SUPREME COURT REPORTS [I9ti4J

NAROTIAMDAS v.

STATE OF MADHYA PRADESH

(P. B.

GAJEN!>RAGADKAR, c. J., K. N.

WANCHOO, M.

HIDAYATIJLLAH, K. C. DAS GUPTA AND N. RAJAGOPALA

AYYANGAR, JJ.J •

Wages-Law passed fixing rates of minimum wages Tetrospecti7J11ly-Effect of-Validity-Minimum Wages Act, 1948 (Act 11 of 1!!48}-Madhya Pradesh Amendment and Validation Act, 1001 (Act 23 of 1961), s. 31A-Madhya Pradesh Ordinance No. 4 of 1962-Madhya Pradesh Minimum Wages Fixation Act, 1962 (Act No. 16. of 1962), ss. 2, 3 and 4-Constitution of India, Art. 19(l)(f) and (g).

The aopellant was the manager of a Bidi counting and labelling factory. Jn 1951, the State of Madhya Pradesh fixed rates of minimlJ!ll wages payable to workmen in accordance with the provisibns of the Minimum Wages Act, 1948. These rates were revised in the year 1956 and new rates were notified by the Government ty a notification dated December 30, 1958 directing that these rates would come into force from January 1, 1959. The validity of this notification was successfully cllallenged by the appellant before the High Court. To meet the situation the Legislature enacted the Minimum Wages Act, 1961 giving effect to the impugned notification. Qn.challenge of this Act by the appellant and other Bidi manufactories, the High Court allowed the applications and restrained the Government from giving effect to the impugned notification. Thereafter, the Madhya Pradesh Ordinance No. 4 of 1962 was PasOOd fixing rates of minimum wages retrospectively. The ordinance was later replaced by ; m Act, the Madhya Pradesh Minimum Wages Fixation Act, 1962. On challenge of the validity ol. this Act by the appellant, the High Court held the Act to be valid and disallowed the application. Jn this Court the validity of the Act was challenged on the ground (l) that in enacmng the Act of 1962 the Legislature was not exercising its independent legislative power but only validating the notification dated December 30, 1958 which it was not competent to do, (2) that by giving retrospective effect to the rates of wages fixed bv this Act the State had put unreasonable restrictions on the appellant's fundamental rights under Art. 19(l)(f) & (g) and (31 that by making the provisions of ss. 20 and 22 of the Central Act of 1948 applicable to the wages now fixed the Act had contravened Art. 20(1) of the Constitution.

Held: (i) The contention that the Act was not independent legislation cannot be accepted. Section 2 of the Act merely says that the expressions used in this Act shall have the same meaning for the purpose of this Act as defined in the Minimum Wages Act of 1948. The definition of expressions used in an Act with reference to another Act is a well known device in legislative practice generally adopted for the sake of brevity.

The definition would remain effective even after the other Act with reference to which the definition was given ceases to exist.

This fact of defining expressions in an Act with reference to some other Act cannot therefore have the etr.., ct of making this Act dependent on such other Act.

It is clear from s. 3 of the impugned Act that the legislature was fixing for itself the minimum rates of wages in certain scheduled employments. The fact that the rates mentioned in the Table appended to the Act happened to t e the same as the rates fixed elsewhere cannot reasonably justify a conclusion that the validation of the old rates was being affected. Independent legislation does not cease to be so, merely because its effect is the same as it would have been if a validating Act had been passed.

(ii) The retrospective operation of legislation is a relevant circumstance jn deciding its reasonableness. It is, however, not necessarily a decisive test. Section 3 of the Act does not make the new rates of w'1ges payable on the 1st January 1959. The proviso to s. 4 is a clear statement of the legislature's intention that it is on the 21st June 1962 that the rates which had become enforceable under s. 3 with effect from 1st January 1959 became payable. The appellant's aDPrehension that he might be made liable for payment of compensation under s. 20(3) or to prosecution under s. 22 of the Minimum Wages Act 1948 as a result of mere passing of the Act must therefore be held to be groundless. The contention therefore that ss. 3 and 4 of the impugned Act impose unreasonatle restrictions on the appellant's fundamental rights must be rejected.

Rai Ramkrishna v. State of Bihar, [1964] 1 S.C.R. 897, applied.

(iii) On a proper construction of ss. 3 and 4 of the impugned Act, the attack on the validity of the section on the ground of a contraventicn of Art. 20(1) of the Constitution must also fail.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 221 of 1964. Appeal from the judgment and order dated September 5, 1963 of the Madhya Pradesh High Court in Misc.

Petition No. 334 of 1962.

M. C. Setalvad, B. V. Shukla, Rameshwar Nath, S. N.

Andley, and P. L. Vohra, for the appellant

B. Sen and /. N. Shroff, for. the respondents.

April 21, 1964. The Judgment of the Court was delivered by

DAs GUPTA, J.-This appeal raises the question of the Daa G,, pla, J. validify of the Madhya Pradesh Minimum Wages Fixation Act, 1962 (Act No. 16of1962). The appellant is the Manager of a Bidi counting and labelling factory of M/s. Mohanlal Hargovindas, Jabalpur, who are engaged in the trade of purchase and sale of Bidi in the State of Madhya Pradesh and other States of India. In 1951 the State of Madhya Pradesh fixed rates of minimum wages payable to workmen engaged in Bidi making manufactories. This was done in accordance with the provisions of the Minimum Wages Act, 1948 (Central Act 11 of 1948). These rates of minimum wages were revised in the year 1956 by a notification of the Madhya Pradesh Government dated the 23rd February 1956. New rates of minimum

Narouanttla& ...

Slate of Madhya

l'ratkah .

V.. Gupla, J.

wages for workmen engaged in the Bidi making manufactories were notified by the Madhya Pradesh Government by a notification dated the 30th December 1958. The notification directed that these rates would come into force from January 1, 1959. The validity of this notification was however successfully challnged by the present appellant before the Madhya Pradesh Htgh Court. To meet the situation the Madhya Pra desh Legislature enacted the Minimum Wages (Madhya Pradesh Amendment and Validation) Act, 1961-(Madhya Pradesh Act No. 23 of 1961). Section 3 lA which was introduced by this Act into the Central Act (No. 11 of 1948) provided that the rates of minimum wages fixed or revised under the notification of the 30th December 1958 "shall be and shall always be deemed to have been validly fixed and revised and shall be deemed to have come into force on the date mentioned in the said notification, notwithstanding any judicial decision to the contrary or any defect or irregularity in the constitution of the Advisory Board under s. 7 of the principal Act read with s. 9 thereof or publication of the notification in the Gazette or non-compliance with any other requirement of law and shall not be called in question in any court merely on the ground that there was failure to comply with the provisions of the principal Act."

The appellant and some other Bidi manufactories of Madhya Pradesh challenged the validity of this Act before the High Court by petitions under Art. 226 of the Constitution.

The High Court allowed the applications, struck down s. 31A . as invalid and restrained the Government from enforcing the section and from giving effect to the impugned notification dated the 30th December, 1958.

The High Court gave its decision on the 2nd May 1962.

On the 21st June 1962 the Madhya Pradesh Ordinance No. 4 of 1962 was passed fixing rates of minimum wages retrospectively. The Ordinance was later replaced by an Act, the Madhya Pradesh Minimum Wages Fixation Act, 1962. On the 5th October 1962, the appellant made an application to the High Court of Madhya Pradesh under Art. 226 and Art. 227 of the Constitution challenging the validity of this Act and praying for a declaration that the Act is ultra vi.res, void and inoperative and a writ in the nature of mandamus restraining the State of Madhya Pradesh and the other respondents from giving effect to or enforcing the provisions of the Act. The High Court has held that the Act is valid and has disallowed his application. Against that decision the present appeal has been preferred.

The challenge to the validity of the Act is based on three principal grounds. The first is that in enacting Act No. 16

of 1961 the Madhya Pradesh Legislature was really not exercising its independent legislative power but only validating the notification dated the 30th December 1958 which it was not competent to do.

The second ground is that by giving retros pective effect to the rates of wages fixed by this Act the State has put unreasonable restrictions on the appellant's funda mental rights under Art. l 9(J)(f) & (g) of the Constitution. The last ground on which the Act was challenged as invalid is that by making provisions of s. 20 and s. 22 of the Central Act No. II of 1948 applicable to the wages now fixed the Act has contravened Art. 20(1) of the Constitution.

The impugned Act is a short Act of five sections only. The first section givoo the title of the Act and the fifth section repeals the Ordinance to rplace which this Act was passed.

Three remaining sections are in the following words: -

"2. The expression used in this Act and defined in the minimum Wages Act, 1948 (XI of 1948), in its application to the State of Madhya Pradesh shall have the meanings assigned to them in the said Act.

3. Notwithstanding anythfog contained in s. 5 of the Minimum Wages Act, 1948 (XI of 1948), in its application to the State of Madhya Pradesh (here inafter referred to as the said Act) or any other provisions contained therein relating to the fixation or revision of minimum rates of wages in scheduled employments and any judgment, decree or order of any court to the contrary, the mini mum rates of wages in respect of employments in items 2, 3, 5, 6, 7, 8 and II in Part I and in res pect of employment in Part II of the Schedule to the said Act shall be and shall always, in respect of each employment, be deemed to be as specified in Table appended hereto and it is hereby enacted that the said minimum rates of wagoo shall be payable by the employer in the said scheduled em ployments and be enforceable against him with effect from the 1st January 1959, as if the provi sions herein contained have been in force at all material times.

4. The provisions of section 4-A, section SA, in so far as they relate to revision of minimnm rates of wages, and of sections 12 to 30.A of the said .. Act, and the rules made thereunder shall apply to miriimum rates of wages specified in section 3 as they apply to minimnm wages in respect of sche duled employments fixed in accordance with the said Act;

Narollamda.

Stal< of Madhya

Praduh

D .. Gupta, J.

'1964

Narotta't'tUlaa

Btate of Madhya

pw; J.,, h

Das Gupta, J.

Provided that with reispect to claims arising out of payment of minimum rates of wages specified in section 3 pertaining to a period prior to the publication of the Madhya Pradesh Minimum Wages Fixation Ordinance, 1962 (4 of 1962) in the Gazette, the period of one year referred to in the first proviso to sub-section (2) of section 20 of the said Act Ghall be counted with effect from the 21st June, 1962, the date of the publication of the said Ordinance in the Gazette."

It is not disputed that the Madhya Pradesh legislature had the legislative competence to make a law as regards minimum wages under Entry 24 of List III (Sch. Seventh). Mr.

Setalvad contends that this power of independent legislation was not really exercised by the legislature and that in the guir, e of independent legislation it has in substance passed a validating Act, after an attempt to validate the notification of the 30th December, 1958, had failed. In support of his argument that it is not independent legislation Mr. Setalvad laid stress on the language of s. 2. That section merely says that the expressions used in this Act shall have the same meaning for the purpose of this Act as defined in the Minimum Wages Act of 1948. According to the learned counsel, this shows that this was really a dependent and not independent legislation. We can find no substance in this argument.

The definition of expressions used in an Act with reference to other Act is a well known device in legislative practice generally adopted for the sake of brevity. The definition would remain effective even after the other Act with reference to which the definition was given ceases to exist. This fact of defining expressions in an Act with reference to some other Act cannot therefore have the effect of making this Act dependent on such other Act.

Mr. Setalved next urged that. quite clearly the object of s. 3 was to validate the minimum rates of wages as fixed by the notification dated the 30th December 1958 and nothing more.

As we read the section we find that it merely fixed wages in respect of certain employments at the rates mentioned in the Table appended to the Act. We are informed that the rates mentioned in the Table are identical with the rates mentioned in the notification dated the 30th December, 1958. The effect 'of enactment of s. 3 would therefore be the same as if the notification of 1958 had been validated. To say that, however, i~ not to say that this Act has validated or that even it seeks to validate the 30th December 1958 notification. On the face of it the legislature was fixing for itself the minimum rates of wages in certain scheduled employments. That is stated in the preamble and is plain from s. 3 itself. The fact

Narottamda1

that rates mentioned in the Table appended to the Act happened to be the same as rate; i fixed elsewhere cannot reasonably justify a conclusion that the validation of the old rates was being affected. Independent legislation does not cease to be so, merely because its effect is the same as it would have been if a validating Act had been passed. The contention that thL> Act was not independent legislation cannot therefore be accepted.

State of Madhya

Prade.h

Nor is it possible to accept the argument that the Act is an unreasonable restriction on the appellant's fundamental rights under Art. 19(!)(f) and (g) of the Constitution. Restriction there undoubtedly is, but we are not satisfied that the restriction is unreasonable. Section 3 of the Act makes the new rate.> of wages effective from January 1, 1959. Section 4 makes the various provisions of the Central Act No. 11 of 1948 available for revision and enforcement of the rates as .specified in s. 3. The consequence is that if an employer does not pay the rates as specified, an application may be made under s. 20 of Act 11 of 1948 to enforce such payment. He will

be liable aloo to prosecution and penalties under s. 22 of the Act. What according to the learned counsel makes the Act unreasonable is that such application can be made and such prosecution and penalties can be imposed even in respect of the past period-from 1st January 1959 upto the date of the Act. How is it possible for the employer, it is urged, to pay such arream which might amount in many cases to consi• derable sums of money when the accounts for the past years had been closed, profits had been distributed and the available surplus had either been spent or invested in other ways?

We have no hesitation in agreeing to the proposition that the retrospective operation of legislation is a relevant circumstance in deciding its reasonableness. It is, however, clearly established by a long series of decisions of this Court that this is not neces.-iarily a decisive test. We may mention in this connection the decision of this Court in Rai Ramkrishna v.

State of Bihar('). There the Court had to consider the question whether the retrospective operation of the Bihar Taxation of Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961 put such an unreasonable restriction on the fundamental rights guaranteed under Art. l 9(1)(f) and (g) of the Comtitution as to make the Act invalid to the extent of its retrospective operation. The Bihar Finance Act, 1950 (Bihar Act XVII of 1950) had imposed a tax on passengers and goods carried by public service motor vehicles in Bihar. In an appeal arising out of a suit filed by the passengers and owners of goods, this Court struck down Part Ill of the aid Act as unconstitutional. This judgment was pronounced on the 12th

(') [1964] 1 S.C.R 897.

Das Gupta, J.

N arottamdas

State of Mad Ii ya

Pradesh

Daa Gupta, J.

. December 1960. Then an Ordinance, viz., Bihar Ordinance

No. II of 1961 was issued on August 1, 1961. By this Ordinance the material provisions of the earlier Act of 1950 were validated and brought into force retrospectively from the date when the earlier Act had purported to come into force. Subsequently, the provisiono of this Ordinance were incorporated in the Bihar Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961. Section 23 of the Act provided that any amount paid, collected or recovered or purported to have been paid, co)lected or recovered as tax or penalty under the provisions' of Part III of the Bihar Finance Act, 1950 or rules made thereunder during the period beginning with the first day of April 1950 and ending on the thirtyfirst day of July 1961, shall be deemed to have been validly levied, paid, collected or recovered under the provisions of this Act. It was urged that thio retrospective operation for such a long period like IO years itself made the provisions unconstitutional. In repelling this contention, Gajendragadkar, J. (as he then was) speaking for the Court observed thus:-

"If a statute paBsed by the legislature is challenged in proceedings before a court and the challenge is ultimately sustained and the statute is struck down. it is not unlikely that the judicial proceedings may occupy a fairly long period and the Legislature may well decide to await the final decision in said proceedings before it uses its legllilative power to cure the alleged infirmity in the earlier Act. In such a case, if after the final judicial verdict is pronounced in the matter the legislature passes a validating Act, it may well cover a long period taken by the judicial proceedings in court and yet it would be inappropriate to hold that because the retrospective operation covers a long period, therefore, the restriction imposed by it is unreasonable."

These observations which were made in resoect of a validating Act apply fully to a legislation as in the Act now under consideration.

It is not also possible to accept the picture presented by Mr. Setalvad of the employers' financial difficulties in making payment for the past period as a fair repreBentation of the true facts. For practically the entire period from the !st April 1959 to the date of the present Act the employers had before them the provisions of what purported to be a good law requiring them to pay at these very rates. As good businessmen they are expected to have made provisions

7 S.C.R.

SUPRElIE COURT REPORTS 827

for payments on these very rates, even though they intended to challenge the validity of the previous Act a_nd ultimately succeeded in that attempt. We are not prepared to believe that such provisions are not generally made. The hardship which according to Mr. Setalvad the employers would have to face in making the payments for the past periods is, in our judgment, more imaginary than real.

But, urges the learned counsel, s. 3 of the Act while giving to the rates of wages fixed by the Act retrospective effect from the lst January 1959 has afsb made wages at these new rates payable on January l, 1959 for the past period.

The result of this, according to the learned counsel, is that as soon as an application is made under s. 20 of Act 11 of

.1948 the employer would be liable not only to pay the arrears t>f wages but also compensation as provided in sub-s. 3 of s. 20.

Sub-section 3 of s. 20 of Act ll of 1948 provides, inter alia, that the minimum wage authority may direct:

"In the case of a claim arising out of payJ!lent of less than minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess." It has further provided that the authority may direct payment of such compensation in cases where the excess or the amount due is paid by the employer to the employee before the disposal of the application.

If the legal position were as urged by the learned counsel,' that s. 3 made the new rates of wages for the past period payable on January I, 1959 or the apprehension that the employer might be made to pay heavy compensation may well be true. Another consequence of that legal position would be that the employer would also be liable to prosecution under s. 22 of the Act for his omission to pay on January I, 1959 the rates which were fixed first by the Ordinance and then by the impugned Act. We are satisfied however that s. 3 of the impugned Act does not make the new rates of wages payable on the lst January 1959. The words used are ...... "and it is hereby enacted that the said minimum rates of wages shall be payable by the employer in the said scheduled employments and be enforceable against him with effect from the !st January 1959. as if the provisions herein contained have been in force at all material times." By these words, it is urged on behalf of the appellant, the legislature not only made the minimum wages effective from the 1st January 1959 but also made them payable on that date for the past period. In other words, the sentence is sought to be read as saying: -

N a.rottam.tku

•• Sta•e of Madhya

PradMh

Drt-9 Gupta, J.

Narottamdas

State of Madhya

Ptadesh

Das Gupta, J.

"the said minim um rates of wages shall be payable by the employer in the said scheduled employments with effect from !st January 1959 and shall be enforceable against him with effcet from Isl January 1959." If that had been the intention of the legislature the appropriate words to use would have been "the said minimum rates of wages shall be payable by the employer in the said scheduled employments and enforceable against him with effect from 1st January 1959." No purpose would be served by the word "be" before the word "enforceable" if the phrase "with effect from the !st January

1959" was intended to apply both to "payable" and to "enforceable". The very fact that the legislature took care to say "be enforceable" in the latter part of the sentence shows clearly that while it was intended that the new rates would be enforceable against the employer with effect from the 1st January 1959 no date was being prescribed by s. 3 as regards the date on which it became payable.

An examination of s. 4 of the Act further makes it clear beyond any reasonable doubt that it was the intention of the legislature that new rates became payable only on the 21st June 1962, the date of the publication of the Ordinance which was later replaced by the Act. Section 4 makes applicable to the minimum rates of wages as fixed by s. 3, the provisions of s. 4A and s. 5 of the Minimum Wages Act (Act II of 1948). that is, the provisions as regards the revision in future of the rates fixed by the impugned Act, and of sections 12 to 30A.

Among the sections thus included is therefore s. 20 which prescribes the procedure for claims arising out of payment of less than the minimum rates of wages. The first proviso to sub-section 2 of s. 20 prescribes a period of limitation within which an application on such claims has to be made. The period prescribed is one year from the date on which the minimum wages became payable. It was thus necessary for the legislature when giving retrospective effect to the rates fixed bys. 3 of the.impugned Act to indicate the date on which the new rates would become payable. This indication is clearly given by the proviso to s. 4. The proviso (which has already been set out) is in these words: -

"Provided that with respect to claims arising out of payment of minimum rates of wages specified in s. 3 pertaining to a period prior to the publication of the Madhya Pradesh Minimum Wages Fixation Ordinance 1962 (4 of 1962) in the Gazette, the period of one year referred to in the first proviso to sub-section (2) of section 20 of the said .Act shall be counted with effect from the 21st June 1962, the date of publication of the said Ordinance in the Gazette."

Narnrt-nmda&

The above provision that "the period of one year referred to in the first proviso to sub-section (2) of s. 20 of the said Act shall be counted with effect from the 2 lst June 1962"' is a clear statement of the legislature"s intention that it is on lhe 21st June 1962 that the rates which had become enforceable under s. 3 with effect from lst January 1959 became payable.

That is how the High Court has construed the section and in our judgment that construction is correct. The appellant's apprehension that he might be made. liable for payment of compensation under s. 20(3) or to prosecution under s. 22 of the Minimum Wages Act, 1948 (Act II of 1948) as a result of the mere passing of the Act is therefore groundless.

Stale of ModhyA

Pradesh

It is clear that the duty to pay at these rates arose only on and from the 21st June 1962 and no liability to pay compensation under s. 20(3) or to prosecution under s. 22 of the Minimum Wages Act, 1948 would arise if payment was made on the 21st June 1962.

It was then urged that it would be unreasonable to expect the employer to be able to make such payment on the 2 lst June 1962, the date of publication of the Ordinance. Some time would elapse, it is pointed out, before the employer could acquaint himself with the detailed provisions of the Act amt some further time in making arrangements for payment; there was thus the risk of an application being made against him under s. 20 of the Minimum Wages Act, 1948, and an order directing him to pay compensation. While there is no doubl a theoretical possibility of .such a thing happening, the risk appears to us practically non-existent. It is to be noticed that it is discretionary with the minimum wage authority to make an order for payment of compensation. It is very unlikely that the authority will in the use of his discretion make aa order for payment of compensation when he finds that the employer has made the payment within a few days after the 21st June 1962.

The risk of prosecution under s. 22 because of failure to pay exactly on the 21st June 1962 is even less.

But such prosecution, it may be pointed out, will be entertained by courts only after an application under s. 20 as reg:; rds. the facts had been made and partly succeeded and the appropriate Government or an officer authorised by it has sanctioned . the making of a complaint. It does not appear to us likely . that prosecution will be launched because of failure to pay exactly on the 21st June 1962. The contention that s. 3 and s. 4 of the impugned Act impose unreasonable restrictions on the appellant's fundamental rights must therefore be rejected.

The last ground urged in support of the appeal. viz., that the impugned Act contravenes Art. 20(1) of the Constitution, is based on the assumption that the new rates of wages became payable on the Ist Januar~ 1959 even as regards the

Do• o.., ta, J •.

191J4

Naroftamd1is

Stak of MadAya

J>,(u, wi

Das Gupl.a, J.

past period. If that assumption were correct it would no doubt be also correct to say that the combined effect of ss. 3 and 4 of the impugned Act was to make the employer liable to conviction for offences for violation of a law which was not in force at the time of the commission of the act charged. We have already held however that on a proper construction of ss. 3 and 4. the new rates of wages for the past period became payable not on the !st January 1959 but on the 21st June

1962. The attack on the validity of the sections on the ground of Art. 20(1) of the Constitution therefore fails.

All the points raised in the appeal fail. The appeal is accordingly dismissed with costs.

Appeal dismissed.

NAROTIAMDAS

STATE OF MADHYA PRADESH

WANCHOO

K. C. DAS GUPTA

AYYANGAR, JJ

s. 31A

Madhya Pradesh Ordinance

ss. 2, 3 and 4

Constitution of India

Art. 19(l)(f)

State of Madhya Pradesh

Minimum Wages Act, 1948

January 1, 1959

Jn this Court the validity of the Act

December 30, 1958

Art. 19(l)(f)

ss. 20 and 22

Art. 20(1)

Section 2

Minimum Wages Act

s. 3

Section 3

1st January 1959

s. 4

21st June 1962

s. 3

s. 20(3)

s. 22

Minimum Wages Act 1948

ss. 3 and 4

[1964] 1 S.C.R. 897

ss. 3 and 4

Art. 20(1)

M. C. Setalvad

B. V. Shukla

Rameshwar Nath

S. N.

Andley

P. L. Vohra

B. Sen

N. Shroff

DAs GUPTA

Daa G

Jabalpur

Madhya Pradesh

India

23rd February 1956

V.. Gupla

Madhya Pradesh Htgh Court

Madhya Pra desh Legislature

Madhya Pradesh Act

Section 3

Act into the Central Act

s. 7

s. 9

Art. 226

s. 31A

30th December, 1958

2nd May 1962

5th October 1962

High Court of Madhya Pradesh

Art. 226

Art. 227

State of Madhya Pradesh

Madhya Pradesh Legislature

30th December 1958

s. 20

s. 22

Art. 20(1)

s. 5

Minimum Wages Act, 1948

section 4

sections 12 to 30

section 3

D .. Gupta

Das Gupta

section 3

section 20

Madhya Pradesh legislature

Setalvad

s. 2

Minimum Wages Act

Setalved

s. 3

s. 3

s. 3

State of Madhya

Art. 19(!)(f)

Section 3

Section 4

s. 3

s. 20

s. 22

Bihar Finance Act, 1950

Bihar Act XVII of 1950

Bihar

[1964] 1 S.C.R 897

State of Mad Ii ya

Pradesh

Daa Gupta

Section 23

Part III of the Bihar Finance Act, 1950

first day of April 1950

thirtyfirst day of July 1961

Gajendragadkar

s. 3

January l, 1959

s. 20

s. 3

s. 20

section 3

s. 20

s. 3

January I, 1959

s. 22

s. 3

Gupta

Narottamdas

State of Madhya

s. 3

s. 4

Section 4

s. 3

s. 4A

s. 5

Minimum Wages Act

sections 12 to 30A

s. 20

section 2

s. 20

s. 4

s. 3

section 20

s. 20

2 lst June 1962

s. 3

s. 20(3)

s. 22

Minimum Wages Act, 1948

s. 20(3)

s. 22

Minimum Wages Act, 1948

s. 20

Minimum Wages Act, 1948

s. 22

s. 20

s. 3

s. 4

Art. 20(1)

Das Gupl.a

ss. 3 and 4

ss. 3 and 4

!st January 1959

21st June

1962

Art. 20(1)


lrlarch 9

SUPREJ\IE COURT REPORTS

A. P. KRISHNASAMI NAIDU ETC. v.

STATE OF MADRAS (With connected Petitions)

[J 964]

[P. B. GAJENDRAGADKAR. C. J., K. N. WANCHOO, J.C. SHAH,

N. RAJAGOPALA AYYANGAR ANDS. M. SIKR!, JJ.J

Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961 (Mad. 58 of 1961) ss. 5(1), 50-Provisions for land ceiling and compensation-If violative of Art. 14--Constitution. of India, Arts. 14, 19, 31(2).

The constitutionality of the Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961 was attacked on the ground that it violated Arts. 14, 19, 31 (2) of the Constitution.

Held (i) The provisions of s. 5(1) of the Act result' in discrimination between persons equally circumstanced and are thu& violative of Art .. 14 of the Constitution. As this section is the basis of Chapter II of the Act, the whole chapter must fall along with it.

The ratio of Karimbil Kunhikoman v. State of Kerala [1962] Supp. 1 S.C.R 829 applies with full force to the present case.

(ii) The provisions in s. 50 read with Sch. III of the Act with respect to compensc.tion are discriminatory and violate Art. 14 of the Constitut'on.

Karimbil Kunhikoman v. State of Kerala [1962] Supp. l S.C.R 829, followed.

(iii) Ss. 5 'and 50 are the pivotal provisions of the Act, and as they fall, the whole Act must be struck down as unconstitutional.

ORIGINAL JURISDICTION: Writ Petitions 1, 7, 8, 10, 53 and 76 of 1963.

Petitions under Art 32 of the Constitution of India for the enforcement of Fundamental Rights.

R. V. S. Mani and K. R. Shama, for the petitioner (in W.P. Nos. 1 and 76 of 1963).

R. V. S. Mani and T. R. V. Sastri, for the petitioner (in W.P. Nos. 7, 8, 10 and 53).

A. V. Ranganadham Chetty and A. V. Rangam. for the respondent (in the petitions).

I. N. Shroff, for the interveners Nos. I and 5 (in all the petitions).

M. C. Setalvad, N. S. Bindra and R. H. Dhebar, for intervener No. 2 (in W.P. No. I of 1963).

C. P. Lal, for intervener No. 3 (in W.P. No. 1 of 1963).

R. H. Dhebar, for intervener No. 4 (in W.P. No. 1 of ' 1963).

S. V. Gupte, Additional Solicitor-Genera/, N. S. Bindra and R. H. Dhebar, for intervener No. 6 (in W.P. No. 1 of 1963).

March 9, 1964. The Judgment of the Court was delivered by

WANCHOO, J.-These six petitions under Art. 32 of Constitution raise a common question about the contitution . ality of the Madras Land Reforms (Fixation of Ceiling on Land Act, No. 58 of 1961 (hereinafter referred to as the Act), which was assented to by the President on April 13, 1962 and came into force on publication in the Fort. St. George Ga1.ette on May 2. 1962. The constitutionality of the Act is attacked on the ground that it violates Arts. 14, 19 and 31(2) of the Constitution. It is not necessary to set out in full the attack made on the constitutionality of the Act in these petitions. It will be enough if we indicate the two main attacks on the constitutionality of the Act under Art. 14. The first of these is with respect to s. 5 of the Act which lays down the cejling area. The second is on s. 50 of the Act read with Sch. III thereof, which provides for compensation. It is urged that the Act is not protected under Art. 31-A of the Constitution and is terefore open to attack in case it violates Art. 14, 19 or 31. The petitioners in this connection rely on the judgment of tliis Court in Karimbil Kwihikoman v. State of Kera/a(').

Before we consider the two main attacks on the constitutionality of the Act we may briefly indicate the scheme of the Act. Chapter I is preliminary, Section 3 thereof provides for various definitions, some of which we shall refer to later.

Chapter II deals with fixation of ceiling on land holdings.

Section 5 thereof fixes the ceiling area. The other sections provide for determining surplus land, and s.18 provides for the acquisition of surplus land which vests in the Government free from all encumbrances. Chapter III provides for ceiling on future acquisition and restriction on. certain transfers. Chapter IV provides for the constitution and functions of the land board. Chapter V provides for the constitution and functions of the sugar factory board. Chapter VI provides for compensation. Section 50 thereof read with Sch. III lays down the mode for determining compensation for the land acquired by the overnment and other ancillary matters. Chapter VII proV1des for survey and settlement of lands in the transferred territory which came to the State of Madras by virtue of the

Stats eorganisation ct of 1956. Chapter VIII provides for.

cultJvag tenants' ceiling area. Chapter IX provides for exemption of certain lands from the application of the Act.

Chapter X provides for land tribunals and Chapter XI for a_ppeals and revision. Chapter XII provides for certain penalties and ocedure while Chapter XIII provides for :disposal of land aC<Jurred. by the Governme!1t under the Act. Chapter XIV d~ with mJSCCllaneous proVISions, including s.IIO, which proV1des for the framing of rules .

..4.P.K,;,-.,.;

Naid• do.

Stal< of JI adnlf

Waidoo, J.

.A .P. Kriali...,.mi

Naitl• etc.

Blale of Jladras

w-.J.

SBPREME COURT REPORTS [1964]'

The main purpose of the Act is to provide for a ceiling on land holdings, for determining surplus land which would be acquired by Government and for payment of compensation therefor. The Act is applicable to agricultural land as defined in s. 3(22) and is mainly concerned with persons holding lands in ryotwari settlement or in any other wa, y subjc; ct to payment of revenue direct to the Government. It is not in dispute that the Act is not protected under Art. 31-A of the Constitution and it is in this background tha.t we shall consider the attack based on Art. 14 on the two main provisions of the Act relating to ceiling area under s. 5 and compensation under s. 50 read with Sch. III of the Act.

It is first necessary to read certain definitions in s 3. Section 3(14) defines family as follows:-

" 'family' in relation to a person means the person, the wife or husband, as the case may be, of such person and his or her-

(i) minor sons and unmarried daughters; and

(ii) Minor grandsons and unmarried grand daughters in the male line, whose father and mother are dead." It is unnecessary to refer to the explanation of s. 3(14), for present purposes. Section 3 (34) is in these terms: -

" 'person' includes any trust, company, family, firm, society or association of individuals, whether incorporated or not." Section 3 (45) is as follows: -

" 'surplus land' means the land held by a person in excess of the ceiling area and declared to be sur plus land under sections 12, 13 or 14." Section 5 is in these terms : -

"5. (!) {a) Subject to the provisions of Chapter VIII,' the ceiling area in the case of every person and, subject to the provisions of sub-sections (4) and (5) and of Chapter VIII, the ceiling area in the case of every family consisting of not more than five members. shall be 30 standard acres .

(b) The ceiling area In the case of every family consisting of more than five members shall, subject to the provisions of sub-sections (4) and (5) and of Chapter VIII, be 30 standard acres together with an additional S standard acres for every member of the family in excess of five.

(2) For the purposes of this section, all the lands held individually by the members of a family or jointly by some or all of the members of such family shall be deemed to be held by the family.

(3) (a) In calculating the extent of land held by a

1P64 member of a family or by an individual person, A. P. Kn.A ...... > the share of the member of the family or of the Naid• ttc. individual person in the land held by an undivided Bum ef Mlldtv Hindu family, a Marumakkattayam tarwad, an Aliyasanthana family or a Nambudiri Illom shall Wane.loo, J. be taken into account.

(b) In calculating the extent of land held by a family or by an individual person, the share of the family or of the individual person in the land held by a firm, society or association of individuals (whether incorporated or not) or by a company (other than a non-agricultural company) shall be taken into account.

Explanation-For the purposes of this section-

(a) the share of a member of a family or of an individual person in the land held by an undivided Hindu family, a Marumakkattayam tarwad, an Aliyasanathana family or a Nambudiri Illom. and

(b) the share of a family or of an individual person in the land held by a firm, society or association of individuals (whether incorporated or not), or by a company (other than a non-agricultural company), shall be deemed to be the extent of Jand-

(i) which, in case such share is held on the date of the commencement of this Act, would have been allotted to such member, person or family had such land been partitioned or divided, as the case may be, on such date; or (ill which, in case such share is acquired in any manner whatsoever after the date of the commencement of this Act. would be allotted to such member, person or. family if a partition or division were to take place on the date of the preparation of the draft statement under sub-section (I) of section 10. ·

"(4) ..

It is unnecessary to consider the rest of s. 5 for present purposes .

. The. attack o~ s. 5 (I) is that it is hit by Art. 14 inasmuch as 1t demes qahty fore the Jaw or equal protection of law to prsons sunilarly. s.1tuate, and reliance is placed in this connect10n on the decmon of this Court in Karimbil Kunhikoman('~. In tha~ case this Court was considering the Kerala Agranan Relat10ns Act, 1961 (hereinafter referred to as the

1961 Kerala Act). The argument is that as in the Kerala Act, so in A P Kriai . the present Act, the word "family" has been given an artificial Naidv. ;:::-.., definition which does not conform to any kind of natural ... families prevalent in the State. namely. Hindu undivided .si.u. •I lladwu family, Marumakkattayam family, Aliyasanathana family or Waachoo, J Nambudiri Illom, and that a double standard has been fixed in s. 5(1) in the matter of providing ceiling. It is therefore .urged that the ratio of that decision fully applies to the present Act. Therefore, s. 5(1) should be struck down as violative of Art l 4 in the same manner as s. 58 of the Kerala Act was struck down.

We are of opinion that this contention is correct and the .ratio of that case applies with full force to the present case.

It was observed in that case that "where the ceiling is fixed . . . . . . . . . by a double standard and over and above that the family has been given an artificial definition which dces not correspond with a natural family as known to personal' law, there is bound to be discrimination resulting from such a provision". In the present case also "family" has been given an artificial definition as will immediately be clear on reading .s. 30 4), which we have set out above. It is true that this definition of "family" in s. 3(14) is not exactly the same as in the Kerala Act. Even so there can be no doubt that the definition -0f the word "family" in the present case is equally artificial'.

Further in the Kerala Act s. 58 fixed a double standard for the purpose of ceiling; in the present case s. 5(l)(a) fixes a double standard though there is this distinction that in s. SU) the same ceiling is fixed in the case of a person as in the case of a family consisting of not more than five members. namely. 30 standard acres while in the Kerala Act, the ceiling fixed for a family of not more than five was double that for an adult unmarried person. But that in our opinion makes no difference in substance. The provision of s. 5(0 results in discrimination between persons equally circumstanced and is thus

viola.le of Art. l 4 of the Constitution. This will be clear from a simple example of an undivided Hindu family, which we may give. Take the case of a joint Hindu family consisting of a father. two major sons and two minor sons. and assume that the mother is dead. Assume further that this natural family has 300 standard acres of Janel. Oearly according to tl1e personal Jaw, if there is a division in the family, the father and each of the four sons will get 60 standard acres per head.

Now apply s. 5(1) to this family. The two major sons being not members of the family because of the artificial definition given to "family" in s. 304) of the Act will be entitled to . 30 standard acres each as individuals and the rest of their holdings i.e. 30 standard acres in the case of each will be -surplus land. But the father and the two minor sons being an artificial family as defined in s. 3(14) will be entitled to 30

standard acres between them and will thus lose 150 standaru 1964 acres, which will becoine surplus land. This shows clearly A.P. Kriahmuam; how this double standard in the matter of ceiling read with Naidu etc. the artificial definition of "family" will result in complete is- State ; j Madras crimination between these five members of a natural family.

Under the Hindu law each member would be entitled to one- Wanchoa, tifth share in the 300 standard acres belooging to the family.

Under the Act however the two major sons will keep 30 standard acres each while the father and the two minor sons together will keep 30 standard acres which work out to 10 standard acres each. The two major sons will thus lose 30 standard acres each while the father and the two minor sons will lose lifty standard acres each. No justification has been shown on behalf of the State for such discriminatory treatment resulting in the case of members of a joint Hindu family; nor are we able to understand why this discrimination which clearly results from the application of s. 5 (l) of the Act is not violative of Art. 14 of the Constitution. Examples can be multiplied with reference to joint Hindu families which would show that discrimination will result on the application of this provision. Similarly we are of opinion that discrimination will result in the case of Marumakkattayam family, Aliyasanthana family and a Nambudiri Illom, particularly in the case of the former two where the husband and wife do not belong to the same family. We are clearly of opinion that as in the case of s. 58 of the Kerala Act so in the case of s. 5 (1) of the Act discrimination is writ large on the consequences that follow from s. 5()). We therefore hold that s. 5(1) is violative of the fundamental' right enshrined in Art. 14 of the Constitution. As the section is the basis of Chapter II of the Act, the whole Chapter must fall along with it.

Next we come to the provisions as to compensation contained in s. 50 read with Sch. III of the Act. Here again we are of opinion that the decision of this Court in Karimbil Kunhikoman's(') case fully applies to the scheme of compensation provided in the Act which is as discriminatory as was the scheme in the Kerala Act. Learned counsel for the respondent however contends that Sch. III does not provide for any cut in the purchase price as was the case in the Kerala Act, and therefore the provisions in the Act are not discriminatory. If we look at the substance of the matter, however, we find that there is really no difference between the provisions for compenation in the Kerala Act and the provisions in respect thereof m the Act, though the provisions in the Act are differently worded. What was done m the Kerala Act was to arrive at the figure. of compensation .on certain principles, and a cut was then _1mpoed on the figure thus arrived at and this cut progressively mcreased by slabs of Rs. 15,000. Jn the present

1964 case, a converse method has been adopted and the provision A. p, Kriahnasami is that first the net annual income is .arrived at and thereafter

Naidu etc. compensation is provided for slabs of Rs. 5,000 ea.ch of net Stal• o/itaaras income. For the first slab of Rs. 5.000, the compensation is 12 times the net annual income, for the second slab of WancAoo, J.

Rs. 5.000 it is 11 times, for the third slab of Rs. 5,000 it is ten times and thereafter it is nine times.

Let us now work out this slab system. Take four cases where the net annual income is respectively Rs. 5,000, Rs. 10,000, Rs. 15,000 and Rs. 20,000. The first person whose net annnal income is Rs. 5,000 will get Rs. 60,000 as compensation, the second person whose net annual income is Rs. 10,000 will get Rs. 1,15,000, the third person with a net annual income of Rs. 15,000 will get Rs. 165,000 and the person with a net annual income of Rs. 20.000 will get Rs. 2, l 0,000. Jf the same multiplier had been applied as in the case of the first slab of Rs. 5,000 to the other three slabs also, these persons would have got compensation of Rs. 1,20.000, Rs. 1,80,000 and Rs. 2,40,000. This will show that in effect there is a cut of about 4 per cent on the total compensation which corresponds to the purchase price in the Kerala Act in the case of a person with a net annual income of Rs. 10,000, of about 8 per cent in the case of a person with a net annual income of Rs. 15,000 and about L?. per cent in the case of a person with a net annual income of Rs. 20.000. Though the manner of arriving at the total compensation is ostensibly different from that provided in the Kerala Act, its effect is the same, namely, as the total net income goes up after the first slab of Rs. 5,000 there is a progressive cut in the total compensation just as was the case in the Kerala Act. The argument that the cut is justified on. the same basis as higher rates of income-tax on higher slabs of income has already been rejected by this Court in Karimbil Kunhikoman's case('). Therefore, for the reasons given in that case, we are of opinion that the provisions contained in s. 50 read with Sch. III of the Act with respect to compensation are discriminatory and violate Art. 14 of the Constitution.

Sections 5 and 50 are the pivotal provisions of the Act, and if they fall, then we are of opinion that the whole Act must be struck down as unconstitutional. The working of the entire Act depends on s. 5 which provides for ceiling and s. 50 which provides for compensation. If these sections are unconstitu- . tional, as we hold they are, the whole Act must fall.

We therefore allow the petitions and strike down the Act as unconstitutional. The petitioners will get their costs from the State of Madras-one set of hearing fee.

Petitio111 allowed. (') [1962] Suppl. 1 S.C.R. 829.

A. P. KRISHNASAMI NAIDU ETC

STATE OF MADRAS

P. B. GAJENDRAGADKAR

K. N. WANCHOO, J

C. SHAH

N. RAJAGOPALA AYYANGAR

ss. 5(1), 50

Art. 14

Arts. 14, 19, 31(2)

Arts. 14, 19, 31

s. 5(1)

s. 50

Art. 14

Ss. 5

Art 32

Constitution of India

R. V. S. Mani

K. R. Shama

T. R. V. Sastri

A. V. Ranganadham Chetty

A. V. Rangam

I. N. Shroff

M. C. Setalvad

N. S. Bindra

R. H. Dhebar

C. P. Lal

S. V. Gupte

WANCHOO

Art. 32

Fixation of Ceiling on Land Act

April 13, 1962

May 2. 1962

Arts. 14, 19 and 31(2)

Art. 14

s. 5

s. 50

Art. 31

Art. 14, 19

Section 3

Section 5

Section 50

Madras

Waidoo

s. 3(22)

Art. 31

Art. 14

s. 5

s. 50

s 3

Section 3(14)

s. 3(14)

Section 3

Section 3

sections 12, 13

Section 5

section 10

s. 5

s. 5

Art. 14

Karimbil Kunhikoman('~.

s. 5(1)

s. 5(1)

s. 58

s. 30

s. 3(14)

Further in the Kerala Act

s. 58

s. 5(l)(a)

s. 304

s. 3(14)

A.P. Kriahmuam

Naidu

s. 5

Art. 14

s. 58

s. 5

s. 5()

s. 5(1)

Art. 14

s. 50

Karimbil Kunhikoman

What was done m the Kerala Act

WancAoo

s. 50

Art. 14

Sections 5 and 50

s. 5

s. 50

State of Madras


' '

7 S.C.R.

SUPREME 001.;'RT REPORTS

GURBUX SINGH

BHOORALAL

[P. B. GAJENDRAGADKAR, c. J .• K.

HIDAYATULLAH, K. C. DAS GUPTA

AYYANGAR, JJ.J

W ANCHOO.

AND N. RAJAGOPALA

Civil Procedure-Suit filed for recovery of possession m•d mesne profits-In a previous suit a decree for mesne profits u:as passed in respect of the same land-Wht!ther cause of action same in both suits-Subsequent suit whether barred under provisions of the Code-Code of Civil Procedure, 1908 (Act 5 of 1908), Order 2 rr. (2) and (3).

The plaintiff-respondent brought a suit against the appellant for recovery of possession of certain property and for mesne profits. The plaintiff claimed recovery of possession and mesne profits on the ground that he was the absolute owner of the property .described in the plaint and the defendant was in wrongful possession of t)le same. fo the plaint the plaintiff made reference to a previous suit that had been filed by him and his mother (C.S. 28 of 1950) wherein a claim had been made against the defendant for the recovery of the mesne profits in regard to the same property for the period ending February l 0,

1950. fa the previous suit the mense profits had been decreed.

In his written statement in the present suit the defendantappellant raised a technical plea under Order 2 rule 2 of the Civil Procedure Code to the maintainability of the suit.

Before evidence was led by the parties the trial court decided this preliminary issue raised by the defendant. The trial court held that the suit was barred under 0. 2 r. 2 of the Code.

On appeal, the Appellate Court held that the plea of a bar under Order 2 rule 2. Civil Procedure Code should not have teen entertained at all because the pleadings in the earlier suit

C.S. 28 of 1950 had not been filed in the present case.

Therefore, the Appellate Court set aside the order of the trial Court. Against this order the defendant preferred an appeal which was dismissed by the High Court. The appellant obtained special leave against the judgment of the High Court.

Hence the appeal:- Held: (i) A plea under Order 2 rule 2 of the Code based on the existence of a former pleading cannot be entertained when the pleading on which it rests has not been produced. It is for this reason that a plea of a bar under 0. 2 r. 2 of the Code can be established only if the defendant files in evidence the pleadings in the previous suit and thereby proves to the court the identity of the cause of action in the two suits. In other words a plea under 0. 2 r. 2 of the Code cannot be made out except on proof of the plaint in the previous suit the filing of which is said to create the bar. Wlithout placing before the court the plaint in which those facts were alleged, the defendant cannot invite the court to speculate or infer by a process of deduction what those facts might be with refer€nce to the reliefs which were then claimed. On the facts. of this case it has to be held that the plea of a bar under 0, 2 r. 2 of the Code should not have been entertained at all by

April 22

196l

Gurbux Singh v.

JJluJQralal

the trial Court because the pleadings in civil suit No. 28 of liJ]iO_ were not filed by the appellant in support of this plea.

(ii) in order that a plea of a bar under 0. 2 r. 2(.•\ of the Code should succeed the defendant who raises the plea must make out (i) that the second suit was in !espect. of the sa::de cause of action as that on which the previous suit v.:as _bas •

(ii) that in respect of that cause of act10n he plamllff. was entitled to more than one relief. (iii) tht bemg thus ent:tle~ w more than one relief the plamtiff, without leave obtame from the Court omitted to sue for the rellef for which the second suit had been filed.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 583 of

1961. Appeal by special leave from the Judgment and decree dated August 12, 1959, of the Rajasthan High Court in Civil Misc. First Appeal No. 50 of 1956.

Gopal Singh, for the appellant.

B. P. Maheshwari, for the respondent.

April 22, 1964. The Judgment of the Court was delivered by

Ayyan9ar, J.

AYYANGAR, J.--The facts giving rise to this appeal, by special leave, are briefly as folows: The respondent- Bhooralal-brought a suit-Civil Suit 20 1954-in the Court of the Subordinate Judge, First Class, Kekri against the appellant claiming possession of certain property which was described in the plaint and for mesne profits. The allegation in the plaint was that the plaintiff was the absolute owner of the said property of which the defendant was in wrongful possession and that in spite of demands he had failed to vacate the same and was therefore liable to pay the mesne profits claimed. In the plaint he made reference to a previous suit that had been filed by him and his mother (C.S.

28 of 1950) wherein a claim had been made against the defendant for the 'recovery of the mesne profits in regard to the same property for the period ending with February 10,

1950. It was also stated that mesne profits had been decreed in the said suit. In the Written Statement that was filed by the present appellant, besides disputing the claim of the plaintiff to the reliefs prayed for on the merits, a technical plea. to the maintainability of the suit was also raised in these terms:

"That 0. 2. r. 2, Civil Procedure Code is a bar to the suit. When the suit referred to in paragraph 2 of the plaint was filed the plaintiff had a cause of action for the reliefs also. He having omitted to sue for possession in that suit, is now barred from claiming relief of possession. No second suit for recovery of mesne profits is maintainable in law.

... •

Since the plaintiff had lost his remedy for the relief of possession he cannot seek recovery of mesne profits also." On these pleadings the learned Subordinate Judge frameli 5 issues and of these the 4th issue ran :

"Whether 0. 2. r. 2, Civil Procedure Code is a bar?".

Before evidence was led by the parties issue no. 4 was argued before the learned trial Judge as a preliminary issue and the Court recorded a finding that the suit was barred by the provision named and directed the dismissal of the suit.

The plaintiff preferred an appeal from this decree to the additional District Judge and the appellate Court considered this plea as regards the bar under 0. 2. r. 2, Civil Procedure Code on two alternative bases. In the first place, the learned District Judge pointed out that the pleadings in the earlier suit-C.S. 28 of 1950-had not been field in the case and made part of the record, so that it was not known what the precise allegations of the plaintiff in his previous suit were.

For this reason the learned District Judge held that the plea of a bar under 0. 2. r. 2, Civil Procedure Code should not have been entertained at all. He also considered the question as to whether, if the plea was available, it could have succeeded.

On this he referred to the conflict of Judicial opinion on this point and held that if the point did arise for decision he would have decided in favour of the plaintiff and treated the cause of action for a suit for mesne profits as different from the cause of action for the relief of possession of property from a trespasser. In view, however, of his finding on the first point as to there being no material on the record to justify the plea of a bar under 0. 2. r. 2, Civil Procedure Code the learned District Judge did not rest his decision on his view of the law as regards the construction of 0. 2. r. 2(3). In the circumstances he set aside the dismissal of the suit and remanded it to the trial Court for being decided on the merits in accordance with the law.

The defendant-the appellant before us-preferred a second appeal to the High Court of Rajasthan and th•~ learned Single Judge dismissed this appeal. It is from this judgment that the appellants have preferred this appeal after obtaining special leave .

As already indicated, there is a conflict of judicial opinion on the question whether a suit for possession of immoveable property and a suit for the recovery of mesne profits from the same property are both based on the same cause of action, for it is only if these two reliefs are based on "the same cause of action" that the plea of 0. 2. r. 2., Civil Procedure Code

L 'P(D)ISCT-2;

Gurbu:e Singl v.

Bliooralal

Ayyangar, J.

Gurbux Singh

•• Bhooralal

A'!J"J<Jnya;, J.

SUPHEME COURT REPORTS [1964]

that was raised by the appellant could succeed. Clause (3) of

0. 2. r. 2, Civil Procedure Code that is relevant in this context reads:

"(3) A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs, but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any reliefs so omitted."

Some of the High Courts, notably Madras, have in this connection, referred to the terms of 0. 2. r. 4 which runs:

"R. 4. No cause of action shall, unless with the leave of the Court. be joined with a suit for the recovery of immoveable property, except-

(a) claims for mesne profits or arrears of rent in respect of the property claimed or any part thereof; lb) claims for damages for breach of any contract under which the property or any part thereof is held; and ·

(c) claims in which the relief sought is based on the same cause of action:

Provided that nothing in this rule shall be deemed to prevent any party in a suit for foreclosure or redemption from asking to be put into possession of the mortgaged property".

as an aid to the construction of the term 'cause of action' and the expression 'relief based on the same cause of action' in

0. 2. r. 2(3).

Reading these two provisions together it has been held that the cause of action for suits for possession of immoveable property and the cause of action for a suit in respect of mesne profits from the same property are distinct and different.

On the other hand, it has been held. particularly by the High Court of Allahabad that the basis of a claim for mesne profits is wrongful possession of property and so is a claim for possession and thus the cause of action for claiming either relief is the same viz., wrongful possession of property to which the plaintiff is entitled. On this reasoning it has been held that a plaintiff who brings in the first instance a suit for possession alone or for mesne profits alone is afterwards debarred from suing for the other relief under 0. 2. r. 2(3).

The learned trial Judge had, after referring to the conflict of authority,' expressed his preference for the Allahabad view and had, therefore, upheld the defence.

At the stage of the appeal the learned District Judge had, as already pointed out, expressed his preference for the other view. The

learned Single Judge expressed his concurrence with the learned District Judge in preferring the Madras view as against the decisions of the Allahabad High Court.

Learned counsel for the appellant sought to argue that the Allahabad view was more in accordance with principle and with the proper construction of 0. 2. r. 2(3), Civil Procedure Code. We do not consider it necessary to examine this conflict of judicial opinion in this case as, in our opinion, the learned District Judge was right in holding that the appellant had not placed before the Court material for the purpose of founding a plea of 0. 2. r. 2, Civil Procedure Code.

In order that a plea of a bar under O. 2. r. 2(3), Civil Procedure Code should succeed the defendant who raises the plea must make out (!) that the second suit was in respect of the same cause of action as that on which the previous suit was based, (2) that in respect of that cause of action the plaintiff was entitled to more than one relief, (3) that being thus entitled to more than one relief the plaintiff, without leave obtained from the Court, omitted to sue for the relief for which the second suit had been filed. From this analysis it would be seen that the defendant would have to establish primarily and to start with, the precise cause of action upon which the previous suit was filed, for unless there is identity between the cause of action on which the earlier suit was filed and that on which the claim in the later suit is based there would be no scope for the application of the bar. No doubt, a relief which is sought in a plaint could ordinarly be traceable to a particular cause of action but this might, by no means, be the universal rule.

As the plea is a technical bar it has to be established satisfactorily and cannot be presumed merely on basis of inferential reasoning. It is for this reason that we consider that a plea of a bar under O. 2. r. 2, Civil Procedure Code can be established only if the defendant files in evidence the pleadings in the previous suit and thereby proves to the Court the identity of the cause of action in the two suits. It is common ground that the pleadings in C.S. 28 of 1950 were not filed by the appellant in the present suit as evidence in support of his plea under 0. 2. r. 2, Civil Procedure Code. The learned trial Judge,· however, without these pleadings being on the record inferred what the cause of action should have been from the reference to the previous suit contained in the plaint as a matter of deduction .. At the stage of the appeal the learned District Judge noticed this lacuna in the appellant's case and pointed out, in our opinion rightly, that without the plaint in the previous suit being on the record, a plea of a bar under 0. 2. r. 2, Civil Procedure Code was not maintainable. Learned counsel for the appellant, however, drew our attention to a passage in the judgment of the learned Judge in the High Court which read: "

J, IP(D) !SCI-27(")

Gurbux Sing•

Bkooralal

Ayuangar, J.

Gvb11x Si11gh

Bkoor11lal

Ayyangnr, J.

"The plaint, written statement or the judgment of the earlier court has not been filed by any of the parties to the suit.

The only document filed was the judgment in appeal in the earlier suit. The two courts have, however, freely cited from the record of the earlier suit. The counsel for the parties have likewise done so. That file is also before this Court." It was his submission that from this passage we should infer that the parties had, by agreement, consented to make the pleadings in the earlier suit part of the record in the present suit. We are unable to agree with this interpretation of these observations. The statement of' the learned Judge "the two courts have, however, freely cited from the record of the earlier suit" is obviously inaccurate as the learned District Judge specifically pointed out that the pleadings in the earlier suit were not part of the record and on that very ground had rejected the plea of the bar under 0. 2. r. 2, Civil Procedure Code. Nor can we find any basis for the suggestion that the learned Judge had admitted these documents at the second appeal stage under 0. 41. r. 27, Civil Procedure Code by consent of parties. There is nothing on the record to suggest such an agreement or such an order, assuming that additional evidence could legitimately be admitted in a second appeal under 0. 41. r. 27, Civil Procedure Code. We can therefore proceed only on the basis that the pleadings in the earlier suit were not part of the record in the present suit.

Learned counsel for the appellant, however, urged that in his plaint in the present suit the respondent had specifically referred to the previous suit having been for mesne profits and that as mesne profits could not be claimed except from a trespasser there should also have been an allegation in the previous suit that the defendant was a trespasser in wrongful possession of the property and that alone could have been the basis for claiming mesne profits. We are unable to accept this argument. In the first place, it is admitted that the plaint. in the present suit was Jn Hindi and that the word 'mesne profits' is an English translation of some expression used in the original. The original of the plaint is not before us and so it is not possible to verify whether the expression 'mesne profits' is an accurate translation of the expression in the original plaint. This apart, we consider that learneµ counsel's argument must be rejected for a more basic reason.

Just as in the case of a plea of res judicata which cannot be established in the absence on the record of the judgment and decree which is pleaded as estoppel, we consider that a plea under 0. 2. r. 2, Civil Procedure Code cannot be made out except on proof of the plaint in the previous suit the filing of which is said to create the bar. As the plea is basically founded '

7 S.C.R.

SUPREllIJ~ COURT HEPOHTS 837

on the identity of the cause of actin in the two suits the defence which raises the bar has necessarily to establish the cause of action in the previous suit. The cause of action would be the facts which the plaintiff had then alleged to support the right to the relief that he claimed. Without placing before the Court the plaint in which those facts were alleged, the defendant cannot invite the Court to speculate or infer by a process of deduction what those facts might be with reference to the reliefs which were then claimed. It is not im- .possible that reliefs were claimed without the necessary averments to justify their grant. From the mere use of the words 'mesne profits' therefore one need not necessarily infer that the possession of the defendant was alleged to be wrongful. 1t is also possible that the expression 'mesne profits' has been used in the present plaint without a proper appreciation of its significance in law. What matters is not the characterisation of the particular sum demanded but what in substance is the allegation on which the claim to the sum was based and as regards the legal relationship on the basis of which that relief was sought. If is because of these reasons that we consider that a plea based on the existence of a former pleading cannot be entertained when the pleading on which it rests has not been produced. We therefore consider that the order of remand passed by the learned Additional District Judge which WM confirmed by the learned Judge in the High Court was right. The merits of the suit have yet to be tried and this has .been directed by the order of remand which we are affirming.

The appeal fails and is dismissed. In the circumstances of the case there will be no order as to costs.

Appeal dismissed.

1~1/j).

Uwl_ux Si1h

' Ul1u<1r11ffJ

GURBUX SINGH

BHOORALAL

P. B. GAJENDRAGADKAR

HIDAYATULLAH

K. C. DAS GUPTA

AYYANGAR, JJ

Code of Civil Procedure, 1908

S. 28

Order 2 rule 2

Order 2 rule 2

Civil Procedure Code

S. 28

Order 2 rule 2

Gopal Singh

B. P. Maheshwari

Bhooralal

S.

28

February 10,

1950

Civil Procedure Code

Civil Procedure Code

Civil Procedure Code

S. 28

Civil Procedure Code

Civil Procedure Code

High Court of Rajasthan

Civil Procedure Code

Ayyangar

Gurbux Singh

Civil Procedure Code

Madras

High Court of Allahabad

Allahabad

Allahabad High Court

Civil Procedure Code

Civil Procedure Code

Civil Procedure Code

Civil Procedure Code

S. 28

Civil Procedure Code

Civil Procedure Code

Ayuangar

Ayyangnr

Civil Procedure Code

Civil Procedure Code

Civil Procedure Code

Civil Procedure Code


April 22

SUPREME COURT REPORTS [196t]

STATE OF MADHYA PRADESH AND ORS.

SIRAJUDDIN KHAN

[K. SUBBA RAO, J. C. SHAH AND S. M. S1KRI, JJ.]

Madhya Pradesh Abolition of Proprietary Rights (Estates ..

Mahals, Ali&"tated Lands) Act, 1950 (M. P. Act No. 1 of 1951) Sch. I, r. 2(2)(c).

The respondent was an owner of an estate in Madhya Pradesh. Under the provisions of the Madhya Pradesh Aboli-· tion of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 the respondent's estate was vested in the State and he became entitled to compensation. The compensation was to be paid at the rate of ten times the net income. The net income would be calculated by deducting from the gross in-· come, inter alia, the average of the income tax paid in respect of the income from big forest during 30 agricultural years proceeding March 31, 1951. In calculating the net income the Compensation Officer deducted not only income tax but also super tax and the r, espondent appealed to the Settlement Commissioner against the deduction of super tax. On the rejection of the appeal the respondent filed a writ petition in the High Court and the High Court held that on a construction of the various provisions of the Act it was wrong to deduct the supertax while calculating tire compensation payable to the respondent. The appellant filed this appeal on special leave granted by this Court.

It was contended on behalf of the appellant that the object of the r. 2(2) (c} of Schedule I to the Act is to provide a method for ascertaining the net income of an estate and therefore there cannot be any distinction between income tax and super-tax and the expression "income-tax" has been used comprehensively to include super-tax also. The contention on behalf of the respondent was that from a historical point as well as from the provisions of the Act it is seen that income tax and super-tax were distinct and separate and the former does not include the latter.

Held: (i) There are two essential differences between in-- come-tax and super-tax. They are (1) though both the taxes are assessed on the total income of a person, the total income for the purpose of income tax is computed on the basis of income classified chargeable under the different heads mention-ed in s. 6 of the Income-tax Act whereas super-tax is not concerned with the different heads, but is payable on the total income so ascertained and (2) while super-tax 1, except in a few cases, is payable by the assessee direct, the income tax is payabl.e by him direct as well as by deduction.

(ii) Examining the provisions of r. 2(2)(c) Schedule I of the Act it is evident that with the knowledge that under the Income-tax Act two seperate duties namely income-tax and super-tax are imposed the Legislature has used the expression "income tax". If the intention was to refer to both the talreS. it would have stated income-tax and super-tax. The menticn or the one and the omission of the other is a sure indication of its intention. The qualification that income-tax paid should have been in respect of the income received from the big ..

forests necessarily excludes super-tax for under the Income- 1964 tax Act no super-tax is payable in respect of the income re- State >I Ma4k

ceived from big forest but only in respect of the total income. p,.0.::Aana0t'f:..

(iii) Having regard to the terms of r. 2(2)(c) of Sche- 8 . .., J Kha• dule I to the Act it is clear that income-tax does not take in ""' in .super-tax. - Case law reviewed.

Brooks v. Commissioner of Inland Revenue, (1914) 7 T.C. 236, Bates. In re: Salmea v. Bates, 1925 Ch. D. 157 and Reckitt

v. Reckitt, (1933) 1 LT.R. 1.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5101

1963. Appeal by special leave from the judgment and order dated January 22, 1960 of the Madhya Pradesh High Court in Misc. Petition No. 35 of 1959.

B. Sen and J. N. Shroff, for the appellant.

K. N. Rajagopal Sastri and A. G. Ratnaparkhi, for the .respondent.

April 22, 1964. The judgment of the Court was delivered by

SueeA RAo, J.-This appeal by special leave raises the Subba Baa, J. question whether the expression "income-tax" in cl. (c) of sub-r. (2) of r. of Schedule I to the Madhya Pradesh Abolition of Proprietary Rights (Estate, Mahals, Alienated Lands) Act, 1950 (M.P. Act No. 1 of 1951), hereinafter called the Act, includes super-tax.

The facts are as follows: The respondent was the zamindar of Bhadra Estate in Balaghat District of Madhya Pradesh. His estate was known as Bahela Zamindari consisting of 78 villages. The Act came into force on January 26,

1951. Under the Act the proprietary rights of the zamindari vested in the State and he became entitled to compensation in respect of the said rights in the said villages under s. 8 .of the Act The compensation was to be determined in accordance with the rules contained in Schedule I to the Act.

Under r. 8 of Schedule I the zamindar would be entitled to compensation at 10 times the net income. The net income would be calculated by deducting from the gross income, inter alia, the average of the income-tax paid in respect of the income from big forest during 30 agricultural years preceding March 31, 1951. On November 30, 1951, the Compensation Officer determined the compensation payable to the respondent at Rs. 2,21,330-12-6. In arriving at that figure he deducted not only the income-tax payable by the respondent but also the super-tax and sur-charge payable by him. 1:he average of the income-tax paid by him during the material 30 years was only Rs. 3.760-2-9, but if the average of 'the super-tax and sur-charge was included, the average came

SUPRE:\IE COURT REPORTS [1964]

1964 to Rs. 7,070-8-0. The result was that the net yearly income State of Jfadhya of the estate was reduced by Rs. 3, JJ 0-5-3 and compensation Prud"h aml. Other• was paid to him on the basis of the amount so reduced. The

Sirajud~",. 1'ha• respondent moved the Settlement Commissioner under s. 15

- of the Act for enhancement of the compensation. but the Subba Rao, J. Commissioner confirmed the order of the Compensation

Officer. Thereafter, the respondent filed an application in the High Court under Arts. 226 and 227 of the Constitution for quashing the order of the Compensation Officer. ThC' High Court held. on a construction of the relevant provisions of the Act, that super-tax should not be taken into account while calculating the compensation payable to the respondent. The State of Madhya Pradesh has filed the present appeal against the order of the High Court.

Mr. Sen. learned counsel for the State, contends that the object of r. 2(2)(c) is to provide a method for ascertaining the net income of an estate, that in that context there cannot be any justifiable distinction between income-tax and super-tax. for both of them have, inter a/ia, to be deducted -from the gross income to arrive at the net income. and that the Legislature used the word "income-tax" in/ its comprehensive sense so as to take in super-tax. He adds that under the Income-tax Act super-tax is only an additional duty of income-tax and, therefore. a part of it.

Mr. Rajagopala Sastri. learned counsel for the respondent-assessee, argues that in construing a provision of an exproprietary Act. the Court will have to construe such a pro-- vision strictly and if so construed, super-tax cannot be included in the expression "income-tax". He took us through the relevant provisions of the Income-tax Act to support his contention that super-tax is different in its origin, description. scope, incidents and collection from the income-tax.

The question turns upon the correct interpretation of r. 2(2)(c) of the rules of Schedule I to the Act. The relevant provisions of the Act and the rule read: Section 8(1) of the Act: "The State Government shall pay to every proprietor, who is divested of proprietary rights, compensation determined in accordance with the rules contained in Schedule

I." Schedule I to the Act Rule 2. (2). The net income of an estate or mahal in the Central Provinces shall be calculated by deducting from the gross income the sums under the following heads, namely:- • * * • *

(c) the average of the income-tax paid in respect of the income received from big forest during

the period of thirty agricultural years preceding

1!J64 the agricultural year in which the relevant date Statc of A!..U.ya falls; Pradesh ,, nd Othera

v • • • • • • 8ir11juddin Khan Rule 8. (!) The amount of compensation in the Cen Subba Rao, J. tral Provinces and in Berar shall be ten times the net income determined in accordance with the rules herein contained.

The combined effect of the said provisions is that for the purpose of ascertaining the net income of an estate one of the deductible items is the average of the income-tax paid in respect of the income received from the big forest. That average is ascertained on the basis of the income-tax paid during the 30 agricultural years preceding the agricultural year in which the relevant date falls. The compensation payable is ten times the net income ascertained under the rules.

The relevant date for the purpose of ascertaining the average

is the date specified by notification by the State Government under s. 3 of the Act: for instance, if the relevant date falls in the year 1951, the income-tax paid during the years 1921 to 1951 will afford the basis for arriving at the average.

To appreciate the distinction between the concepts of income-tax and super-tax a brief history of their incidents will not be inappropriate. Under the Income-tax Act of 1886 the total income from various sources was not the criterion for assessment but the different sources alone were the basis for it. For the first time the 1918 Act introduced the scheme -0f total income for the purpose of determining the rate of tax. Under that Act several heads were enumerated, under which the income of an assessee fell to be charged.

The 1922 Act went further and enacted that loss under one head of "income" can be set off against the profit under another head. Till the 1922 Act super-tax was separately levied. It was first introduced by the Super-tax Act of 1917 and then it was replaced by the 1920 Act. Only in 1922, for the first time, it was incorporated in the Income-tax Act. Though both the taxes are dealt with by the same Act, their distinctive features are maintained. As regards income-tax, in the words of a learned author, "s. 3 charges the total income, s. 4 define its range, s. 6 qualifies it and ss. 7 to 12 quantify it." There are various other sections which provide the machinery for the ascertainment of the total income for assessment and recovery pf tax. As regards super-tax, a separate chapter viz., Ch. IX, deals with it; it comprises ss. 55 to 58. Section 55 is the charging section for the purpose of super-tax; under that section. "In addition to the inwme-tax charged for any year, there shall be charged, levied

and paid for that year in respect of the total income of the

1964 previous year ............... an additional duty of income-tax

Stale of MIU!.hya (in this Act referred to as super-tax) at the rate or rates laid Pradesh and Other• down for that year by a Central Act". Section 56 says that

8 . . dJ: Kh for the purpose of super-tax, except in specified cases, the

''"J" "' an total income shall be the total income as assessed for the S.Wba Rao, J. purpose of income-tax. Section 56A exempts from super-tax certain dividends. Section 58(1) applies by reference to supertax certain provisions of the Act relating to the charge, assessment, collection and recovery of income-tax. It would be seen from this Chapter that though super-tax is described as an additional duty of income-tax it is not incorporated in the income-tax; its identity is maintained. A self-contained chapter deals .with the charge, assessment, collection and recovery of super-tax. There are essential differences between the two taxes emanating not only from the express provisions contained in Ch. IX but also from the omission to apply the specified sections of the Act to the said tax. Successive Finance Acts also made a distinction between the two taxes. This is not the occasion to notice in detail the differences between the two taxes. It is enough to state that there are pronounced differences between the incidents of the two taxes. But two relevant differences may be noticed, namely, (i) though both the taxes are assessed on the total income of a person, the total income for the purpose of income-tax is computed on the basis of income classified and chargeable under the different heads mentioned in s. 6 of the Act, whereas super-tax is not concerned with the different heads, but is payable on the total income so ascertained; and (ii) while super-tax, except in a few cases, is payable by the assessee direct, the income-tax is payable by him direct as well as by deduction. While in the case of income-tax by reversing the process the tax attributable to a particular source can be ascertained, in the case of super-tax no such process is possible as the said liability springs into legal existence ollly after the total income is ascertained. The only possible method by which the said tax may be split up is by working out the proportion of the tax payable by the assessee in respect of an income from a particular source on the basis of the ratio the said income bears to the total income. But this method is not sanctioned by the Act. It is not legally possible to predicate what particular part of the super-tax is attributable to an income from a particular source. for, unlike in the case of income-tax, total jncome alone is the criterion and the income from different sources is not relevant. To illustrate: super-tax is now levied on income over certain level-at present Rs. 25,000/-. If "A's" total income is Rs. 35.000/- made up of Rs. 20.000/- from big forest and Rs. 15,000 /- from other sources, what is the super-tax attributable to the income from the big forest?

The answer is, it is not possible to do so.

With this background Jet us give a close look to the

J9G4 provisions of r. 2(2)(c) of Schedule I to the Act. The Jegls- StaJe of Mrulky• Jative intention is manifest from the express language used Pradesh and Otli<n and also by internal evidence. With the knowledge that Sirajwl;. Kha•

under the Income-tax Act two separate duties, namely, in- - come-tax and super-tax, are imposed, the Legislature has Subba Rao, J, used the expression "income-tax". If the intention was to refer to both the taxes, it would have stated "income-tax and super-tax". The mention of the one and. the omission of the other is a sure indication of its intention.

The qualification that income-tax paid should have been in respect of the income received from the big forest necessarily excludes super-tax, for under the Income-tax Act no super-tax is payable in respect of the income received from big forest, but only in respect of the total income. As we have pointed out earlier, it is not legally possible to disintegrate and allocate a portion of the super-tax to the income .attributable to the big forest. It is not paid in respect of the income from the big forest, but is paid only in respect of the total income. If the contention of the appellant prevails, though the income from big forest falls below the taxable income, it will be deducted if, in combination with the income from other sources, the income goes up to the taxable level. In that event super-tax not payable in respect of the income from big forest will have to be deducted. That apart, the rules made under the Act do not provide for any machinery for allocating the super-tax payable on the total income among the different sources. It is said that the same difficulties are present even in the case of income-tax. Though income-tax is also a tax on the total income of an assessee, the Act, as we have indicated earlier, provides for computing the income under different heads and, therefore, it is not in- appropriate to describe a particular tax as attributable to an income from a particular head, but it would wholly be inappropriate to describe that a part of the suj:ler-tax is payable in respect of an income from a particular source.

The argument of Mr. Rajagopala Sastri, learned coun- sel for the respondent, that the 30 years mentioned in the rule takes us back to a period when there was no super-tax appears to be not sound, for, as we have stated earlier, supertax was payable in one form or other from the year 1917.

That apart, if the income-tax takes in super-tax, the nonexistence of super-tax in a particular year does not make any difference in ascertaining the average, for the income-tax for that year will be the income-tax without the addition of super-tax. This circumstance is not, therefore, of much relevance and we exclude it from our. consideration.

844 SUPREi\IE COURT REPORTS

[1964J

964 The argument that if the Legislature intended not to Sia!' nJ Madllya exclude super-tax from the gross-income, it would have ex-

Prod<.1' ...i Oll1m pressly stated so in the rule is an attempt to put the shoe

S. . . 1-:: K'- on the wrong foot. The proper approach, particularly in the

""J"' ""' min f . . k h . h case o an expropnetary statute, is to as t e question w y 8.bba Bao, J. the Legislature did not expressly mention super-tax, if it intended to do so. The use of one of the two well understood expressions is, on the other hand, an indication that the Legislature provided for the deduction of the one used and not of the other omitted. The reason for the rule, if it is. legitimate to speculate, appears to be that as it is concerned with the calculation of the net-income from the estate after making certain deductions, only those deductions which have a direct relation to that income are allowed. If the other construction prevails, speculation would take the place of certainty and super-tax not paid factually in respect of the income from big forest would have to be deducted. Such a construction defeats the purpose of the rule.

Some of the decisions cited at the Bar may now be noticed. Lord Sumner pithily remarks in Brooks v. The Commissioner of Inland Revenue('):

" ............ for super-tax is another and a new tax none the less, though it is an additional duty of Income Tax." In Bates, In re: Se/mes v. Bates('), a testator gave to his wife by his will "such a sum in every year as after deduction of the income tax for the time being payable in respect thereof will leave a clear sum of £ 2000." It was held that the wife was entitled to the £ 2000 free of income-tax only and was not entitled to payment of any sum in respect of super-tax. There the trustees were directed to pay the annuity after deducting the inoome tax in respect of that annuity.

Rejecting the argument advanced on behalf of the wife that the said annuity should be free from super-tax also, Russell.

J.. observed :

"Now super-tax was not a charge in respect of any particular annuity or sum, but was a charge in respect of the recipient's whole income and was not a matter with which the trustees would be charged or concerned at all, and, in his opinion, what the testator had done was to give the widow the yearly sum of £ 2500 clear of all deductions for which the trustees were accountable, but that did not include super-tax, which she must pay herself ... ---

1') (1914) 7 T.C. 236. 258. (') [1925] Ch. D. 157. 159-160, 161.

196i The learned Judge proceeded to state:

"No super-tax is really payable

sum."

'in respect of this State ofMadhga

P-raduli and Ol4et'a

It is true that the said judgtpent turned upon the provisions of a particular will, but the reasoning is helpful. There, income-tax was deductible in respect of the sum bequeathed, here income-tax is deductible in respect of the income received from big forest. As super-tax is not a charge in respect of the income from big forest, on the parity of reasoning it shall be held that the word "income-tax" used in cl. (c) of r. 2(2) of Schedule I to the Act excludes super-tax. In Reckitt, In re: Reckitt v. Reckitt('), a fund was bequeathed to trustees upon trust for investment and to pay out of the income of the investments "the annual sum of £ 5000 free of income-tax" during the life of the annuitant. The Court of Appeal held that the annuitant was entitled to have the sum paid to her without deduction on account of super-tax and that the trustees must pay the super-tax payable in respect of that sum out of the income of the fund. The conclusion turned upon the provisions of the will. Lord Hanworth, M.R., distinguished the decision in Bates, In re: Se/mes v. Bates(') on the ground that Russell, J., founded his judgment upon the reference to deductions and also upon the direction to the trustees that specified sum should be paid after deduction of income-tax in respect thereof and proceeded to observe that in the case before them no reference was made to the system, or the power of the trustees to make deductions;. and that it was simply that a total sum in each year was to be paid free of income-tax. That decision may be right or wrong on the construction of the will before the Court of Appeal. but the features which distinguished Bates case from the decision in Reckitf s case are also present in the case before us now. Here also the rule empowers the prescribed authority to deduct from the gross income incometax paid in respect of the income received from big forest.

The earlier decision is more in point to the present case than the later. Be that as it may, the English decisions on the construction of will are not of much help in construing the express provisions of r. 2(2)(c) of Schedule I to the Act: they shall be construed on their own terms. Having regard to the terms of the rule. we have come to the conclusion that income-tax does not take in super-tax .

. h1 the result, the appeal fails and is dismised with costs.

A ppea/ dismissed.

(' )(1933) 1 I.T.R. 1.- (') [1925] Ch. 0. 157.

Sira.jud<lin Kha"*

Sobba Rao, J.

STATE OF MADHYA PRADESH AND ORS

SIRAJUDDIN KHAN

K. SUBBA RAO, J.

C. SHAH

March 31, 1951

Schedule I to the Act

s. 6

Income-tax Act

CIVIL APPELLATE JURISDICTION

B. Sen

J. N. Shroff

K. N. Rajagopal Sastri

A. G. Ratnaparkhi

SueeA RAo

Subba Baa

Schedule I

Madhya Pradesh

January 26,

1951

s. 8

Schedule I

Schedule I

November 30, 1951

Sirajud~

s. 15

Subba Rao

Arts. 226 and 227

State of Madhya Pradesh

adds that under the Income-tax Act

Rajagopala Sastri

Schedule I to the Act

Section 8(1)

Schedule

I

Schedule I to the Act Rule

8ir11juddin Khan

The net income of an estate or mahal in the Central Provinces shall be calculated by deducting from the gross income the sums under the following heads, namely:- •   • *

(c) the average of the income-tax paid in respect of the income received from big forest during

the period of thirty agricultural years preceding

1!J64 the agricultural year in which the relevant date Statc of A!..U.ya falls; Pradesh ,, nd Othera

v • • • • • • 8ir11juddin Khan Rule 8. (!)

Cen Subba Rao

Berar

s. 3

Income-tax Act

Income-tax Act

s. 3

s. 4

s. 6

ss. 7 to 12

ss. 55 to 58

Section 55

Section 56

S.Wba Rao

Section 56A

Section 58(1)

Successive Finance Act

s. 6

Schedule I to the Act

Income-tax Act

Income-tax Act

8.bba Bao

Sumner

Bates

Russell

Schedule I to the Act

Reckitt

Hanworth

Russell

Reckitf

Schedule I to the Act

Sobba Rao