o ::>.C.R.

SUPREME COURT REPORTS 913

BA~A NT KUMAR SARKAR AND OTHERS

EAGLE ROLLING MILLS LTD. AND OTHERS

(P. B.) GAJENDRAGADKAR, C.J., K. N. WANCHOO, J. c.

SHAH, N. RAJAGOPALA AYYANGAR AND S. M. SIKRI JJ.)

Employees State Insurance Act (XXXlV of 1948)J'. 1(3) Constitutional validity--Central Government empowered to apply provision1 of Act by notification-If excessive delegation.

The appellants as workmen of respondent No. 1 in all the three respondent concerns were getting free medical benefits of a very high order in a well furnished hospital maintained by respondent No. 1.

Respondent No. 3. the Union of India issued a notification under s. 1 (3) of the Employees State Insurance Act appointing 28th August. 1960 as the date on which some provisions of the Act should come into force. in certain areas of the State of Bihar and the area in which the i\ppellants were working came within the scope of the Act. In pursuance of the said notification, the Chief Executive Officer of Respondent No. 1 issued notices to the appellants that the me'dical benefits upto the extent admissible under the Act will cease to be provided to insurable persons from the appointed day and the medical benefits would thereafter be governed by the relevant provisions of the Act. The appellants in a writ petition to the High Court challenged the validity of s. 1 (3) of the Act and legality of thenotifications issued under it, inter alia, on the ground that it contraveneli Art. 14 of the Constitution and suffers from the vice of excessive delegation. The High Court rejected the plea and dismissed the writ petitions.

On appeal by special leave the appellants contende.d that s. 1 (3) of the Act suffers from excessive delegation and is, therefore. invalid.

Held: (i) S. 1(3) of the Act is not an illustration of delegated legislation at all, it can be described as coiiditional legislation. It purports to authorise the Central Government to establish a corporation for the a'dministration of the scheme of Employees' State Insurance by a notification. As to when the notification should be issued and in respect of what factories it should be issued, has been left to the dis .. cretion of the Central Government and that is precisely what is usually done by conditional legislation.

Queen v. Burah, 5. I.A. 178, relied on.

(ii) Assuming there is an element of delegation, the plea is equally unsustainable. because there is enough guidance given by the relevant provisions of the Act and the very scheme of the Act itself. In the very nature of things, it would have been impossible for the legislature to decide in what areas and in respect of which factories the Employees' State Insurance Corporation shoufd be established. It is obvious that a scheme of this kind, though very beneficent, could not be introduced

34 -159 S.C.-58

,,_nt Kumar v. ..,,, Rollin1

lllilb

Qa/endragadkar

c. J.

in the whole of the country all at once. Such . beneficial measures which need careful experimentation have sometimes to be adopted by stages and in different phases, and so, inevitably, the question of extend~ ing the statutory benefits contemplated by the Act has to be left to the discretion of the appropriate Government. That cannot amount to excessive delegation.

Edward Mills Co. Ltd. Beawar v. The State of Ajmer, [1955] I S.C.R. 735, Mis Bhikusa Yamasa Kshatriya v. Sangamner Ako/a Taluka Bidi Kamgar Union, [1963] Supp, I S.C.R. 524 and Bhikusa Yamasa Kahtriva v. Union of India, [1964] I S.C.R. 860 followed:

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 721-723 uf 1962.

Appeals by special leave from the judgment and order dated March 1, 1961, of the Patna High Court in Misc.

Judicial Cases Nos. 1167, 1122 and 1235 of 1960.

N,. 'c. Chatteriee, Ra; Behari Singh and Udai Pratap Singh,' for the appellants (in all the appeals).

' I( P. Singh, N. P. Singh and I. N. Shroff, for the respondent No. 1 (in al! the appeals).

Daphtary, Attorney-General, N. S. Bindra, V. D. Maha; an and B. R. G. K. Achor, for respondents Nos. 2 and 3.

February 26, 1964.

The Judgment of the Court was delivered by

GAJENDRAGADKAR. C.J.-The short question which arises in these appeals by special leave is whether section 1 ( 3) of the Employees' State Insurance Act, 1948 (No. 34 of 1948) (hereinafter called the Act) is invalid. By their

writ petitions filed before the Patna High Court, the .ippellants who are the workmen of the three respondent .,; oncerns, the Eagle Rolling Mills Ltd., the Kumardhubi Engineering Works Ltd., and Kumardhubi Fire Clay ane1 Silica Works Ltd., respectively, alleged that the impugned 8ection has contravened Art. 14 of the Constitution, and suffers from the vice of excessive delegation, and as such ts invalid.

These employers were impleaded as respondent No. 1. respectively in the three writ petitions.

The High Court has rejected the plea and the writ petitions filed by

the appellants have accordingly been dismissed. It is against this decision of the High Court that the appellants have come to this Court and have impleaded the three employers respectively.

The three appeals proceed on similar facts and raise an identical question of law and have, therefore, been heard together.

It appears that respondents No. 1 in all the three appeals are under the management of Mfs. Bird & Co. Ltd., through a General M.mager, and the appellants are their workmen.

As such workmen, the appellants were getting satisfactory medical benefits of a very high order free of any charge.

Respondent No. 1 in each appeal maintained a wellfurnished hospital with provision for 60 permanent beds for the workmen, their families and their dependents. The main grievance made by the appellants is that as a result of s. 1 ( 3) of the Act, the appellants have now to be content with medical benefits of a less satisfactory nature. That is why they challenged the validity of the impugned section and contest the propriety and legality of the notification issued under it.

To these writ petitions as well as to the appeals, the Employees' State Insurance Corporation and the Union of India have been impleaded as respondents 2 and 3 respectively.

On the 22nd August, 1960, respondent No. 3 issued a notification under section 1, sub-section ( 3) appointing the 28th August, 1960 as the date on which some provisions of the Act should come into force in certain areas of the State of Bihar. By this notification, the area in which the appellants are working came within the scope of tne Act.

In pursuance of the said notification, the Chief Executive Officer of respondent No. 1 informed the appellants on the 25th August, 1960 that the medical benefits including indoor and outdoor treatment upto the extent admissible under the Act will cease to be provided to insurable perso11~ from the appointed day. A notice in that behalf was duly issued and published by the said Officer.

Similar notices were issued indicating to the appellants that medical benefit• .r.• would thereafter be governed by the relevant provisions of the Act and not by the arrangements which had been made

196'

B, unm Kra111r

Y. &tit J!olU..

M/116

Gajendra[llUIJ; ar

c. J.

B,..ant Kumar

earlier by respondent No. 1 in that behalf.

That', in brief, is $.e genesis of the present writ petitions and the nature of the dispute between the parties.

T • ..,,, Rolling

Milli

Go/endragadkar

c. /.

The first point which Mr. Chatterjee has raised before us is that s. 1 (3) of the Act suffers from excessive delegation and is, therefore, invalid.

In order to consider the validity of this argument, it is necessary to read section l, sub-section (3) :-

"The Act shall come into force on such date or dates as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and for different States or for different parts thereof'.

The argument is that the power given to the Central Government to apply the provisions of the Act by notification, confers on the Central Government absolute discretion, the exercise of which is not guided by any legislative provision and is, therefore, invalid.

The Act does not prescribe any considerations in the light of which the Central Government can proceed to act under s. 1( 3) and such uncanalised power conferred on the Central Government must be treated as invalid.

We are not impressed by this argument.

Section 1 ( 3) is really not an illustration of delegated legislation 11t all; it is what can be , properly described as conditional legislation. The Act has prescribed a self-contained code in regard to the insurance of the employees covered by it; several remedial measures which the Legislature thought it necessary to enforce in regard to such workmen have beep specifically dealt with and appropriate provisions have been made to. carry out the policy of the Act as laid down in its relevant sections. Section 3 ( 1) of the Act purports to authoris.: the Centr11! Government to establish a Corporation for the administration of the scheme of Employees' State Insurance by a notification. In other words, when the notification should be issued and in respect of what factories it should be issued, has been left to the discretion of the Central Government and that is •a precisely what is usually done by conditional legislation.

What Lord Selbome said about the powers conferred on the Lieutenant-Governor by virtue of the relevant provisions <if Act 22 of 1869 in Queen v. Burah('), can be said with equal justification about the powers conferred on the Central Government by s. 1 ( 3).

Said Lord Selborne in that case :

"Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the Lieutenant-Governor (large as they 1H1doubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor-General in Council. Their whole operation is directly and immediately under

and by virtue of this Act (XXII of 1869) itself. The proper Legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things.

The conditions having been fulfilled, the legislation is now absolute''.

That 1s the first answer to the plea raised by Mr. Chatterjee.

Assuming that there is an element of deleg11tion, the plea is equally unsustainable, because there is enough guidance given by the relevant provisions of the Act and the very scheme of the Act it11elf. The preamble to the Act shows that it was passed because the legislature thought it expedient to provide for certain benefits to employee! in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto.

So, the policy of the Act is unambiguous and clear.

The material definillons of "ben$fil Qeriod'', "P-mployee", "factory", "insured person'', "sickness'', "wages" and other terms contained in s. 2 give a clear idea as to the nature of the factories to which the Act is intended to be applied, the class of ersons for whose benefit it has been passed and the nature of the benefit which is intended to be conferred on them.

Chapter II of the Act deals with the

(I) 5 J.A. 178 at p. 195.

19M

/Ja!a ... t Kumar

"· Eagle Rollln,

Milli

Gajendragadkar

C. I.

1961 a-Ill Kumar ... "'1fl• Ro/lint

Milli

 0./endragadkar

c. J.

Corporation, Standing Committee and Medical Benefit Council and their constitution; Chapter Ill deals with the problem of finance and audit; Chapter IV makes provisions for contribution both by the employees and the employer, and Chapter V prescribes the benefits which have to be conferred on the workmen; it also gives general provisions in respect of those benefits. Chapter V-A deals with transitory provisions; Chapter VI deals with the adjudication of disputes and claims; and Chapter VII prescribes penalties.

Chapter VIII which is the last Chapter, deals with miscellaneous matters. In the very nature of things, it would have been impossible for the legislature to decide in what areas and in respect of which factories the Empioyees' State Insurance Corporation should be estal.Jiished. It is obvious that a scheme of this kind, though very beneficient, could not be introduced in the whole of the country all at once.

Such beneficial measures which need careful experimentation have sometimes to be adopted by stages and in different phases, and so, inevitably, the question of extending the statutory benefits contemplated by the Act has to be left to the discretion of the appropriate Government. "Appropriate Government" under s. 2 (1) means in respect of establishments under the control of the Central Government or a railway administration or a major iport or a mine or oilfield, the Central Government, and in ali other cases, the State Government. Thus, it is clear that when extending the Act to different establishments, the relevant Government is given the power to constitute a Corporation for the administration of the scheme of Employees' State Insurance.

The course adopted by modern legislatures in dealing with

Wtllfare schemes has uniformly conformed to the same pauem. The legislature evolves a scheme of socio-economic welfar.,, makes elaborate provisions in respect of it and

leaves it to the Government concerned to decide when, how and in what manner the scheme should be introduced.

That, in our opinion, cannot amount to excessive delegation.

The question of excessive delegation has been frequently considered by this Court and the approach to be adopted in dealing with it is no longer in doubt.

In the Edward 1 Mills Co. Ltd., Beawar and Others v. The State of Aimer

and Another('), this Court repelled the challenge to tnc validity of s. 27 of the Minimum Wages Act, 1948 (No. XI of 1948), whereby power had been given to the appropriate Government to add to either part of the schedule any employment in respect of which it was of opinion that minimum wages shall be fixed by giving notification -in a particular manner, and it was provided that on the issue of the notification, the scheme shall, in its application to the State, be deemed to be amended accordingly.

In dealing with this problem, this Court observed that there was an element of delegation implied in the provisions of s. 27, for the legislature, in a sense, authorised another body specified by it to do something which it might do itself; but it was held that such delegation was not unwarranted and unconstitutional and it did not exceed the limits of permissible delegation.

To the same effect are the recent decisions of this Court in M / s. Bhikusa Y amasa Kshatriya and Another v. Sangamner Ako/a Taluka Bidi Kamgar

Union and Others( 2 ), and Bhikusa Yamasa Khatriya (P) Ltd. v. Union of India and Another('). Therefore, we must hold that the impugned section 1 (3) of the Act is not shown to be constitutionally invalid.

Before we part with these appeals, there is one more point to which reference must be made. We have already mentioned that after the notification was issued under s. 1 ( 3) by respondent No. 3 appointing August 28, 1960 as the date on which some of the provisions of the Act should come into force in certain areas of the State of Bihar, the Chief Executive Officer of respondent No. 1 issued notices giving effect to the State Government's notification and intimating to the appellants that by reai.on of the said notification, the medical benefits whicli were be 'ing given to them in the past would be received by tl.•:n under the relevant provisions of the Act.

It wa.1 11rl :id by the appellants before the High Court that these notices were invalid and should be struck down.

The ar1 ument which was urged in support of this contention wa~ that espondent

(1)[19551 I S.C.R. 735.

(2) [19631 Supp. I S.C.R. ~24.

(3) [1964] I S.C.R. 860.

Ba.sant Kimi#

Eagl• Roi/inf

Mi/Lr

Gajtndrag..0.-

C. /,

19M

Ba1ant Kumar

v. llark RoWng

Mills

Gaiendragadkar

c. J.

February 26

No. 1 in all the three appeals were not entitled to curtail the benefits provided to the appellants by them and that the said benefits were not similar either qualitatively or quantitatively to the benefits under the Scheme which had been brought into force under the Act.

The High Court has held that the question as to whether the notices and circulars issued by respondent No. 1 were invalid, could not be considered under Art. 226 of the Constitution; that is a matter which can be appropriately raised in the form of a dispute by the appellants under s. 10 of the Industrial Disputes Act.

It is true that the powers conferred on the High Courts under Art. 226 are very wide, but it is not suggested by Mr. Chatterjee that even these powers can take in within their sweep industrial disputes of the kind which this contention seeks to raise. Therefore, without expressing any opinion on the merits of the contention, we would contirm the finding of the High Court that the proper remedy which is available to the appellants to ventilate their grievances in respect of the said notices and circulars is to take recourse to s. 10 of the Industrial Disputes Act, or seek relief, if possible, under sections 74 and 75 of the Act.

The result is, the appeals fail and are dismiBsed. There would be no order as to costs.

A ppea/s dismissed.

SHIV PRASAD CHUNILAL JAIN v.

THE STATE OF MAHARASHTRA

(K. SUBBA RAO, RAGHUBAR DAYAL AND

J. R. MUDHOLKAR JJ.)

Criminal Trial-Whether the person must be physically present at the

1.1ctual commission of the crime-Acts done by several person.t in 1u11,'1erance of common intention-Essence of-lndia11 Penal Code,

!KllO ( 4S of 1860), •· 34.

In a trial by jury the appellants were jointly charged along witlt accused No. 1 with an offence punishable under ss. 471 and 467 read with s. 34 of the Indian Penal Code. The first charge was that in

913

BA~A NT KUMAR SARKAR AND OTHERS

EAGLE ROLLING MILLS LTD. AND OTHERS

P. B.) GAJENDRAGADKAR, C.J.

K. N. WANCHOO, J.

SHAH

N. RAJAGOPALA AYYANGAR

S. M. SIKRI JJ.

Employees State Insurance Act

Central Government

s. 1

Insurance Act

28th August. 1960

Bihar

s. 1

Art. 14

s. 1

S. 1(3)

nt Kumar

Behari Singh

Udai Pratap Singh

P. Singh

N. P. Singh

I. N. Shroff

Daphtary

N. S. Bindra

V. D. Maha

B. R. G. K. Achor

February 26, 1964

GAJENDRAGADKAR

section 1

State Insurance Act, 1948

Patna High Court

Eagle Rolling Mills Ltd.

Kumardhubi Engineering Works Ltd.

Art. 14

Mfs. Bird & Co. Ltd.

s. 1

22nd August, 1960

section 1

28th August, 1960

25th August, 1960

Chatterjee

s. 1

s. 1( 3)

Section 1

Section 3

Selbome

s. 1

Selborne

s. 2

Chapter II of the Act

s. 2

s. 27

Minimum Wages Act, 1948

s. 27

section 1

s. 1

August 28, 1960

Ba1ant Kumar

Ba.sant KimiEagl• Roi/inf

Mi/Lr

Gajtndrag..0.-

C. /,

19M

Ba1ant Kumar

v. llark RoWng

Mills

Gaiendragadkar

c. J.

February 26

No.

Gaiendragadkar

Art. 226

s. 10

Industrial Disputes Act

Art. 226

s. 10

Industrial Disputes Act

sections 74 and 75

K. SUBBA RAO

RAGHUBAR DAYAL

J. R. MUDHOLKAR

Penal Code

ss. 471 and 467

s. 34

Indian Penal Code


19M

Ba1ant Kumar

v. llark RoWng

Mills

Gaiendragadkar

c. J.

February 26

SUPREME COURT REPORTS

No. 1 in all the three appeals were not entitled to curtail the benefits provided to the appellants by them and that the said benefits were not similar either qualitatively or quantitatively to the benefits under the Scheme which had been brought into force under the Act.

The High Court has held that the question as to whether the notices and circulars issued by respondent No. 1 were invalid, could not be considered under Art. 226 of the Constitution; that is a matter which can be appropriately raised in the form of a dispute by the appellants under s. 10 of the Industrial Disputes Act.

It is true that the powers conferred on the High Courts under Art. 226 are very wide, but it is not suggested by Mr. Chatterjee that even these powers can take in within their sweep industrial disputes of the kind which this contention seeks to raise. Therefore, without expressing any opinion on the merits of the contention, we would contirm the finding of the High Court that the proper remedy which is available to the appellants to ventilate their grievances in respect of the said notices and circulars is to take recourse to s. 10 of the Industrial Disputes Act, or seek relief, if possible, under sections 74 and 75 of the Act.

The result is, the appeals fail and are dismiBsed. There would be no order as to costs.

A ppea/s dismissed.

SHIV PRASAD CHUNILAL JAIN v.

THE STATE OF MAHARASHTRA

(K. SUBBA RAO, RAGHUBAR DAYAL AND

J. R. MUDHOLKAR JJ.)

Criminal Trial-Whether the person must be physically present at the

1.1ctual commission of the crime-Acts done by several person.t in 1u11,'1erance of common intention-Essence of-lndia11 Penal Code,

!KllO ( 4S of 1860), •· 34.

In a trial by jury the appellants were jointly charged along witlt accused No. 1 with an offence punishable under ss. 471 and 467 read with s. 34 of the Indian Penal Code. The first charge was that in

19M

Shiv Prasad Chunilal v.

furtherance of their common intention to cheat the railway administration, accused No. 1 had fraudulently or dishonestly used the forge'd railway receipt.

The sl.!cond ch .. rge v.:as framed in the alternative. Firstly it charged all the .accused under s. 467 read with s. 34 l.P.C. on account of accused No. I having forged the bill portion. In the alternative, accused No. 1 was charged under s. 467 I.P.C. and the appellant.~ were charged under s. 467 read with s. 109 I.P.C. for having abetted accused No. 1 in the ..:ommission of that offence. Similarly charges

los. 3 to 6 were framed in the alternative. The jury returned a unanin1ous verdict of guilty against all the accused for the various offencrs

read with s. 34 I.P.C. The verdict of the jury was not recorded with respect to the five alternative charges against accused No. 1 regarding substantive offences and against appellants with respect to various offences read with s. 109 I.P.C. The Sessions Judge accepted the verdict of the jury and convicteO them of the various offences read with s. 34 J.P.C. Their appeals to the High Court also failed. On appeal by Special Leave the appellants mainly contended that the learned Sessions Judge misdirected the jury with respect to the requirements of s. 34

T.P .C. tt was urged that the various offences were actually committed by accused No. l, that the appellants were not present when accused t.J o. 1 presented the forged railway receipts, did other criminal acts and took Uelivery of the goods and that therefore even if they had agreed

V1ith accused No. I for the cheating of the railway by obtaining the ioods dishonestly by presenting the forged receipt. they might have a.betted the commission of the various offences, but could not be guilty of those offences with the aid of s. 34 J.P.C. whose provisions do not 1.pply in the circumstances of the case. For the applicability of s. 34 against an accused, it is necessary that that accused had actually partiicipated in the commission of the crime either by doing something which forms part of the criminal act or by at least doing something which 'Vfould indicate that be was a participant in the commission of that criminal act at the time it was committed.

Stai. of MaMrashtra

Held: In the present case, accused No. 1 alone did the various acts which constituted the offences of which he was convicted. The oppellants took no part in the actual commission of those acts. Whatever they might have done prior to the doing of those acts, did not form an ingredient of the offences committed by accused No. 1.

They 1:ould not be said to have participated in the commission of the criminal act which amounted to those various offences. They could not be therefore held liable, by virtue of s. 34 I.P.C., for the acts committed by accused No. 1 alone, even if those acts bad been committed in further ance of the common intention of all the three accuse([. Therefore. the conviction of the appellants, for the various offences read with s. 34 I.P.C. must be set aside.

Barendra Kumar Ghosh v. The King Emperor, (1929) L.R. 52 I.A. 40, Shree Kantiah Ramayya Munipalli v. State of Bombay [1955] I S.C.R. 1177 and Jaikrishnadas Manohardlll Duai v. State of Bombay [1960)

3 S.C.R. 319, referred to.

Shiv Pra•ad

Chunilal v.

State of Maha

rashtra

922 SlTPREME COURT REPORTS

CRIMINAL APPELLATE JURISDICTION: Criminal Appeals Nos. 150 and 185 of 1961.

Appeals by special leave from the judgment and order dated Jun~ 19, 1961 of the former Bombay High Court in Crimin31 Apneals Nos. 218 and 242 of 1961 respectively.

S. Mohan Kumarmanga/am, R. K. Garg and M. K.

Ramamurthi. for the appellant (in Cr. A. No. 150/61).

B. M. Mistry, Ravinder Narain and J. B. Dadachanji, for the appe1lant (in Cr. A. No. 185 of 1961 ).

B. K. Khanna, B. R. G. K. Achar and R. H. Dhebar, for the respondent (in both the appeals).

February 26, 1964.

The Judgment of the Court was delivered by

&, hubar v111al J.

RAGHUBAR

DAYAL J.-Shiv Prasad Chunilal Jain, appellant in Criminal Appeal No. 150 of 1961 was accused No. 3 and Pyarelal Jshwardas Kapoor, appellant in Criminal Appeal No. 185 of 1961 was accused No. 2, at the Sessions Trial before the Additional Sessions Judge, Greater Bombay.

Along with them was a third accused, Rameshwarnath Brijmohan Shukla who was accused No. l at the trial.

As the two appeals arise from a common judgment. we would dispose of them by one judgment.

The appellapts would be referred to as accused No. 3 and accused No. 2 respectively.

The facts leading to the conviction of the appellants are that a large quantity of iron angles was consigned early in February 1959 from Gobind Garb to Raypuram under railway receipt No. 597 481.

They were despatched in an open wagon bearing E.R. No. 69667.

The labels of the wagon were changed at Jtarsi railway station and it was diverted to Wadi Bunder under a label showing that the iron angles had been despatched from Baran to Wdi Eunder under railway receipt No. 43352 dated February 6,

,;59, This wagon reached Wadi Bunder on February 16,

B59.

On February 17 it was unloaded by Ilaburao

Gawade, P.W. 1 and Shridhar. P.W. 14. On February 18, 1964

accused No. 1 obtained the delivery sheet of the bill and Shiv J:riuad signed it in the name of Shri Datta.

He also obtained Chunii.J ... delivery of the iron angles from the railway and signed the state of Mahi>-· Railway Delivery Book in the name of Shri Datta.

The r~ railway authorities delivered these on the presentation ;;~ Raghubar Dayal J; the forged receipt No. 43352 and on payment of the charges amounting to Rs. 1,500/-.

These iron angles were then transported to the godown of the National Transport Company at Sewri and stored there.

The entries in the book showed their receipt in the account of accused No. 3 and also contained a further entry indicating the goods to be received in the account of accused No. 2.

The latter entry was made on the receipt of a chit, Exhibit ZS, from accused No. 1 saying that the goods be entered in the name of accused No. 2.

On Febrnary 24, 1959 the accused No. 2 signed an application, Exhibit K, addressed to the head office of the National Transport Company for delivering the goods. Accused No. 1 obtained the goods from the godown of that company on February 26 and March 3, 1959.

A complaint by the original consignee about iile nonreceipt of the iron angles sent from Gobind Garb led to an enquiry and eventual prosecution of the three accused.

Six charges were framed. The first charge was against all the accused for an offence punishable under ss. 471 and 467 read with s. 34 l.P.C. and stated that in furtherance of their common intention to cheat the railway administration, accused No. 1 had fraudulently or dishonestly used the forged railway receipt No. 43352.

The second charge was framed in the alternative.

Firstly it charged all the accused for an offence under s. 467 read with s. 34 l.P.C. on account of accused No. 1 having forged the bill portion. In the alternative, accused No. 1 was charged with the offence under s. 467 l.P.C. and the other accused Nos. 2 and 3 were charged under s. 467 read with s. 109 l.P.C. for having abetted accused No. I in the

commissiC1n of that offence.

1961 Charges Nos. 3 to 6 were similarly framed in the Shiv Prasad alternative, i.e., in the first instance all the three accused Chunilal were charged with certain offences read with s. 34 LP .C.

Stak 0j Mahawhile in the alternative accused No. 1 was charged of .the

TfJ8htra specific offence and the other two accused were charged

Jl11i/iubar DayalJ. with that offence read with s. 109 l.P.C.

The accused were tried by the Additional Sessions Judge, Greater Bombay, with the aid of a jury. The jury returned a unanimous verdict of guilty against all the accused for the various offences read with s. 34 I.P.C. The verdict of the jury was not recorded with respect to the five alternative charges against accused No. 1 regarding substantive offences and. against accused Nos. 2 and 3 with respect to the various offences read with s. 109 I.P.C. The Sessions Judge accepted the verdict of the jury and convicted them of the various offences read with s. 34 I.P.C.

Their appeals to the High Court were unsuccessful and therefore accused Nos. 2 and 3 have preferred these appeals after obtaining special leave from this Court.

The main contention for the appellants is that the learned Sessions Judge misdirected the jury with respect to the requirements of s. 34 l.P.C.

The contention is that the various offences were actually committed by accused No. 1 on February 18, that neither accused No. 2 nor accused No. 3 was present when he presented the forged railway receipt, did other criminal acts and took delivery of the iron angles and that therefore even if they had agreed with accused No. 1 for the cheating of the railway administration by obtaining the iron angles dishonestly by presenting the forged receipt, they might have abetted the commission of the various offences, but could not be guilty of those offences with the aid of s. 34 I.P.C. whose provisions, it is contended, do not apply in the circumstances of the case.

It is contended that for the applicability of s. 34 against an accused, it is necessary that that accused had actually participated in the commission of the crime either by doing something which forms part of the criminal act or by at least doing something which would indicate that " he was a participant in the commission of that criminal act at the time it was committed.

Reliance is placed on the

cases reported as Barendra Kumar Ghosh v. The King Emperor(') and Shreekantiah Ramayya Munipalli v. The State of Bombay(2 }.

The learned Sessions Judge in the instant case had told the jury:

"In case you come to the conclusion that there was a common intention in the minds of all the three accused and accused No. 1 was acting in furtherance of that common intention, all the accused would be answerable for the cffences proved against accused No. 1 by virtue of the provisions of s. 34 of the Indian Penal Code, and it would be no answer to the charge to say that the acts were done by accused No. 1 alone.

Therefore, you have first, to consider for yourselves what offences are proved against accused No. 1.

You have next to ask yourselves whether it is proved (and it can also be proved by circumstantial evidence) that there was a common intention in the minds of all the three accused and the acts done by accused No. l were done in furtherance of that common intention. If your answer is 'yes' all the three accused would be guilty of the oharges proved against accused No. 1 by virtue of s. 34 of the Indian Penal Code."

It is contended that in thus ptitting the case to the jury the learned Sessions Judge was in error as he did not take into consideration the fact that accused Nos. 2 and 3 were not present at all at the time when the various offences were actually committed by accused No. 1. The two cases relied upon by the appellants support their contention.

In Shreekantiah's case( 2 ), three persons were convicted Oil.several charges under s. 409 read with s. 34 I.P.C. for committing criminal breach of trust of certain goods entrusted to them as government servants in charge of the stores depot

(I) L.R. 52 I.A. 40.

(2) [1955] 1 S.C.R. 1177.

Shiv Praltlll

Chunllal

Stat• of M.m.

rashtra

Raghubar D111al I.

1964 at Dehu Road near Poona. The stores had illegally passed

Shiv PraMd out of the depot and were handed over to a person who was Chuni1411 not authorised to get them from the depot. It was alleged Stat• 0/· Mahathat those accused had conspired to defraud the Government rashtra of those properties and that it was in pursuance of that llaghubar Dayal J. conspiracy that they had arranged to sell the goods to the other person. Accused No. 1 in that case was not present when the goods were loaded nor was he present when they were allowed to pass out of the gates, that is to say, he was not present when the offence was committed.

Bose J., delivering the judgment of the Court, said at p. 1189 :

"If he was not present, he cannot be convicted with

the aid of section 34. He could have been convicted of the abetment had the jury returned a verdict to that effect because there is evidence of abetment and the charge about abetment is right in law. But the jury ignored the abetment part of the charge and we have no means of knowing whether they believed this part of the evidence or not." In considering the misdirection in the charge to the jury and the requirements of s. 34 I.P.C. the learned Judge said at p. 1188 :

"The essence of the misdirection consists in his direction to the jury that even though a person 'may not be present when the offence is actually committed' and even if he remains 'behind the screen' he can be convicted under section 34 provided it is proved that the offence was committed in furtherance of the common intention.

This is wrong, for it js the essence of the section that the person must be physically present at the actual commission of the crime." Shreekantiah's case(') is practically similar to the present case. Both accused No. 2 and accused No. 3 deny their presence at the railway station on February 18 when the various offences were committed.

None deposed that accused No. 3 was then present. The presence of accused No. 2 was, however, stated by Babu Rao Gawade, P.W. 1.

(!) [1955] I S.C.R. 1177.

He had not stated so in his slatement before tlr T'dice during 1964 investigation and the summmg up by the learned Sessions Shi• PraJtUl Judge was that, under tho>e circumstances, it was for the Chunilal jury to consider whether tc believe the statement of the Stat• of. Ma/ut. witness in Court or not. It cannot be said as there was other ras/Jtra evidence against accused No. 2 as well about his connection R.aghubar Dayal 1. with this criminal transaction whether the jury believed his presence at the railway station on February 18 or not.

In Jaikrishnadas Manohardas Desai v. The State of Bombay('), Shreekantiah's ca.1e(') came up for consideration and was distinguished, on facts. In that case, the two accused, who were directors of a company, were convicted of an offence under s. 409 read with s. 34 l.P.C. for committing criminal breach of trust with respect to certain cloth supplied to them.

It was alleged that one of the accused was not working at that factory. during the period when the goods must have been removed and that therefore he could not be made liable for the misappropriation of the goods by taking recourse to the provisions of s. 34 I.P.C. Shah J ., delivering the judgment of the Court, said at p. 326 :

"But the essence of liability under s. 34 is to be found in the existence of a common intention animating the offenders leading to the doing of a criminal act in furtherance of the common intention and presence of the offender sought to be rendered liable under s. 34 is not, on the words of the statute, one of the conditions of its applicability. . ..... A common intentiona meeting of minds-to commit an offence and participation in the commission of the offence in furtherance of that common intention invite the application of s. 34. But this participation need not in all cases be by physical presence.

In offences involving physical violence, normally presence at the scene of offence of the offenders sought to be rendered liable on the principle of joint Iiabi 1ity may be necessary, but such is not the case in respect of other offences where the offence consists of diverse acts which may be

(I) 11960] 3, S.C.R. 319.

(2) [1955] I S.C.R. 1177.

Shiv Pr@tld

Chun/la/ v.

Stat• of Maharashtra

Roghubar Dayal J.

done at different times and places.

In Shree Kantiah's case( 1 ), misappropriation was committed by removing the goods from a Government depot and on the occasion of the removal of the goods, the first accused was not present.

It was therefore doubtful whether he had participated in the commission of the offence, and this Court in those circumstances held that participation by the first accused was not established.

The observations in Shree Kantiah' s case (1) in so far as they deal with s. 34 of the Indian Penal Code must, in our judgment, be read in the light of the facts established and are not intended to Jay down a principle of universai application."

Accused No. 1, in the present case, alone did the various acts on February 18, 1959 which constituted the offences of which he was convicted. Accused Nos. 2 and 3 took no part in the actual commission of those acts. Whatever they might have done prior to the doing of those acts, did not form an ingredient of the offences committed by accused No. 1.

They cannot be said to have participated in the commission of the criminal act which amounted to those various offences. They cannot be therefore held liable, by virtue of s. 34 I.P.C., for the acts committed by accused No. 1 alone, even if those acts had been committed in furtherance of the common intention of all the three accued.

The result, therefore, is that the conviction of the appellants, viz., accused Nos. 2 and 3, for the various offences read with s. 34 I.P.C. is to be set aside.

We did not hear, at first, the learned counsel for the appellants, on the alternative offences of abetmcnt being made out against the appellants and with respect to which the verdict of the jury was not recorded by the Sessions Judge. We did not consider it necessary to remit the case for further proceedings with respect to those charges and preferred to dispose of the case finally after giving a further hearing to the learned counsel for the appellants. We accordingly heard them on the charges relating to the appellants abetting accused No. I in the commission of the

\IJ [19551 I S.C.R. 1177.

' ..

' '

various offences, subjt'Ct mtter of charges Nos. 2 to 6 and now deal with that matter.

We need not discuss the evidence on the record and would just note the various facts which are established from the evidence or which are admitted by lhe accused.

The relevant facts having a bearing on the question of accused No. 2 abetting the commission of the offences committed by accused No. I are :

1. Accused No. 1 is the servant of accused No. 3 at whose shop accused No. 2, who is a broker, sits.

2. Accused No. 2 deals in non-ferrous goods.

3. Accused No. 2 went with Baburam Gavade, P.W. 1, a clearing agent, on February 17, 1959, to see the goods.

4. The godown register showed the angle irons to be received in the account of Shiv Prasad Bimal Kumar and Pyare Lal, accused No. 2.

5. Accused No. 2 wrote the letter Exhibit K to the National Transport Company for issuing the delivery order with respect to the angle irons in order to enable him to take delivery thereof.

6. Accused No. 2 was in possession of the note Exhibit Z-7 which he delivered to the police during the investigation.

The relevant facts having a bearing on the alleged abetment of the offences by accused No. 3 are :

1. Accused No. 1 is an employee of accused No. 3.

2. The angle irons were stored at the depot of the National Transport Company at the instance of accused No. 1.

3 . The hooks of the godown noted their receipt in the account of accused No. 3, though the account showed further that they were received in the account of accused No. 2. This further entry was made on receipt of Exhibit Z-8 from

134-159 S.C-59

196~

Shiv Prarad

Chunilal

v .• State of MaJrt..

rashtra

Raghubar Dayal I.

Shiv Pruad

Ch1111illll

S•t• of Jlahara1htra

accused No. 1 when the last lot was delivered at the godown on February 18.

a., hubar D•yal J,

4. The entire writing on Exhibit Z-7 except the signature of an unknown person and the date below it, was written by accused No. 3. That document reads :

"To, Piaraya Lal c/ o M/s. Sheopershad Bimal Kumar, Bombay.

l. RR. No. 43351, dated 4-2-59 Ashoknagar to Carnac Bridge.

2. RR. No. 43352, dated 6-2-59 Baran to Wadi Bunder.

I have received the material of the above RR which I have handed over to you for clearance.

Sd./- Y ashwant ....

24-2-1959."

Besides these circumstances, it is urged for the State that the effect of the diversion of the wagon from its right course at !tarsi railway station indicates that the people responsible for it must have a fairly large and influential organization with funds and that such a diversion could noi have been merely at the instance of accused No. 1, an employee of accused No. 3, who is a substantial merchant.

About Rs. 1,500/- were paid as charges to the railway authorities before the angle irons could be taken delivery of.

Accused No. 1 could not have been in a position to make that payment.

It is further urged that accused No. 1 would not ha~ stored the goods with the National Transport Company unless the storage was on account of his master, accused No. 3.

Accused No. 2 admits his going to see the goods on February 17, but states that he lost his interest in the goods i. u they were iron angles and his line of business was in non-ferrous goods. He explains his signing the letter Exhibit

K by saying that he did so at the instance of accused No. 3 who represented to him that accused No. 1 had, by mistake, 11tored the goods in the name of accused No. 2 and of accused No. 3 showing him the document Exhibit Z-7 which he retained with himself.

Accused No. 3 states that he had nothing to do with this matter and that he wrote Exhibit Z-7 at the instance of accused No. 2 who asked him to do so, he himself being unable to write in English or Hindi.

We now discuss the evidence to determine whether the accused Nos. 2 and 3 abetted the commission of the offences committed by accused No. 1.

Exhibit Z-7, as originally written, does not, appear to have had the first line, viz., the writing of 'To, Piaraya Lal C/o'. This was written subsequently. This is clear, as urged for accused No. 2, from the facts that it appears to have been written with a different pen and, possibly, with different ink also, and because the word 'C/ o' has been written at an unusual place. In ordinary writing, it should have been in line with the latter expression 'M / s. Sheopershad Bimal Kumar'. It follows therefore that this document was first written by accused No.· 3 to show that a third person had entrusted him with the railway receipt No. 43352, <luJed February 6, 1959, and that that person had received the material to which the railway receipt related. In this original form, the only conclusion possible from the original contents of the document can be that M/ s. Sheopershad Bimal Kumar, of which accused No. 3 is the proprietor, received this receipt from the third person in order to clear the goods from the railways. This would amply explain accused No. 1 taking delivery of the goods on February 18 and storing them with the National Transport Company in the account of accused No. 3 and the entries in the godown register.

Himmatlal, P.W. 13. is the godown-keeper. He issued the receipt Exhibi~ Pl which records :

'We have today received the under-mentioned goods for storage with us in our godown No. IPL on behalf of and under lien to Shiv Prasad Bimal Kumar."

196/

Shiv Pras'ad

Chunilal

Stal• of Ma,,.

rashtra

Raghubar Dayol }.

1961 This is a clear indication of the fact that the goods were 911• Priuad stored on behalf of Sheoper&had Bimal Kumar, i.e., accused Chunilal No. 3. The words 'under lien' are of great significance in y. 1141• of Mahathis respect and show that the storage was not shown to be

ra.rhtra on behalf of accused No. 3 merely because the angle irons llJJghub;; iiayal 1. were sent by accused No. I who was an employee of nccused

No. 3.

The expression 'under lien' points to there being some specified transaction between accused No. 3 and the National Transport Company for the storing of the articles.

This note further confirms the statement of Himmatlal that he had at first written in the accounts that the goods were received on account of Sheopershad Bimal Kumar and that it was on receipt of Exhibit Z-8 from accused No. 1 that he noted the words 'Account Pyare Lal' in the entries with respect to those goods .

. The circumstance that accused No. 3 was in a better position to finance the transaction than accused No. I, is

alo consistent with the aforesaid conclusion from the original contents of Exhibit Z-7.

Apart from the apparent later noting of the first line in this document, Exhibit Z-7, there appears no good reason why the receipt should have been writ'..en in this form if it was to be written at the instance of accused No. 2. There was no reason to give the address of Pyare Lal 8S c/o M/s. Sheopcrshad Bimal Kumar.

The later entry in this document must have been therefore for a purpo:; e nd that could have onlv been to show that the railway receipt No. 43352 was d:alt with by accused No. 2 and not by accused No. 3.

Mention may be made bere of the fact that certain witnesses who had, during their police statements, referred to certain actions of accused No. 3, stated in Court that those acts were committed by accused No. 2. No reliance can be placed on any of the statements of those witnesses and this fact.is just mentioned to show that it fits in with the very first attempt in converting the document originally prepared to, show that accused No. 3 had dealt with this forged railway receipt into a document showing that it was

' '

. -

not accused No. 3 but accused No. 2 who dealt with that receipt.

Shiv Prasad

Chullilll/ Accused No. 2 has been acting as a broker. He signed v.

E h.b. K H b . h h I .

Stat• of Moht>- x 1 1t . e must e conversant wit t e anguage Ill r03htra which he signed. It was not necessary that the receipt R h b D al 1 Exhibit Z-7 should have been written in English or in Hindi ag " ar 01 • even if accused. No. 2 did not know any of those languages.

We are therefore not prepared to accept the explanation of accused No. 3 with respect to his recording the document Exhibit Z-7.

We hold, as admitted by him, that he had written this document.

It .makes reference to the forged receipt of which advantage was taken in getting delivery of the iron angles.

Accused No. 3, writing such a receipt, clearly points to his being concerned with the taking delivery of the iron angles, by accused No. 1, his employee. Once the forged receipt is traced to accused No. 3, from his own writing, the natural conclusion is that it was he who passed it on to his employee accused No. 1 for the purpose of getting delivery of those goods from the railway authorities.

He thus aided accused No. 1 in obtaining delivery of those goods, and in his committing the various offences for achieving that object. The further fact that the receipt was endorsed in the name of Datta and not in the name of accused No . .1, also proves that accused No. 3 must have known that the receipt he was dealing with was not a genume receipt for the goods which were to be taken delivery of.

If he had believed the Teceipt to be a genuine one, he would have endorsed it . or got it endorsed in the true name of his employee. 'His employee too would not have taken c.lelivery

under a false name. We are therefore of opinion that it is established from these various circumstances and facts that accused No. 3 had abetted the commission of the offences, the subject matter of ch'!rges Nos. 2 to 6, by accused No. I •

The points in favour of accused No. 2 are that he does not deal in non-ferrous metals and therefore he would not have taken any interest in the transaction after he Jiad found out on February 17 that the goods were ferrous and not non-ferrous. The fact that the goods were not stored in his

name in the accounts of the godown of the National Trans-

1961 port Company, but were stored in the first instance in the Shiv Prasad name of No. 3, also goes in his favour. If accused No. 3 Chunilal had nothing to do with it and accused No. 1 was simply State of Mahaacting for accused No. 2, he would have sent instructions

rashtra in the very first instance to Himmatlal that goods were to Rarhubir Dayal 1. be stored in the account of accused No. 2. He did not do so. He sent intimation for storing the goods in the name of Pyarelal with the last lorry transporting the iron angles to the godown. Pyarelal bad no previous dealings with the National Transport Company.

In this connection, the exact direction given by accused No. 1 is of some significance.

The direction given by him in Exhibit Z-8 was 'Please give a receipt in the name of a/ c Py are Lal'.

The request was not that the goods were of Pyare Lal and so be stored on his account. That should have been the natural direction. The receipt would have then been issued in the name of Pyare Lal and of nobody else. The direction given by accused No. 1 therefore indicates that for certain purposes he desired the receipt alone to be in the name of Pyare Lal. Naturally, Himmatlal bad to make some entry in the books of the godown which would be consistent with a receipt issued in the name of Pyare Lal. Himmatlal therefore noted the words 'account Pyare Lal' below the original note 'account Sheopersbad Bimal Kumar', but saw no reason to make a statement in the receipt Exhibit P that the goods were stored on behalf of Pyare Lal and noted in it that they were stored on behalf and under lien to Sheopershad Bimal Kumar.

Accused No. 2 signed the letter Exhibit K for the issue of the delivery order.

His explanation is that he did so when accused No. 3 insisted and told him that his employee had by mistake stored the goods in bis name. Ordinarily, this should not have been believed by accused No. 2 as there

wa~ no reason why accused No. 1 should store the goods in bis name by mistake. He could have and might have suspected something not straight, but could shake off such su&picion by his being shown the receipt Exhibit Z-7, which showed that the goods had been cleared by A-3 on behalf of certain person who had passed on that receipt. He was under an o\lligation to accused No. 3 and it is possible that he oould

' '

not have strongly resisted the request of accused No. 3 to sign the letter Exhibit K.

Accused No. 3 had necessarily to obtain a letter signed by Pyare Lal when the goods had not been shown to be stored in his account but were noted in the account of Pyare Lal or of both Sheopershad Birnal Kumar and Pyare Lal.

It is significant that accused No. 2 himself did not go to take delivery of the goods. It was accused No. 1 who took the delivery in two lots and each time signed the receipt in the name of Pyare Lal.

If accused No. 2 was also a party to the dishonest obtaining of the goods from the railway, there would not have been any occasion for such duplication of names on whose behalf the goods were stored with the National Transport Company or for such a document as Exhibit Z-7 coming into existence or for accused No. 2 keeping the document with himself. He kept it with himself for his protection and produced it for that purpose during investigation. It may be that when accused No. 3 tried to dispel his doubts when he was requested to sign the Jetter Exhibit K, accused No. 2 himself suggested the receipt Exhibit Z-7 to be addressed in his name, as only then that receipt could be of any help to him.

Jn these circumstances, we are of opinion that the complicity of accused No. 2 in the commission of the various offences by accused No. 1 is not established beyond reasonable doubt.

We therefore allow the appeal of Pyare Lal and acquit him of the offences he was convicted of.

We dismiss the appeal of accused No. 3, Shiv Prasad Chunilal Jain, but alter his conviction for the various offences read with s. 34 l.P.C. to those offences read with s. 109 I.P.C., and maintain the sentences.

Appeal No. 185 allowed cmti Appeal No. 150 dismissed.

Conviction altered and sentence maintained.

lf64

SltiY l'rlllllll

CllllnlW

•• Stat1 of JI..,.

r111htr•

Raghubar Dqlll 1.

Art. 226

s. 10

Industrial Disputes Act

Art. 226

Chatterjee

s. 10

Industrial Disputes Act

sections 74 and 75

SHIV PRASAD CHUNILAL JAIN

THE STATE OF MAHARASHTRA

K. SUBBA RAO

RAGHUBAR DAYAL

J. R. MUDHOLKAR

Penal Code

ss. 471 and 467

s. 34

Indian Penal Code

s. 467

s. 34

s. 467

I.P.C

s. 467

s. 109

I.P.C

s. 34

I.P.C

s. 109

I.P.C

s. 34

s. 34

s. 34

s. 34

s. 34

I.P.C

s. 34

I.P.C

(1929) L.R. 52 I.A. 40

[1960)

3 S.C.R. 319

S. Mohan Kumarmanga

R. K. Garg

M. K.

Ramamurthi

B. M. Mistry

Ravinder Narain

J. B. Dadachanji

B. K. Khanna

B. R. G. K. Achar

R. H. Dhebar

Pyarelal Jshwardas Kapoor

Rameshwarnath Brijmohan Shukla

Raypuram

Wadi Bunder

Baran

Wdi Eunder

February 6,

,

February 16,

B59

Ilaburao

Gawade

Shridhar

February 18, 1964

Shiv

Datta

state of Mahi>-· Railway Delivery Book

Raghubar Dayal

Sewri

Febrnary 24, 1959

February 26 and March 3, 1959

ss. 471 and 467

s. 34

s. 467

s. 34

s. 467

s. 467

s. 109

Chunilal

s. 34

s. 109

s. 34

I.P.C

s. 109

I.P.C

s. 34

I.P.C

s. 34

s. 34

I.P.C

s. 34

s. 34

Indian Penal Code

s. 34

Indian Penal Code

Shreekantiah

s. 409

s. 34

I.P.C

L.R. 52 I.A. 40

[1955] 1 S.C.R. 1177

Bose

section 34

s. 34

I.P.C

section 34

Babu Rao Gawade

R.aghubar Dayal

s. 409

s. 34

s. 34

I.P.C

s. 34

s. 34

s. 34

Shiv Pr@tld

Stat• of Maharashtra

Roghubar Dayal

Shree Kantiah

s. 34

Indian Penal Code

February 18, 1959

s. 34

I.P.C

s. 34

I.P.C

Baburam Gavade

February 17, 1959

Shiv Prasad Bimal Kumar

Pyare Lal

National Transport Company

Shiv Prarad

Chunilal

State of MaJrt

Piaraya Lal

Sheopershad Bimal Kumar

Himmatlal

Shiv Pras'ad

Chunilal

Himmatlal

Sheopcrshad Bimal Kumar

Shiv Prasad

rashtra

Rarhubir Dayal

Pyarelal

Sheopersbad Bimal Kumar

Sheopershad Birnal Kumar

Shiv Prasad Chunilal Jain

s. 34

s. 109

I.P.C


March, 3

SUPREME COURT REPORTS

STATE OF MADRAS

D. NAMASIVAYA MUDALIAR AND OTIIERS

(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, J. C,

SHAH, N. RAJAGOPALA AYYANGAR AND s. M. SIKRI, JJ.)

Madras Lignite (Acquisition of Land) Act (XI of 1953). ss. 2 and 3 -Acquisition of lignite lands-Compensation to be assesed on market value prel'ailing on April 28, 1947-Va/ue of nvnagricul-

J... tural improvements after that date not to be taken into consideration-Act passed before Constitution (Fonrth Amend1nent)- Validity of Ac:--Compensations now fixed-Constitution of India, Art. 31 PTior to the Constitution (Fourth Amend111e11t) Act, 1955.

The respondents in the above appeals are owners of certain lands which are to be compulsorily acquired untler Madras Lignite (Acquisition of Land) Act, 1953. This Act came into force on August 20, 1953 before Art. 31 of the Constitution was amended by the Constitu tion (Fourth Amendment) Act, 1955. By the saia Act substantially two provisions which are material to the present appeals were made.

The first was that compensation for acquisition of lignite-bearing lands under the Land Acquisition Act is to be assessed on the market value of the land prevailing on August 28, 1947 and not on the date on which notification is,/issued under s. 4( 1) of the Land Acquisition AcL Secondly it was provided that in awarding compensation the value of non-agricultural improvements commenced since April 28, 1947 will no& be taken into consideration.

In accordance with the above provisions, after issuing the notices u required under ss. 4(1) and 6 of the Land Acquisition Act the Land Acquisition Officer made awards regarding the lands of the respondents.

The respondents thereupon filed petitions under Art. 226 of the Consti• tution before the High Court of Madras challenging the validity of tho award on the ground that the provisions of the i\ct relating to tho award of compensation violate Art. 31(2) of the Constitution [as ii

stood before the Constitution (Fourth Amendment) Act. 1955]. Tho High Court upheld the contention. In appeal,

Held: (i) The validity of the Act impugned in the present appeal has to be examined in the light of the provisions of Art. 31 of tho Coristitution as they stood before the Constitution (Fourth Amendment) Act, 1955.

Chiranjit Lal Chuwdhuri ii. Union of India, [1950] S.C.R. 869, State of West Bengal v. Subodh Gopa/ Bose, [1954] S.C.R. 587, ao'd State of West Bengal v. Mrs. Bela Baneriee, [1954] S.C.R. 558, relied.

(ii} The principle laid down in Bela Ban ; rjee's case, that the ceilj :1 ... on the compensation without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due com .. pensation in letter and spirit \Vithin the reliuircrnent of Art. 31(2), would apply to the impugned Act.

Fixation of compensation for C.:"11pulsory acquisition of land notified many years after that date on the market value prevailing on the date on which lignite was discovereCl is wholly arbitrary and inconsistent with the letter and spirit of Art. 31(2) as it stood before the Constitution (Fourth Amendment) Act, 1955.

(iii) Any principle for determination of compensation denying to the owner all increments in value between a fixed date and the date of issue of the notice under s. 4( 1) of the Land Acquisition Act must prilna facie, be regarded as denying him the true equiv:ilent of the land which is ex propriatcd and it is for the State to show that fixation of compensation on the market value on an anterior date does not amount to a viofo.tion of the Constitutional guarantee. In the present appeals no materials have been placed by the State which would support any such case.

(iv) Denial of compensation for the value of non-agricultural im~ provements would be denying to him just compensation for the loss suffered by him on account of compulsory acquisition of his holding and would amount to infringement of Art. 31(2) of the Constitution.

CIVIL APl'ELLATE JURISDICTION: Civil Appeals Nos. 6 to 12 of 1963.

Appeals from the judgment and decree dated February 2, 1959 of the Madras High Court in Writ Petition Nos. 1, 2, 202, 203, 204, 309 and 373 of 1958.

A. Rang1N1adham Chetty and A. V. Rangam, for the appellants (in all the appeals).

R. Gopalakrishnan, for the respondent (in C.A. No. 11/63).

S. V. Gupte, Additional Solicitor-Genera/ and R. H.

Dhebar, for interveners Nos. 1 and 2.

M. C. Setalvad, N. S. Bindra and R. H. Dlzebar, for intervener No. 3.

G. C. Kasliwal, Advocate-General, Rajasthan, R. , H.

Dhebar and B. R. G. K. Achar, for intervener No. 4.

Stall of Madr"' •

D. N•111D1ivaya

MudaliJJT

.State of Madra.r

D. Namalivayo

Mudaliar

Shah /.

March 3, 1964. The Judgment of the Court was delivered by

SHAH, J.-"Whether ss. 2 and 3 of the Madras Lignite (Acquisition of Land) Act XI of 1953 which eek to amend the Land Acquisition Act I of 1894 in their application to acquisition of lignite-bearing lands are invalid because they infringe the fundamental right under Art. 31 of the Constitution of owners of lands whose property is to be compulsorily acquired is the only question which falls to be determined in this group of appeals.

Investigations conducted by the Geological Survey of India in 194 7 revealed deposits of lignite in the South Arcot District of the State of Madras, and exploratory mining operations were commenced by the Government of M2-dras.

Discovery of deposits of lignite led to speculation in lands.

On October 6, 1948, the Government of Madras issued a

"Pres~-Note" announcing that the Government proposed to undertake legislation reserving power to compel any person who had purchased land on or after a date to be prescribed in 1947 in the !ignite-bearing areas to sell such lands to the Government at. the rate at which it was purchased. The Government also advised the owners of the lignite-bearing lands in the Vriddhachalam ancl Cuddalore taluks not to sell their lands to speculators.

On January 7, 1953, the Government of Madras published a Bill to amend the Land Acquisition Act I of 1894 in certain respects.

The Bill was duly passed by the State Legislature on June 2, 1953 and received the assem of the President.

It was published as an Act on June 10, 1953 and came into force on August 20, 1953.

By this Act substantially three provisions are made: ·

( 1) that compensation for acquisition of lignitebearing lands under the Land Acquisition Act as amended, is to be assessed on the market value of the land prevailing on.April 28, 1947, and not on the date on which the notification is issued under s. 4 (1) of the Land Acquisition , Act;

6 S.C.R.

(2)

power is reserved under s. 17 of the Land Acquisition Act to take possession in cases of urgency of lands for the purpose of working lignite mines in the areas in which the Madras Lignite (Acquisition of Land) Act XI of 1953 extends; and

(3) in assessing the market value of the land on April 28, 194 7, value of any non-agricultural improvements on the land commenced, made or effected after that date are not to be taken into account, even if such improvements were made before the date of publication of the notification under s. 4 (1) of the Land Acquisition Act.

l'ursuant to this Act, notifications under s~ 4( 1) of the Land Acquisition Act were issued between the months of January and May 1957 notifying for acquisition certain lands in Vriddachalam taluk of the South Arcot District.

These notifications were followed by notifications under

' 6 of the Land Acquisition Act. Between the months of May and November 1957 the Land Acquisition Officer made his awards under s. 11 of the Land Acquisition Act assessing compensation on the basis of market value of the lands on April 28, 1947 and ignoring in the computation

of compensation the value of houses built or other non- 11gricultural improvements made on the land since that date.

The owners of the lands affected by these awards submitted petitions under Art. 226 of the Constitution to the High •Court of Judicature at Madras challenging the validity of the awards on the ground that the provisions of Madras Act XI of 1953 violated the fundamental right of the owners of the lands under Art. 31 (2) of the Constitution.

They claimed that the Land Acquisition Officer was bound to award compensation for acquisition of their lands and buildings at the market value prevailing on the respective dates of the notifications under s. 4 (1), and that awards valuing the lands at the market rate prevailing on April 28, 1947, and excluding the value of buildings constructed after that date and trees thereon were without jurisdiction. The petitioners accordingly claimed that writs of mandamus be

State uf Jillllru ...

D. Ntlllfllliwt1c

JludJJliar

Sllllh /.

stol• of Madraa ...

D. Nan11uiwq11

Mudaliar

Shl.h J.

issued directing the State of Madras and the Land Acquisition Officers to refrain from taking rpossession of the lands and buildings from the petitioners without payment of adequate compensation and for other appropnate 1elief.

The High Court upheld the contention of the petitioners. and declared that the awards made on the basis of the provisions of Madras Act XI of 1953 could not be sustained.

Against the order passed by the High Court, these appeals have been preferred by the State of Madras, with certificate of fitness granted by the High Court under Art. 132 1Jf the

Constitution.

The Madras Act XI of 1953 makes an important departure from the scheme of the Land Acquiition Act I of 1894.

Under the Land Acquisition Act I of 1894, a person interested in any land compulsorily acquired is entitled to the market value of his interest in the land at the date of the publication of the notification under s. 4 (1), and this compensation includes the value of all improvements agricultural and non-agricultural made in the land upto the date of the notification.

By Ma:dras Act XI of 1953, compensation made payable for compulsory acquisition of.Jand is the value of the land on April 28, 1947, together with the value of any agricultural improvements ma•e thereon after that date and before publication of the notification under s. 4( 1). The result of the Madras Act is therefore to freeze for the purpose of acquisition the prices of land in the area to which it applies, and the owners are deprived of the benefit of appreciation of land values since April 28, 1947, whenever the notification wider s. 4( 1) may be issued and also of non-agricultural improvements made in the land after April 28, 1947.

Departure from the provisions of the Land Acquisition Act is challenged as illegal on the ground that it deprives the owner of the land of just compensation for cCJmpulsory acquisition of hii. property.

Madras Act XI of 1953 was passed before the Constitution (Fourth Amendment) Act, 1955 was enacted, and we have to deal with the question of the validity of the Act in the light of the constitutional provisions contained in Art. 31 before the constitutional amendment. We may

. "

ake it clear that for the purpose of this judgment, we 196! express no opinion on the question whether it is possible State al Mfidrtu

by enacting legislation after the amendment of Art. 31 ( 2)

Y • . by the Constitution (Fourth Amendment) Act, 1955 D. ~",; d~

(which is not given any retrospective operation) to provide that compensation for compulsory acquisition of land may

SW .J. be fixed on the basis of market value prevailing on a date

terior to the date of the issue of the notification under :s. 4 (1) . Article 31 before it was amended by the Consti

tion (Fourth Amendment) Act 1955, by its els. ( 1) and

(2) provided:

"( 1) N0 person shali be depnved of his property save by authority of Jaw.

(2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, .shall be taken possession of or acquired for public purposes under any law authorising the takmg of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifics the principles on which, and the manner in which, the compensation is to be determined and given."

1t wa.s hdd by this Court in Chiraniit Lal Clwwdhuri v.

Union of India and others(') and The State of West Bengal

v. S!1bhodh Go pal Bose and others( 2 ) that els. (1) aAu (2) of Art. 31 relate to the same subject of "eminent domain".

By Art. 31 therefore every person was protected against deprivation of his property save by authority of law, and the law authorising taking possession or acquisition of property for public purposes had io fix the quantum of compensation, or to specify principles on which compensa tion was to be determined for the property taken possession .of or acquired. Power to legislate in respect. of compensa

tion for acquisition and requisitioning of property was

(I) [19SO) S.C.R. 869.

(2) [19,4) S.C.R. S81.

19'1

Stld• .t Madr111 ...

D. Nlll1WlYtr1• ltllldalilr

Shoh J.

contained in Entry 42 List ill of the Seventh Schedule and read as follows :

"Principles on which compensation for iproperty

acquired or requisitioned for the purpose of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given."

The Constitution therefore conferred by Art. 31 (2) a fundamental right upon every person, protecting his property against compulsory acquisition otherwise than by authority of law, and without just indemnification for Joss suffered by him. In The State of West Bengal v. Mrs. Bela Banerjee and others ( ') this Court observed that when under Emry 42 List III the Legislature was given discretionary power to lay down the principles which should govern determination of the amount to be given to the owner of the property appropriated, such principles must ensure that what i~ determined as payable must be a just equivalent of what the owner has been deprived of, and that subject to this basic limitation the Constitution allowed free play to the legislative judgment as to what principles should guide the determination of the amount payable. The Court therefore held that the West Bengal Land Development and Planning Act, 1948, which was enacted primarily for the settlement of immigrants who had migrated into West Bengal due to communal disturbances in East Bengal and which by s. 8' provided that the compensation to be awarded for com

pulsory acquisition to the owner of the land was not to• exceed the market value on December 31, 1946, was 11/tra vires the Constitution and void under Art. 31(2) of the Constitution. It was observed at p. 564 :

"Turning now to the provisions relating to compensation under the impugned Act, it will be seen that the latter part of the proviso to section 8 limits the amount of compensation so as not to exceed the market value of the land

(I) [19S4] S.C.lt. HI.

. '

' '

on December 31, 1946, no matter when the land is acquired.

Considering that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came into force, the fixing of the market value on December 31, 1946, as the ceiling on compensation, without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due compensation in letter and spirit with the requirement of article 31 ( 2)."

That principle must apply in adjudging the validity of Madras Act XI of 1953.

It may be assumed that April 28, 1947, was the date on which lignite deposits were discovered in the areas to which the Act is extended. But there fa no true relation between the acquisition of the lands in these cases and fixation of compensation based on their value on the market rate prevailing on April 28, 1947. Fixation of compensation for compulsory acquisition of lands notified many years after that date. on the market value prevailing on the date on which lignite was discovered is wholly arbitrary and inconsistent with the letter and pirit of Art. 31 (2) as it stood before it was amended by the Constitution (Fourth Amendment) Act. 1955. If the owner is by a constitutional guarantee protected against expropriation of his property otherwise than for a just monetary equivalent, a law which authorises acquisition of land not for its true value, but for value frozen on some date anterior to the acquisition, on the assumption that all appreciation in its value since that date is attributable to purposes for which the State may use the land at some time in future, must be regarded as infringing the fundamental right.

Counsel for the State of Madras relying upon the following observation of Patanjali Sastri, CJ., in Mrs. Bela

Banerjee's case(') at p. 564:

"The fixing of an anterior date for the ascertainment of value may not, in certain circumstances, be

(I) [19541 S.C.R. SSB.

State of MadrtU v.

D. Namruiva1fll.

MUllaliar

Shah I.

'1141• of MadrlU

v. ;/J, Na'llltl8ivaya

Mlldali4'

,.,,,,,. /.

a violation of the constitutional requirement as, for instance, when the proposed scheme of acquisition becomes known before it is launched and prices rise sharply in anticipation of the benefits to be derived under it, but the fixing of an anterior date, which might have no relation to the value of the land when it is acquired, may be, many years later, cannot but be regarded as arbitrary",

submitt!!d that a law which merely fixes the market value on a date anterior to the da, te on which the owner is expropriated of his land, as determinative of the market value on which the compensation is to be based, cannot without further enquiry be regarded as infringing Art. 31 (2) of the Constitution.

In our view this observation cannot assist the State of Madras in saving the provisions of Madras Act XI of 1953 from the vice of infringing the constitutional guarantee under Art. 31 (2) of the Constitution. The right which is guaranteed is undoubtedly the right to a just indemnification for loss, and appreciation in the m.arket value of the land because of the proposed acquisition may in assessing compensation be ignored.

Even the Land Acquisition Act provides for assessment of C01111Jlcnsation on the basis of market value of the land noi on the date on which interest of the owner of land is extinguished under s. 16, but on the basis of market value prevailing on the date on which the notification under s. 4 (1) is issued.

Whether this rule in all cases irrespective of subsequent developments ensures just indemnification of the expropriat ed owner so as to be immune from attack, does not call for comment in this case.

But any principle for determination of compensation denying to the owner all mcrements in value between a fixed date and the date of issue of the notification under s. 4( l ), must prima facie, be regarded as denying io him the true equivalent of the land which is expropriated and it is for the State to show that fixation of compensation on the market value on ; m anterior date <foe not amount to a violation of the constitutional guarantee No m:a1erials. have been placed by the State before this Court which would support any such case.

It is true that the Province of Madras had issued a "Press-Note" in 1948 announcing that the Government proposed to undertake legislation reserving the power to compel any person who had purchased land in the lignite bearing areas to sell such land to them at the rate at which it was purchased. The only intimation given thereby to the owners of lands was that the Government may undertake legislation for the purpose of purchasing lands at the price at which the speculators in land may have purchased them.

There is no evidence that any scheme for acquisition of land for mining of lignite was prepared in 1947 by the Government of Madras.

The mining operations in 1947 must, in the very nature of things, have been exploratory.

The statement of objects and reasons for the Act clearly discloses that initially mining operations were started by the Government on a small area.

Assuming that in appropriate cases, fixation of a date anterior to the publication of the notification under s. 4 ( l) for ascertainment of market value of the land to be acquired, may not always be regarded as a violation of the constitutional guarantee, in the absence of evidence that . compensation assessed on the basis of market value on such anterior date, awards to the expropriated owner a just monetary value of his property at the date on which his interest is extinguished, the provisions of the Act arbitrarily fixing compensation based on the market value at a date many years before the notificatkm under s. 4 ( l) was issued, cannot be regarded as valid. It is a matter of common knowledge that since the termination of hostilities in the last World War there has been an upward tendency in land va'ues resulting in appreciation In some areas many times the original value of lands. No attempt

ha~ been made by the State to prove that appreciation in the market value of lands in the area since April 1947 was solely attributable to a scheme of land acquisition of lignite bearing lands. To deny to the owner of the land compensation at rates which justly indemnify him for his loss by awarding him compensation at rates prevailing ten years before the date on whic)l the notification under s. 4 (1) was .issued amounts in the circumstances to a flagrant infringement of the fundamental right .of the owner of the land

under Art. 31 ( 2) as it stood when the Act was enacted.

134-159 S.C.-60

196#

St•t1 of Madra1

D. Namam~

MudalUir

Shall I.

.196#

State of Madtm

D. NamtUivtI'I•

Mudalinr

Shah /.

The validity of the provision relating to fixation of compen.ation had to be adjudged in the light of the constitutional protection guaranteed at the date when the Act was brought into operation, and any restriction oi

the constitutional protection by subsequent amendment of Art. 31 ( 2) which has not been given retrospective effect, must be entirely ignored.

The provision which denies to the owner of land compensation for non-agricultural improvements made by him since April 28, 1947, also infringes the protection of Art. 31 ( 2). Under s. 3 (a) of the Land Acquisition Act "land" is defined as including benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth, and when under s. 4(1) land is notified for acquisition, the acquis:tion is of the entityty of the interest of the owner in the land including underground rights if any, crops, trees and superstructures.

By the Madras Act the owner is deprived of the value of all non-agricultural improvements including the value of non-agricultural buildings, erected on the land after April 28, 194 7. It is not clear whether the non-agricultural buildings constructed after the specified date are forfeited to the

State on acquisition, or the owner is entitled to remove them. In either case the owner is deprived of just value of his land including the uperstructure, of which he is expropriated. Denial to the owner of the land of the value of the structures constructed by him (even of those put up after April 28, 1947, with the knowledge that the Government may undertake legislation for the purpose of compulsory acquisition of the land) would still be denying to him just compensation for the loss suffered by him on account ·

of compulsory acquisition of his holding, and would amount to infringement of Art. 31( 2) of the ConStittnlon.

We are therefore of the view that the provisions which require the Land Acquisition Officer and the Court to assess compensation of the land compulsorily acquired only on the market value of the land on April 28, 1947, together with the value of agricultural improvements on the land commenced, made or effected after that date, and before the date of the publication of the notification under s. 4(1),

without taking into consideration the value of non-agricultural improvements made after that date, must be regarded as invalid.

We are not called upon to express any opinion on the question whether the power reserved under s. 17 of the Land Acquisition Act as amended by s. 2 of Madras Act XI of . 1953 to take possession of lands under the emergency clause for the purpose of working lignite mines in the areas to which the Madras Lignite (Acquisition of Land) Act, 1953, extends is invalid.

No argument has been advanced by either side before us on this question.

Nor was the High Court called upon to consider the validity of that provision.

The appeals therefore fail and are dismissed.

The respondents in this group of appeals, except in appeal No. 11 of 1963. have not appeared in this Court.

Therefore in appeal No. I 1 of 1963 alone, the State of Madras will pay the costs of the respondent. There will be no order as to costs in other appeals.

Appeals dismissed.

THE TOWN MUNICIPAL COMMITTEE, AMRAVATI

I'.

RAMCHANDRA VASUDEO CHIMOTE AND

ANOTHER

(P. B. GAJENDRAGADICAR, C.J., K. N. WANCHOO, K. c. DAS

GUPTA, J.C. SHAH AND N. RAJAGOPALA AYYANGAR, JJ.)

Terminal Tax-Imposition of ttrminal tax by Municipality on silver ond

•ilvtr i•w•ll•ry, gold and told i•w•ll•ry and pr.cioiu llon.. In 1960-Th•" tax" not l<vi•d b•for. by Municipality-Wh•lhtr 1aved by Art. 277 of the COMtitution-''Continut to bt levied and to b• applitd to th• 111m• purposd'-Mtaning of--C.P. and Btrar Municipalititt Act, 1922, •· 55-Gov•rnmtnt of InJia Act, 1935, 1. 143(2)--ColUlitutlon of India, Art. 277.

' 196#

St•l1 of Madra3

"· D. Nam°'iwrfo

Mudaliar

Shah J.

196#

March 3

STATE OF MADRAS

D. NAMASIVAYA MUDALIAR AND OTIIERS

P. B. GAJENDRAGADKAR, C.J.

K. N. WANCHOO, J.

SHAH

N. RAJAGOPALA AYYANGAR

s. M. SIKRI, JJ.

ss. 2 and 3

Constitution of India

Art. 31

August 20, 1953

Art. 31

August 28, 1947

s. 4( 1)

April 28, 1947

ss. 4(1) and 6

Art. 226

High Court of Madras

Art. 31(2)

Art. 31

Chiranjit Lal Chuwdhuri

Bela Ban

Art. 31(2)

Art. 31(2)

s. 4( 1)

Art. 31(2)

Madras High Court

A. Rang1N1adham Chetty

A. V. Rangam

R. Gopalakrishnan

S. V. Gupte

M. C. Setalvad

N. S. Bindra

R. H. Dlzebar

G. C. Kasliwal

H.

Dhebar

B. R. G. K. Achar

.State of Madra.r

ss. 2 and 3

Acquisition Act I of 1894

Art. 31

Arcot

Madras

October 6, 1948

Government of Madras

Cuddalore

January 7, 1953

Acquisition Act I of 1894

June 2, 1953

June 10, 1953

s. 4

s. 17

April 28, 194 7

s. 4

Vriddachalam taluk

Arcot District

s. 11

Art. 226

Art. 31

s. 4

D. Nan11uiwq11

Madras Act XI of 1953

State of Madras

Art. 132

Madras Act XI of 1953

Acquiition Act I of 1894

Acquisition Act I of 1894

s. 4

s. 4( 1)

s. 4( 1)

Madras Act XI of 1953

Art. 31

State al Mfidrtu

Art. 31

s. 4

Article 31

Art. 31

Art. 31

Shoh

Seventh Schedule

Art. 31

Joss

East Bengal

s. 8

December 31, 1946

Art. 31(2)

section 8

article 31

Madras Act XI of 1953

Art. 31

Patanjali Sastri

Bela

Banerjee

Art. 31

Madras Act XI of 1953

Art. 31

Even the Land Acquisition Act

s. 16

s. 4

s. 4( l )

Province of Madras

s. 4

s. 4

s. 4

Art. 31

Art. 31

Art. 31

s. 3

s. 4(1)

Art. 31( 2)

s. 4(1)

s. 17

s. 2

TOWN MUNICIPAL COMMITTEE, AMRAVATI

RAMCHANDRA VASUDEO CHIMOTE

P. B. GAJENDRAGADICAR

K. c. DAS

GUPTA

J.C. SHAH

Art. 277

Btrar Municipalititt Act, 1922

InJia Act, 1935

Art. 277

D. Nam

' 196St•l1 of Madra3

"· D. Nam°'iwrfo

Mudaliar

Shah J.

196March 3

Shah