SALES TAX OFFICER, JODHPUR AND ANOTHER

M/S. SHIV RATAN G. MOHATTA February 12, 1965

IP.B. GAJENDRAGADKAR, C.J., M. HIDAYATULLAH, J.C. SHAH AND

S.M. SIKRI, JJ.]

CoJ>stitution of India. Arts. 226 and 286(1) (b)-Questions of fact to determine whether sale in the course of import~Therefore if State sales tax leviable-VFhether should be decided in writ proceed-ings.

C The Sales Tax Officer rej"cled the assessee's claim that he was not liable :.a be assessed to sale.5. tax in respect of certain sales of cement imported from Pakistan because (i) he was not a deal€f within the meaning of s.2(f) of the Rajasthan Act 29 of 1954, and (ii) the sales in question were iii the cJurse of the import within the meaning of Art. 286(1) (b) of the Constitution. In the order of assessment. there was no 'discussion of the question of applicability of D Art. 286(1) (b).

The assessee therefore filed a petition under Art. 226 challenging the assessment order on the grounds taken before the Sales Tax Officer and aiso claiming that the latter had failed to c<Jnsider the impact and effect of Art. 286 (1) (b) on the facts of the case. The State objected to the maintainability of the petition on the ground that the !)2titioner should have avciled of the alternative remedy of appeal E provided under the Rajasthan Sales Tax Act, but the High Court overru'ed this objection for the reeson, inter alia, that the petitioner had challenged th~ appellant's jurisdiction to assess him to sales tax in view of the provisions of Art. 286(1) (b). Upon dealing with the merits cf the case, the High Court held that on the facts of the case it was cl, ea: that the sales in question took place when the goods \\'ere in the course o; imioort and therefore, by virtue of Art. 286(1) (b) were not F liable to sales tax. The court therefore quashed the order of assessment.

On appeal to this Court, it was contended on behalf of the State that the High Court should have refused to entertain the petition as many of the crucial facts had not been brought on the record by the respondent, and further-more, it was not established that the cement was sold in the course of import into India.

G HELD: The High Court should not have decided the disputed questions of fact, but should merely have quashed the assessment order on the ground that the Sales Tax Officer had not dealt with the question raised before him and remanded the case. [77 Bl OBITER: The High court should have declined to entertain the petition, as in this case there were no exceptional circumstan- H ces to warrant the exercis€ of the extraordinary jurisdiction under Art. 226. It was not the object of Art. 226 to convert High Courts into original or appellate assessing authorities whenever the assessee chose to attack an assessment order on the ground that a sa1e was made in the course of import and was therefore exempt from tax. The fact that an assessee might have to deposit sales tax when filing an appeal could not in every case justify his bypassing the remedies provided by the Sales Tax Act. There must be something mor2 :n a case to warrant the entertainment of a petition under .Art. 226, something going to the root of the jurisdiction of the Sales

Tax Officer something to show that it would be a case of , palpable A injustice td the assessee to force him to adopt the remedies provided by the Act. f75 G, Hl A.V. Venkateswaran v. Ramehand Sobhraj Wadwani,

A.I.R. 1961 S.C. 1506, referred to.

C!vrL APPELLATE JURISDICTION: Civil Appeal No. 652 of 1964.

Appeal from the judgment and order dated May 7, 1963 of B the Rajasthan High Court in D.B. Civil Misc. Writ Petition No. 157 of 1962.

G.C. Kasliwal, Advocate-General for Rajasthan. K.K. Jain, for the appellants.

M.D. Bhargava and B.D. Sharma, for the respondent. c

The Judgment of the Court was delivered by

Sikri, J. This appeal by certificate of fitness granted by the Ra jasthan High Court is directed against its judgment dated May 7, 1963, quashing the order of assessment dated March 5, 1962, made by the Sales Tax Officer, Jodhpur City, in so far as it levied J) sales tax on the turnover of Rs. 23,92,252.75 np.

The respondent, Mis Shiv Ratan G. Mohatta, which is a partnership firm having .its head office at Jodhpur, hereinafter referrd to as the assessee, claimed before the Sales Tax Officer that they were not liable to be assessed lo sales tax in respect of E the abve turnover because, firstly, the assessee was not a dealer within s.' 2(f) of the Rajasthan Sales Tax Act (Rajasthan Act XXIX of 1954) with respect to this turnover, and secondly, be cause the sales were in the course if import within Art. 186 (])(b) of the Constitut:on. Although the Sales Tax Officer set out the facts of the case relating to the secJnd ground, F he deemed it sufficient to assess this turnover on the ground that the assessee was a dealer within s. 2(f) of the Rajasthan Sales Tax Act, without adverting to the second ground. The facts on which the assessee had relied. upon to substantiate his second ground were these. The Zeal-Pak Cement Factory, Hyderabad (Pakistan), hereinafter called the Pakistan Factory, manufactured ce- G ment in Pakistan. The Pakistan Industrial Development Corporation, hereinafter called the Pakistan Corooration, entered into an agreement with Mis Milkhirain and Sos (P) Ltd., Bombay, for the export of cement manufactured in Pakistan to India. The State Trading Corporatian of India entered into an agreement with the said M/ s Milkhiram & Spns for the purchase of, inter alia, 35,000 H long tons of cement to be delivered to it F.O.R. Khokhropar in Pakistan, on the border of Rajasthan. The State Trading Corporation appointed .the assessee as its agent. broadly speaking, to look after the import and the sale of the imported cement. The modus operandi ad-0pted by the assessee for the sale of the cement was as follows. It would obtain from a buyer in Rajasthan an order under an agreement, a sample of which is on the record

A The agreement fixed the price and the terms of supply. By one clause the assessee disclaimed any responsibility regarding delay in despatch and non-receipt of consignment or any loss, damage or shortage in transit due to any reason whatsoever. The agreement further provided that "all claims for loss, damage or shortage, etc., during transit will lie with the carriers and our pay- B ments are not to be delayed on any such account whatsoever." It was further provided in the agreement that the dues were payable in advance in full, or 90% in advance and the balance within 15 days of billing plus sales tax and other local taxes. Clause 6 of the agreement is in the following terms: c

"A Post Card Loading Advice will be sent to you by the Factory as soon as the wagons are loaded in respect of your orders, and it will be your responsibility to arrange for unloading the consignment timely according to Railway Rules. Ourselves, and the suppliers will not be responsible for demurrage etc. on any account whatsoever. If the consignment reaches earlier than the Railway Receipt, it is the responsibility of buyer to arrange for and get the delivery timely against indemnity bond etc.

All the Railway Receipts etc. will be sent by registered post by the Suppliers in Pakistan.".

After this agreement had been entered into, the assessee would E send despatch instructions to the Pakistan Corporation. These instructions indicated the name of the buyer-consignee and the destination, and provided that the railway receipt and DI A should be sent by registered post to the consignee. These instructions were sent with a covering letter to the Pakistan Corporation requesting that these instructions be passed on to the Pakistan Factory for I' necessary action. The Pakistan Corporation would then forward these despatch instructions to the Zeal-Pak Cement Factory. Later, the Pakistan Factory would advise the consignee that they had "consigned to the State Bank of India, Karachi, the particular quantity as per enclosed railway receipt and invoice." The State Bank of India, Karachi, would endorse the railway receipt in fa- 6 vour of the consignee and send it to him by post. The consignee would take delivery either by presentation of the railway receipt or by giving indemnity bond to the Station Master undertaking to deliver the railway receipt on its receipt.

The Sales Tax Officer did set out most of these facts and the H contentions of the assessee in the assessment order but disposed of the case with the following observations:

"All the above went to prove that the assessee was an Agent of the non-resident dealer for the supplies in the State. The Assessee was an importer and hence submitted an application to the Custom Authority for the same. It booked orders and issued sale bills. Under the terms of an agreement of appointment of Agent, sale was to be effected by the Agent. Again while obtaining 'Jrders from the A buye_rs under condition S Sales Tax was to be paid by the buyers to the assessee.

Thus to all intents and purposes the assessee is a dealer who is liable for payment of Sales Tax to the State. They have rightly collected this amount fr.om the buying dealers B and retained with them. This should come to the Government.".

We can find no discussion in the order on the question raised by the assessee that the sales were made irl the course of import within Art. 286(l)(b) of the Constitution.

The assessee then filed a petition under art. 226 of the Constitution and raised two contentions before the High Court, namely, (I) that the Sales Tax Officer failed to consider the impact and the effect of Art. 286(l)(b) on the facts of the case, and (2) that

the Sales Tax Officer illegally held that the petitioner for all intents and purposes was a dealer liable to pay sales tax. The State D raised an objection to the maintainability of the petition on the ground that the petitioner should have availed of the alternative remedy bf appeal provided under the Rajasthan Sales Tax Act, but the High Court overruled this objection on the ground that "the contention of the petitioner is that in view of Art. 286(l)(b) of the Constitution, the respondent had no jurisdiction to assess the E petitioner to pay the 'Sales tax on the sale of goods in the course of the import into the territory of India", and that even if there was no total lack of jurisdiction in assessing the petitibner to pay sales tax, the principle enunciated in A.V. Venkateswarn v Ramchand Sobharaj Wadhwani (') applied, and it was a case which should not be dismissed in limine.

Then the High Court proceeded to deal with the merits of the case. It first dealt with the question whether the petitioner was a dealer within the meaning of s. 2(f) of the Rajasthan Sales Tax Act, and came to the conclusion that the petitioner must be deemed to be a dealer within the said s. 2(t).

Then it proceeded to deal with the question whether the sales. had taen place in the course of import. The High Court held that m the crrcumstances of the case these sales had not occasioned

th~ movement of goods but it was te first sale made by M / s MilkhJTam and Sons to the State Tradmg Corporation which had oc- Il casioned the movement of goods. Seconidly, it held that in the circumstances of the case "the property in goods after the deliyery had bee~ taken by the petitioner on behalf of the State Trad-

1g Corporation passed t? the State Trading Corporation. and simultaneously to the ultimate buyers. Thus the property in the

(1) [1962] l S.C.R. 753.

A goods passed to the ultimate buyers in Rajasthan when the goods had not reached the territory of India and were in course of import. In view of the authority of their I .ordships of the Supreme Court fo J.V. <; okal and Co. (Private) Ltd. v. The Assistant Collector of Sales Tax (Inspection) & Others, ('), it must be takt:n that the sale took place when the goods were in the course of the B import and they should not be liable to the payment of the Sales

Tax by virtue of Art. 286(1)(b). ". In the result, the High Court quashed the order of assessment in so far as it sought to levy tax on the turnover in dispute. The Sales Tax Officer, Jodhpur, and the State of Rajasthan having obtained certificate of fitness from C the High Court filed this appeal.

The learned Advocate-General has raised two points before us: First, on the facts of this case the High Court should have refused to entertain the petition, and secondly, that it has not been established that the cement was sold in the course of import with- D in Art. 286(l)(b).

Regarding the first point, he urges that an appeal lay against the order of the Sales Tax Officer; no question of the validity of the Sales Tax Act was involved and the taxability of the turnover depended on where the property passed in each consignment.

E This involved consideration of various facts and, according to him. the crucial facts had not been brought on the record by the assessee on whom lay the onus to establish that the sales were in the course of import. He says that the assessee should have proved that each railway receipt was endorsed by the State Bank of India, Karachi, to the buyer before each consignment crossed the frontier.

F We are of the opinion that the High Court should have declined to entertain the petition. No exceptional circuinstances exist in this case to warrant the exercise of the extraordinary jurisdiction under Art. 226. It was not the object of art. 226 to convert High Courts into original or appellate assessing authorities whenever an G assessee chose to attack an assessment order on the ground that a sale was made in. the course of import and therefore exempt from tax. It was urged on behalf of the assessee that they would have had to deposit sales tax, while filing_ an appeal. Even if this is so, does this mean that in every case in which the assessee has to deposit sales tax, he can bypass the remedies provided by the Sales H Tax Act? Surely not. There must be something mpre in a cae to warrant the entertainment of a petition under art. 226, something going to the root of the jurisdiction of the Sales Tax Officer, something to show that it would be a case of paipable injustice to the assessee to force him to adopt the remedies provided by the Act.

But as the High Court chose to entertain the petition, we are not inclined to dismiss the petition on this ground at this stage.

] 1960] 2 S.C.R. 8•12.

Regarding the second point, the learned Advocate-General A .argues that the onus was on the assessee to bring his case within Art. 286(1)(b) of the Constitution in respect of the sales to the various consignees. He says that there is no evidence on record as to

when, the State Bank of India endorsed the railway receipt in favour of the ultimate buyer in respect of each consignment and

w.ithout this evidence it cannot be said that the title to the goods B passed to the ultimate buyer at Khokhropar or in the course of import. He further urges that it would have to be investigated in each case as to when the State Bank endorsed the railway receipt and when the goods crossed the customs barrier. He says that it is not contested that the ultimate buyer took delivery of goods without producing the railway receipt by virtue of special arrangements C entered into with the railway, and according to him, it is only when the delivery was taken by the buyer in Rajasthan that the title passed. By that time, accodring to him, the course of import had ceased. ·

We do not think it necessary to consider the various argu- D ments addressed by the learned Advocate-General or the soundness of the view of the High Court on this point, because we are of the opinion that the High Court should not have gone into this question on the facts of this case. The Sales Tax Officer had not dealt with the question at all, and it is not the function of the High Court under art. 226, in taxing matters, to constitute itself E into an original authority or an appellate authority to' determine questions relating to the taxability of a particular turnover. The proper order in the circumstances of this case would have been to quash the order of assessment and send the case back to the Sales Tax Officer to dispose of it according to law. Under the Rajasthan Sales Tax Act, and other Sales Tax Acts, the facts have to be F found by the assessing authorities. If any facts are not found by the Sales Tax Officer, they would be found by the appellate authority, and it is not the function of a High Court to find facts. The High Court should not encourage the tendency on the part of the assessees to rush to the High Court after an assessment order is made. It is only in very exceptional circumstances that the High G Court should entertain petitions under art. 226 of the Constitution in respect of taxing matters after an assessment order has been made. It is true, as said by this Court in A. V. Venkateswarn v.

Ramchand Sobharaj Wadhwani(') that it would not be desirable to lay down inflexible rules which should be applied with rigidity H in every case, but even so when the question of taxability depends upon a precise determination .of facts and some of the facts are in dispute or missing, the High Court should decline to decide such questions. It is true that at times the assessee alleges some additional facts not found in the assessment order and the State, after a fresh investigation, admits these facts, but in a petition under art.

11) [1962] l S.G, R. 753.

A 226 where the prayer is for quashing an assessment order, the High Court is necessarily confined to the facts as stated in the order or appearing on the record of the case.

In this case, as already indicated, we have come to the conclusion that the High Court should not have decided disputed

8 questions of fact, but should merely have quashed the assessment order on the ground that the Sales Tax Officer had not dealt with the question raised before him and remanded the case. Accordingly, we allow the appeal, set aside the order of the High Court, quash the assessment order in so far as it relates to the turnover of Rs. 23,92,252.75 np, and remit the case to the Sales Tax Officer

0 to decide the case in accordance with law. He will find all the facts necessary for the determination of the question and come to an independent conclusion untrammelled by the views expressed by the High Court. We may make it clear that we are not expressing any view whethr the finding of the High Court that the property in the goods passed simultaneously at Khokhropar ttJ D the State Trading Corporation and the ultimate buyer is correct or not. There would be no order as to costs in this appeal.

Appeal allowed.

li'B(D)2SCI-7

SALES TAX OFFICER, JODHPUR AND ANOTHER

S. SHIV RATAN G. MOHATTA February

IP.B. GAJENDRAGADKAR, C.J.

M. HIDAYATULLAH, J

C. SHAH

S.M. SIKRI, JJ.

Arts. 226 and 286(1)

Art. 286(1)

Art. 286(1)

Art. 226

Art. 286

Art. 286(1)

Art. 286(1)

India

Art. 226

Art. 226

Art. 226

C!vrL APPELLATE JURISDICTION

G.C. Kasliwal

K.K. Jain

M.D. Bhargava

B.D. Sharma

Sikri

Mis Shiv Ratan G. Mohatta

Rajasthan Act XXIX of 1954

Art. 186

s. 2(f)

Pakistan

Mis Milkhirain and Sos (P) Ltd., Bombay

State Trading Corporatian of India

Milkhiram & Spns

Rajasthan

State Trading Corporation

Clause 6

Pakistan Corporation

Zeal-Pak Cement Factory

Pakistan Factory

State Bank of India, Karachi

Art. 286(l)(b)

art. 226

Art. 286(l)(b)

Art. 286(l)(b)

s. 2(f)

s. 2(t)

MilkhJTam and Sons

Supreme Court

Art. 286(1)(b)

Jodhpur

State of Rajasthan

Art. 286(l)(b)

State Bank of India

Karachi

Art. 226

art. 226

art. 226

1960] 2 S.C.R. 8

Art. 286(1)(b)

Khokhropar

art. 226

Sales Tax Act

art. 226

art.

11


PRABHAKAR RAO N. MAWLE v.

STATE OF ANDHRA PRADESH

April 9, 1965

[K. SUBBA RAO, K. N. WANCHOO, M. HIDAYATULLAH, J. C. SHAH

AND s. M. S!KRI, JJ.]

Madras Vexatious Litigation (Prevention) Act, (Act 8 of 1949) s. 2(1) and States Reorganisation Act (37 of 1956), ss. 65, 119 and 121-

App!icability of Madras Act in Telangana area of Andhra Pradesh

State.

By s. 2(1) of the Madras Vexatious Litigation (Prevention) Act 1949, the High Court of Madras was competent to issue an order against any person that no proceedings shall be instituted by him in any court (i) in the Presidency-town without the leave of the High Court, and (ii) 'elsewhere without the leave of the District and Sessions Judge. On the application of the Advocate-General of Andhra Pradesh the High Court of Andhra Pradesh ordered that no proceeding should be instituted by the appellant in the City of Hyderabad without leave of the High Court, in the City of Secunderabad without leave of the Chief City Civil Judge and elsewhere, without leave of the concerned District and Sessions Judge.

In his app2al to this Court, the appellant contended that: (i) the High Court had no jurisdiction to take action under the Act as its provisions were not extended to the Telangana area of the State, which formed part of the former State of Hyderabad; and (ii) the Act was unconstitutional because it prevented some citizens from approaching the Court, which everyone is entitled to in a State governed by the rule of law.

HELD: (i) (Per K. Subba Rao, K. N. Wanchoo, M. Hidayatullah and S. M. Sikri, JJ.) The High Court was in error in holding that the Act merely created a procedural jurisdiction to put persons who indulge habitually in vexatious litigation under a procedural restraint, in the former High Court of Madras, which jurisdiction, on its division into the two High Courts of Madras and Andhra Pradesh inhered in both the High Courts and continued to inhere in the High Court of Andhra Pradesh even for the purposes of those areas to which the Act had not been extended. [752 D-F] The Act was passed by the Madras Provincial Legislature, and conferred jurisdiction upon the Madras High Court to deal with habitual litigants indul, qing in vexatious liti({ation. It Vv'as not an inherent jurisdiction of the Madras High Court. By ss. 30 and 53 of the Andhra State Act, 1953, the Vexatious Litigation (Prevention) Act continued to be in force in the Andhra State, and the Andhra High Court possessed the same jurisdiction as the former Madras High Court.

But the Act is unworkable in the State of Andhra Pradesh which is formed under the States Reorganisation Act, 1956, by adding the Telangana area of the former Hyderabad State to the State of Andhra; and s. 65 of the States Reorganisation Act does not alter the position. (753-H]

744 SUPREME COURT REPoRTS

[1965) 3 B.C.R.

' _All laws are i_ntended to operate territorially and no Provindal A.

Legislature !n India, possesses extra-tei:ritorial jurisdiction. What the Madras Legislature enacted was to operate in its own territorv and it said so in the Vexatious Litigation (Prevention) Act. ln its operative part also, the order under the Act was to be made with territoria_I distinction between the Presidency town and the rest of the Presidency of Madras. The Aat vested a jurisdiction in the High Court to deal with a particular type of litigant, but the Act made the B High Court deal with the matter territorially and if new territories were to be governed by it, it had to be extended to the new territories and till so extended, the Act can only operate within the old territories. Under s .. 119 of the States Reorganisation Act no law of one Of the amalgamating States is to be extended to the area of the other amalgamating States, except by a competent legislative or other competent authority, and further, the law shall be constTU.d as res- C tricted to the .territories within each State immediately before the reorganisation. Since the Act has not been extended to the Telangana area, 'the application of the Act in that area is made impossible by s. 119, and it cannot be extended by judicial construction. No doubt, the Court possesses a power, under s. 121 of the States Reorganisation Act, to construe laws by adapting them in such a manner. as to facilitate their application to the newly formed State, qut the power is of adaptation and oot legislation. An increase in the territories in which D an Act is to apply is dependent on legislation such as is contemplated by s. 119. [753 F-H; 754 A-CJ

Moreover, there being no 'Presidency town in the State of Andhra Pradesh, s. 2(1)(i) of the Act is inapplicable in the State of Andhra Pradesh. The mention of the Presidency town in the sul>-section was not with a view to indicate the seat of the High Court, but because E the Madras High Court, possessed original jurisdiction in the Presidency town. Therefore, the distinction between the City of Hyderabad and other parts of Andhra Pradesh, drawn by the High Court as if the City of Hyderabad was a Presidency town, was an artificial distinction which should not have been drawn by the High Court.

Section 2(l)(ii} is also inapplicable because, the contention that the entire State may be taken to be governed by that sul>-clause would lead to the strange result that the District and Sessions Judge would decide whether a particular litigant should be allowed to move the High Court in appeal, revision or in an original proceeding. [754 E-HJ

Per Shah, J. (Dissenting): Parliament having by the Andhra State Act invested the High Court of Andhra with authority to exercise all Jurisdiction which the High Court of Madras possessed, within the territories of the State of Andhra, and thereafter, having by s. 65(l)(a) of the States Reorganisation Act extended the exercise of that authority over the entire territory of Andhra Pradesh, it would be impossible to accept the argument that in respect of the jurisdiction conferred by the VexatiouS Litigation (Prevention) Act, the High Court of Andhra Pradesh was incompetent to pass the order which It did against the appellant. [759 A-CJ

The Andhra High Court was a successor of the Madras High Court and exercised all the powers and adminiStered the same law which the latter exercised in the territories comprised in the Andhra State. Since Parliament expressly provided by s. 55 of the Andhra State Act, that a court may ctrue a law which it hs to enforce, with such alterations not affectmg the substance as may be necess~

or proper to adapt it to the matter before the cow:t. te expression "Presidency town" must, in the context of the constituti?n of !' separate Andhra High Court, mean the town of the State m which the

PRABHAKAR RAO V. ANDHRA PRADESH 745

High Court was located. If it be granted that the High Court of Andhra had jurisdiction to pass orders under the Vexatious Litigation (Prevention) Act, it would be difficult to hold that s. 119 of the States Reorganisation Act restricts the exercise of the power by the High Court of Andhra Pradesh to prevent a vexatious litigant from instituting proceedings in and from certain areas of the Andhra Pradesh and not elsewhere. Section 65(1) of the States 'Reorganisation

Act which must be read harmoniously with s. 119 authorises the High Court of Andhra Pradesh to exercise all jurisdiction, which the High Court of Andhra could exercise, over all the territories transferred to the State of Andhra Pradesh from the existing State of Hyderabad.

The Vexatious Litigation (Prevention) Act, does not require that the person to be restrained must be residing. in or have a domicile within the jurisdiction of the Court, nor has the order contemplated to b::: passed. any direct territorial operation. It is a personal direction, which imIXJses restrictions upon the person restrained. Once the High Court pronounces an order, it may be removed in appropriate cases only by the High Court, where the proceeding is to be instituted in any court in the town in which the High Court is located, and elsewhere, by order of the District and Sessions Court; and so, there is no conflict of jurisdiction between the High Court and the District Court. [756 D-H] z

(ii) (By Full Court): The Act is not unconstitutional.

'I"he litigants who a:re prevented from approaching the court without proper sanction are persons who habitually file vexatious actions. Even they are not deprived of their right to go to a court in genuine and bona fide actions, but the Act only creates a check. The E object of the Act is to promote public good, because, it cannot be claimed that it is an inviolable right of any citizen to bring vexatious actions without control.

Civ1L APPELLATE JURISDICTION /ORIGINAL JURISDICTION: Civil Appeal No. 900 of 1963.

f' Appeal by special leave from the judgment and order dated

April 21. 1961 of the Andhra Pradesh High Court in C.M.P. No. 239 of 1960.

WITH

Writ Petition No. 146 of 1961.

Petition under Art. 32 of the Constitution of India for the enforcement of the fundamental rights.

AND

Civil Miscellaneous Petition No. 186 of 1962.

Appeal against the order of the Registrar dated November 21, 1961 refus; ng to receive the petitioner's application for refund of Court-fees.

The appellant appeared in person.

K. R. Chaudhuri and B. R. G. K. Achar, for the respondent (in C. A. No. 900/63 and W.P. No. 146/ 196]).

SUPREME

COURT

REPO&TS [1965] S s.c.n.

The Judgment of Subba Rao, Wanchoo, Hidayatullah and A Sikri, JJ. was delivered by Hidayatlillah, J. Shah, J. delivered a separate Opia.ion.

Hidayatullah, J .. On January 11, 1960, the Advocate General applied to the High Court of Andhra Pradesh, Hyderabad for action against the appellant Prabhakar Rao H. Mawle under s. 2 B of the Vexatious Litigation (Prevention) Act 1949 (Madras Act VlII of 1949), on the allegation that Mawle had been "habitually" and without any reasonable ground instituting "vexatious proceedings" in the courts within the cities of Hyderabad and Secunderabad and also in. the High Court and appearing in the cases in person; that he was responsible for a considerable amount C of litigation or, in other words, that he was a vexatious and habitual litigant. In support of the petition for the invocation of the punitive provisions of the Act, the Advocate-General referred to the following cases: -

(i) In C.R.P. No. 1765/58 Mawle described the judgment D of the lower court as: " .................. shocking to the sense of justice, a grave dereliction of duty, flagrant abuse of fundamental principles of law and the natural justice, full with errors patent on the face, showing a gross manifest injustice done through the tyrannical arbitrary acts."

It was stated that Mawle apologised to the High Court to escape proceedings for contempt of court.

(ii) He filed a writ petition No. 1369/18 after the above Civil Revision Petition was dismissed and then preferred an appeal CCCA 42/59.

(iii) He filed a stay petWon against an intended execution before steps were taken ari.d when the petition was dismissed he filed an appeal C.M.A. 86 / 59 and obtained stay.

(iv) He filed an appeal against the dismissal of the writ G petition 1369 I 58.

He was thus said to have asked for five remedies in one suit (0.S. 200 of 1958).

(v) In an appeal filed on 3-6-1959 he did not pay court fee of Rs. 995 as stamps were not available undertaking

'.H to pay the balance which he did not pay.

(vi) In S. R. 38516 and S.C.C.M.P. Mawle stated that as he had appeared in person-

"without any weightage to his submissions though of law, for in the ends of justice, as against the professional . privileges claimed by both these veteran advocates (Mr. 0. V. Subbanayadu and

< '

PRABHAKAR RAO v. ANDHRA PRADESH (Hi.dayatullah, J.) 747

Mr. Hari Narayanalal) even though they had taken the role of a party, sole witnesses, swearing false affidav; ts ............ ".

(vii) In S.R. 12409/59 against decree in O.S. 109/1958,

though himself the sole defendant, Mawle caused to be preferred an appeal in forma pauperis by his wie and children, getting the judgments under appeal pnvately printed and cerflying them as true.

(viii) C.R.P. No. 1094/ 59 against the judgment in suit No. 198/2 dismissed against his tenant he filed a revision petition which was dismissed in limini.

(ix) C.R.P. No. 988/1959 filed against I.A. 230/58 in 0.S.

99/2 of 1957 of the City Civil Court, Hyderabad was dismissed in limini.

(x) He has filed S.R. 31845 I 59 as L.P.A. against an order

refus'ng to review C.R.P. against a Small Cause Suit and S.R. No. 27605 / 59 as a L.P.A. against an order in a petition refusing to condone the delay in filing a review petition in a C.R.P.

(xi) C.R.P. 954/ 1959 filed against an order in L.R. petition in a Small Cause Suit, originally attempted to be filed as an appeal, C.M.P. 5518 filed and stay ordered on condition that Mawle should deposit the decretal amount. He then withdrew the C.M.P.

(xii) Several crim'nal matters in High Court. Complaint in Cr. App. 406/58 and Cr!. R.C. 506/59.

(xiii) C.M.P. 1858 / 57 for taking action against the respond- F ent for alleged contempt of court.

(xiv) S.R. No. 43198/59, a L.P. Appeal.

1he Advocate General claimed that though the Act was not extended to the area covered by the former Hyderabad State, it must be treated as the law in force there by reason of the States Re- G organisat'on Act, 1956.

Mawle was heard on notice and, as was to be expected from a litigant of his sort, filed a fairly long statement in reply denying each accusation and explaining his conduct. He questioned the jurisdiction of the High Court of Andhra Pradesh to take action B under the Act as its provisions were not extended to the .area . comprised in the former State of Hyderabad. He challenged the Act as ultra vires and unconstitutional on the ground that it abridged the right of citizens to seek redress in a court of law. He stated that he was a businessman and a landlord and owned considerable properties in the city of Hyderabad and other cities in the District and the State. He produced a certificate from the District Magistrate. He explained that owing to unpleasant experience he had

LIP(D)5SCI-9

us SUPJ!BKll COUBT BllfOllTS

[1965) 3 8.C.B.

to take away his work from advocates and since 1952 he had start- A ed coaducting his own cases. He alleged that he had to recover a couple of lakhs of rupees from his clients/tenants etc. and had, therefore, to file a large number of cases. He attempted an Ci(· planation of the cases to whicll the Advocate Geaeral had referred in his petition. '

The High Court by its judgment dated April 21, 1961, now nmjer appeal, held that the Act was both constitutional and intra vires, that the High Court had jurisdiction to make the order and that action under the Act was called for. The High Court ordered that no proceeding, civil or criminal, should be instituted by Mawle

in the City of Hyderabad without the leave of the High Court, in c the city of Secunderabad, without the leave of the Chief City Civil Judge and elsewhere without the leave of the District and Sessions Judge concerned. A copy of the order of the High Court was published in the Gazette of Andhra Pradesh as required by the Act.

Mawle sought a certificate under Articles 132, 133, or 134 of the Constitution but the certificate was refused on the ground that no D substantial question of law as to the interpretation of the Constitution or otherwise was involved. The petitioner then applied for and obtained special leave from this Court and filed the present appeal.

The Act with which we are concerned, though a copy substantially of 16 and 17 Viet. Ch. 30 (now replaced by section S 1 of E the Supreme Court of Judicature Consolidation Act, 1925: 15 & l6 Geo V c. 49) is perhaps the only one of its kind in India. Its provisions are extremely brief and they may be read here:

"l. Short title, extent and commencement.

(1) This Act may be called the Vexatious Litigation (Prevent; on) Act, 1949.

(2) It extends to the whole of the State of Madras.

(3) It shall come into force at once.

2. Leave of court necessary for vexatious litigant to institute proceedings.

(1) If, on an application made by the Advocate-General, the High Court is satisfied that any person has habitually and without any reasonable ground instituted vexatious proceedings, civil or criminal, in any Court or Courts, the High Court may, after giving that person an opportunity of being heard, H order that no proceedings, civil or criminal, shall be ilistituted by him in any Court-

(i) in the Presidency-town, without the leave of the High Court; and

(ii) elsewhere, without the leave of the District and

SesSions Judge. ·

. E

PRABHAKAR RAO v. ANDHRA PRADESH (Hidayafullah, J.) 719

(2) If it a(ipcars to the High Court that the person

against whom an application is made under subsection (!). is unable, on account of poverty, to engage a pleader, the High Court may engag~ a pleader to appear for h'm.

Explanation-For the purpose of this section 'pleader' has the same meaninl, l as in section 2, clause (I~ of the Code of Civil Procedure, 1908.

3. Leave to be granted only if prima facie ground exists.

The leave referred to in section 2, subsect'on (I), shall not be given in respect of any proceedings unless the High Court or, as the case may be, the District and Sessions Judge, is satisfied that there is prima facie ground for such proceed 'ngs.

4. Proceedings instituted without leave to be dismissed.

Any proceedings instituted by a person against whom an order under section 2. sub-section (!), has been made, without obtain'ng the leave referred to in that sub-section shall be dismissed:

Provided that this section shall not apply to any proceedings instituted for the purpose of obtaining such leave.

(5) Publicat'on of orders .

A copy of every order made under section 2, sub-section (!), shall be published in the Fort St. George Gazette."

The High Court of Andhra Pradesh has held that it enbys all the jurisdiction of the former High Court of Madras and thus the provisions of the Act create a jurisd'ction in the High Court capable of being exercised in Telangana area even though the Act as such, has not been extended to this part of the territorv of the State. The High Court also holds that the Act is perfectly valid.

In this appeal in addit'on to que£tioning the order on the above ground and also merits the appellant contends that the .o Madras Act itself was invalid inasmuch as it was not covered by any Entry in List II or III of the Government of India Act, 1935 and had not received the assent of. the Governor-General. This argument is without substance. The Act had received the assent of the Governor-General 11nd the subject of the legislation was covered by Entries 2 of List II and 2 and 4 of List III of the Govern- R ment of India Act, 193~. The next argument of the appellant before us is that this Act is unconstitut'ona.l because it prevents some citizens from approaching the court and obtaining relief to which everyone is entitled in a State governed by Rule of Law. This argument really invokes Art. 19 and Art. 14. The latter Article is invoked because the Act, according to the appellant. seeks to create an unreasonable distinction beween litigant and litigant. This ar.u

ment is also not acceptable to us because the litigants who are to

750 BUl'l\JWE

OOUBT RllPORTS [l 9611] 3 S.11.B.

be prevented from approach'ng the court, without the sanction of

/I. the High Court etc., are in a class by themselves. They are describ ed in the Act as persons who 'habitually' and 'without reasonable cause' file vexatious actions, civil or criminal. The Act is not in tended to deprive such a person of his right to go to a court. It only creates a check so that the court may examine the bona {ides of any claim before the opposite party is harassed. A similar Act,. B passed in England, has been applied in several cases to prevent an abuse of the process of court. In its object the Act promotes public good because it cannot be claimed that it is an inviolable right of ; my citizen to bring vexatious actions without control, either leg islative or administrat've. The Act subserves public interest and the restraint which it creates, is designed to promote public good. The (j: Act does not prevent a person declared to be habitual litigant from bringing genuine and bona fide actions. It only seeks to cut short attempts to be vexatious. In our judgment, the Act cannot be described as unconstitutional or offending either Art. 19 or Art. 14.

The next contention of the appellant is that the Act has not ]): been extended to the area of the former State of Hyderabad and the High Court cannot exercise jurisdiction in that area. This con tention merits close scrutiny. The High Court has. given a history of the evolution of the State and of the High Court of Andhra Pra desh. It is common knowledge that the High Court of Madras was founded by Letters Patent of 1865 and exercised all original, g appellate and other jurisdictions conferred by that Letters Patent.

The Act, which was passed by the Madras Provincial Legislature in 1949 conferred jurisdict'on upon the Madras High Court to deal with cases of habitual litigants who were persistently filing vexatious actions and were guilty of an abuse of the process of court.

This jurisdiction belonged to the High Court of Madras by virtue r

of the Act and was not an inherent jurisdiction whether as a Court of Record. or otherwise.

When the State of Andhra was formed in 1953 by the Andhra State Act of 1953, the High Court of Madras ceased to exercise jurisdiction over the territory of the State of Andh'ra. This jurisdic- G tion was then to be exercised by the High Court of Andhra from a date to be appointed by the President. The jurisdiction of the Andhra High Court was to be the same as that of the Madras High Court. Section 30 of the Andhra State Act read as follows: -

"30. Jurisdiction of Andhra High Court. ][ The High Court of Andhra shall have, in respect of ti)e territories for the time being included in the State of Andhra, all such original, appellate and other jurisdiction as. under the law in force immediately before the prescribed day,. is exercisable in respect of the said territories or any part thereof by the High. Court at Madras."

PRABHAKAR BAO v. ANDHRA PRADESH (HidayatuUah, J.) 7:&1

By virtue of this section the new High Court possessed the same powers and jurisdiction as the original Madras High Court in i_ts territory. But by s. 53 of the Andhra Act no change was effected in the territorial extent of the laws and references in all laws to the State of Madras were to be adapted to refer to the new State in its application to the new State of Andhra. In other words, the Act continued to be an Act in force in the Andhra State and the Andhra Hicrh Court possessed the same jurisdiction as the former Madras Hih Court. So far no difficulty can be seen, but it is obvious thn1 the original jurisdiction of the High Court of Madras in the Pre~! dency Town could not be exercised at Guotur and did not follow the High Court.

The next change came in 1956 by the States Reorganisation Act, !"956. By that Act certain territor'es were amalgamated with the State of Andhra and prominent among those territories was the former Hyderabad State which for convenience may be referred to here as 'the Tefangana Area'. The city of Hyderabad and the city of Secunderabad are in that area. The States Reorganisation Act, 1956 contained a special prov'sion to limit the territorial extent of the laws in force in the different areas which were combined to form the State of Andhra Pradesh. Section 119 of the States Reorganisation Act provided as follows: -

" 119. Territorial extent of laws.

The provisions of Part II shall not be deemed to have effect ed any change in the territories to which any law in force immediately before the appo; nted day extends or applies, and territorial reference in any such law to an existing State shall, until otherwise provided by a competent Legislature or other competent authority, be construed as meaning the territories within that State immediately before the appointed day."

The appellant relies upon this provision to state that the area of operation of the Act can only be the former territories of the State G of Andhra and the Act is not applicable in the terr; tory comprised in the Telangana Area. The other side contends that by virtue of s. 65 the High Court of Andhra Pradesh acquires all the jurisdiction of the High Court of the State of Andhra and therefore it acquires the jur'sdiction invested by the Act in the former Andhra High Court. Section 65 of the States Reorganisation Act 1956 H reads as follows: -

"65. High Court of Andhra Pradesh. (]) As from the appointed day,-

la) the jurisdiction of the High Court of the existing

State of Andhra shall extend to the whole of the terdories transferred to that State from the existing State of Hyderabad;

752 eUPREME

COURT

RF.POP.T8 (1965]

~ S.C, R

(b) the said High Court shall be known as the High A Court of Andhra Pradesh; and • • • •

The question that arises is whether the application of the Act in the Telangana area is made impossible by s. 119 of the Act of

t,956 or depends upon s. 65 of that Act. If the Act under which B act'on is purported to be taken can be said to have operated territorially then it is obvious that the extent of territory in whicb it was to apply was not only not enlarged by the States Reorgania tion Act but under s. 119 was kept rigid by lim:ting it to the territory of the former Andhra State. If. however, that Act created a jurisdiction in the High Court to deal with a particular class of C litigants, who. were hab'tually bringing vexatious suits it may be then possible to contend that jurisdiction continues to vest in the High Court of Andhra Pradesh. The High Court has viewed this matter from the latter angle and come to the conclusion that s. 65 and not s. 119 controls the matter.

D The argument of the High Court is that the Act controls litigation and creates a new procedure in rspect of persons who in dulge habitually in vexatious litigation. The Act confers a jurisdic tion to put such persons und.er a procedural restraint and th's jurisdiction, the High Court holds. inhered in the former Madras High Court and later in the Madras and the AAdhra High Courts sepa- E ·· ~. rately and now it inheres in the Andhra Pradesh High Court. In the op'nion of the High Court, the jurisdiction can be exercised within all the territories subject to the Andhra Pradesh High Court including the Telangana Area.

Mr. K. R. Choudhury in supplementing this reasoning points F o!Jt that the High Court of Madras could take action aga 'nt any person who actd in a manner to attract the provisions of the Act, irrespective of where the person came from. He contends that a vexatious litigant from Bengal or Bombay could be visited with the punit've provisions of the Act and submits that there is no reason why the Andhra Pradesh High Court cannot control the prac- G tice and procedure in the courts of the Telangana area in the same way. Accord'ng to him, the Act must be treated as extended to the Telangana area 'as the Andhra Pradesh High Court continues to possess all the jurisdiction of the former Madras High Court. This was also the original plea of the Advocate-General in his petition in the High Court, though not apparently accepted by the High It Court.

We do not accept the argument of Mr. Choudhury. the Madras Act was applied by the legislaure only to the Madras Presidency. Suppose it had been applied to one district only. Could

the High Court have said that notwithstanding the lim'ted application, it would take action in the other districts of the Madras Presidency? If it could not"1ave extended the territorial limits of the

PJlAllHAKAR RAO v. ANDHRA PRADESH (llidayatullah, J.) 753

application of the Act in Madras Presidency, the position is not any different now, in view of the provisions of s. 119 of the States Reorganisation Act which clearly lay down that no law of one of the amalgamating States is to be extended to the area of the other amalgamating States except by a competent legislative or other competent authority and further that the law shall be construed as restricted to the territories within each State immediately before the Reorganisat'on. The territorial area is thus not only not enlarged but is frozen. We may now consider whether s. 65 of the States Reorganisation Act makes any difference to this position.

The Act was designed to control vexatious litigation and it created for the purpose, a new procedure which. applied to persons whose visits to courts, as litigants, were not only frequent but were also habitually . vexatious. The Act enabled the Advocate-General to apply to the High Court and the High Court on being satisfied that a person had been acting in this manner, could make an order

tht no proceeding thenceforward was to be filed by that person in the Presidency town without the leave of the High Court and elsewhere without the leave of the District & Sessions Judge. -The Act was intended to apply in the whole of the Presidency of Madras including the area carved away from the Pres; dency of Madras and made into the State of Andhra in 1953 and which is now a part of the State of Andhra Pradesh after 1956. The Act was intended to E operate territorially as indeed the clause dealing with the extent of application of the Act itself shows. [n its operative part also the order was to be made with a territor; al distinction between the Presidency Town and the rest of the Presidency of Madras. The order to be passed under the Act contemplated leave of the High Court before a su!t "'as filed in the Presidency Town and the leave of the District & Sessions Judge elsewhere.

rt is plain that on its terms the Act cannot apply in the State of Andhra Pradesh atleast in so far as the Presidency Town mentioned in s. 2(l)(i) is concerned. That Presidency Town was the city of Madras and therefore s. 2(!)(i) of the Act cannot apply in Andhra Pradesh, because there is no Presidency Town in Andhra Pradesh to which s. 20 )(;) can now refer. The distinction between the city of Hyderabad and other parts of the State of Andhra Pradesh has been artificially brought into existence by the High Court by making the order in respect of the city of Hyderabad as if it was a Presidency Town. Th's is legislation pure and simple and it cannot be undertaken by the High Court. Section 2(1)(i) of the Act can no longer apply without a proper amendment. It may, however, be contended that s. 2(l)(ii) can apply and the whole of the new Stat~ of Andhra Pradesh may be taken to be governed by sub-cl. (11). It would, however, be somewhat strange to make the District & Sessions Judge decide whether a particular lit; gant should be allowed to move the High Court in appeal, revision or in an" original proceeding. The Act is unworkable ; n the State of Andhra Pradesh without substantial modifications to it.

SUPH.R.MK COUH'l' UEl'OH'l'S

[ J 965] 3 S.C.R.

. This is not a question merely of procedural jurisd\ction as the A High Court has reasoned. No doubt the Act as it stood, vested a

i!-lisdiction in the High Court o deal with a particular type of ht1gant but the Act made the High Court to deal with the matter territorially. It is because the territory has changed that the question arises whether the old jurisdiction of the High Court can now take iii new territory. All laws are intended to operate territorially B and no Provincial Legislature in India possessed extra-territorial jurisdiction. That the Madras Legislature enacted was to operate in its own territory and it said so in the Act. If new territories are to be governed by the Act it must be extended to the new territories and till it is extended the Act can only operate within the old territories and this is the obvious result of s. 119 of the States Re- C organisation Act.

Thus there are two difficulties in the way of holding that this Act is operative in the Telangana area of the new State of Andhra Pradesh.- To begin with it has not been extended to the area known D as the _Jelangana area and, till exlended, s. 119 of the States Reorganisation Act expressly prohibits an extension to the Telangana area by judicial construction. Secondly, there being no Presidency Town as such in the new State of Andhra Pradesh, s. 2(l)(i) cannot now be made applicable to the new State of Andhra Pradesh, until some other town 's substituted by the Legislature in its place.

E The mention of the Presidency Town in s. 2(l)(i) was not with a view to indicate the seat of the High Court but was so made because the High Court possessed original jurisdiction in that area.

The words 'Presidency Town' might, of course, have been amended to read Hyderabad, the seat of the Andhra Pradesh H'gh Court, but this .has not been done. No doubt the court under s. 121 of the p

States Reorganisation Act possesses a power to construe laws by adapting them in such a manner as to facilitate their application to the newly formed State, but the power which is exercisable is only a power of simple adaptation and not a power of legislation.

An increase in the territories in which an Act is to apply is dependent on legislation such as is contemplated by s. 119 of the G States Reorganisation Act. What the High Court has done is more' than an adaptation. It has not only substituted the city of Hyderabad for the Presidency town but it has also made the law applicable to Telangana courts contrary to the intendment of s. 119 of the States Reorganisation Act. Formerly the seat of the High Court was different and the Act must, on the same reason'ng have applied H there, so that the words 'Presidency Town' must have read as Guntur at first and now they read Hyderabad. In our opinion, the High Court was in error in holding that the Act merely created a prooedural jurisdiction in the High Court of Madras which on its .div'sion into two High Courts, inhered in both the High Courts and continues to inhere in the High Court of Andhra Pradesh even for purposes of areas to which the Act has not been extended. In this

PRABHAKAR RAO I'. AiillRA l'RAllE; H (8/w/t . .!.) 755

.A view of the matter the order made by the High Court cannot be sustained and it must be discharged.

We have not gone into the merits and there is much that justified action against Mawle. He has filed dozens of cases and has floojed courts with litigation often by way of repeated petitions .B on the same matter. As we find that the Act is not available against him we say nothing more. We may place on record that Mawle expressed his willingness before us to be restrained in his litigation and we hope that he will now make amends for his past conduct.

We expect him to behave properly in future. c The appeal is allowed but in the circumstances of the case we make no order about osts.

Shah, J. The Provincial Legislature of Madras exercising power under the Government of India Act, 1935 enacted the Vexatious Litigation (Prevention) Act 8 of 1949. The material provi- D sions of the Act are: -

"2. (I) If, on an application made by the Advocate-General, the High Court is satisfied that any person has habitually and without any reasonable ground instituted vexatious proceedings civil or criminal, in any Court or

(2)

Courts, the mgh Court may, after giving that person an opportunity of being heard, order that no proceedings, civil or criminal, shall be instituted by him in any Court-

(i) in the Presidency-town, without the leave of the High Court; and

(ii) elsewhere, without the leave of the District and Sessions Judge.

• • *

3. The leave referred to in section 2, subsection (!), shall not be given in respect of any proceedings unless the High Court or, as the case may be. the District and Sessions Judge, is satisfied that there is prima facie ground for such proceedings.

4. Any proceedings instituted by a person against whom an order under section 2, sub-section (]), has been made, without obtaining the leave referred to in that subsection shall be dismissed: Provided that this section shall not apply to any proceedings instituted for the purpose of obtaining such leave.

5. A copy of every order made under section 2. subsection (!), shall be published in the Fort St. George Gazette."

7[6 81J1>UE1o!E COURT REPORTS

(1965) :3 S.C.R.

By this Act the H; gh Court of Madras was invested with A. power t0 place restrictions upon vexatious litigants. The prin.:iple of thi~ legislation, it appears, was borrowed from statute 16 & 17 Viet. Ch. 30 enacted by the British Parliament. By Art. 225 of the Constitution, the jurisd; ction of the High Court of Madras, subject to the provisions of the Constitution and to the provisions of any law of the appropriate Legislature remained the same as imme- B diately before the commencement of the Constitution. On September 14. 1953 the State of Andhra was carved out of the territories of the State of Madras by the Andhra State Act 30 of 1953. Section 28 of that Act prov'ded:

"(!) As from the !st day of January, 1956, or such earlier a

date as may be appointed under sub-section (2) there shall be a separate High Court for the State of Andhra."

The High Court of Andhra which was constituted by a notification issued by the President had by s. 30, in respect of the territories D included in the State of Andhra. all such original, appellate and other jur'sdiction as under the law in force immediately before the prescribed day was exercisable in respect of the territories or any part thereof by the High Court at Madras. The Andhra High Court was therefore a successor of the J;:igh Court of Madras and

xercised all the powers and administered the same law which the E Madras High Court exercised in the territories comprised in the Andhra State. By s. 2(1) of Act 8 of 1949 the H; gh Court of Madras was competent to issue an order against any person that no proceedings, civil or crimim I. shall be instituted by h'm in any Court (i) in the Presidency-town without the leave of the High Court, and (ii) elsewhere, without the leave of the D'strict and F Sessions Judge; and this power, by virtiie of s. 30 cf Act 30 of 1953 became exercisable by the Andhra High Court. The expression

''Presidency-town" means by the General Clauses Act, 1897 (s. 3(44\) the local limits of ordinary original jurisdiction of the High Court of Jud:'cature at Calcutta, Madras or Bombay as the case may be. and there was no Presidency-town within the area of the G Andhra State as constituted by Act 30 of 1953. The Parliament had, however, with a view to meet anomalies of the present nature expressly provided by s. 55 that "Notw'th>tanding that no provision or insufficient provis; on had been made under s. 54 for the adaptation of a law made before the appo•nted day, any court,

• • • required or empowered to H enforce such .law may, for the purpose of facilitating its application in relation to the State of Andhra, • • construe the law with such alterations not affecting the substance as may be necessary or proper to adapt it to the matter before the court * * •." The expression "Presidencytown" must in the context of the cdnstittition of a separate H'gh Court for Andhra. after the State of Andhra was formed, mean '

l'JL\JlllAKAH HAO 1 • • 4..~HllRA PR.4..l>Jo:ll (S/w.11, J.) j;)7

the Capital town of the State in wkich the High Court was locate<l, Such an adaptation does not affect the substance of the Act, and it would facilitate application thereof to the change<l circumstances,

The new State of Andhra Pradesh was censtituted under the States Reorg;111isation Act 37 of 1956 by incorporating certain areas specified in s. 3 to the territory of the old State of Andhra,

B_v s. 65( I )ti) from the appointed day i.e. Nov"mber I, 1956 the jurisdiction of the High Court of the existing State of Andhra was, it was declared. to exten1 to the whole -of the territories transferred to that State from the ex'sting St1te of Hyderabad, the High Court was to be known as the High Court of Andhra Pradesh, and the princ'pal seat of the High Court was to be at Hyderabad. The jurisdiction of the High Court of Andhra was by the express provision made in s. 65(1)(a) exercis]ble over the whole of the territory transferred to that State from the existing State of Hyderabad, The phraseology used by the Legislature, in my judgment. authorises the new High Court of Andhra Pradesh to exercise all jurisdiction which the High Court of Andhra could exercise before the appointed day.

The High Court of Andhra Pradesh made an order against the appellant on April 21. 1961 that no pro:eedlngs, civil or criminal. shall be instituted by the appellant in the city of Hyderabad without the leave of the H'gh Court; in the c:ty of Secunderabad without the leave of the Chief City Civil h.dge; and elsewhere without the leave of the District and Sessions Judge concerned.

This wcs manifestly a personal direction which impo•ed restrictions upon the appellant. The power to impose a ban under s. 2, 't may be noticd, vests only in the High Court: the power to remove the b>n in specific cases is exercisable by the High Court, or a Judge of the District and Sessions Court according as the proceeding is to be instituted in a Court in the cap'tal of the State where the High Court is located. or in any Court in the mofuss'J: There can therefore be no question of conflict of jurisdiction between the High Court 2nd the District Court. Once the H'gh Court pronounces an order under s. 2, it may be removed in appropriate cases only by the High Court where the proceeding is to be instituted in any Court in the Capital town in which the High Court is located and el>ewhere by order of the Distr'ct and Sessions Court. The Act confers jurisdiction upon the High Court and does not as a condition of its exercise require that the person to be restrained must be residing or have a domicile in any area within the jurisd'ction of the Court invested with jurisdiction. Nor has the order contemplated to be p3ssed any direct territorial operation: it is ; ssued against a per<on individually and restrains him from 'nstituting proceedings without leave of the Court specified in that behalf. A personwherever resid"ng or domiciled-may therefore be restrained by an 0rder under s. 2.

8UPHEME

COURT

REPORTS [ 1965] :l s.c.n.

A But it is said that notwithstanding the comprehensive phraseology used by the Legislature in s. 65, because of s. 119 of the States Reorganisation Act 37 of 1956 a somewhat anomalous situ- .ation hs resulted. It is c:aimed that the power w; th wh:ch the High Court is 'nvested to prevent a litigant from instituting proceedings wh'.ch are vexatious may be exerc'sed in respect of proceed'ngs to be i.11>titute:l in comts within the limits of the former State of B Anlhra or which arise from proceedings decided by Courts in that area. The upshot of the argument is that a l'tig&nt may .be treated as voxatious only in respect of proceedings to be institutefi by him in the Court; of the Districts within the former State of Andhra and :n respect of procedings sought to be brought before the High 0 Court in exercise of its appellate, revision a I or superintending jurisdiction from orders made by Courts wilhin the territory of the former. State of Andhra: he may therefore be subjected to a disability in respect of proceedings to be instituted in some distr; cts in the State und also in respct of proceedings reaching the High Court from cases instituted in those districts, and not in respect of D the rest. Whal the effect of such a v'ew may be upon the exercise of the High Court's jurisdictian under Arts. 226 and 227 of the Constitution or the orig; nal jurisdiction, for instance, under the Companies Act or the Banking Companies Act, the appellant who has argued his case pe:sona\ly did not attempt to tackle. Section 119 of the States Reorganisation Act, 1956 provides: E "The provisions of Part fl shall not be deemed to have effected any change in the territories to which any law in force immediately bfore the appointed day extends or applies, and territorial references ; n 'ny such law to an existing State shall, until otherwise prov; ded by a competent Legislature or other competent authority, F . be construed as meaning the territories within that

State immediately before the appointed day."

By that section the territorial extent of the laws 'n operation prior to the appointed day, until amended by a competent Legislature or othc:r competent authority. contim•es. But s. 119 must be read G harmoniously withs. 650Hal. The l:tter clause declares in unambiguous terms that the jurisdiction of the High Court of the exist; ng State of Andhra shall extend to the whole of the territories transferred to that State from the existing State of Hyderabad. If it be granted that the High Court of the State of Andhra had jurisdiction to pass orders under the Vexatious Litigation (Preven)in) Act" it H would be difficult to hold that s. 119 of Act 37 of 1956 sttll restricts

the exercise of the power by the High Court to prevent a vexatious litigant from instituting proceedings in certain areas in the mofussil and not in others or from instituting proceedings by way of appeals or revisions from orders and decrees in proceedings instituted in the Courts in the area within the former State of Andhra and not elsewhe, e. The Porliament having by Act 30 of 1953 invested the

1'RA13HAKAH HAO t'. ANl_.HJtA PH.ADE.SH 18haJt, J.) 7591

A High Court of Andhra with authority to exercise all jurisdiction

wh'ch the High Court of Madras possessed within the territories of the State of Andhra as constituted and thereafter having by s. 65(1)(a) of Act 37 of 1956 extended the exercise of that authority over the entire territory of Andhra Pradesh. and in my judgment, it would be impossible to accept the argument that in respect of B the jurisdiction conferred by the Vexatious Litigation (Prcvent'on) Act 8 of 1949 the High Court was incompetent to pass the order which it did against the appellant.

I need not add anything to what Hidayatullah, J., has said in upholding the comt'tutionality of the provisions of the Act, for I agree with him that the Act is not unconstitutional as offending either Art. 19 or Art. 14 of the Constitution.

On the merits, however, I am of the opinion that the cases which the appellant had instituted in the var'ous Courts did not justify a drastic order of the nature passed against him. The appellant claims that he is the owner of a large estate in the city of Hyderabad, and that is not denied: he also carries on an extensive business and in the course of carrying on h's business and managing his estate, he has often to seek recourse to courts of law. The appellant says that because of certain reasons (which need not be set out) he conducts his litigation before the Courts without any professional assistance. Assuming that the appellant has in instituting and prosecuting cases which he had inst'tuted shown less objectivity and more enthusiasm than a lawyer may in similar cases show, and had attempted to obtain benefit of what he thought were lacunae in the law, imposition of a blanket restriction against him of the nature imposed by the High Court may not seem to be warranted. I am unable to agree having carefully considered the nature of the various cases filed by the appellant or from the general progress of those cases as set out in the list of cases filed in this CoLl!'t and the .orders passed therein that those proceedings are vexatious or frivolous.

I would therefore allow the appeal, but not on the grounds which are set out by Hidayatullah, J.

A ppea/ allowed.

PRABHAKAR RAO N. MAWLE

STATE OF ANDHRA PRADESH

April 9, 1965

K. N. WANCHOO

M. HIDAYATULLAH, J.

C. SHAH

s. 2(1)

States Reorganisation Act

ss. 65, 119 and 121

s. 2(1)

High Court of Madras

Andhra Pradesh

High Court of Andhra Pradesh

Hyderabad

Secunderabad

Telangana

K. Subba Rao

K. N. Wanchoo

M. Hidayatullah

S. M. Sikri

High Courts of Madras and Andhra Pradesh

Madras Provincial Legislature

Madras High Court

ss. 30 and 53

Andhra State Act, 1953

Andhra State

Andhra High Court

States Reorganisation Act, 1956

s. 65

States Reorganisation Act

Madras Legislature

States Reorganisation Act

s. 119

s. 121

States Reorganisation Act

s. 119

s. 2(1)(i)

Per Shah

High Court of Andhra

s. 65(l)(a)

States Reorganisation Act

Parliament

s. 55

Andhra State Act

s. 119

States Reorganisation Act

Section 65(1)

s. 119

State of Andhra Pradesh

Art. 32

Constitution of India

K. R. Chaudhuri

B. R. G. K. Achar

Subba Rao

Hidayatullah

A Sikri

Hidayatlillah

Shah

January 11, 1960

High Court of Andhra Pradesh, Hyderabad

Prabhakar Rao H. Mawle

s. 2

Mawle

S. 200

0. V. Subbanayadu

Hari Narayanalal

S. 109

S.

99

Geaeral

April 21, 1961

Articles 132, 133

S 1

India

Madras

section 2

Code of Civil Procedure, 1908

section 2

section 2

section 2

Art. 19

Art. 14

England

Art. 19

Art. 14

High Court of Andhra Pra desh

Andhra

Andhra State Act

Section 30

Andhra State Act

High. Court at Madras

s. 53

Andhra Hicrh Court

Madras Hih Court

Guotur

States Reorganisation Act

State of Andhra

States Reorganisation Act, 1956

Section 119

States Reorganisation Act

s. 65

Section 65

States Reorganisation Act 1956

High A Court of Andhra Pradesh

s. 119

s. 65

s. 119

s. 65

s. 119

Madras and the AAdhra High Courts

Andhra Pradesh High Court

K. R. Choudhury

Bengal

Bombay

Choudhury

Madras Presidency

s. 119

States Reorganisation Act

s. 65

States Reorganisation Act

s. 2(l)(i)

s. 2(!)(i)

s. 20

Section 2(1)(i)

s. 2(l)(ii)

s. 119

Andhra Pradesh.-

s. 119

States Reorganisation Act

s. 2(l)(i)

s. 2(l)(i)

Andhra Pradesh H'gh Court

s. 121

States Reorganisation Act

s. 119

States Reorganisation Act

Telangana courts

s. 119

States Reorganisation Act

PRABHAKAR RAO

section 2

section 2

section 2

Art. 225

September 14. 1953

Andhra State Act

Section 28

State of Andhra

s. 30

High Court at Madras

s. 2(1)

s. 30

General Clauses Act, 1897

s. 3(44\)

High Court of Jud:'cature at Calcutta

s. 55

s. 54

s. 3

s. 65( I )

s. 65(1)(a)

April 21. 1961

s. 2

s. 2

s. 2

s. 65

s. 119

States Reorganisation Act

Arts. 226 and 227

Companies Act

Companies Act

Section 119

States Reorganisation Act, 1956

s. 119

High Court of the State of Andhra

s. 119

s. 65(1)(a)

Art. 19

Art. 14


THE TATA OIL MILLS CO. LTD. v.

K. V. GOPALAN AND ORS.

April 15, 1965

[P. B. GAJENDRAGADKAR, CJ., K.N. WANCHOO, M. H!DAYATULLAH

AND V. RAMASWAMI, JJ.]

Kcrala Industrial Estabfohment (National and Festival Holidays) Act, 1958, ss. 3 and 11-Scope of.

Under the Standing Orders of the appel!ant company, its employees were entitled to five holidays with pay on specified dates during each year. Furthermore, by an agreement with the respondents' union, the company had agreed to grant an additional day's holiday with pay, thus raising the total number of paid annual helidays to six. In 1958 the Kerala Industrial Establishments (National and Festival Holidays) Act, 1958, was passed and s. 3 of the Act required evgry employer to declare holidays on every 26th January, 15th August and 1st May, and to grant four additional festival holidays each year, on dates to be fixed by the Inspector after consulting the employer and the employees. The number of paid holidays was thus statutorily fixed at 7.

In 1962, the company obtained the Inspector's decision on the four .festival holidays and declared the dates on which such holidays would be given. At that time, while an industrial dispute between the company and its employees was pending, the respondents filed applications under s. 33A of the Industrial Disputes Act, 1947, before the Tribunal. It was contended in these applications that the statutory provision in s. 3 for 7 paid holidays did not override or abro- gate the existing arrangement as to paid holidays and that the holidays to be given under s. 3 would be in addition, to the holidays which t\le appellamt was bound to give the respondents under existing arrangements; and that the appellant's attempt to limit the number of paid holidays to 7 during 1962 was contrar.v to the terms of employment evidenced by the existing arrangement and therefore violative of s. 33. This contention was upheld by the Tribunal.

In appeal to this Court, HELD: Under s. 3 the statutory requirement is 7 paid holidays each year. If under an existing anangement the employees were entitled to more than 7 paid holidays, such more favourable right was protected by s. 11. The scheme of s. 11 clearly shows that s. 3 is not intended to prescribe a minimum number of paid holidays in addition to the exis.ting ones and, in the preseni case, would operate only to rai•e the total number nf holidays from 6 un<ler the existing arrangements to 7 paid holidays in accordance with s. 3. [764 B-E]

Ov1L APPELLATE JURISDICTION: Civil Appeal Nos. 150 and 160of 1964.

Appeals by special leave from the award dated September 20. 1962, of the Industrial Tribunal. Ernakulam in Industrial Dispute Nos. 11 and JO of J 962 respectively.

~'ATA MILLS '' (lOl'ALAN (Gajendragadkar, C.J.) 7Hl

A G. B. Pai, J. B. Dadachanji. 0. C. Mathur and Ravinder Narain, for the appellant.

M.R.K. Pillai, for the respondents.

The Judgment of the Court was delivered by Gajendragadkar, C. J. The short question of Jaw which_ these B two appeals raise for our decision relates to the constrctlon of ss. 3 and 11 of the Kerala Industrial Establishments (Nattonal all.d Festival Holidays) Act, 1958 (No. 47 of 1958) (hereisafter calle'1 th.e Act). That question arises in this way .. Two comJ.1>laints were tiled against the appellant, the Tata Oil Mills Company Ltd .• by the two groups of respondents, its workmen, resperu_vely under C s. 33A of the Industrial Disputes Act. These applications alleged that the management of the appellant had contravened the provi sions of s. 33 of the said Act inasmuch as it had denied its employees leave with wages on Founder's Day and Good Friday in

1962. According to the respondents, they were entitled to have holidays with pay on the said two days under the terms and con- D ditions of service, and so, they claimed that the Tribunal should direct the appellant to give its employees holidays under the said existing arrangement and should pass other appropriate orders for the payment of wages for the two holidays in question. The appel !ant disputed the correctness of the respondents' contention. The Tribunal has rejected the appellant's plea and has declared that the E respondents are entitled to the privilege of paid holidays on Founder's Day and Good Friday in 1962. It has also ordered that the appellant should pay the wages to the respondents for those two days and the proportionate salary of the staff members as soon as the award comes into force. It is against these orders passed by the F Tribunal on the two complaints preferred before it by the respective respondents that the appellant has come to this Court by special leave; and on its behalf, Mr. Pai has contended that in making the award, the Tribunal has misconstrued the effect of ss. 3 and 11 of the Act. • Standing Order 30 of the Standing Orders of the appellant G company makes. provision for leave of all categories. S.O. 30 (vi) provides for holidays. It lays down that the factory will be closecl on the following days which will be considered as Company Holidays with pay, and will not be counted against the casual or privilege leave of an employee:

I. New Year Day ([st Jam:iaryl . . lI

2. Founder's Day (Saturday nearest to 3rd March)

3. Good Friday

4. Onam

5. Christmas Day (25th December) There is a note appended to this provision which makes it clear 1hat

in the event of the Company being compelled to observe a holiday or holidays for reasons of State such day or days shall not he couni- .ed as against the privilege or casual leave of the employees but shall

762 SL'l'Hl:~IJ:o~ COUlt'l' Ul!.:l'ORTS

(1965) ;\ S.t'.H.

be treated as a Company holiday or holidays. Thus. it is clear that A. under the relevant Standing Order. the respondents are entitled to 5 paid holidays every year. •

ft fie" the Standing Orders were framed and certified, there was •.in agreement between the appellant and the respondents' Union as ii result of which the appellant agreed to grant a further holiday, B and this agreement raised the number of total paid holidays in a year to 6. The additional holiday which the appellant thus agreed to J1:

0 Ve to the respondents was to be given on the day when the tespondents' Union would celebrate its Union Day. Apparently. this holiday was analogous to the Founder's Day. the idea underlying the agreement being that just as the appellant gave a paid holiday C on the Founder's Day, the respondents should be given a paid holiday on the Union Day.

It appears that even after this agreement was reached, the respondents began to claim additional holidays; but the appellant was not prepared to make any addition to the list of holidays. It was pre- D pared to leave the choice of the agreed holidays to the employees provided they subm; tted to the Company an agreed list of such holidays.

In 1958, the Act was passed and it came into force on the 29th December, 1958. Section 3 of the Act provides E "Grant of National and Festh; al Holidays-- Every employee shall be allowed in each calendar year a holiday of one whole day on the 26th January, the 15th August and the !st May and four other holidays each of one whole day for such festivals as the Inspector may. in consultation with the employer and the em- F ployees specify in respect of any industrial establishment"'.

The result of this provision was that every employer to whom the Act applied had to declare holidays on the 26th January. the 15th August and the !st May and had to give four other holidays G according to the decision of the Inspector, the requirement of the section being that the Inspector had to consult the employer and the employees before fixing such other holidays. In other words, s. 3 statutorily fixed the number of paid holidays at 7; fixed three out of them and left the decision of the remaining four to the Inspector who. had to consult the employer and the employees.

In pursuance of this provision, the Inspector declared certain holidays for the year 1959. Not satisfied with the decision of the Inspector, one of the appellant's employees Mr. Baskara Menon filed a writ petition in the Kerala High Court under Art. 226 of the Constitution challenging the validity of the Inspector's decision. In that writ petition, the question about the construction of s .. 3of the

TATA llILLS t. GOPJ.uN (Goj•11dragadkar, G. J.) i63

A Act was agitated. In the result, tho High Court held that the cOlllplaint made by the petitioner against the validity of the decision of the Inspector was not well-founded, and so, th~ writ petition was dismissed.

B In 1962, the appellant followed the same procedure and got a decision as to the festival holidays from the Inspector and declared that the said holidays would be observed as paid hqlidays in the year. At this time. certain industrial disputes were pending between the appellant and its employees belonging both to monthly and daily-rated categories before the Industrial Tribunal at Ernakulam.

C The respondents felt that the declaration of the holidays made by the appellant for the year 1962 amounted to 11 contravention of s. 33 of the Industrial Disputes Act, and so, they filed the two pre sent complaints before the Industrial Tribunal under 33A of the said Act. That, in brief, is the genesis of the present complaints. ,

D We have already noticed the provisions of s. 3 of the Act. The contention raised by the respondents before the Tribunal was that the statutory provision as to 7 paid holidays prescribes the minimum number of holidays which the employer has to give to his employees. This provision, according to the respondents. does not over-ride or abrogate the existing arrangement as to paid holidays.

E In regard to paid holidays which are common to s. 3 and the present arrangement. they would, of course, have to be treated as paid holidays, but the four other festival holidays which the Inspector decides from year to year would be in addition to the holidays which the appellant is bound to give to the respondents under the existing arrangement. and since the appellant has limited the F number of paid holidays to 7 for the year 1962, it has acted contrary to the terms of employment evidenced by the existing arrangement as to paid holidays and that constitutes the violation of s. 33 ,)f the _Industrial Disputes Act. This contention has been uphf<ld by the Tribunal; and Mr. Pai argues that the view taken by the Tribunal is plainly inconsistent with the true scope and effect of s. 3 read G with s. 11 of the Act.

That takes us to s. 11 of the Act, because this section has to be read along. with s. 3 in determining the validity of the conclusion recorded by the Tribunal on the main point of dispute between the parties. s. 11 reads thus: -

"Rights and privileges under other laws, etc., not affected-

J; lothing cotained in tis Act shall adversely affect any nghts or privileges which any employee is entitled to with respect to national and festival holidays on the date on which this Act comes into force under any

ote_r law. contract. custom or usage, if such rights or pnv1leges are more favourable to him than those to which he would be entitled under this Act''.

SUP.REM&

COURT

REPORTS J l\!63] 3 S.C.lt,

This section gives an optio!l to the employees, they can choose to A. have the paid holidays either as prescribed by s. 3 or as are available to them under any other law, contract, custom or usage. In exercising this choice, it must, however, be borne in mind by the employees that the 26th January, the 15th August and the 1st May have to be taken as three holidays. That is the direction of s. 3. In regard to the remaining 4, the Inspector decides which days should B be paid holidays. In other words, the statutory requirement is 7 paid holidays. If under the existing arrangement the employees are entitled to have more than 7 paid holidays, that right will not be defeated by s. 3, because s. 11 expressly provides that if the rights or privileges in respect of paid holidays enjoyed by the employees are more favourable than are prescribed by s. 3, their existing rights C and privileges as to the total number of holidays will not be prejudiced by s. 3. The scheme of s. 11 thus clearly shows that s. 3 is not intended to prescribe a minimum number oL paid holidays in addition to the existing pnes, so that the respondents should be entitled to claim the seven holidays prescribed by s. 3 plus the six D holidays to which they are entitled under the existing arrangement. If in addition to the three holidays which are compulsory under s. 3, the employees are getting, say J other paid holidays, then s. 3 would step in and would require the employer to give his employees one more paid holiday, so as to make the number of paid holidays 7. In our opinion, if ss. 3 and 11 are read together, there can be no doubt that the respondents' claim that they B should have 7 holidays as prescribed by s. 3 plus 6 holidays as are available to them under the present arrangement is cleary untena:,1e. In the present case, the respondents were having six paid holidays. The statute has fixed the minimum number at 7 paid holidays, and so, since the existing arrangement was less favourable to the F employees, the statutory provision will come to their help and they will be entitled to claim 7 paid holidays in a year, and that means that s. 3 will be operative. If thatbe so, the procedure followed by the employer in consulting the Inspector and in fixing the list of 4 paid holidays for 1962 in addition to the three holidays fixed by the statute is perfectly consistent with the provisions of s. 3 of the G Act. The Tribunal was, therefore, in error in holding t!iat the appellant had contravened s. 33 of the Industrial Disputes Act.

In the result, the appeals must be allowed, the orders passed by the Tribunal in the two respective complaints set as[ ie, and the two complaints dismissed. There would be no order as to costs.

Appeals allowed.

,. ,

THE TATA OIL MILLS CO. LTD

K. V. GOPALAN AND ORS

April 15, 1965

P. B. GAJENDRAGADKAR, CJ.

K.N. WANCHOO

V. RAMASWAMI, JJ.

ss. 3 and 11

s. 3

s. 33A

Industrial Disputes Act, 1947

s. 3

s. 3

s. 33

s. 3

s. 11

s. 11

s. 3

s. 3

~'ATA MILLS

Gajendragadkar

A G. B. Pai

B. Dadachanji

C. Mathur

Ravinder Narain

M.R.K. Pillai

ss. 3 and 11

Tata Oil Mills Company Ltd

That question arises in this way .. Two comJ.1>laints were tiled against the appellant, the Tata Oil Mills Company Ltd .• by the two groups of respondents, its workmen, resperuvely under C s. 33A of the Industrial Disputes Act.

s. 33A

Industrial Disputes Act

s. 33

Pai

ss. 3 and 11

Founder's Day

Good Friday

Onam

Christmas Day (25th December)

29th December, 1958

Section 3

s. 3

Baskara Menon

Kerala High Court

Art. 226

Industrial Tribunal at Ernakulam

s. 33

Industrial Disputes Act

s. 3

s. 3

s. 33

Industrial Disputes Act

s. 3

s. 11

s. 11

s. 3

s. 11

s. 3

s. 3

s. 3

s. 11

s. 3

s. 3

s. 11

s. 3

s. 3

s. 3

s. 3

ss. 3 and 11

s. 3

s. 3

s. 3

s. 33

Industrial Disputes Act