appointment of a )!ember to the Tribunal constituted under s. 7, and that the Not, ification in so far as it continued Shri A.N.\n\nGujral. as a l\\Iembcr of tho Tribunal after his term\n\nof office had expired on Mach IO, 1957, was unauthorised and void.\n\nOn the same date on which the above Notification was i\"sud, t, hat is on April 19, 1957, the Government of Punjab issued a Notification under s. 7 A of the Act of which the relevant portion is as follows:-\n\n\"No. 4194-C'.-Lab-57 /66 l-RA-In exercise of the powers conferred by Section 7 A of the Industrial Disputes Act, 19!7, as inserted by section 4 of the Industrial Disputes (Amendment and Miscellaneous Provisions)\n\nAct, 1956, (No. 36 of 1956), and all other powers enabling him in this behalf, the Governor of Punjab is pleased to constitute an Industrial Tribunal with Headquarters at Jullundur and to appoint Shri Avtar Narain Gujral, B.A., LL.B., as its Presiding Officer\n\nwith effect from the date of the publication of this notification in the Official Gazette up to 3rd June, l!l57.\"' It will be noticed that this Notification firstly constituted a new Tribunal being the Industrial Tribunal, Jullundur, and secondly it appointed 8hri A. N. Gnjral as its Presiding Officer np to June 3, 1957. The significance of that date is that, under s. 70 (b) enacted by the Amendment Act, 1956, the age of retirement fur members was fix<•d at sixty-five, and under that provision, Shri A .N. Gujral would have to retire on June 3, 1957.\n\nTne Punjah Legislature intervened at this stage and enacted two statutes which are material for the present dispute. One of them was the Industrial Disputes (Punjab Amendment) Act 8 of Ul57.\n\nSection 3 of this Act amended s. 70 (b) of the principal Act by substituting for the words \"he has attained the age of sixty-five years'', tho words \"he has attained the the age of sixty-seven years\".\n\nThus the age of retirement was raised to sixLy-seven years. By the operation of this Act, the tenure of Shri A. N. Gujral could be extended from\n\nThe Atlas Cycle Industries, Ltd. 1\n\nSonepat\n\nTheir Workmen\n\nV tnkatarama\n\nAl)ar J.\n\ni9ti2\n\nTht Atltu Cycl1 In du,nacted by the Punjab Governmf'nt is the Industrial Disputes (Amendment anict.ing 1111drr R.\n\n3:~B (I) oft.he Art, and A. :lO of th\" Amendment Act\n\n19:i6, ns further amended by Punjnh Art, 9of19fl7. thP Government. of P1injab issned by t.he appellant against this or Act that, in consequence, the reference to him dated Febr.uary 14, 1965, was incompetent;\n\n(2) that the Notification of the Punjab Government d1tted April. Hl, 19ii7, appointing Shri A. N. Gujral as a Member of the Industri1tl Tribunal, Jullundur, and the subequent Notifications extendin~ his tenure of office are unauthorised and inoperative;\n\n(3) that the Notification of the Punj1tb Government dated October 3 /, 1957, tmnsf,, rring the proceedings pending before the old Tribunal to the new Tribunal was inoperative, because (i) the Punjab Act 8 of I 967 is void being repugnant to Art. 14 of the Constitution and the appointment of Shri A. N. Gujral as Member under that Act is also void;\n\nThe Atlas Cyclt\n\nlndustr1:es, Ltd.,\n\nStmepat\n\nTheir Vlorkmeti\n\nVenkatMama\n\nA(var J.\n\n19G2\n\nThe Atlas Cyclt\n\nlrl'luslriu, 1.td.,\n\nTheir Worl; mtn\n\nVenlcularama\n\n:liya•, .!,\n\n96 Sl\"PREl\\IE COCRT REPORTS [1962] SL\"PP.\n\nand (ii) s. 30[2) enitcted by Punjab Act 9 of 1957 under whieh the transfer was made, did not authoriso transfer of proceedings, .which had Loen pending on or before :lfarch 10, I !J57.\n\n(I) Taking up fil'llt the cont-0ntion that Shri.\n\nA. N. Gujral was not <]nalified to he appoinU, d to th~ Trihunal on August 29, l!J53, by reason of the fact that he was over sixty years of age, the question is one of interpretation of the language of s. i ( 3)( c) of the Act.\n\nSection 7, in so far as it is material for the present purpose, is as folloirn:-\n\n\"7. lnd1utrial Trilrunals.-(I) The appropriate Go-vPrnment m\"v contitute one or more Tn1!ustrial Tribunals for thA adjurson to bo appointed as additional or ading , Judge by the Prsi.\n\nas prescribing a qualification for his appointment. It is argued for tho :tppcllant that the appointment of an AdvoCLtions under sub-els. (a) and (b).\n\nIt would therefore be legitimate to constme sub-el. (c} as not. importing any qualification on the ground of age. But it iH said t.hat sub-els. (a) and {h)\n\nform a distinct group having reference to judicial officers, whereas,\n\ncl. (c) is confined to Advocates, who form a distinct category by themselves, and\n\nthat in view of this difference, considerations as to age applicable to cl. (a) and (b) need not be applicable t that section which was also relied on is as follows :-\n\n\"Disqualifications for the presiding officers of Labour Courts, Trilmnals and National Tribunals.\"\n\nThe argument of the appellant is that, in prescribing the age as a qualification under s. 7C, the Legislature only made cxplioit what was implicit in\n\n8. i(3)(e), and that therefore the qualification on the basis of age should also be imported in s. 7(3)(c).\n\nThis inforenco does not, in our opinion, follow.\n\nThe insertion of age qualification in s. iC is more consistent with an intention on the part of the Legislature tu add, in the light of the working of the repealed s. i, a new provision prescribing the age of retirement for i\\lcmbers.\n\nWe ; greo with the decision of the Punjab High Court in Prabhu- <.Wyals case(I) and hold that s.i(3)lc) docs not import any qualification based on the age of the person to be appointed, am! that the appointment. of Shri A. N. Gujral on Augui; t 29, 1953, wao valid under s. 7(3)(c).\n\n(2) The next contention advanced for the appellant is that tho Notification dated April 19,\n\n11157, appointing Shri A. N. Gujral as a llfembcr of the Tribunal issued under s. 30 of the Amendment Act 36 of 1956 was not authorised by thu terms of that section and that therefore there was no validly constituted Tribunal from that date.\n\nSection 3U is as follows :-\n\n\"Savings as to proceedings pending before Tribunals : If immediately before the commencement of thi~ Act there is pending any proceeding in relation to an Industrial dispute before a Tribunal oonstituted\n\n(1) A. I. R. [1959] Puoj. 460.\n\nunder the Industrial Disputes Act, 1947 (14 of 1947), as in force before such commencement, the dispute may be adjudicated and the proceeding disposed of by that Tribun'11 after such commencement, as if this Act had not been passed.\"\n\nThe contention urged before us is that s. 7 under which Shri A. N. Gujral had been constituted Tribunal was repealed on March 10, 1957, the notification dated April 19, 1957, appointing him as a Member of the Tribunal is void.\n\nThere is no substance in this contention.\n\nSection 30 expressly provides for the life of the Tribunal being extended for the period specified therein, and that necessarily implies a power to continue Shri A. N.\n\nGujral as the Tribunal, and we should add that in view of our decision on point No. 3 this objection is practically of no importance.\n\n(3) Lastly, it is contended that the transfer of the proceedings pending before the old Tribunal to the new Tribunal under the Notification dated October :n, 1957, was invalid and inoperative.\n\nTwo grounds were urged in support of this contention. One is that Shri A.N. Gujral attained the age of sixty-five on June 4, 1957, and his term of office would have then expired under s. 7C. , Then the Punjab Legislature enacted Act 8 of 1957 raising the age of retirement under s. 7C(b) from sixty- five to sixty-seven. That was with 9, view to continue Shri A.N. Gujral in office. And this legislation came into force only on June 3, 1957. This Act,' it is said offends Art. 14 as its object was to benefit a particular individual, Shri A.N. Gujral, and reference was made to a decision of this Court in Ameeroonissa v. Mehboob (1) as supporting this contention. There is no foree in this contention.\n\nThere the legislation related to the estate of one\n\n(1) [1953) S.C.R 404.\n\nTiu Atlas Cycle Industries, ltd.,\n\nSunepat •\n\nThefr Workmen\n\nVenkatarama\n\n.A.tyar J.\n\nTtu Atla1 Cyclt lwlwtr; tI, ltd., • Soritf'aC ...\n\nThtir W orkmtn\n\nVtnk1itcrema\n\nAiyar .. ,\n\n104 SCPREJIE COCRT REPORTS [1962] SUPP.\n\nNawab 'Waliu7 is of gem ral application, the age being raiRcd to sixty\n\nseven with refer<'nce to all per8ons holding tho ofiice under that oection. The occasion which inspired\n\nthe enactment of the statute might he t.bc impen ding retirem1nt of Siu i A. !\\. Gujral.\n\nBut that is not a ground for holding tltat it is discrimim1tory and contravenes .l\\rt. I~, when it is, on its terms, of general application.\n\nThe second ground of attack against. the order of transfer i' that it is not competP11t under s.:l0(2) of the Ami nconRti\n\nt.utn that Tribunal for adjudieatin°q that dispute and dispo; ing of that proci>edin6 after Hn<'h commence nwnt as if this Act. bad not\n\nb1,..n pa; sed, and the proceeding may be eontinunl by that Tribunal from tlw stage at wjiieh it Wall left,\"\n\n3 S.C.R.\n\n. SU~REME COURT REPORTS 105\n\nThe contention urged before us is that this provision has no retrospective operation and that in consequence t.he proceedings which had been pending before the old Tribunal on March 10, 1957, could not be transferred to the new Tribunal under thi\" section. This content.ion is clearly untenable, because the whole object of s.30(2) is to provide for the hearing of disputes which were pending before the old Tribunal, and its operation is entirely retrospective. This contention must therefore be rejected.\n\nIn the result, the repeal fails and is dismissed with costs. \"\n\nA ppe, al dismissed.\n\nSRI SATYA NARAIN SINGH\n\nDISTRICT ENGINEER, P.W.D. AND ANOTHEli\n\n(B. P. SINHA, J. L. KAPUR, M. HIDAYATULLAH, J. C. SHAH and J, R. M:uDHOLKAR, JJ.)\n\nPu.blic ferry--Toll-Right to coUe9. ·\n\nN. C. Chatterjee and P. /(. Chritterje_e, for the appellant.\n\nC. I(' Dapftlar?J, Solicitor-General of India, B. R. L. Iyengar and P. D. Menm1., for the respondents.\n\nR.111. Patnai!.:, S. N. Andley, lliimeshu-ar Nath and P. L. T' ol!ra, for the Intervener.\n\n1962. March W.\n\nThe , Judgment of the Court was delivered by\n\nWA~CITOO, J.-This is an appeal by special leave against the judgment of the Orissa High Court. The brief facts necessary for present purposes are these. The appellant made an ap13lication to the State Govornmcnt of Orissa in 1949 for . grant of a mining lt>asc for manganese ore over an area comprising 5400 acres situated in the distric't of Keonjhar. The appellant was the first applicant for the lease of the aforesaid area, and subsequently other persons applied for lease of tho same area including Messrs. Tata Iron and Steel Company Limited {hereinafter referred to as Tatas). the intervener in the present a.ppca.l.\n\nThe Government of Orissa decided to grant. tlrn lease in favour of Tatas and in .Jan1111ry 19156 referred tho matter to the Central Government for its approval under r. :l2 of the Mineral Concession Rule of any avail to the petitioners concerned in those cases and could give them no . relief for the orders of the superior authority outside the jurisdiction would. remain\n\noutstanding and opcrativo af.(ainst them. 1'horefore, as no writs could be issued against the outside authorities, this Court was of the view that tho High Courts were right in dismis8ing the petitions, as any writ against the inferior e.uthority which is within the jurisdiction of the High Court, in vi\"w\n\nof the orders of the superior authority, would be infructuous. The position in the present case is similar to that envisaged above. The Orissa Government rejected the api>iJcation of the appellant for grant of the mining lease.\n\nThe ii ppella.nt being aggrieved by that order went in review to the Contra] Government under tho Rule8 and that review petition was dismissed so that in effect the Central\n\n(!) [1955] 2 S.C.R. 1196,\n\n3 S.d.R.\n\nSOPREME COURT REPORTS 913\n\nGovernment also rejected the application of the appellant for grant of the mining lease to him. It is not in dispute that if the Central Government was so minded it could ha.ve allowed the review and directed the Orissa Government to grant mining lease to the appellant. Therefore when the Central Government rejected the review petition, it in effect rejected the application of the appellant for the grant of the mining lease to him. This order of the Central Government in effect rejecting the applica- . tion of the appellant for the .grant of the inining lease to him and confirming the rejection of the application of the appellant by the Orissa Government is clearly not amenable to the jurisdiction of the High Court of Orissa under Art.226 in view of the fact that the Central Government is not located within the territories subject to the jurisdiction of the Orissa High Court. It would therefore have been useless for the Orissa High Court to issue a writ against the Orissa Government for the Central Government's order rejecting the review petition and therefore in effect rejecting the application of the appellant for grant of the mining lease would still stand. This is made clear by r. 60 of the Rules, which provides that \"the order of the Central Government under Rule 59 and subject only to such order, any order of a State Government under these rules, sall be final''.\n\nClearly therefore r. 60 provides that where there is a review petition against the order passed in the first ihstance by the State Government, the order of the Central Government passed in review would prevail and would be the final order dealing with an application for a mining lease under the Rules. Therefore, quite apart from the theoretical question of the merger of the State Government's order with the Central Government's order, the terms of r.60 make it perfectly clear that whenever the matter is brought to the Central Government under r . .59, it is the order of the Central Government which is effective and final. In these\n\nM ad, n Gopal Rungta\n\ny, Secrclay to ht G(; Vernment of Orissa\n\nlYanchoo J.\n\nMadat< Gopal\n\nRungld ... 8e'1'dcny lo lht Governmerct oj Orillo\n\nwoncAoo J.\n\n9I4 SUPREME COUR'\"i. REPORTS [1962] SUPP.\n\ncircumstances we are of opinion that the High Court was right in holding that it had no jLirisdiction to issue a writ under Art. 22() in the present c1isc as the final order in this ease was that of the ntral Governm<'nt which was not situate within the territories over which the High Court has jurisdiction.\n\nOur attention in this connection was drawn to Shivji Nathubhai v. 'J'he l.:nion of India (1).\n\nIn that case a mining lease had been granted by the State Government to a particular person and them was a review petition against the grant of that mining lease. The order granting tlw mining lease was set aside on reviow without notice to thc person to whom the lease had been granted. In that connection a question arose whether tho person to whom the State Government had granted tho lea, e had any interest to enable him . to make an application under Art. 22ti. It was then pointed out liy this Court that under the Rules the order of tho State Government would be cfft>ctive a~ there was no requirement that it was not final until confirmation by the Central Govornmm1t.\n\nThat case however is of no assistance to the appellaut for where there is a review petition and the Central Government passes an order on such potitiou one wy or thn other it is the Central Government's order that prevails and the State Government's order must in those eircurustances merge in the order of tho C\"ntral Government. The observations in that case on which the appellant relics were made in another\n\nconnection and can have no bearing on the question before us, where an order has been paBBed by the Central Government on review and it is that order which is made final by r. tiO and which stands in the way of the appellant. 'lhere is therefore no force in this appeal and it is hereby dismissed with costs.\n\nAppeal dismissed.\n\n(IJ [1960J 2 s.c.J.{. ns.", "total_entities": 28, "entities": [{"text": "s. 29", "label": "PROVISION", "start_char": 243, "end_char": 248, "source": "regex", "metadata": {"statute": null}}, {"text": "GTA\n\nSECRETAH.YTO THE OOVERNMENTOF\n\nORISSA", "label": "RESPONDENT", "start_char": 446, "end_char": 488, "source": "metadata", "metadata": {"canonical_name": "SECRETARY TO THE GOVERNMENT OF ORISSA", "offset_not_found": false}}, {"text": "B. P. 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P. srnHA, c. J., K. suBBA RAo, N. RAJAGOPALA\n\nAYYANGAR, J. R. MuDHOLKAR and T. L.\n\nVENKATARAMA AIYAR, JJ.)\n\nHabeas Corpus-Arrest and detention for de1Jortalion- Petition for haheas corpus-Police holding detenues for production before High Court-Non-1iroduction before Magistrate- Production before High Court and grant of bail-Detention, if illegal-Con•titution of India Art. 2 2( 2).\n\nIn pursuance of an order for their deportatio11 the respondents were arrested on July 21, and sent to Amritsar.\n\nThe next day a habeas corpus application was filed on their behalf before the High Court at Lucknow and they were ordered to be produced on July 25, but on the High 'Court being informed that the respondents were beyond its jurisdiction it directed the application to be consigned to the records.\n\nOn spurious information being received at Amritsar that the respondents had to be produced before the High Court the respondents were sent back to Lucknow which they reached at 1 P.M. on July 25.\n\nThey were produced before the Deputy Registrar at 3 P. M. and he directed them to be produced at I0.15 A.M. on 'the next day. In the mean time a second habeas corpus application was filed on behalf of the respondents, inter a1ia, on the ground that the detention of the respondents was in violation of Art.22 of the Constitution as they had not been produced before any Magistrate. The respondents were produce¢ before the High Court at 10.30 A.M. on July 26, when the High Court adjourned the case till 2 P.M. onJuly\n\n0 27, and directed the production of the respondents at the time of hearing. On July 27, the High Court ordered the release of te respondents on bail and adjourned the case till July 28. On July 28, the High Court allowed the application and directed the respondents to be released on the ground of a contravention of Art. 22(2). It did not consider the legality of the detention in the first stage, i.e. from July 21 to 1 p.m. on July 25, but held that the detention in the second stage was illegal as the respondents were not produced before a Magistrate within 24 hours of l P.M. of July 25.\n\nHeld, (per Sinha, C.J., Ayyangar, Mudholkar and'Aiyar,\n\n- J.J., Subba Rao, J., dissenting), that the detention of the\n\n196:!\n\nMarch16.\n\n19G2\n\nStales of Uttar\n\nI'rarksh\n\nA /.c}ul Sa11uJcl\n\n!)Hi SUPREME OOUitT HEPORTS [1002] SUPP.\n\nrespondents was lei; al and the High Cou1 t '''a=> , .. 1ong in orUer ing their relcast'.. rhc rcsponrlc:nts \\\\'Crc produced before the High Court on .July 26, within 2+ hours of their airival at Luckno\\v and the lligh C0urt by ordcrini.;· their production the . next day permitted the rr:spondcnts to rcn1ain in police custody. 'I hey were again produced before the 1-Iigh (; ourt within the\n\nnext 24 hours on July 2i, \\Vhr:n they \\Vere ordered cu be rrleased on bail. \"fhus at no tin1e during the sccund sragc wuld the respondents be said to have been 11legally detainer! for 1nore than 24 hours \\Vithout production before a j udical authority in violation of Art. 22(2).\n\nPer Subba Rao, J. The detention of the respondents \\Vas illegal.\n\nThe detention could no! b: dissected into t\\\\'O stages; it ,.,,.as a continuous one.\n\nArrest an'Uishj .\n\nCRIMJNAL APPELLATE .JuHJ~!JfCTlOl'i : Criminal Appeal !\\o. 48 of UHll.\n\nAppeal by special leave from the judgment and order dated July 28, I fHiO, of the Allahabad High Court (Lucknow Bench) at Lucknow in Cr. :\\iisc. rase :No. 186 of IU60.\n\nG. C. , Jfot/mr and C. /'. Lal, for the appellant.\n\nS. P. Siiiha and JJJ. I. JOmuj11, for the respondents.\n\n19(i2. March !ti. The , Judgment of Sinha., C. , J., Ayyangar, 7lludholk1; r and Aiyar, , J, J., was delivered by Ayyangar, J., Subba Rao, J., d1•livcrPd a separate Judgment.\n\nAYYA:SGAR, J.- This is an appeal by special lcaYc against the judgment and orcl!'r of the High Court of Allahabad by l\\hich it allowed a petif.ion under, s. , l!)l of the Criminal Proc<'ased on bail.\n\nTho learned Judges have divided this into two periods-the dividing line being\n\n1 P.'.IT. nn 25th July l(lUO, when they were brought to Lu\"know\n\nin pursuance of the telephonic message purporting to emanate from the Under Secrctarv to G0\\'1 rnment for being proclucerl before the High Court.\n\nThe Learned , Judges of t.he High Court confined their attention to tho second period aud holding\n\nthat during this period there had been a violation of the requirements of Art. 22(2) of the Constitution, in that the respondents had not been produced before a Magistrate within 24 hours of the commencement of the custody, expressed their opinion that the detention was illegal and directed the release of the respondents. It is the correctness of this order . of the High Court that arises for consideration in this appeal.\n\nBefore p:'oceeding to examine the reasoning of the learned Judges it it necessary to state one matter. In view of the ver, v limited question before us we do not feel called upon to deal with the scope of Art. 22(1) or .22(2) or of the two clauses read together in relation to the taking into custody of a person for the purpose of executing a lawful order of deportation which would require to be considered in regard to the detention durin~ what has been stated earlier as the first period. When the question does arise for decision the following circumstances would be among those to be considered before the scope of the constitutional guamntee could be properly determined: (1) An alien has no legal and enforceble\n\nright to enter the country and can do so only subject to the permission granted by the executive under our law and when such a person overstays in the country beyond the period for which he i' so permitted, the State acting through the executive is entitled to require the alien to quit the country for the mere reason that the period for which he has been permittd to stay has elapsed. - (2) That where an alien is takn into custody in pursuance of a valid order of deportation he is not charged with any offence within the meaning of these words in Collector of Malabar v. Ebrahim Hajee (1 J but the State is merely effecting his removal from the country - an act which the alien was himself bound by law to have done. (3) When the Constitution makes a provision for procluction before a Magistrate, the requirement is not to be trea.te1l as any\n\n(1) [1937J S.C.R, 970. .\n\n196B .\n\nState of Uttar\n\nPraderh\n\nAbdul Samad\n\nAyyangar J.\n\n19C2\n\nStalt nf Uttar\n\nPradtJh v.\n\nAbdul Sr; mad ---.\n\nA vangor J.\n\n924. SUPREME COURT REPORTS [1962) SUPP.\n\nformality but as purposeful designed to enable the person arrested anre was no justification whatsoever for the finding on tho basis of which the loamed Judges directed the release of the respondents.\n\nWe have given anxious thought to the quPstion as to the proper order to pass in the appeal.\n\nIn the first place, we have to take into account that it is the liberty of the person that is involved and that it is the duty of the Courts to ensure that there is no encroachments on that liberty anrl particularly of infringements of the guaranteeB which the Constitution has conferred on all persons, oitizens and others in that regard. When the highest Court in a Sta.te has made an order upholding such a libCrty, this Court would naturally be slow to intorfero with it unless satisfied that there has been a miscarriage of justice caused by a patently erroneous interpretation of the law, though it need hardly bo added that a miscarriage of justice might equally be occasioned by the improper order of release of a person whose custody is lawfo!. We are alsn conscious of the fact that the appeal before us is\n\nby virtue of special leave under Art. 136, and that\n\n3 S.O.R. SUPREME CC>URT REPORTS 929\n\nin such cases, it is not every error that would be corrected, and in a case of the kind now before us, the conscience of the Court should be satisfied that interference is called for before the order of the Court below is interfered with. It is bering these considerations in miad that we have arrived at the conclusion that the order of the High Court should not be allowed to stand.\n\nThe appeal is accordingly allowed and the order of the High Court set aside.\n\nSUBBA RAo, J.-I regret my inability to agree. The facts are simple. The two respondents, husband and wife, were arrested at Lucknow by the polioe on July 21, 1960 at about 6 p.m.\n\nSoon thereafter, they were sent by train to Amritsar for being deported to Pakistan. They reached Amritsar in the early hours on July 23, 1960, and were produced before a Magistrate at Amritsar at\n\n10 a.m. on the same day. They were ordered by the said Magistrate to be kept in Civil Lines Than& till further orders. They were brought back to Lucknow in the afternoon on July 25, 1960, and, immediately thereafter, they were produced before the Deputy Registrar, High Court, Lucknow Bench, who directed them to be produced before the Court at 10.15 a.m. on the next day. At 10.15 a.m. on July 26, 1960, the High Court directed the respondents to be produced in court at 2 p.m. on July 27, 1960 to which time the petition for habeas cor- pus, filed by the respondents, was posted for hearing. The petition was adjourned to July 28, 1960 and the High Court directed the two applicants to be released on bail on certain terms. On July 28, 1960, the learned Judges allowed the petition for a writ of habeas corpus on the ground that the arrest of the respondents was in violation of the provisions of Art. 22(2) of the Constitution and, therefore, directed them to be set at liberty.\n\nThe State of Uttar Pradesh has preferred the present appeal against the said order of the High Court.\n\n196t\n\nState of Uttar\n\nPradesh\n\nAbdul Samad\n\nSubb11 Rao, J •\n\n\"'tali of Utldr\n\nl'r11d, sh\n\nAbdul Sa1nad\n\n930 SUPll™E OOUH:r Rl>ORTS [1962] SUPP.\n\nIt has been brought to our notice that subsequent to the tiling of the present appeal, the\n\nrespondents filed a smt and obtained an injunction against the State from deporting them to Pakistan pending the disposal of the suit. In the circumsta.nCCH they have ceased to have any interest in the present appeal.\n\nThe first question is whether it is a. fit oase for exercising the extraordinary juriRdiction of this Court under Art. 136 of the Constitution. The appeal has become infructuous, for even if the 1State succeeds it cannot arrest the respondents till the disposal of the suit. Nor has the High Court decided any such impcrta.nt question of law as to cause some irreparable injury to the appellant unless this Court sets the matter right. The learned Judges expressly left open the question raised, namely, whether Art. 22 would govern the arrest for the purpose of deportation. I would, therefore, dismiAs the appeal on tho simple ground that this is not a fit case for interference by this Court,\n\nThat a.pa.rt, I am also not satisfied that the conclusion arrived at by the High Court is wrong. On the said facts, the respondents were arrested on July 21, }!)60, for tho purpose of deportation and they wre admittedly not produced before the nearest Magistratp, wit.bin a period of\n\n24 hours of such arrest excluding the time necessary for the journey from thfl place of arrest to the court of the Magistrate. .Such persons coulcl not be detained in custody beyond the said period without the authority of a Magistrate. There iH an allegation that the respondents were produced before a Magist.rat<' at Amritsar, I.Jut that i\\Iagistrate did not satisfy the definition of \".:llagistrate\" in Art. 2:!(2) of tho Constitution. I find it difficult to dissect the detentiou into two periods, namely, (i) detention for deportation, and\n\n(i) detention for production before the High Court.\n\nThe act of detention was a continuous one and it did not cease to be one for the purpose of deportation by the fact that the respondents were brought back to Lucknow or thereafter to the High Court pursuant to the notice issued.\n\nThe question, therefore, is whether such an arrest for the purpose of deporta, tion is outside the ken of the constitutional protection given under Art.22(2).\n\nIndeed, the State of Uttar Pradesh in its petition for. special leave contended that the detention was for the purpose of deportation and, . therefore, was not governed by the said provisions. The material portions of the article read:\n\n\"22. (2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessa.ry for the journey from the place of arrest to the court of the magistrate and no such persqn shall be detained in custody beyond the said period without the authority of a magistrate.\n\n(3) Nothing in clauses (1) and (2) shall apply-\n\n( a) to any person who for the time being is an enemy, alien; or\n\n'(b) to any person who is arrested or detained under any law providing for preventive detention.\"\n\nIt would be seen that under this provision there is a constitution injunction that a person arrested and detained in custody shall be produced before a magistrate within the prescribe~ tin; ie. It cann?t\n\nbe gainsaid that arrest and detention m custody m contravention of this provision is illegal. Clause\n\n(3) of the article specifies two exceptions to the\n\n196t\n\nStott of Uttar\n\nPrarlesh\n\nv. /bdul S motl\n\nSubba Rao J.\n\nSI•\" of Uttar\n\nPraclesla\n\nAbdul Samoa\n\nSubba Rao J.\n\n932 SuPREME COURT REPORTS [1002] SUPP.\n\nsaid injunction.\n\nAdmittedly the respondents did not fall under one or other of the two exceptions.\n\nThe constitutional provision is couched in clear\n\nand unambiguous phraseology and it is not permissible to read into thn.t. proviRion exceptions other than those specially provided for.\n\nWhen a provision issues an injunction in clear words and provides for two specific exceptions it must be held that it prohibits any other exceptions. In the present .case it is not. disp•1ted that the respondenta were arrested by the police on July 21, 1960,\n\nand detained in their custody till they were pro, duced before the High Court, and tha.t their production before the Magistrate at Amritsar was not in compliance with the provisions of Art. 22(2) of the Constitution.\n\nBut. it iH argued that this Court has limited tho eontcnt of the words \"arrested and detained\" in State of Pim jab v. Ajaib Sinyh{l) and The Collector of Malabar v. Erimal Ebrahim Hajee(').\n\nThe first case relates to an abducted person taken int@ custody for the purpose of being ha.oded over to a rescue-home. But that decision was confined only to the facts of that case, namely, a <'.ase whir:h dealt with an extraordinary situation of unprecedented exodus and abduction.\n\nDas, J., as he then was, observed:\n\n\"It is not, however, our purpose, nor do we consider it desirable, to attempt 11 precise and meticulous enunciation of the scope and ambit of this fundamental right or to enumerate exhaustively the cases that some within its protection. Whatever else may come within the purview of article 2:!( 1) and ( 2), suffice it to say for the purposes of this case, that we are satisfied that the physical restraint put .upon an abducted person in the process of recovering and taking that person into custody\n\n{I) !1953)S.C.R. 254,269.\n\n(2) [1957) $.C.R. 970.\n\nwithout .any allegation or accusation of any actual or suspected or apprehended commission by that person of any offence of a criminal or quasi-criminal nature or of any act prejudicial to the State or the public interest, and delivery of that person to the custody of the officer in-charge of the nearest camp under section 4 of the impugned Act cannot be regarded as arrest and detention within the meaning of article 22(1) and (2)\".\n\nThere, this Court was dealing with a case of the police taking into custody an abducted person with the limited object and with the sole view of delivering that person to the custody of an officer incharge of the nearest rescue-home. In the , view of this Court, such a person was not doing any act prejudicial to the State or the public interest and, therefore, the act of taking such a person into custody was not arrest within the meaning of the said constitutional provision. But in the present case the respondents, who are alleged to be foreigners, were directed to leave the eountry; and, as they failed to do so, the police arrested them wit, h a view to deport them out of the country. The respondents were certainly guilty of an act prejudicial to the State or the public intereAt and, therefore, their arrest could not be equated with thitt of the person in the aforesaid case. This Court in express terms confined that deciAion to the facts of that case.\n\nThe second decision took away the case of . arrest of a person in execution of a warrant by a\n\n, civil court out of constitutional protection. That decision does not bear upon the present case.\n\nFor the foregoing reasons, I hold that the\n\nSlate of Uuar\n\nPr-adesh\n\nv •.\n\nAbdul Samad\n\nSubba Rao J,\n\nS14, of Uttar\n\nPratk1h\n\nAbdul Samad\n\nSribja Rao J.\n\nMarch I'\n\n934 SUPREME COC'RT REPORTS [1962) SUPP.\n\narrest of the respondents was illegal and that the High Court rightly ordered their release.\n\nIn the result, the appeal fuils and is dismissed.\n\nBY Cov1a. In accordance with the opinion of the majority, the appeal is allowed.\n\nM/S. SERAJUDDIN & CO.\n\n1;.\n\nTHEIR WORKMEN\n\n(P.R. GAJENDHAGADKAR and K. ~. WA~CIIOO, JJ.)\n\nI11dustrial DispMle-Reference b11 Stau Gol'emmenlr alidity-\"A1)1)ropriate Goiern1nent 1 i -''Industrial dispute'', in relation to 1nine-l'onstrur.tion of-1'J(ine\"-DefinilionbidMslrial Dispuf.fs Ar.t, 1947 (J4of 1947), ss. 2(a), 2(a)(i), 2(j), 2(k)-Jfinr., Act, 1962 {-~··; of 19o2), \"' 2(j), 2(k). 2(h).\n\n/\\. DRAGADKAR, J.-This appeal by special leavefraises a very short question about the construction or a part of section 2( a) of the Industrial Disputes Act (14of1947)(bereinafter called the Act).\n\nThat question arises in this \\vav. On the 14th March, 1960, the Government of West Bengal referred for adjudication to the Fourth Industrial Tribunal six items of dispute between four employers and their respective employees. Amongst the employers was the appellant M/s. Serajuddin & Co., p-16, Bentinck Street, Calcutta-I. and tho items of dispute covered claims made by the employees for grade aud scale, Dearness Allowance, House rent, leave and holidays, Provident Fund and Gratuity, and condition of service. It appears that all tht'l workmen employed in the tbreo other industrial concerns filed affidavits before the Tribunal intimating to it that they did not want to proceed with tbe case because the dispute between them and their respective employers had been settled. That is bow the only dispute which waR loft before tho Tribunal for its adjudication was tho dispute between the appellant and its workmen.\n\nOn behalf of the appellant, a preliminary objection was raisrt of the mine, any industrial dispute between the said Office and its employees .is an industrial dispute concerning a mine under s. 2(a)(i), and so the appropriate Government must be the Central Government and not the State Government.\n\nSection 2( a) ( i) provides, inter aila, that unlesA there is anything repugnant in the subject or context, \"appropriate Government\" means - in relation to an industrial dispute concerning a mine tqe ·\n\nSerajuddin Co. v.\n\nTheir Workmen\n\nGajendr6gadkar J.\n\nSnajuddi\" d.• Cn.\n\nTlvir lfor!mtr1\n\nGajrndragod/r.Gr J.\n\n938 SUPREME COURT REPORTS [19!i2) S\"GPP.\n\nCentral GO\\ernmont.\n\nThe question which ariseB for our decision is whether the present dispute can .\n\nbe said to be an industrial dispute concerning a mine.\n\nMr. Sanyal'a argument is that the word \"industry\" is wide enough to include the Head Office of a mining company, though it may be situatod away from the place where the mining operations are actually carried on; and it is in the light of the said ddinition 0f the word \"industry\" contained ins. 2(j) tha1 the words \"in relation to\n\na mine\" must be construed. An \"industrial dispute\" under s. 2(k) m<•ans inter a/ui any dispute between employers and workmrn and the expression \"work man\" means any person employed in any industry to do any skilled or uuskilled work of the type described by section 2 (H).\n\nTherefore, th1• words \"industrial dispute\" used in s. 2(a)(i) necessarily take us to the definition of the word \"industn\"' in s. 2(j) because au industrial dispute takes us to tho definition of the workman and the definition of a workman inevitably brings in the c; Jefinition of \"industry\" in s. 2(j).\n\nThat is how in construing the clause \"an indutrial dispute concerning a mine\" we cannot iwoid hringing in the wide 1.fofi nition of tho worrl \"in n1akes the High Court think that an order made by a Subordinate Court is fit for the exercise of its po\\vers of revision.\n\nDosJ.\n\n1, hc important eds of the motor car to the Head Cashier. The High Court however granted a certificate under Art. 134(I)(c) of the Constitution that this was a fit caso for appeal to this Court and on hat certificate this appeal has been preferred by the State of Kerala.\n\nThe principal point urged in Rupport of the appeal is that after the death of the accused no revision application lay to the High Court againt the order of the Sef!Bion~ Court maintaining his conviction.\n\nLearned Counsel for the appellant has based his argument in support of this contention on the principle cmbodiod in the maxim actio persanali,.~ moritur cum. persrma and has urgf'd that except where the stn, tute has stepped in to make any special provisions no proceedings either against the accused or on behalf of the accucd can be entertained or continued in t.he Court in respect of any crime said to have been committ.ed by a person after the death of such person. He has dra.wn our attention to Salmond's obAOITationA in his \"Jurisprudence\" Ele\"Ventb Edition, page 442 : That criminal responsibility muAt dit• witb wrong\n\ndoor himself, and has urged that as all criminal proceedings 1tre personal actions, proceedins in connection with a crime can, in the absence of any statutory provision, neither be comm<'nced or continued against an accused person or on his bPhalfunlcss hn is. in existence. It may be noted however tha.t Salmond himself goes on to say in discusing the matter that the modern opinion rejects the conclusion based on the received ma.xim actio personalis morit11r cum persona, that all actions for penal redress mut be brought against a living offender and must die with him. \"'hat is more important to notice is th1't we are not concerned here with the question of\n\ncriminal proceedings being continued or commenced against a person but with the question whether when a criminal proceeding has ended unfavourably to an accuaed person, an action can be take~ in the\n\nCourt in respect thereof. On this question the common law maxim is of little, if any, use and the answer to the question must be found in other provisions of law.\n\nThe Criminal Procedure Code gives a right of appeal to the convicted person in certain cases. if, after the conviction and before an appeal has been filed the convicted person dies, there is no provision for any appeal on his behalf. What will happen when after an appeal has been filed by the convicted person, he dies, is provided for in s. 4:ll of the\n\nCriminal Procedure Code. That section provides that every appeal against acquittal and every other appeal under Chapter XXXI except an appeal from a sentence of fine shall finally abate on the death of the appella, nt. The High .Court or the Court of Sessions cannot therefore exercise its appellate jurisdiction in favour of a dead person even if an appeal has been filed by him, except in an appeal from a sentence of fine. ·\n\nAs regards the revisional jurisdiction of the High Court there is no provision similar to s. 431.\n\nNor is there any provision whether a revisional application can be or cannot be made in respect of an order of conviction when the convicted person is dead. We cannot but notice the important distinction that while the appellate jurisdiction can be exercised only after an appeal is filed by the convicted person -or against an order of acquittal under s. 411 ors. 417, there is no such limitation on the Court's revisional jurisdiction. ·\n\nThe opening words of s. 439 of the Criminal Procedure Code, viz., \"in the ca.se of any proceedings the record of which ha3 been called for by itself or which has been reported for orders or\n\nTiu Stata of Kuala •• • Narayon: Amma\n\nKamila Devi\n\nDasJ.\n\nTht .Slate Qj Kuala\n\nv, JVara1a11i Amina\n\nK11malr:: Dt1:i\n\nDasJ.\n\nwhich otherwise come8 to its knowledge\", produce the result that rcvisional jurisdiction can be exercised hy the High Court by being moved either by the convicted person himself or by any other person or suo morn, on tho basi8 of its own knowledge deriver! from any source whatsoever without being moved by any person at all.\n\nAll that is necessary to bring tho High Court's powers of revision into operation is, such information as makes the High Court think that an order made by a Subordinate Court. is fit for the exercise of its powers of revision.\n\nBut, says llfr.\n\nPathak, look at the words that follow in this section stating what powers can he cxerdscd.\n\nThest\\ words, viz., tho High Court may in its discretion exercise any of the powers conferred on a court of appeal by es. 42a, 426, 427, and 128 ........ make it clear that a High Court's power of nwision docs not extend to anything more than what the court of appeal can do. When therefore a court of appeal cannot give any rolief in respect of. an order of conviction and sentence of fine or anv other order made against an accused person after the accused person is dead, how cn, n the High Conrt in revision give any such relief a.fter the accuRed person's death. This argument confuses the definition of the extent of power with the conditions for the exercise of the power.\n\nThe conditions for the exercise of the power of revision are laid down in the opening clauses of s. 439 which has ju8t bel'n set out above, while the next clause thn, t the High Court may exercise any of the powers conferred on a court of appeal undor s. 4:!3, s. 426, s. 427 and s. 428 ......... define the extent of the power. The fact that the extent of the power of a court in rnvision docs not extend-except as regards the power of the courts by s. 4:39 to enhancement of the sentenm to more than what the appellate court's po1rnr, does not effect tho position that while the conditions for the exercise of the powers of courts of appeal is\n\nthat an appeal must be preferred by the convicted person, that condition is conspicuous by its absence where the conditions of the exercise of the powers of revision are laid down in s. 439.\n\nTlte State of Kera/a v.\n\nNarayani A.mma\n\nKamala Devi It appears to us therefore that in a. proper Das J. case the High Court can exercise its power of revision of an order made against an accused person 11ven after his death.\n\nThis view was expressed by the Bombay High Court in I mperatrix v. DongaJ°i Andaji\\ 1).\n\nThe direct question in that case was whether the appeal lodged by a convicted person abates on his death.\n\nMelvill J. and Kem ball J. differed on this question.\n\nMelvill J. being of the opinion that on the death of the appellant the appeal abated while Kemball J. came to a contrary conclusion. Chief Justice Westropp, to whom the case was referred agreed with Melvill J. that the appeal abated. All the three !ear- , ned Judges appear to have however been of opinion that the death of convicted person would be no impediment in the way of the court's exercising its power of revision. Melvill J. observed :-\n\n\"In a recent case the Chief Justice and myself did consider the proceedings in a criminal case after the death of the convict.\n\nBut the proceedings in that case had been called for under s. 297, and we were sitting as a Court of Revision. No person has any right to be heard before the High Court in the exercise of its powers of revision. The Court is.not supposed to be _acting on the application of the convict, hut in the exercise of its power of supervision over subordinate courts, and with a view to correcting their errors. I think that we should have power to interfere in the present case, as a Court of Revision, if we saw any error, in law, invalidating the conviction, or if the sentence were too severs\n\n(1) (1878) I.L.R. (Born.) 564.\n\nTiu Stott of Keralo\n\nN., ayani Ammo\n\nKunaU 1. tvi\n\nDOJJ.\n\nfor the offence which has been he l due to justice. I do not understand that my oµiniu11 is required by my brothers i\\lelvill and Komball on the question whether such a case\n\nhas been made as to render it desirable that the record should be brought up.\" It is thus clear thRt though apparently the High Court's powers of revisions were not exercised in that case, all the three judges agreed in thinking that in a proper case this could and should Le done even after the death of the convicted person.\n\nThis case was considered Ly this Court in Pranab Kumar Mitra v. 'l'he Susie of IVe..st JJenyal (1).\n\nThe question in Pranab Kumar Mitra's case was whether where the Pccused the building on .Tune 8, I 957, in tho compliance with the directions of the Court and was satisfied that the pillar had been satisfactorily repaired.\n\nIn this view of the matter the learned District .Judge allowed the appeal and dismissed the application.\n\nThn, there was an application in revision under s. lii(•'i) of the Act to the High Court.\n\nThis application was dealt with by K. L. Gosain, .J. who wrongly prn?Ceded on the footing tat the appli.c~ tion in rev1s10n was one under s. ii:>, Code of C1v1l Procedure. Though the learned Judge said that he had \"one through the evidence and agreed with the\n\nfindias arrived at by thn District Judge, he came\n\nto tho 0 conclusion that as no question of jurisdiction was involved within the meaning of s.115, Cod!l of Civil Procedure, he saw no reasons to interfere and dismissed thn application in revision.\n\nThe present appeal is direct.id against this order of the learned smgle Judge.\n\nTho learned Attorney .General who appeared on behalf of the appellant has rightly pointed out that the learned J udgo of tho High Court was in\n\nerror in disposing of the case as though the application in revision made to the High Court was an application under s. 115, Code of Civil Procedure.\n\nThe application was really an application under s. 15(5) of the Act which is in these terms : ' \"15. (5) The High Court may, at any time, on the application of any aggrieved party or on its own motion, call for and examine the records relating to any order passed or proceedings taken under this Act for the purpose of satisfying itself as to the legality or propriety of such order or proceedings and may pass such order in relation thereto as it may deem fit.\"\n\nIt is manifest that the scope of subs. ( 5) of s. 15 of the Act is not the same as the scope of s. 115, Code of Ci•il Procedure. The learned Attornev General has submitted. rightly in our opinion, that.the scope of sub-s. (5) of s. 15 of the Act is wider and is not confined to questions of jurisdiction only.\n\nBut even if the learned Jud!!; e of the High Coart was in error in treating the application as one under s. 115, Code of Civil Procedure, the fact still remains that he affirmed the findings of the learned District Judge and one of these findings was that the landlord did not require the building to carry out the repair work which was su?gested by the Municipal Committee. The Municipal Committee liad suggested a very simple work of repair, namely, filling up of the doorway in the pillar so that the pillar might be one solid wall to support the screen. It has not been seriously disputed before us that such repairs could be easily carried out without the necessity of asking the respondent to vacate the building. As a matter of fact the learned Dis trict Judge has pointed out that the Executive\n\nEnginear, Central P.W.D. had, subsequent to the application, exfJ, mined the pillar and found thn, t\n\nJ96!t\n\n,1-fah~, rof Jagat 8'Jlladur Singh ..\n\nBodri Prasad Seth\n\nDasJ.\n\n,\\faharaj J •got B!lhJdur Singh ..\n\nBad1i Prasad Sttli\n\nDas J.\n\nthe repair work had already been done by the respondent.\n\nThe leiirned Attorney General has contenrled that the lciirned District Judg<• was in error in holding that the appelliint had manipulat.ed the notices\n\n..nclcr as. 11 :i am! 114 of the Punjab :lfonicipal Ant.\n\nWe think it unnece88ary to go into that qn<'stion\n\nbecause the relevant provision in s. J::l(3)(a) of tho Act makes it quite clear that the landlord is m1tit.-\n\nled to an order from the Controller directing the terant to put thP landlord in pos8ession rJf th<·\n\nbuilding only when the landlord requires it.to carry out any building work etc.\n\nTho relevant provision rpads as follows :\n\n\"13. (1) A tenant in posFession of a building or rented fan the word \"1cquires\" in the provision. Having regard to the sehme and purpose of tbp. legislation it is abundantly clear that cl. (iii) of\n\n' '\n\ns.l3(3)(a) of the Act is attr.icted only when the building work is such that the lJ.ndlord requires that the building be vacated by the tenant in order to carry out the work ; in other words, the repairs needed are so extensive and fundamental in character that they cannot be carried out if the tenant remains in possesRion. Then only it can be said that the landlord requires the building to carry out the building work. We think that it is absurd to suggest that any such small work as white-washig, or filling up the gap in the doorway as in the present case, comes within cl. (iii) of s. 13(3)(a) of the\n\nAct .\n\nThe learned Attorney General has argued that the learned District Judge wrongly took into consiqeration facts which had come into existance after the filing of the application under s.13 of the Act.\n\nHere again we think that having regard to the scheme and purpose of the legislation it was open to the learned District Judge to take into consideration such facts as existed at the time when the order for vacation was to come into offer; t. Section 13 \\ 3l(b) says that the Controller shall, if he is satisfied that the claim of the landlord is bona fide, make an C•rder directing the tenant to put the landlord in possession of the building on such date. as may be specified by the Controller. In the present case the Controller made the order in July, 1957, and directed the building to be vacated by Septem her 25, 1957. But long before that date, namely, on June 8, 1957, the Executive Engineer, Central P.W.D., had inspected the building and found that the pillar had been repaired satisfactorily. The Controller did not accept the testimony of the Executive Engineer and the learned District Judge pointed out that the testimony of the Executive Engineer had been rejected by the Controller on very insufficient grounds. Tt was open to the learned District Judge to take into consideration the testimony of the Executive Engineer and having regard\n\n196!\n\nMahoraj Jagat\n\nBaharlur Singh\n\nBadri Prasad Seth\n\nDasJ.\n\nMah1raj Joeat\n\nBahadur Smgti\n\nBadri Pratad Stth\n\nDos J.\n\nA1arch :?0,\n\n960 SUPREME COURT REPORTS [1962] SllPl'.\n\nto that testimony, the lcarnes the cost price and that the sale of chemicals harl resulles the cost price and that the sale of chemicals harl resulle the High Court, which was answered against the Dcparment.\n\nIt arose in the following circumstances. The res. pond to as the asscssce Company) was incorporated in rn:n primarily with the object of acquiring and working the rights, title and interest in a match factory belonging to one A. Y. Thomas at :IIuiper for manufacture had escapecl assessment.\n\nThe Official Liquidator took up the position that the match manufacturing had been stopped, and that businPsS had been wound up, and there was thus only an appreciation of the capital assets and not a busine:is profit, which was liabie to assessment. The Deputy Commissioner,· however, relying upon thA Memorandum of Association, which allowed the asses8ee Company to manufacture and sell chell)icals, and on the Directors' report, held that the assessee Company was liable to incometax on a profit of Rs. 2 lakhs arising from this sale.\n\nThe Commissioner of Income-tax on appeal, however, reduced the assessable profits to Rs. 1,15,25\\1.\n\nBefore the Gommissioner, the Liciuidator admitted that the profit from the sale of the chemicals was Rs. I, 15,259.\n\nAn appeal was then filed before the Incometax Appellate Tribunal at Trivandrum, and the assessee Company contented that a stock-in-trade could only be that which was the subject of trade, and that the stock of raw materials was not sold in the oourse of ordinary trading but in a reali-\n\n-1 sation sale after the Company had been wound up.\n\nThe Tribunal found that the business had not\n\nJ9'i2\n\nK .iVf.R. Ref.S. Rtddy, Commissioner of\n\nlncomr;-~ x, Kerola •.\n\nTM West Coa1t\n\nChemi.ais and\n\n/11d11llrir.J l.td.\n\nH; dayat, llah .1.\n\nSUPRE~IB COURT REPORTS [1962) SUPP.\n\ncompletcl, v ceaed to exist, since the assessee Company was carrying on manufacturing on behalf of the purchaser, 11nd the sale could not be regarded ns a realiation sale after the Company was wound up, but had the characteristics of a trading sale.\n\nAt the request of th<.> asRessee Company, however, the Tribunal referred two questions to the High Court for its deciAion, and they were: - \"( 1) whPther the transaction of s:ile of the rnw materials along with the business, • incluciing machinery, plant and premises is a revenue sale, and whethrr in the facts and circumstances of t.ht' casn, the Rum of ns. I, I .~.25!1 ha.s lJ., en rightly charger! to\n\ninome.tax; and\n\n(2) whether the decision that the sale of match, machinery and premises, was distinct from the sale of chemicals iR legally warranted and whether there was legally a single transaction of the entire match factory inclusive of raw mawrials~\" It may be pointed out that prior to the sale of chemicals to the purchaser, the only evidence of sale of chPmicals by the assssec Company was of two transactions .. In the first transaction, there was a sale of chemicals on .Tuly 24, l!J4a, to an educational institution for Rs. 50 and another sah,\n\non October 30, l!J43, to a stranger for Rs. 7-12·0 . . The High Court held that by th1> sale no business\n\nwas done, and that. the amount obtainNI was only hy way of realisation sa.l<>, and was not, therefore, liable to tax.\n\nThe argument of the Department (also raised hefore the High Court) proceeds in this way.\n\nThe Department reforn to the llfrmorandum of Association under which the assessee Company was to carry on the h1rnines~ of manufacturing and\n\nselling chemicals, that in the past it had sold chemicals, that in the first sale of its assets it had ex- . eluded chemicals and some other raw materials necessary for the manufacture of matches and had sold the concern for a lesser price, that later it included chemicals and raw materials and obtained a larger price, \"and that admittedly there was an identifiable profit of Rs. l, 15,259 on the sale of the chemcials and raw materials.\n\nThe Department, therefore, contends that the amount of Rs. l,15,259 was properly brought to tax as a trading profit. The question, therefore, is whether there can be said to be a sale in the carrying on of the business in respect of the chemicals and other raw materials. This qustion is not one easy to decide, specially with the assistance of rulings, in which the facts were different. There is a great danger of extracting a principle from the reported cases, divorced from the facts.\n\nIn Halsbury's Laws of 1£ngland, 3rd Edn., Vol. 20, pp. 115-117, there is a list in the footnotes of the cases which have been decided on one side or the other of the dividing line. In the text, the law, as summarised from the cases, is stated as follows :-\n\n\"210. Mere realisation of assets is not trading; but the completion of outstanding contracts after the dissolution of a firm, the commencement of liquidation of a company, or the winding up of the affairs of a trader, has been held to be trading ..... . 21 l. .. The cases illustrating the question arising in such circumstances can be divided .into two categories, first, those where the sales formed part of trading activities, and, second, those where the realisation was not an act of trading\".\n\nThis distinction, in our opinion, is a sound one. The only difficulty is in deciding whether a particular\n\nK.M .S. lleddy, Commin:onrr of.\n\nIncome-tax, Kerala\n\nThe West Co.it\n\nChemicals and Industries Ltd.\n\nHida_yafollah J.\n\nJ9G2\n\nK JJ .S. lidd7, Comtnissicmtr of [11coma-tax, Ktra(a v.\n\nTht H't.sf Coajt Clum icalJ a11d lndu1tri1s l..Jtl,\n\nHida71ttdi.h J,\n\n966 SUPREME COURT REPORTS (1962) SUPP.\n\nca.se belong• to one category or the other.\n\nIn this, much support cannot be derived from ol>scrvations made by learned , Judges pertaining to the factH of a case, but they do guide one in a true appraisement of tho case in hand.\n\nIn the well-knuwn case of Californiun Cuppu Syndicate v. Harri,, (1), the difference betwceu the purchase price and the value of the shares for which the property was cxch inged was considered as profiL assessable to income-tax. Thern, the company was\n\nformed for the purpose of acquiring and rt'Helling mining properties, and though what it had acquired had all been sold or exchanged, the transaction was considerod a l>usiness transaction falliug within the avowed objects, of the company. The case has l>ecu accepted as decided on these uarrow facts, in 'l'ebraii (Johore) Jiubber Syndicate Ltd. v. Funner ('),\n\nin which a different conclusion was reached o:i slightly different facts.\n\nThere also, the Company was formed with tho objoct of acquiring rubl>er estates a.nd for developing them. Under the Memorandum, the Company had the power to sell its properties.\n\nTwo properties having l>ccn acquind aud the funds having run out, they were sold but at\n\na profit.\n\nThis profit was considered as an appreciation of capital and uot as assessable profit.\n\nThe differonee botween these two cases is that whereas in the formor, though the whole of the prope1 ty was sold, it was sold as a part of trading, in the letter, the property was sold not as part ot trading out on a winding up sale.\n\nThe Department relics upon Californian Copper Sy1uiicate v. Harris ('), while the assessee Compauy\n\nrelies upon 1'ebrau (Julwre) Rubber Syndiwte Ltd. v.\n\nParmer ('). These caseH were also considered and applied by the Privy Cuneil in. Doughty ,., Commissioner of Taxes('), which 1s relied upon l>y .\n\n(I) [190·1] S T.C. 159.\n\n:2) [ 1910] S T.C. 658.\n\n(3) [1927] A.G. 327.\n\n• -\n\n3 S.C.R • SUPl~EME COURT REPORTS 967\n\nboth sides, in view of certain observations of the Pl'ivy Council, tu which we shall presently refer. In that case, thre were two partners carryin, g on busi ness in New Zealand .as general merchants. They sold the partnership to a limited company, of which they were the only shareholders. The sale was of the entire assels including the good will, and the price was payable in the shape of fully paid shares in the new company.\n\nThe nominal value of the shares was more then the capital account as shown in the last balance sheet, and the partners 'prepared a new balance sheet in which a larger value was placed upon the stock-in-trade. The Income-tax authorities in New Zealand treated the difference between the value placed on the stock-in-trade in the old balance sheet and that placed in the new balance sheet as a profit liable to tax. The Privy Council held that this was wrong, pointing out that for profit to arise, there must be a trading, and that a mere alteration of a book-keeping entry was not evidence that there was profit. It also held that the sale was of the entire assets, and that the price represented a payment for the entire business without a separate sale or valuation of this stock-in trade for purposes of sale. It referred to two cases decided respectively by the Supreme Court of New Zealand and the High Court of Australia, in which sales by pastora lists of their flock of sheep had taken place. In the New Zealand case, the excess obtained over the book value was treated as assessaMe profit, but in . the Australian case, it was not. Bot, h the sales were of the entire stock. The Privy Council approved of the Austra.!ian case, and though it . did not ex pressly dissent from the New Zealand case, it indicated that it found it difficult to appreciate the decision. These two cases from New Zealand and Australia were, of oourse, relied upon by the rival parties before us, and we shall consider them.\n\nK.Jf .S. Reddy, Commissioner 'f lncome .. tax1 Kira/a\n\nThe WtSt Coas1\n\nChemicals and Industries Ltd.\n\nHidaatullah J,\n\nK.M S. R, JJr, C-0'11f11issi-OntT of Income-tax, Kera/a\n\nv. 1hr 1VeJt Co1;1\n\nChernUal and l11d1otrie1 Ltd,\n\nlli\"\"oyatul/ah J.\n\n968 SUPREME COURT REPORTS [1962] SUPP.\n\nThe Australian case is Commissio-11er of 'l'a:i.ntion (W. A.) v. Newman (1).\n\nA persn11 who carried on business in WPst.ern Australia as a pastoralist sold his propctry including all live.stock and plant, as a going <'Oncern.\n\nThe Commissioner of Taxation for the State apportioned the purchn.e money in respect of the livcstoek, and assessed the n.mount which was \"received in excess, as income derived from carryir, g on a business. The High Court held that the transaction was not during tho carrying on of the business or even for the purpose of carrying on the business, but was for the purpose of putting an end to the business, and that thus the exccsB represented a capitid appreciation and nut a trading profit.\n\nThe Now Zealand case is Anson v. Co1mni;; sioner of 'l'cixes ('). Ia that ca.Ile also, a sheep farmer sold his entire stock of Hheep.\n\nHe had the practice of plaoing on his sheep at the begi11ning and cud uf each year an arbitrary value without referenco to the\n\nactual market value. When he sold his entire stock, a nominal profit of i 5,000 ud. 11, dJy, Commisdor.tr nf , r, co11tr•:ax, hr•ala\n\nJiu lfrs! Co:ut Chemicals ar.d J11duJ11irJ Lid.\n\n070 SUPREfE COURT REP0l{T5 (1962] SUPP.\n\nonJinary course of trade. It was held by the King's Bench Division of the High Court of Justice in Ireland that the sales were not in the ordinarv couf'se of trad~ but wore part of the realisation ,; f the trading stock and winding up of the business, and thus not liable to tax. The Court of AppC'al\n\nin Ireland unanimously re, ersed the decision of the High Court.\n\nHonan,\n\nL. J., pointed out that though the taxpayer had retired from busirress and had decided not to pu rchaso any more stock,. he was still carrying on the busi- 11css of trading in wines and spirits till his existing stocko were exhamted, and, therefore, the excess obtained by him represented profit. On appeal to the Houso of Lorcfs, it was held that there was e\\'idonco 011 which the Commissioners could arrive at their finding that trading was, in fact, being carri<'d on.\n\nLord Buckmaster, speaki11g of the fads in that case, observed as follows :\n\n\"For in truth it is quite plain that right up to the end of 1\\1 Ii thry were engaged in tradi11g which, so far as the cxtemal world is concerned, was the ordinary method of carrying on trade modified 011ly by arrangements which were merely part of the rnaohinory of\n\nbusinPss dealing adopted to <'ffect their intention to retire. It m&y well be accepted that they die! so intend ; yet the intention of a man cannot be considered as determining\n\n11hat it is that his acts amount to; and the real thing that has to be decided !1ere is what were the acts that were done m counect1on\n\nwith this business and whether they amount to a trading which woulcl cause the profits that accrued to be profits arising from a trade or busine?~ ?\" The ca,; e was, Lhcrcforc, decided on the finding of the special Commissioners, for which there was enough material in oddcnco. Similarly, tho case\n\nof The Commissioner of Inland Heveniw y. \"Old BelShni!ls\"· Distillery Co., Ltd. (in Liquid-ztion) (l)\n\nwas one decided on a finding, in support of which there wa~ evidence.\n\nThe two cases relied upon by the Dapartment afld the assessee Company respec: tively do not shed any light upon the problem before us, because the central decision in both of them was whether the Commissioners' finding was justified or not.\n\nIn J. and M. Craig (Kilm1rnock), Ltd. v. Cowperthwaite (' ), the question was how the opening stock s!:wuld have been valued, and whether any profit could be said to have resulted. The Privy\n\nCouncil in IJoughty's case (\") remarked about this case as follows :\n\n\"There, on a transference from one company to another, one-third of the value of each item, other than stock in trade, as it stood in the books of the selling company, was treated as its value for transfer purpose, and the balance of a slump price, which, with an under. taking to discharge JiabUities, formed the consideration, was infernntialJ v attributable to the stock. It was held, hwever, in that case that no sum could bu pitched upon as the actual price of the stock, and no claim to assess a profit could be based upon such a foundation.\" This case shows that where a slump price is paid and no portion is attributable to the stock-in-trade, it may not be possible to bold that there is a profit other than what results from the appreciation of capital. The essence of the matter, however, is not that an extra amount has been gained by the selling out or the exchange but whether it can fairly\n\ntli (l926J lZ T.c. uis. c2J (l9l4J 13 r.c. 617. (3)\n\n(1927) A.C, 327.\n\nK.M .S. Reddy, Commissfoner (If lncoriietax, Kcrala v.\n\nThe JVest Coasi\n\nChmicals and Industries Ltd.\n\nHidayatull ,/i J.\n\nK .. \\1 S. Ucdd-''• Cummi.niomr of lnc'.m'tax. Kuala\n\nv Thr IV, ..id, makes no difference, because the vrr is Je!'s, and in the cac;.c tr, J., r],.Jiverwl a separate , Judgment. a,;,., d,.gm/k ·\" J.\n\nGA, TEJ\\flRAOADKAR, .J.-Thc principal quest.ion which ariRes in t.hiR nppeal relattion arises in this way. Tlw appellant, !lforlanl:ll Fnkirchand Dudherliya, and respondent£ Nos. 2 and :land th\" father of reopondents :\\os. i to IO were the promoters of the 1st respondent Co., Shree Changdeo Su[!ar :\\Tills Ltd. The said Co.\n\nwas incorporatPd in I !l~O as a Private Limited Company.\n\nTt. was. however, ~'onverted into a Public Ltd. Co. in 1!)44.\n\nAt th<' time of the original incorporation of the Co.,\n\n11. Promoter's A(!rerment. was arrivC'd at whcrel1y the Co. agrned dming its existPnce to pay a. sum equal to 3-1,'8~~ every year out. 0f its net profits to each of thP. four promoters.\n\nAs a re•ult nf this agreement, the aggrpgate con•ideration payable \"very year to\n\nt.he promot., rs r~'\\me to 12-112°;, of t.hfl n<>t profits of the Co. Article a of the Artic!Ps of Assodation of tho Co. just.ifierl th,. making of this ngreement.\n\nIn l\\H I the Co. ca.me into financial difficulties and\n\n3 S C.R.\n\nSDPREl\\IE CODRT REPORTS 977\n\nin consequence, on the 22nd April, 19il, a tripar tite Agreement was arriv_ed at between the Com pany, Mis. Ardeshir Hormusji Bhiwandiwalla & Co., and the Promoters. Under this agreement, it was agreed inter alia, to appoint the said firm of Bhiwandiwalla & Co. or its nominee as the Managing Agents of the Co. for 10 . years with a, n option to the Co. to extend the said period upon certain terms. At this time, the earlier agreement as to the payment of the promoters' commission was modified an:l the sa, id commission payable to the promoters was reduced to 6-1/4% and Art. 3 of the Articles of Association was accordingly amended. Three years later, dispute arose between the parties and they led to three snits filed on the original side of the Bombay High Court. All the said suits were compromised and\n\ndecrees hy consent were passed in them. One of the terms of the compromise was that the promoters' commission payable to the four promoters which was Ks. 1-9-0 to each of them and which came 6:1/4% in the aggregate payable to them under the agreement entered into between them and the Managing Agents shall remain in force as in the Agreement and the promoters' right of commi ssion shall continue accordingly.\n\nThus, as a result of the compromise, the promoters' comm1ss10n which was payable to them under the earlier Agreement was saved.\n\nAfter the Act came into force on the 1st of April, 1956, the appellant received a letter from respondent No. 1 informing him that respondent No. 1 had been 'advised that as from the date of the commencement of the Act, the agreement between the parties as to the payment of the promoters' romrnission had become illegal and void and t, hat the 1st respondent would not. therefore, pay any more commissions after April, 1956. In October, 1956 the appellant received a notiee from the 1st respondent that an extraordinary general\n\nMadanlal Fakirchan4\n\nDud/iediya ..\n\nShree Changde() Sugar Mil,/s Ltd.\n\nG 11jendragad/oar J.\n\nJleddnlal F&ikirch.nd\n\nDudhttiiJa\n\nSllrtt CluJngdto Sugar Mills Ltd.\n\nO•jtndragadkar .T.\n\n978 SUPREME COURT REPORTS [19621 SUPP.\n\nmeeting of the sharoholders of the !st respondent Co. was going to be held,_ inter aUa, for the pur. pose of amending certain Articles of Association of the Co.\n\nOne of tht' amendments proposed to be. put before the said meeting was to delete Article 3 from the Articles of Association of the Co.\n\nOn receipt of this notice, the appellant filed the present suit on the 13th December 19ii6.\n\nBy his plaint, he claimed a declaration that the agree ment between tho partieH was \\'alid and legal and he asked for an injunction r('straining respondent :N'o. I from passing any resolution deleting Article 3 of the Articles of Association of tho respondent Co. or from taking any action on the basis that tho said agreement had become illegal and void.\n\nRespondent o. l resisted this suit. It was urged\n\non its beh1tlf that as a result of the prnvisions of section 76(1) and (2) of t.he Act, the agreement in question had become void and could not be en forced.\n\nRespondents '.Ii os. 2 to l 0 are the other beneficiaries under the said agrl'cment and they supported the appellant. The le1trned .Tudgo who tried the suit held that the defence raised by respondent No. I was wcll-foundod and that the agreement in question having become void and unenforceable under the relevant prnviBions of the Act, no declaration could be granted or no injunction could be issued in favour of the appel11tnt as claimed by him. In the result, the appellant's suit was dismissed with costs. The appellant then prefPrrod an appeal challenging the <'Orrectncss of the decision of the Trial Court. The Court\n\nof Apppeal, howl\"ver, agreed with , the view taken by the learm•d Trial Judge and dismissed t.he appeal preferred by the appellant. The appellant. then applied for ancl obt1tincd a certificate from the High Court and it is with the said certific1ttc that he h1ts come to this Court by his present appeal.\n\nThat is how the principal point which has been raised for our decision in the present appeal is about the construction of secticn 76( I) and ( 2).\n\n1962 Mr. Sastri contenrls that in coming to the conclusion that the appellant's claim to enforce Madanlal Faki\"hcnd • f th f\"t Dudhediya the agreement in question in respect o e pro 1 s v. made by respoudent No. 1 is affected by s. 76, the Shroe Changdea Courts below have misconstrued the provisions of Sugar Mill, Dd. the said section. It is conceded by Mr. Sastri Gai, nd•agadlar J. that the promoters have so far received .an aggregate amount of over Rs. 5,80,000 which is far in excess of the maximum amount now permissable under s. 76( I ).But his argument is that the statutory provision imposing the limit in regard to the payment of commission on which respondent No. I relies is inapplicable t6 a caRe where the said commission is claimed not out of capital but out of the profits of the Company.\n\nBefore dealing with this point, however, it would be convenient to dispose of another objection raised by Mr. Sastri. He contends that the agreement in question is really outside the purview of s. 76.\n\nSection 76 refers, inter alia, to the commissions payable to any person for his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of a Co.\n\nThat being so, since . the present agreement has been entered into for consideration other than those specified in s. 76, its enforcement oannot . be resisted on the ground that it 'is hit hy s. 76.\n\nThe d1Jcision of the question naturally depends upon the construction of the two agreements. The first agreement of 1939 provides that for the help rendered and pains taken by the prompters and because each of them had agreed to • purchse and had purchased shares worth Rs. 1-1/2 lakhs out of the C.o.'s capital, the Co. was entering into an agreement with them for the payment of the commission.\n\nThe agreement provid<>d that the said commission would be payable as long as the Co. was in existence. It is thus clear that though the help rendered by the promoters ar.d pains taken by them are incidentally 1eferred to, the a.greement\n\nJI. \"411lal l\"dli.irclumd\n\nD:uUttdiJa\n\nShrtt Char1gd!J Sugar Mills l.td.\n\nGajtntiragaika rJ.\n\n980 SUPREME COURT REPORTS [1962] SUPP.\n\nis substantially, if not entirely, based upon the fact that the promoters hail agreed to purchase and had purchased shares worth Its. 1-1/2 lakhs and so there can be no doubt tha, t this agreement clearly falls\n\nwithin tbe mischif of s. 7().\n\nIt is, however, urged that the completion of the first agreement changed completely when the second agreement was entered into in 19·11.\n\nIn this latter agreement which was entered into betwct of the commission is authorised by the articles and the commission paid or agreed to be paid does not exceed the amount or rate so authorised and if the\n\nMaianlal Fakircha1\n\nDudhediya\n\nShree Chandeo Sugar 1.\\1. ills Lrrl\n\nGaj:; ndragadkar J\n\nAJadatilal Fakfr:hand\n\nJJudl.tdiy4\n\nShrtt Criangd10 Sugor ,\\1 ills Ltd,\n\n(Jojrndragailka1 .J\n\n9!JO SUPREME COURT REPORTS [1962] SC'PP.\n\namount or rate per cent. of the commission\n\npaid or agreed to be paid is-\n\n(a) in the rase of shams offered to t.hc public for subscription, cliscloecd in the prspectns ; or\n\n(h) in the cases of share not offered to the public for snhscription, disclos<'uhscrihing or agreeing to subscribe, whether ahRolutely tJr conditionally, for any shares in, or debenture,\n\n3 S.C.R. ,\n\n(b)\n\n• •\n\nof, the company, or • his procuring or agreeing to procur? ubscriptions, whether absolute or cond1t10nal for any shares in, or debentures of, the company, . if the following conditions are fulfilled,\n\nl1iz.-\n\n(i) the payment of the commission is authorised by the artinles ;\n\n(ii) the commission paid or agreed to be paid does not exceed in the case of shares, five per cent of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is less, and in the case of debentures, two and a half per cent of the price at which the debentures are issued or the amount of the rate authorised by the articles, whichever is less ;\n\n(iii) the amount of rate per cent. of the commission paid or agreed to be paid is-in the case of shares or debentures offered to the public for subscription, disclosed in the prospectus : and in the case of shares or debentures not offered to the public for subscription, disclosed in the statement in lieu of prospectus, or in a statement in the prescribed form signed in like manner as a statement in lieu of prospectus and filed before the payment of the commiBsion with the Registrar and, where a circular or notice, not being a prospectus in viting subscription for the shares or debentures, is issued, also disclosed in that circular or notice ; and\n\n(iv) the number of shares or\n\nMadanlal Fal irclani\n\nDudhedi)a\n\nShree lhangdo Sugar Mills Ltd.\n\nGajendragadkar J.\n\n:lJadanlaJ. F .. kircl1a11d\n\nIJ11dlu~: i; a\n\nShrte Cflan£dtJ Su::rar M 1/ls I.Id.\n\nGajn; d•a[TadJ.:.11r .J.\n\n992 SUPREME COURT REPORTS [1962] SUPP.\n\ndebentures which persoIJB have agreed for a commission to subscribe absolutely or conditiomtlly is discloRed in the manmr aforesaid.\n\n(2) Save as aforesaid and save as providPd in SPction 7fl, no company shall allot any of its sh11, res or debentures or apply any of its capital mr>JH'y~. either directly or indiroctly, in payment of any c0mmission, discount or allnw:mce, to any prrson in consi- m which is a distinguishing feature of tho Act, also shows that it would not be safe to aBBume that s.i6(1) must havo intended to :tchieve exactly what t.he corresponding provision in the En!!'lish statut-0 intended to achievfl.\n\nTherefore, we do not think it would be right to assume at th11 vory outct that the payment of commisshn out of profits is outside the provisions of s. i6 becua; ic it is not included in the corresponcling provision in the English law.\n\nAfter all, the question which has been raised h<'fore us in the present appeal must be determine by us on a, fair and reasonable construction of s.76(1) and (2) antl it is to that problem that we must now turn.\n\nIn construing section 76(1) and (2), it would be necessary to hear in mind the relevant rules of construction. The first rule of construction which ia elementary, .is that the words used in the section must be given their plain grammatica 1 meaning.\n\nSince we are dealing with two sub-sections of s. i6, it is necessary that the said two sub.sections must be construed as a whole \"each portion throwing light, if need he, on the rest.'' The two sub sections must be read as parts of an intPgral whole and as being inter-dependent; an attempt should bo made\n\nin construing them to reconcile them if it is reasonably possible to jendragadkar J.\n\nM tuflal Fal.:irchand\n\nDw!htdiya v.\n\nShrt1 Ch1ngdeo Sugn Mil/. Ltd.\n\nGaj111drt1g• dkar J,\n\n996 SUPREME COURT REPORTS [1962] SUPP .\n\non a rP-aaonahle comt.mction be confined to a. com. mission payable out of capital alone.\n\nClause ('iii)° of s. 76 (l)(bl seems to suggest the eamc conclusion. Under this clause, the condition impo.\n\nsd is that the amount or rate per cent of the commission paid or agrPcd to be paid iH in the case of shares or debentures not offered to the public for subscription, disclosed in the statement in lieu of prospectus, or in a statemont in the prescribed form\n\nigned in like mannl'r as a statement in lieu of pros- pectus and filed before the payment of the commision with the Registrar. In construing this clausl,, it may ho useful to refer to section III of the Act of 1913. l'nder that section, particulars in case of eommis.iion on debentures hnd to be filed and it cannot be disputed that the said particulars wou Id also refer to particulars of commission paid out of profits.\n\nNow th:i.t debentures have been brought under s. 76, woulil it be unreasonable to assume that under the particulars required to be filed under condition (iii), particulars in regard to commission pn.yable out of profits are also required to he filed? In other words, the word \"commission\" used in el. (i) and (iii) seems to refer to commission paid not only out of capital but also out of profits in relation to dobcnturcs. That incidentally supportR the construction that the word \"commission\" used in clause (ii) cannot he confincil only to the commission payable out of capital.\n\nIndeed, if s. 76(1) is read by itself, there can be no doubt or difficulty in coming to the conclusion that commission tlwre contemplated is commission pa)· able both out of capital us well as profits.\n\nThe argument, however, is that if this construction is accept-0cl, there would be repugnancy betwMn the two sub-clauses of s. 76. It is therefore, necessary to examine s. 76(2) because as we have already seen, before determining the true scope and effect of s: 76(1) and (2) we must read them together as parts of an integral whole. Now what does\n\ns. 76(2) provide? It provides that no copany shall allot. any of its shares or debentures or apply any of its capital moneys, either directly or indirectly, in payment of any commission,_ discount or allowance, to any person in consideration of the objects therein specified, savll as aforesaid and as provided in s. 79. In other words, what is prohibited by sub-s. 2 is save as aforesaid in s. 76( l) just as it is save as provided in s. 79. That means that prohibition enacted bys. 76(2) has to be worked out in the light of s. 76(1) and s. 79.\n\nThe prohibition imposed by s. 76(1) is in general terms and it includes payments from any source or fund.\n\nThe Legislature knew that payment of commission may be made by adopting several devices. and what sub-s. (2) intends to achieve is to prohibit the adoption f such devices by m; i.king it clear that whatever be tlie nature of the device adopted, if the object of the device is to pay commission, then it must conform to the limit prescribed bys. 76(1 ). It is well.known that sometimes shares or debentures are allotted or capital money is applied in payment of commission. 8imilarly, under the garb of what may ostensibly be lawful payments, for instance, in respect of purchase money of any property acquired by the company or the contract price of any work to be executed for the company, commission may be paid; the purchase price of any property or the contract price of any work may be fixed so as to include something more than its real ya]ue, the difference being intended to. be paid as commission. It was in view of these devices which the Legislature knew were being adopted for the payment of commission that s. 76(2) has been inserted in the form which it has taken. As has been observed by Craies 'On Statute Law', provisos are often inserted \"to allay fears\" or to remove misa.pprehensions. Just as s .. 76(2) has to be read in the light of s. 79 and subject to its provision, so it has to be read in the light of s. 76(1) and subject to its provision. In\n\nMadanlal Fakirchand\n\nBudhedi.)ia\n\nv • Shree ChantdtfJ Sugar Mills Ltd,\n\nGajendragadkar J.\n\nJ/ adarz[,[ Fakirc/1411d\n\nDuJhldiyo\n\nShrte Cha11gd10 Sugar Mills Ltd.\n\n998 SUPREME OOURT REPORTS [1962] SUPP.\n\nother words, in order to clarify the position in regard to the devices which may l>o adoptnd to defeat the limit imposed by s. i6 (I), the Lgis lature has provided by s. 76 (2) that these devices are also subject to s. i6( l) and paymnnts ea.n b~ made under those garbs or devices, provided they do not exceed the limit prescribed by s. 7ti( Ii: In our opinion, therefore, far from there boing any conflict or repugnancy between s. 7!i( I) and s. 7li(2), they constitnt-0 one integrated provision, 0110 of the objects of which is to impose a limit on the payment of commission either in respect of shares or in respect of debentures. The anxiety to save the profits of the company is as much in evidence in s. 76(1) as it is in other sections to which we have already referred.\n\n' !\\Ir. Sastri however, contends that the proper way to roads. 76(1) and (2) would be totreM s.7!il2) as the main provisi1m and s. 7!i( I) as a proviso to it. ilis argument was thats. 76(2) puts a blanket ban on the allotment of any shares or debentures or the application of any capital moneys and s.76( I )relaxes the ban by allowing the payment to be made within tho limits prescribed and subject to the c011ditio11s therein specified. The ban imposed by s. iG(2) is in respect of capital and not in respect of profits and so the relaxation from the ban prescribed by s. 76(1) must likewise be confined to capital and cannot be extended to profits.\n\nIn our opinion, this is &n argument of desperation.\n\nWhat we are asktd to do by :lfr. Sastri iii in substance, to re-write the two sub-section of s. 76 and that we cannot legitimately do, particularly when on the alternati vc construction it is found that there i~ no repu\"nance between the two sub-sections. On the ap; llant's view, we have to ignore the opening words ins. 76(2) and substitute the said words in s. 7ti( l ). That clearly is the function of the Legiebture which enacts laws and not of the Court which interprets them. Therefore, in our opinion, the learned Judges of the High Court were right when\n\n:; .C.R.\n\nSUPRl£1\\'1E COURT REPOH.TS 999\n\nthey held that a claim for commission out of the profits of the company which the appellant seeks to make in the present suit is hit bys. 76(1) and cannot be entertained.\n\nIn this connection, there are two other points which have .been urged before us by Mr. Aggarwala.\n\nHe contents that ifs. 76(1) and (2) are read as confined to the payment of commission from otit of the capital, there would be uo provision for payment of commission out of profits at all and so, the plaintiff's claim would have to be dismissed on that ground. The argument is that the Act is a Consolidating Act and as such, it would be legitimate to assume that the relevant provisions of s. 76 deal exhaustively with the topic of the payment of commissi.on in respect of shares and debentures. If that be so, whatever is not provided for by s. 76 could not be claimed after the passing of the Consolida• ting Act.\n\nSimilarly, it is urged that if commission payable out of profits in respect of dividends was intended to be saved, a provision would have been made in s. 76 corresponding to the provision made by s. 76(3) in regard to brokerage. s. 76(3) provides that nothing in this section shall affect the power of any company to pay such brokerage as it . has heretofore been lawful for a company to pay.\n\nThere is no such provision in respect of payment of commission out of profits iu relaticin to debentures.\n\nThere may be some force in these contentions.\n\nBefore we part with this subject, it would be relevant to state that in 1960, s. 76(2) has been amended by s. 22 of the Amending Act (No. 65 of\n\n1960) and as a result of this amendment, the word 'capital' has' been deleted. It is common ground that after this amendment was effected,· s. 76(1) and\n\n(2) both refer to payment of commission out of profits as well as out of capital. As we have a.lready seen, the whole of the argument urged by the appellant on the constrqction of s. 76(2) was substantjally based on the use of the expretision \"any of its\n\nMadanlal Fakirch\n\nDudhdiya\n\nShree Chanzdeo Sugar 1llills Ltd.\n\nG-ijendrng1, dkor J\n\nad1Jnlol Fakircl1011d\n\nDudhedi_ya\n\nhree Ghttn'}dto ugor M1lh Ltd.\n\najttufr1godlcar J •\n\n1000 SUPREME COURT REPORTS [1962) SUPP.\n\ncapital moneys\". The word \"capital'' having been deletetl, the provision of s. 76( 2) is wide enough to include profits.\n\nTherefore, there ean be no tte before the Act, and not, so far as I am aware, open to objection on any other !!round.\" He also said referring to sub-s. 1 of s. 8, \"This\n\nsub-section, therefore, permits a limited application\n\n(1)\n\n(1902), A.C. 474,481,479.\n\nMadan{ al Falcirc1-\n\nDudhediya v.\n\nShree Chongdeo Sugar fills Lt1\n\nSarkar J.\n\n1~62\n\nJdanlal !•di itrht nd\n\n/)odhe, liya\n\n' . -; h, rt Chun.1; dt.J :1go1 Mi/ls I.rd.\n\nsakr '\n\n1006 SUPREME C01JRT REPORTS [1962] Sl'PP.\n\nof the company's capital in payment of a commisRion\".\n\nXow there is no doubt to the Act of 1900 there was nothing to prevent the payment of commisRinn for subscrihing for Rhares out of a company's profits.\n\nThe decision in the Oor€11111n Gold Jlfinir1f/ Company\n\nCa-•r: (1) only laid down that thP amount c, f the shares must be paid in foll.\n\nIt would not be so.paicl if the capital was utilised for payment of commission for subscribing for shares. [t was, therefore, the legitimacy of transactions providing for paymP1:t of the commission out of profits that Lord DaYey wnB happy to frel tbt his decision wonlrl not affor.t.\n\nTt. is hence, plain t.hat the HrmsP. 'lf Lorrls \"as of the oninion in Hildr.r v. Dexl.et (') thats. 8, 8Uh-s. 2 of the Act uf 1900 was not conc, erned with pam<'nt of commission out of profits.\n\nThat is how that case has been understood in England: seP P11lmer's\n\nCompany Precedent~, 11th ed; vol.\n\nI p, I i!l, Palmcr\"s Cornµany Law, 20th ed. p. on. See also Sarkar & Sen's fnrlian Companies Act, 1913, p. 302.\n\nIt seems to me that no other view is possible.\n\nThPre is nothing in any Compani0s Act, except wlH'ro it expressly does so, t.o reAtrict in any way the power of a cornpan.v to deal with its profits.\n\ncompan~· is, therefore, free to enter int.n any agreement <'ntitling any person to a part of it.A profit.A in consideration of his subHcribing for sha1cs in it..\n\nThat waR the law nR it exist1icl bcforP. t.he Act of\n\n.1900.\n\nTlw view taken in flilder v. !Je, rter (') waa that t.here wa' nothing in s. 8 of that Act which P-ffected a. chitn!:(e in the pre-existing law.\n\nIn spite therefore of that Act, a company retained fully itR\n\npowers to pa~· out of its profits commission for subscribing for 8hurt>s in it.\n\nI think it right to remind here that we are clt>aling with the powers of a company anri not c1f its directors\n\nSection 8 of the Act I flOO wa• rPp]accd by a. 8fl oft.he Englih Companit'H Act of I!Hl8 and this\n\n(I) (1892) A.C. 125, Jl3.\n\n(2J ·(1902) A.C. 474, 481, 479.\n\n- r\n\n... ·-,.\n\n-··\n\nin its turn was substituted by s. 43 of the English Companies Act of 1929 and the corresponding provision is now contained ins. 53 of the English Com\n\npanies Act of 19±8. Substantially the provision in this regard has remained the same in England throughout from 1900 except the.t in 1929 a further restriction was put on the right to pay commission for subscribing for shares by providing that the commission paid shall not exceed 10 per cent of the price for which the shares were issued or the amount or re.te authorised by the articles whichever was less.\n\nThat restriction could not have effected e. change in the law as it previously existed in England in regard to payment of commission out of profits.\n\nNow in our countrys. 105 ofthe Companies Act of 1913 for the first time introduced the provision corresponding to that contained in s. 8 of the English Act of 1900.\n\nBoth, therefore, on the general principles underlying Company law, under which a company, except in cases where an express provision to the contrary is made, is free to deal with its profits in such manner as it likes and on the authority of Bilder v. Dexter (') which in my view would be fully applicable to our Companies Act of 1913, a company in our country could enter into a valid agreement to pay any commission it liked out of its profits to any person for subscribing for\n\nshare~ in it.\n\nI may here add that s. 10.5 of the Companies Act, 1913 was in terms substantially the same as s. 8 of the English Companies Act of 1900.\n\nIt contained no provision restrieting the amount of the commission to be paid.\n\nI now turn to s. 76 of our Companies Act 1956. 'It provides by sub-s. (I) that \"a company may pay\n\na commission to any person in consideration of his subscribing ......... for any shares in or debentures of the company ... ; ..... if the following conditions are fultilled.\" These. conditions are,\n\n(I) (IO 02) A.C. 475, 481, 479.\n\nMudanl1d Fakirchand\n\nDudhediya\n\n•• Shree Changdev Sugar Mi!ls Ltd.\n\nSark'l.r .1,\n\n198t .,! adaftlal Fal:irchtlnd\n\nDu.flit ii'..r11\n\n•• Shr11 '()1antdt1 Sut:ar .fill1. Ltd.\n\nS11kar .T.\n\n1008 SUPF.EME COURT REPORTS [1962] SUPP.\n\n(il the payment of the commission is authorised by t.he articles;\n\n(ii) the commision paid does not exceed in the case of sharea, ii per r, ent of the price at which thA shares are i•sued or the amount or r>tte aut.horis<'d bv the articlrs, whichever is less, and in the case\n\nof debl'ntures, 2-1/2 per crnt 0ftho price at which tlw dehent.urM are issued or the amount or rate auth0rised hy the articles, whichever is less;\n\n(iii) the amount. or rate of the commission pairl ...... is, in the case of shares or debentures offered to the public for suh•crint.ion, di•closcd in the prospec\n\ntus. in th\" ca.sP nf shares or c!ehrntures not offered to the public for suhscription. disclosed in the state ment in lieu of prosoP-dns. or in a statement in tho prescrihorl form and dulv \"igned and filed bcfor11 the payment of the commission with t.he Registrar anc!, \\vhcre a circula.r or not.ice, not hcinl! :i prosp<•ctuA inviting subscription for the shares or debentures is issu0.d, also diRcloserl in that drcular or notice.\n\nNow, the q1111stion that ariRes is whether t.his sub-section haR made n.ny alteration in th<> law\n\nwhich previously PXiRted 11.nrl which, for the rea,; ons earlier stated, I think permitterl commission to bo\n\npaid freely out of prrifits. In other wnrds, does this sub-section, as it. st.ands. nrevent a 1•ompan~· from paying any commission it likrs out of its profits to anv prson for s11 hscribinl? for sh>ires in' it? I find nothing in it to indieat~ thnt a ehange in !ho\n\nlaw was intended. It is said that the pcrmis, ion granted bv suh-s. (I) is not expressly confined to\n\npaymP.nt, ofr:nmmissinn out of capital only.\n\nNPi ther, however, cloes it say th:it thA enabling provision containPnd which became illegal on the repeal of that Act by the Act of 1956. That would be another reason for saying that s. 76 (I) of the Act of 1956 was not concerned with any payment of commission out of profits.\n\nI pass on now to sub-s. (2) of s. 76 of the Act of 1956. That sub-section says: --\n\n\"Save as aforesaid and save as provided in section 79, no comp.my shall allot any of its shares or debentures or apply any of its capital moneys, either directly or indirectly, in payment of any commission, discount or allowance, to any person in consideration of.-\n\n(a) his subscribing or agreeing to suhb cribe, whether absolutely or conditionally, for any shares in or debentures of, the company, or\n\n( b) his procuring of agreeing to procure Rubsoriptions, hether absolute or conditional, for any shares m or, debentures of the company,\n\nwhether the shares, debentures or money be so allotted or applied by being added t\"O the purchase money of any property acquired by the company, or to the contract price of any work to be executed for the company, or\n\nMadanlal Fakirchand\n\nDudhediya\n\nv. \"Shrte Chongdeo Suztir Mills Ltd.\n\nSarkar J.\n\nM :Jdanlal Fokirclza11d\n\nDudhediy~\n\n•• Shree Chont