K. P. CHOWDHARY v.

STATE OF MADHYA PRADESH & ORS.

March 15, 1966

[P.B. GAJENDRAGADKAR, C.J. K.N. WANCHOO, M. HIDAYATIJLLAH,

J.C. SHAn AND S.M. S1KR1. JJ.]

Con.srtitution oj lndla, 1950, A.rt. 299(1)-lmplled eontrac11, if permissible.

Madhya Pradesh Land Revenue Code, s. 155(b)-Recovery under implied contract.

The appellant gave tho high'"t bids for two foreat contracts at an auction. As the amount of the contract waa more than what the Division Forest Officer coqld accept, the matter waa referred to the Chief Conservation of Forests who had the necessary authority to accept the bids. Aftsr the cloee of the auction the appellant had signed the contract form as required, and tho document& were aen.t to the Chief Conservator of Fortets for unction and signature. Before the Chief Conservator of Foresta could accept the contract, the appellant railed a dispute as to the marking of the trees. . As that diapute waa not settled to tho satisfaction of the

appellant he refused to complete the contract. The Divisional Forest Officer

pve notice to the appellant that if he did not complete the formalities action would bo taken under the conditions of the auction to re-auction

the contract and if there WM My deficiency it would be recovered from him. He did not comply and ultimately he was infon"ed that the two contracts had been cancelled and would be re-auctioned at hii risk. The contracts were re-auctioned at which there was certain deficiency in the amount. A letter was written to the Tehsildar for recovering this deiclent

a.mount from the appellant as arrears of land revenue as per the cond.tiom of auction. Thereupon, the appellant filed .a writ petition challenging the

recovery of the amount -.is arrears of land revenue as the contract was not signed or completed by him. The High Court dismissed the petition. In appeal to this Com:t. HELD: Section 155(b) of the Madhya Pradesh Land Revenue Code does not assist the State in realising this amount as arrears of land revenue.

What was said in the earlier caecs by this Court with respect to s. 175(3) of the Governm&nt of India Act, 1935 applies w:th equal force to Art. 299(1) of the Constitution. Two consequences follow from these disons.

The first is that m view of Art. 299( 1) there can be no implied contract

between the Government and another penon, tho reason being that if 1uch implied contracts between the Government and another person were allowed, they would in effect make Art. 299(1) weleas for then a person who had a contract with Government which waa not executed at all in the

manner provided in Art. 299( 1) could get away by saying that an implied contract may be inferred on the. facts and circumstances of a particular c.se. This is of coune not to say that if there ii a valid contract as enwaged by Art. 299(1), there may not be implications arisin~ out of such a contract. The eecond consequen.co which follows from the1e decisions ii that if the contract between the Government and another person i!I not in full compliance with Art. 299(1) it would be no contract at all and could not be enforced either by th• cto.oruaent or tty the other persoa as

a centract. [J24 A.DJ

S1at1 of &luv v. Mf1. Karam Cltand Tlrapar (1962) 2 S.C.R. 827, $1tlt BikltrtJ,/ Joipurilll v. Union of India (1962) 2 S.C.R 880, Stall of the Wat &tilal v. M11.

B.K. Molfdal (1962) Supp. 1 S.C.R. 876, Chaturbhuj Yitha/das Ja1411t v. M<>ralrwar Prashram (1954) S.C.R. 817, and (S) Unio11 of Jndiav. A.L. Ra/Ito Rmlt,[1964) 3 S.C.R.

164, followed.

In the present case there was no contract between the appellant and tho Go\-ernment before he bid at the auction oor was there any contract B between him and the Government after the auction was over as required by Art. 299( 1) of the Constitution. A3 there can be no implied conlraet

between the Government and another person in view of the mandatory provision of Art. 299( l) of the Constitution there can be no queitioo of recoveiy of any money under an implied contract under cl. (b) of s. 155 of the Madhya Pradesh Land Revenue Code. [924 B-HJ

CIVIL APPELLATF. JURISDICTION : CIVIL APPEAi. No. 669 OP C 1965.

Appeal by special leave from the judgment and order dated October 5, 1961 of the Madhya Pradesh High Court in M. P.

No. 153 of 1961. • J. P. Goyal, for the appellant.

1. N. Shroff, for the respondents.

The Judgment of the Court was delivered by

Wanchoo J. This is an appeal by special leave against the judgment of the Madhya Pradesh High Court. The brief facts E

necessary for present purposes are these.

A notice was issued by the Divisional Forest Officer, Jabalpur Division for auction of various contracts in that division in July 1959. The conditions of the auction specified inter a/ia (a) that no person would be allowed to bid for any forest contract at the auction unless he had signed the sale notice in token of his agreement to abide by the condi F tions thereof and deposited a sum of Rs. 500/- as earnest money in respect of each forest contract before bidding therefore; (b) that the Divisional Forest Officer reserved to himself the power without assigning any reason to accept the highest or any bid,

(c) that the consideration due under a contract was to be payable where it exceeded Rs. 3,0CX>/-, in four equal instalments, the first G instalment being payable immediately at the close of the auction;

(d) that the successful bidder had to sign immediately at the close of the auction the bid-sheet for the contract knocked down in bis •

favour; (e) that the sales of contracts beyond the power of sane tion of the Divisional Forest Officer were subject to the sanction of the competent authority and the successful bidder was bound H by his bid until orders were passed by the competent authority; (f} that the contract clecd and the security bond were to be executed by the successful bidder and his surety immediately at the close

of the auction; (g) that if the successful bidder fails to pay the full amount of the consideration, or the first instalment or to furnish the security required or to complete the formalities, the earnest money deposited by him was to be forfeited to Government and the contract would be re-auctioned at the risk of the successful bidder and any deficiency happening on such re-sale would be recoverable from the successful bidder as arrears of land revenue; and (h) that the act of bidding was deemed to be a complete and unreserved acceptance of these conditions and others which are not material for our purposes.

The appellant bid for two contracts at the auction:and his-were the highest bids.

As the amount of the contract money was more than what the Divisional Forest Officer could accept, the matter was referred to the Chief Conservator of Forests who had the necessary authority to accept the bids. After the close of the auction the appellant had signed the contract form and a surety signed the security bond as required. These documents were sent to the Chief Conservator of Forests for sanction and signature.

Before however the Chief Conservator of Forests could accept the contract, the appellant raised a dispute as to the marking of the trees according to the material notified at the time of the auction.

As that dispute was not settled to the satisfaction of the appellant he refused to complete the contract or to pay the first instalment in respect thereof. Eventually the Divisional Forest Officer gave notice to the appellant on July 29, 1959 that if he did not complete the formalities within a week, action would be taken under the conditions of auction to re-auction the contract and if there was. any deficiency it would be recovered from him and the earnest money would be forfeited.

He did not however pay the first instalment due and ultimately on November 25, 1959 he was informed that the sale of the two contracts sold in the auction held on July 20, 1959 in his favour had been cancelled by the Chief Conservator of Forests and the amount of earnest money had been forfeited. He was also informed that the two contracts would be re-auctioned at his risk. Thereafter the contracts were reauctioned in January 1960. At the re-auction there was a deli-· ciency in the two contracts together of Rs. 51,500/-. The appellant was therefore asked to send this amount to the Divisional Forest Officer. When he failed to do so, a letter was addressed to the Tehsildar Jabalpur by the Divisional Forest Officer for recovering this amount as arrears of land revenue under the conditions of auction.

Thereupon the appellant filed a writ petition out of which the present appeal has arisen. The case of the appellant was that the claim of the respondent-State for recovery of the deficiency on re-sale was not covered by either s. 82 of the Indian Forest Act (No. 16 of 1927) or rules 28 and 29 of the Madhya Pradesh Forest M12Sup.Cl/66-13

Contract Rules or under any other provision of the law, and the A amount therefore could not be recovered as arrears of land revenue as the contract was not signed or completed by him.

He therefore claimed the issue of an appropriate writ 4uashing the notice issued to him and stopping the respondent from recovering as arrears of land revenue the sum of Rs. 51,500/-. The State contested the case and contended that recovery of the amount could B be effected as arrears of land revenue under s. 82 of the Indian Act read with rr. 28 and 29 of the Forest Contract Rules in view of the conditions of auction, which the appellant had accepted.

The petition was heard finally by a Full Bench of the High Court in view of a reference by a Divisional Bench. The Full Bench seems to have held that rr. 28 and 29 of the Forest Contract C Rules did not apply to the case as they dealt with breaches arising after the contract in writing had been executed. In this case the admitted position was that the contract in writing had never been signed by the Chief Conservator of Forests and therefore the question which fell to be considered, according to the Full Bench, was whether the liability arising under the conditions of auction D could be enforced and the deficiency on re-auction recoverd as arrears of land revenue even without the execution of a valid)( contract in writing. On this question the Full Bench went on to hold that this was a case of an implied contract resulting from the appellant's accepting the conditions of auction and that such an implied contract was not hit by Art. 299 of the Constitution as E that applied plainly to contracts which are required to be reduced to writing and an implied contract in its very nature was not such a contract. Finally the full Bench held that s. 155(b) of the Madhya Pradesh Land Revenue Code, 1959, applied to this case of implied contract and the amount could be recovered thereunder as arrears of land revenue. On this view the petition was dismissed. The • High Court having refused to grant a certificate, the appell:mt-J- F applied for and obtained special leave from this Court; and that is how the matter has come before us.

Two questions arise for decision in this appeal. The first is whether the High Court's view that Art. 299 of the Constitution docs not hit an implied contract and therefore the amount could be recovered under s. 155(b) of the Madhya Pradesh Land Revenue Code is correct. The second is that if that view is not correct, whether the amount can be recovered as arrears of land revenue under any other provision of law.

It may be mentioned that Art. 299(1) of the Constitution with which we are concerned is practically in the same terms as s. 175(3) of the Government of India Act, 1935. This Court had occasion 1to deal with s. 175 in The State of Bihar v. Messrs. Karam •

• E

' H

Chand Thapar(') It held that under s. 175(3), three conditions had to be satisfied before a binding contract against the Government could arise. These three conditions are:

(1) the contract must be expressed to be made by the Governor or the Governor- General, (ii) it must be executed m writing, and (iii) the execution should be by such persons and in such manner as the Governor or the Governor-General might direct or authorise. This Court further held in that case that s. 175(3) did not prescribe any particular mode in which the authority must be conferred and where an ad hoc authority was conferred on any person, the requirement must be held to be satisfied.

The matter was again considered by this Court in Seth Bikhrai Jaipuria v. Union of India(2) It was again emphasised that s. 175(3) of the Government of India Act, 1935, required that a contract, if it was to bind the Government, had (a) to be expressed to be made by the Governor or Governor General, (b) to be executed on behalf of the Governor or Governor General, and (c) to be executed by an officer duly appointed in this behalf and in such manner as the Governor or the Governor General directed or authorised. It was also held that the provisions of s. 175(3) were mandatory, as the object of enacting these provisions was that the State should not be saddled with liability for unauthorised contracts.

The matter was considered again by this Court in State of West Bengal v. Messrs. B. K. Monda! and Sons(') It was held that the provisions contained in s. 175(3) were mandatory. The intention of Parliament in enacting the provision was that the State should not be burdened with liability based on unauthorised contracts. The provision was made in public interest and so the word "shall" used therein must be held to make it obligatory and not directory. Further the case of Chaturbhuj Vithaldas Jasani

v. Moreshwar Prashram(4) was explained in that decision and it was held that it should be confined to its own facts in the context of the Representation of the People Act. Finally it was held in that case that s. 70 of the Indian Contract Act (No. 9 of 1872) could be invoked against the Government if the person invoking it could show that he had acted lawfully and had not intended to act gratuitously and the State had enjoyed the benefit.

Lastly this court had occasion to consider the matter again in Union of India v. A. L. Ra Ilia Ram,(5) and it was held that so long as all the requirements of s. 175(3) of the Government of India Act were fulfilled and were clear from the correspondence, s. 175(3) did not necessarily require the execution of any formal document.

(l) [1%2] l S.C.R. 827.

(2) [1962] 2 S.C.R. 880.

(3) [1962] Supp. l s.C.R. 876.

(4) [1954] S.C.R. 817.

924 SUPREME COUllT REPORTS

What was said in these cases with respect to s. 175(3) of the Government of India Act, 1935, applies with equal force to Art. 299 (I) of the Constitution. Two consequences follow from these decisions. The first is that in view of Art. 299(1) there can be no implied contract between the Government and another person, the reason being that if such implied contracts between the Government and another person were allowed, they would in effect make Art. 299(1) useless, for then a person who had a contract with Governn; ent which was not executed at all in the manner provided in Art. 299(1) could get away by saying that an implied contract may be inferred on the facts and circumstances of a particular case. This is of course not to say that if there is a valid contract as envisaged by Art. 299(1), there may not be implicacations arising out of such a contract. The second consequence which follows from the'e decisions is that if the contract between Government and another person is not in full compliance with Art. 299(1) it would be no contract at all and could not be enforced either by the Government or by the other person as a contract.

In the prsent case it is not in dispute that there never was a contract as required by Art. 299(1) of the Constitution.

Nor can the fact that the appellant bid at the auction and signed the bid-sheet at the close thereof or signed the declaration necessary before he could bid at the auction amount to a contract between him and the Government satisfying all the conditions of Art. 299(1).

The position therefore is that there was no contract between the appellant and the Government before he bid at the auction, nor was there any contract between him and the Government after the auction was over as required by Art. 299(1) of the Constitution. Further, in view of the mandatory terms of Art. 299(1), no implied contract could be spelled out between the Government and the appellant at the stage of bidding for Art. 299 in effect rules out all implied contracts between Government and another person.

The view taken by the High Court that s. 155 (b) of the Madhya Pradesh Land Revenue Code which provides for recovery of money as arrears of land revenue would therefore enure in favour of the Government and enable it to recover the deficiency cannot be sustained. That clause provides for recovery of all moneys falling due to the State Government under any grant, lease or contract and says that they shall be recoverable in the same manner as arrears of land revenue. The High Court was of the view that the word "contract'" in this clause includes an implied contract.

But if there can be no implied contract between the Government and another person in view of the mandatory provision of Art. 299(1) of the Constitution there can be no question of recovery of any money under an implied contract under cl. (b) of s. 155.

The view therefore taken by the High Court that this amount could be recovered under s. 155(b) is not correct.

. •'

This brings us to the second question, namely, whether the amount can be recovered under any other provision of law as arrears of land revenue. Jn this connection learned counsel for the State has referred us to s. 82 and s. 85 of the Indian Forest Act. The question whether the amount can be recovered either under s. 82 or under s. 85 of the Indian Forest Act read with the rules framed thereunder has not been investigated by the High Court. The view of the High Court that rr. 28 and 29 of the Forest Contract Rules apply after a contract in writing has been executed appears to be correct. But the question whether the State can still recover the amount as arrears of land revenue by virtue of the conditions of auction, even though rr. 28 and 29 do not apply has not been investigated. This question will require investigation before the petition can be finally disposed of. The appellant had claimed in para 17 of the petition that the claim of the State for recovery of the deficiency on re-sale was not covered under any other provision of law so as to make it recoverable as arrears of land revenue. That question has still to be investigated and it would be for the State to show whether the amount can be recovered under any provision of law or rules relating to forest contracts. So the matter will have to be remanded for further investigation on these lines.

We therefore allow the appeal and hold that s. 155(b) of the Madhya Pradesh Land Revenue Code does not assist the State in realising this amount as arrears of land revenue. We however remand the matter to the High Court for determining after hearing both parties whether there is any other provision of law or rules which would permit the recovery of this amount in view of the conditions of auction. In the circumstances we order parties to bear their own costs of this Court.

Appeal allowed.

K. P. CHOWDHARY

STATE OF MADHYA PRADESH & ORS

March 15, 1966

P.B. GAJENDRAGADKAR, C.J.

K.N. WANCHOO

Madhya Pradesh Land Revenue Code

s. 155(b)

Section 155(b)

s. 175(3)

India Act, 1935

Art. 299(1)

Art. 299( 1)

Art. 299(1)

Art. 299( 1)

Art. 299(1)

Art. 299(1)

(1962) 2 S.C.R. 827

(1962) 2 S.C.R 880

B.K. Molfdal

[1964) 3 S.C.R.

164

Art. 299( 1)

Art. 299( l)

s. 155

CIVIL APPELLATF. JURISDICTION

J. P. Goyal

N. Shroff

Wanchoo

Madhya Pradesh High Court

July 29, 1959

November 25, 1959

July 20, 1959

Jabalpur

s. 82

Indian Forest Act

s. 82

Art. 299

s. 155(b)

Madhya Pradesh Land Revenue Code, 1959

Art. 299

s. 155(b)

Art. 299(1)

s. 175(3)

Government of India Act, 1935

s. 175

Chand Thapar

s. 175(3)

s. 175(3)

s. 175(3)

Government of India Act, 1935

s. 175(3)

s. 175(3)

Parliament

Representation of the People Act

s. 70

Indian Contract Act

s. 175(3)

s. 175(3)

[1962] 2 S.C.R. 880

s. 175(3)

Government of India Act, 1935

Art. 299

Art. 299(1)

Art. 299(1)

Art. 299(1)

Art. 299(1)

Art. 299(1)

Art. 299(1)

Art. 299(1)

Art. 299(1)

Art. 299(1)

Art. 299

s. 155

Art. 299(1)

s. 155

s. 155(b)

s. 82

s. 85

Indian Forest Act

s. 82

s. 85

Indian Forest Act

s. 155(b)


NATl-llA AGARWALLA & ANOTHER

MUSST. JAHANARA BEGUM & OTHERS

March 15, 1966

[P. B. GAJENDRAGADKAR, c. J., K. N. WANCHOO, M.

HIDAYATULLAH, J.C. SHAH ANDS. M. S!KRI. JJ.]

Assam Non.Agricul1ural Urban Areas Tenancy Act, 1955, s. 5(1) (a)- protecrio11 to 1enants agai11st ejectment-ll'lietlier availclble where dec:re.:

for ejectment already obtciined.

A decree for cjcctment was passed against ahc appellants in November 1950 in a suit filed against them by the respondcnLc; and was later confinn cd by the High Court. 1be exccuaion proceedings began in August 1954 iUld were pending when the Assam NonAgncultural Urban Areas Tenancy Act 1955 came: into force from June 26,

1955. 1be appellants thereupon claimed the benefit of s. 5(1 )(a) of the Act (which grants protection from eviction to tenants under certain circumstances) on the ground that the protection of Seciion 5 was available not only in pending !>Uits and appeals but also in pending execution cases. This claim was rejected by the execution Coun and an appeal to the High Court was also dismissed.

On appeal 10 this Court,

HELD: 1bc prolection under Section S(l}(a) was not available: where a decree in cjectmcnt had already hecn obtained.

Section 5 ( l) begins by stating "not withsunding anything in any contract or in any la.w for 1he time being in force hut it does not include decrees for ejcct.mcnt already obtained, in the non-<>hstante clause.

Clause (a) of Section 5 (l) protects tenants of land from cjectmcot by the landlord in tho; e cases in wh; ch the tenant entitled to build on the land under his contract ha~ actually built a permanent structure within five years from the d; ite of his contract, or has without l>Uch right built with the knowledge and acquiescence of the landlord. Such tenant may not be ejected except for non-payment of rent.

Clause (a) applies alike to contracts mldc before or after the commencement of the Act but as

it intends 10 operate on the rij!hts of the landlol'd. rights ;1lrcady enforced and detcnnined cannot be 'aid to be involved and the clause must contemplate a suit and not execution proce-;:dings.

The fact that Section 14 of the Sylhct. Non-Agricultural Urban Areas Tenancy Act 1947 repeakd by the 1955 Act and Section 6( I) of hoth Assam Act 13 of 1949 and As.sam Act 3 of 1946 provided specially for execution proceedings clearly shows that where the Assam Legislature wito; hcd it, it included execution proceedings within the pr()(eclion.

Suresh Chandra Datt" v. Aslwtoslr Dulla mzcl Others A.I.R. 1960 Aso; am 24, referred to.

Q)mparini tatulc of different states is not to be commended because similarity or v:iriation in the laws of different States is not necessarily indicative of a kindred or a changed intention.

Enactments drafted by H different hands, at different times and to satisfy different requirements of a local character. seldom afford tangible or sure aid in construction. [9:!9 F~ F: 9311 E: 931 B-DI

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 893 of 1963

Appeal by special leave from the judgment and order dated August 14, 1959 of the Assam High Court in Appeal from Original Order No. 21 of 1959.

M. C. Setalvad, B. P. Maheshwari and M. S. Narasimhan, B for the appellants.

B. Sen, and P. K. Ghosh, for the respondents.

The Judgment of the Court was delivered by

Hidayatullah J. This is an appeal by special leave against an order of the High Court of Assam dated August 14, 1959 rejecting summarily an appeal in an execution case. The appellants against whom the decree for ejectment is being executed are the widow and son of one Maliram Agarwala whose father Arjun Das had taken on lease the suit land from one Mohd. Soleman, predecessor-in-interest of the respondents.

The decree was passed as far back as November 28, 1950 in a title suit filed .against the appellants and was later confirmed by the High Court.

The present execution began on August 16, 1954 and was pending in the court of the Subordinate Judge, L.A.D., Gauhati when the Assam Non-Agricultural Urban Areas Tenancy Act, 1955 (Assam Act 12 of 1955) came into force from June 26, 1955.

The appellants thereupon claimed the benefit of s. 5 of the Act which grants protection from eviction to tenants, under certain circumstances. The execution Court heard arguments and on November 12, 1957 held that the protection of s. 5 was available not only in pending suits and appeals but also in pending execution cases.

In reaching this conclusion the learned Judge followed a decision of the Assam High Court reported in Harsukh Saraqgi & Anr. v. Mashu/a/ Khemani & Anr(l) and of the Calcutta High Court in Habiba Bibi and others v. Ram Ranjan Mullick and others(2) He accordingly fixed the case for evidence to find out if there existed facts necessary for the application of s. 5 of the Act. Subsequently, the Presiding Judge having changed, the point was reopened on June 6, 1959 by the successor Judge. That learned Judge following a later decision of the Assam High Court (since reported in Suresh Chandra Datta v. Ashutosh Dutta and others)(') held that s. 5(1)(a) was not applicable to execution proceedings and the pending execution must proceed according to law. The only question in this case is whether the provisions of s. 5(l)(a) of the Tenancy Act apply to pending execution proceedings.

The Act was passed "to regulate in certain respects the relationship between landlord and tenant in respect of non-agricultural

(I) A.I.R. 1957 Assam 22.

(2) A.I.R. 1937 Cal 207,

(3) A.I.R. 1960 Assam 24.

land in urban areas of the State of Assam." It consists of 14 sec- A tions. Section 5, with which we are primarily concerned, may be read in full.

It reads : "5. Protection from eviction-

(!) Notwithstanding anything in any contract or in any law for the time being in force-

(a) where under the terms of a contract entered into between a landlord and his tenant whether before or after the commencement of this Act, a tenant is entitled to build, and has in pursuance of such terms actually built within the period of five years from the date of such, contract, a permanent structure on the land of the tenancy for residential or business purposes, or where a tenant not being so entitled to build, has actually built any such structure on the land of the tenancy for any of the purposes aforesaid with the knowledge and acquiescence of the landlord, the tenant shall not be ejected by the landlord from the tenancy except on the ground of non-payment of rent;

( b) where a tenant has effected improvements on the land of the tenancy under the terms whereof he is not entitled to effect such improvements, the tenant shall not be ejected by the landlord from the land of the tenancy unless compensation for reasonable improvements has been paid to the tenant.

(2) No tenant shall be ejected by his landlord from the land of the tenancy except in execution of a decree for ejectment passed by a competent civil court.

(3) No decree for ejectment passed on the ground of non-payment of rent shall be executed within a period of thirty days from the date of the decree and ifthe tenant pays into the Court whose duty it is to execute the decree the entire amount payable under the decree within the aforesaid period, the Court shall record the decree as satisfied."

The remaining sections may be shortly noticed before we proceed to construes. 5. The first three sections contain respectively the short title, the extent of application and the definitions of terms in the Act. Section 4 puts an obligation upon a tenant to pay rent for his holding at fair and equitable rates. Section 6 lays down how compensation for improvements in a suit for cjectment against a tenant is to be calculated and includes within improve-

' .-

) -

A . ments structures, which the tenant entitled to build has actually built after the expiry of the period of five years referred to in cl.

(a) of sub-s. (I) of s. 5. Sections 7, 8 and 9 deal with the question of enhancement of rent from different points of view.

Section 10 prohibits the realisation of any "salami". Section 11 provides that no suit for ejectment, except for arrears of rent, shall be instituted until after the expiration of one month from the date of the receipt of by the tenant of a 1111tice in writing by the landlord B

requiring the tenant to surrender possession of the land in favour of the landlord. Section 12 shows how the notices have to be served and s. 13 gives the power to make rules.

By s. 14, the Sylhet Non-Agricultural Urban Areas Tenany Act, 1917, (Assam Act

10 of 1947) was repealed.

The only question in this appeal is whether s. 5(l)(a) of the Act, which we have reproduced above, applies to execution cases in respect of decrees for ejectment granted before the coming into force of the Tenancy Act. The answer to this question will determine which of the two orders passed by the respective pre- D siding Judges was right.

Two methods of approach were adopted by counsel in this appeal. One was to construe the words of the fifth section taken by themselves or in comparison with those employed in other Acts of the Assam Legislature. The second was to compare and contra! s. 5 of the Assam Act with enactments in rent control E Acts of other States. The second method, although sometimes instructive, is not to be commended because similarity or variation in the laws of different States is not necessarily indicative of a kindred or a change intention. Enactments drafted by different hands, at different times and to satisfy different requirements

of a local character, seldom afford tangible or sure aid in construction.

We would, therefore, put aside the Rent Control Acts of Madras, Bihar, Delhi and other States, because in these States the problem of accommodation in relation to the availability of lands and houses and the prior legislative history and experience, cannot be same as in Assam. We shall however, refer to other Rent Control Acts of the Assam Legislature because they do not suffer from this weakness and may throw some light on how the legislature was accustomed to view such matters. But before we do so we shall consider s. 5 taken by itself.

The section consists of three sub-sections and it is helpful to view the provisions backwards, that is, from the last subsection to the first. The third sub-section deals with decree of ejectment passed on the ground of non-payment of rent.

It affords a last chance to the tenant to retain the land of his tenancy by making such a decree unexecutable for a period of 30 days from its date so that the tenant may, if he cares, deposit

the amount ·.>f the decree in the court which will execute that A decree.

On the tenant so paying, the decree is recorded as satisfied.

This sub-section must apply to all executions which come within its terms because of the clear language "no decree

- , for ejcctment . , .. shall he executed" and "the Court shall record the decree as satisfied". These arc peremptory words and they do not admit of any exception.

All decrees for ejectment in B which thirty days' time had not passed were affected hut, it is clear, that decrees whkh did not come within the terms of the sub-section remained executable.

We may now examine the second sub-section which also takes away some rights of landlords but leaves them free to execute decrees other than those on which the section places an embargo, C That sub-section provides that no tenant shall be ejected by his landlord from the land of his tenancy except in execution of a decree for ejectment passed hy a competent civil court.

Although this sub-section takes away the right of cjcctment in other wa)s, if any, it recognises that cjectment is possible provided there is a decree of a competent civil court. D

We may now consider the first sub-section. Certain matters appear on its face. The sub-section does not speak of an ejectment decree, but of the right of the landlord to eject his tenant.

It begins by stating .. notwithstanding anything in any contract or in any law for the time being in force" but it does not include decrees for ejectmcnt already obtained, in the 11011-obstante clause.

Such decrees could have easily been named, to include them within the protective pro\'isions, but they were not.

The operati\'e parts of the sub-section protect tenants under two circumstances which are mentioned as (a) and (b). Taking (b) first : if the tenant effects improvements on the land which he is not entitled to effect. the landlord may not eject him unless he pays reasonable comrensation. Who will assess the compensation is laid down in s. 6 but that section specifically mentions a suit for cjectment and not execution proceeding.

All this seems to suggest that s. 5 (i) (b) is intended to operate on rights of the landlord which arc being enforced hy a suit hut not on rights already enforced and determined.

By speaking of the curtailment of the landlord's right and hy omitting to provide for decrees into which the rights merge and by mentioning the provisions of s. 6 arc to be irl\oked in a suit for ejectmcnt, it appears that the decrees as such are not put under the same embargo.

So far there is nothing in s. 5 which would suggest that its pro, isions cover decrees in which the rights had passed before the coming into force of the Act.

It remains to see whether s. 5 (l)(a) strikes a different note.

Part (a) ofs. 5 (I) is constnrcted

f -

on very similar lines and does not admit a different approach.

It protects tenants of land from ejectment by the landlord in those cases in which the tenant entitled to build on the land under his contract has actually built a permanent structure within five years from the date of his contract, or has without such right built with the knowledge and acquiescence of the landlord. Such tenant may not be ejected except for non-payment of rent. Clause (a) applies alike to contracts made before or after the commencement of the Act. This creates some doubt but as it intends to operate on the rights of the landlord seeking to enforce them against a tenant, who claims that he cannot be ejected, the clause must again contemplate a suit and not execution proceedings. There is nothing to distinguish cl. (a) from cl. (b) in so far as execution of decrees already granted is concerned.

The decision of the Assam High Court in Suresh Chandra v.

Ashutosh Dutta(') expressed the same conclusion but on a slightly different reasoning. The conclusion is further strengthened when one reads the cognate sections of the earlier Assam Acts passed by the same Legislature. Section 14 of the Sylhet Non-Agricultural Urban Areas Tenancy Act, 1947 (Assam Act 10 of 1947) now repealed by the Act we are considering, provided in clear terms that proceedings in execution were included. It reads as follows:

"14. Pending suits.

The provisions of this Act shall have effect in respect of all suits or proceedings in execution, for ejectment of a person, who would under the provisions of this Act be an occupancy tenant, which are pending at the date of commencement of this Act."

Similarly, s. 6(1) of the Assam Urban Areas Rent Control Act 1949 (Assam Act 13 of 1949) and s. 6(1) of the Assam Urban Areas Rent Control Act, 1946 (Assam Act 3 of 1946) provided specially for execution proceedings. These two sections read the same and only one of them may be read. Section 6 (I) of Act 13 of 1949 read:

"6. Bar against passing and execution of decree and orders.

(a) No order or decree for the recovery of possession of any house shall be made or executed by any Court so long as the tenant pays rent to the full extent allowable under this Act and perform the conditions of the tenancy:

(I) A.I.R. 1960 Assam 24.

Provided that nothing in this sub section shall apply in a suit or pro ceedings for eviction of the tenant from the house-

( a) where the tenant has done any act contrary to the provisions of clause (m), clause (o) or clause (p) of section

108 of the Transfer of Property Act, 1882 or 10 the spirit of the aforesaid clauses in areas where the Act does not apply, or

(b) where the temnt has been guilty of conduct which is a nuisance or an annoyance to the occupiers of the adjoin ing or neighbouring houses, or

(c) where the house is bona fide required by the landlord either for pur poses of repairs or re-building, or for his own occupation or for the occupa tion of any person for whose benefit the house is held, or where the landlord can 'how any other cause which may be deemed satisfactory by the Court, or

(d) where the tenant sublets the house or any part thereof or otherwise transfers his interest in the house or any part thereof without pcm1ission in writing from the landlord.

(1966] 3 S.C.R.

These enactments, which arc quite explicit, show that where the Assam Legislature wished it, it included execution proceedings within the protection. Being aware that if execution proceedings are to be included they need to be mentioned and having at hand

the former sections as models, the departure appears to be deli berate. The language chosen places the right under an embargo G but does not say that decrees already won would become unexecu table thus stating clearly that they were not to be affected. The decision under appeal was, therefore, right.

The appeal has no force; it fails and will be dismissed with costs. . Appeal di.m1issed.

' -·

MUSST. JAHANARA BEGUM & OTHERS

March 15, 1966

P. B. GAJENDRAGADKAR

K. N. WANCHOO

HIDAYATULLAH, J

C. SHAH

Urban Areas Tenancy Act, 1955

s. 5(1)

June 26,

1955

s. 5(1 )(a)

Section 5

Section 5

Section 14

Section 6( I)

Assam Legislature

M. C. Setalvad

B. P. Maheshwari

M. S. Narasimhan

B. Sen

P. K. Ghosh

Hidayatullah

August 14, 1959

Maliram Agarwala

Arjun Das

Mohd. Soleman

November 28, 1950

August 16, 1954

June 26, 1955

s. 5

November 12, 1957

s. 5

Assam High Court

Calcutta High Court

s. 5

June 6, 1959

s. 5(1)(a)

s. 5(l)(a)

Assam

Section 5

Section 4

Section 6

s. 5

Sections 7, 8 and 9

Section 10

Section 11

Section 12

s. 13

s. 14

s. 5(l)(a)

s. 5

Madras

Bihar

Delhi

Rent Control Act

s. 5

s. 6

s. 5

s. 6

s. 5

s. 5

Section 14

s. 6(1)

Assam Urban Areas Rent Control Act 1949

s. 6(1)

Section 6

section

108

Transfer of Property Act, 1882


; H

STATE OF WEST BENGAL

MOTILAL KANORIA

March 15, 1966

[P. B. GAJENDRAGADKAR, C. J., K. N. WANCHOO, M. HIDAYATULLAH, J. C. SHAH AND S. M. S!KRI, JJ.j.

Imports and Exports (Control) Act 18 of 1947, s. 5-lmport (Control) Order No. 17 of 1955, cl. (5)-Goods imported under licence sold without permission from Controller-Such sale lVhether an offence.

Code of Criminal Procedure, 1898, s. 531-Error, ommission of irregu larities in complaint-Application of s, ectlon.

The respondent was the director of a company and also a partner in the firm managing it.

On behalf of the company he made an application for an import licence under the Imports and Exports (Control) Act 1947, and in May 1955 the licence was granti:d.

At that time the grant of licence was governed by an Order issued in 1948 issued under s. 32 of the Act, and under that Order the Controller of lmoorts and Exoorts could attach conditions to licences issued by him. According to the terms of the licence granted to the aforesaid company the good. imported under the licence were to be employed for the company's own use.

In December 1955 the Imports (Control) Order No. 17 of 1955 was passed.,

Under cl. S (3} of the Order certain conditions \vere deemed to be. part of every licence and under cl. 5 ( 4) every licencee was enjoined to. observe the condition of the licence. In 1956 the respondent secured a revalidation of the licence issued to the company.

Thereafter when the goods arrived they were sold by the respondent to another party.

A complaint was filed against the respondent and the company for an offence under s. 5 of the Imports and Exports (Control) Act 1947 read with cl.

(5) of the Imports (Control) Order 1955.

The respondent faced the trial as an accused and participated in the proceedings without any objec .. tion. He was convicted by the trial Magistrate but the High Court acquitted him on the ground that at the time when the transaction of sale was entered into i.e. in December 1956, breach of a condition of licence did not constitute an offence under s. 5 of the. Act of 1947.

The State appealed to tlhis Court. The questions that fell for determination were :

(i) whether by disposing of the imported goods without permission any offence was committed; and (ii) if so whether the respondent was personally liable.

HELD :

(i) Although s. 5 of the Imports and Exports (Control) Act, 1947 did not, before its amendment in 1960, specially provide that breach of a condition of licence would be deemed to be a breach of the Imports (Control) Order, yet by virtue of els. 5(3) and (4) read with cl. 12 of the Imports (Control) Order 1955 the transfer of a licence was a breach of the said order and constituted an offence. No distinction could validly be made in the circumstances of this case between transfer of a licence and transfer of goods imported under it. [945 E-G; 946 B-CJ

C.T.S. Pillai v. H. P. Loh/a & Anr. A.I.R. 1957 Cal. 83, referred to.

East India Conimercial Co. Ltd. Calcutta v. Collector of Customs, Cal .. cutta, [1963] 3 S.C.R. 338, distinguished. 933

SVPREME COURT REPORTS

[ 1966] 3 S.C.R.

Stare v. Abdul Aziz (1964] 1 S.C.R. 830, applied.

(1i) 1ne fact that the licence was obtained by the re.1pondent while ... the l 9-l8 Order \\'as in operation did not help the respondent as un<lcr

cl. 12 of the 1955 Order ;1ny licence i-; sued under any of the earlier ....

Orders \\a'i deen1cd to have been issued under the corresponding provisions of the 1955 Order. 1110 goods under the licence v.erc, moreover, imported and sold after 1955. '!he licence itself ""' revalidated in !956 and that could only have been done by power derived under cl. 7 of the B 1955 Order. (945 B, DJ

(iii) The respondent was responsible for the issuance of the licence and for the transfer of the goods imported under ic.

He v..as therefore rcspon<ible principally along with the company. The complaint no doubt was not clear as lo whom was really meaot to be proseeulcd blll it de.1cribed lhe respondent as an accused 10 which he did 001 objecl at his trial.

The error. omission or irregularity, if any, in the con1plaint was cur;..1hJe C under s. ~37 of tho Code uf Criminal Procedure and in the present Cale could nol be said 10 have led to a foilure of justice. (946 E-111

CRrnlNAL APPELLATF JCRtSOICTIO:->: Criminal Appeal No. 108 of 1964.

Appeal from the jud;?ment and order dated September 4, 1963 of the Calcutta High Court in Criminal Revision No. 396 of 1962.

Debratr1 .\fookerjee, B. L.

Mehta, R.

Dhehar and B. R. G. K. Aclwr, for the appellant.

D .. !\'. Mukherjee, for the respondent.

The Judgment of lhc Court was delivered by

Hidayatullah, J. This is an appeal by certificate under Art. 134 (I) (c) of the Constitulion, against the judgment of the High Court of Calcutta dated September 4, 1963 by which the conviction of the respondent Motilal Kanoria under s. 5 of the Imports and Exports (Control) Acl, 1947 and the senlcnce of fine of Rs. 200/- (in default simple imprisonment for one monlh) imposed by the

Presidency Magistrate, 6th Court, Calculta, were set aside and an acquittal was enlcred. The facts of the case are not in conlroversy and may therefore be slalcd briefly.

Mo1ilal Kanoria was a director of Lachminarayan Jule Manufacluring Co. Ltd., Calcutta.

The Company was managed by a firm of the name of Mukhram Lachminarayan and Molilal Kanoria was one of the partners of the firm.

The Company and the Managing Agents had a common address in Calcutta.

Motilal Kanoria used to sign on behalf of the Managing Agents :ind also generally to deal with the affairs of the Company. All transaclions in this case were by Motilal Kanoria and he had signed the documents to which reference will be made presenlly.

In February 1955 the Governmcnl of India approved of the proposal of the Company to manufacture hackle and combing pins and sanctioned the import of plant and machinery for the

• >

STATE v. KANORIA (Hidayatullah, J.) 935

purpose. The Company was permitted to apply to the Chief Controller of Imports, New Delhi for a licence. The letter of Government is Ex. 2 dated February 4, 1955. On February II. 1955 the Company applied to the Chief Controller of Imports, New Delhi, on the proper application form, for an import licence.

In that application the Company stated that the machinery was to be installed or used at their Mills at Konnaggar, Eastern Railway (Ex. I). On May 26, 1955 a licence was issued (Ex. 3). The licence read as follows:-

"This licence is issued subject to the conditions to the goods licensed as detailed in the Policy Book for the current licensing period and any public notices that may be issued in this behalf from time to time.

LICENCE NO. 035925

Counterfoil

Not available for foreign exchange unless authorised D by Reserve Bank of India.

IMPORT TRADE CONTROL

(Valid for all India Ports)

(Not transferable except under a letter of authority from the authority who issued the licences or from any Import Trade Controller).

Messrs. Shree Luchminarain Jute Manufacturing Co.

Ltd., of 59, Netaji Subhas Road, Calcutta-I. are hereby authorised to Import the goods of which particulars are given below:-

!. Country from which consigned: West Germany.

2. Quantity & Description of goods:

3. Approximate value C.I.F.

4. Period of shipment:

5. Name & Address of Manufacturer Shipper or Suppliers:

Machinery as per list attached for the manufacture of Hackling & Combing pins.

Rs. 1,88,000/- (Rupees

One Lakh and Eighty eight thousand only)

Revalidated upto 31st May 1957.

M/s. Schunacher Metal Works Aktiengeschellacheft, Aachen, Germany.

936 SUPREME COUllT REPORTS

6. Limiting factor for purpoe of clearing through Customs: Value

7. Name of actual user in India

[I 966] 3 S.C.R.

Self.

This licence is granted under Government of India, late Commerce Department Notification No. 23. ITC/43 dated the I st July 1943 as continued in force by the Imports and Exports (Control) Act 1947 18 of 1947) and subject to the rules and orders issued thereunder. This licence is also without prejudice to the applications of any other prohibitions or regulations affecting the importation of the goods "hich may be in force at the time of their arrival.

Sd.

Illegible Section Officer

26-5-55

for Chief Controller of Imports and Exports.

D 26-5-1955.

Issued from file No. L. IV/49 (11) CG/55. (Space for Endorsements by Import Trade Control Authorities)

This licence is issued with an initial validity period of one year from the date of issue.

It will be revalidated at or before the end of the said period of one year, for a further period of two years, provided satisfactory evidence is produced that the order for the goods has been accepted by the foreign suppliers and a firm contract is made within the initial period of one year. In no case, however, will the validity period extend beyond three years from the date of issue.'' In the covering letter, which was sent when forwarding the licence, the Chief Controller said inter a/ia,- ..

(3. The licence is granted to you subject to the following conditions:-

(a) In case the project involves any capital issue and if such capital issue is not sanctioned the licence is liable to cancellation.

(b) That if any sanction to the project is necessary under the laws of the Central, Provin-

• •

.. '

' ,.

STATE v. KANORIA (Hida, vatullah, I.) 937

cial or a State Government the same should be obtained and the position reported to this office by the licensee; in the absence of such sanction being received the licence is liable to cancellation.

4. The licence is liable to cancellation if particulars as to progress of time in accordance with the detailed instructions contained in the accompanying slip are not furnished.

5. The Government do not guarantee for supply of raw materials required for manufacture of the goods.

On June 19, 1956 the Company asked for "revalidation" of the licence and the licence was extended to May 31, 1957. This extension is mentioned in the licence above reproduced at No. 4.

On December 13, 1956 the Company entered into an agreement D (Ex. 25) with Shalimar Wood Products (P) Ltd. of Calcutta for the sale of the machinery imported by the Company. The sale, it is submitted, was at invoice price and there was no profit. On the arrival of the machinery in February of the following year the Company authorised Shalimar Wood Products to receive the shippin& documents from the Company's bankers and to clear it from the Docks. The plant and machinery were then cleared by the E Agents of the Shalimar Wood Products and the latter took them with a view to installing them in their own factory.

On July 30, 1958 the Company wrote a letter (Ex. 7) to the Chief Controller of Imports informing him that owing to the death of their director of Sawal Ram Kanoria who was interested in the production of the said pins the Company was compelled to F sell the imported plant and machinery to Shalimar Wood Products. (P) Ltd., Calcutta and asked for the approval of the transaction.

The Chief Controller of Imports in reply pointed out that permission ought to have been obtained before the transfer and that the Company had apparently committed a contravention of the import licence. A report was made to the police for investigation G and later a complaint under s. 5 of the Import and Exports (Control) Act, 1947 was filed in the Court of the Chief Presidency Magistrate, Calcutta, by the Deputy Chief Controller of Imports and Exports.

Lachminarain Jute Manufacturing Company was named as the accused "represented by Shri Motilal Kanoria". In paragraph 2 of the complaint the Company was stated to be the accused but in later paragraphs of the complaint Motilal Kanoria was named H as the accused. In the prayer it was requested that the court should summon "accused Motilal Kanoria representing the Company and the Managing Agents" to answer the charge of a breach of the lJSupCI/66-14

SUPJ.BMB COURT REPORTS

[ 1966] 3 S.C.R.

conditions of the licence which constituted an offence under s. 5 of the Imports and Exports (Control) Act, 1947 read with clause

(5) of the Imports (Control) Order No. 17 of 1955, dated December 17, 1955.

Motilal Kanoria appeared at the trial, was questioned as an accused, pleaded not guilty and stood the trial. He does not appear to have objected to being arraigned as an accused person -a point he took later in the High Court and has taken before us.

The prosecution examined a large number of witnesses and filed documents to prove the above facts none of which is now denied.

The Presidency Magistrate, 6th Court, Calcutta, convicted Kanoria under s. 5 of the Imports and Exports (Control) Act, 1947 for contravention of clause (5) of the Imports (Control) Order, 1955 and sentenced him to a fine of Rs. 200/· or simple imprisonment for one month. On revision the High Court acquitted him but certified the case as fit for appeal to this Court and the present appeal ii the result.

As the prosecution is in respect of an offence under s. 5 of the Imports and Exports (Control) Act, 1947, we shall begin by examining what the ingredients of that offence are. Under the scheme of that Act there is a power to prohibit or restrict imports and by s. 3 the Central Government is enabled to make provision, by order pnblished in the Official Gazette, for prohibiting, restricting or otherwise controlling them. Section 5 prescribes penalty for contravention of an order. The section, as amended by Act 4

1960, is set down here

"5. If any person contravenes or attempts to con travene, or abets a contravention of, any order made or deemed to have been made under this Act or any condition of a licence granted under any such order, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Sea Customs Act, 1878, as applied by sub-section (2) of Section 3, be punishable with imprisonment for a term which may extend to one year, or with fine, or with both".

(The words underlined were introduced in 1960).

The complaint in this case was filed after this amendment. Diffe rent orders at different times were passed by the Central Government under s. 3 and a word may be said about the orders of 1943 and 1948, although on the date of the transfer of machinery (December 13, 1956) only the order of 1955 was in force.

The first order was made under sub-rule (3) of rule 84 of the Defence of India Rules in force in 1943 (Notification No. 23 I.T.C./ 43 dated !st July, 1943). That order was general and there was no provision authorising the imposition of conditiom in the liamcc, the breach of which would be deemed to be a breach of the order.

STATE v. KANORIA (Hidayatullah, !.) 939

' A In 1948 another order was issued under s. 3 (Notification NO:-2 -"' I.T.C. dated 6th March, 1948). It provided for imposition of conditions but the provisions of the order did not indicate that

• .,. any particular condition would be deemed to be included in a licence if not expressly included. The provisions of that order may be read here: B

"In exercise of the powers conferred by sub-section (1) and sub-section (3) of section 3 of the Imports and Exports (Control) Act, 1947 (18 of 1947), the Central Government is pleased to make the following order namely:-

(a) Any officer issuing a licence under clauses

(viii) to (xiv) of the notification of the Government of India in the late Department of Commerce No. 23 I.T.C./43, dated the 1st July, 1943, may issue the same subject to one or more of the conditions below:

(i) that the goods covered by the licence shall not be disposed of or otherwise dealt with without the written permission of the licensing authority or any person duly authorised by it;

(ii) that the goods covered by the licence on importation shall not be sold or distributed at a price more than that which may be specified in any directions attached to the licence;

(iii) that the applicant for a licence shall execute a bond for complying with the terms subject to which a licence may be granted;

(iv) that the licence shall not be transferable except in accordance with the permission of the licensing authority or a person duly authorised by it;

(v) that such other conditions may be imposed which the licensing authority considers to be expedient from the administrative point of view and which are not inconsistent with the provisions of the said Act.

(b) Where a licensee is found to have coatravened the order or the terms and conditions embodied in or accompanying a licence, the

SUPREME COURT lliPOllTS

appropriate licensing authority or the Chief Controller of Imports may notify him that, without prejudice to any penalty to which he may be liable under the Imports and Exporti (Control) Act, 1947 (18 of 1947), or any other enactment for the time being in force he shall either permanently or for a specified period be refused any further licence for Import of goods."

By this order the licensing authority was given the power to include conditions in a licence.

On December 7, 1955 an order was issued (Notification No. 17/55 dated December 7, 1955). It consolidated all the rul~ in one place and by clauie 12 read with Schedule IV repealed the earlier two orders and aome others but while effecting this re pea,

it added a saving clause- -

"Provided that anything done or any action taken, including any appointment made or licence issued under any of the aforesaid Orders, shall be deemed to have been done or taken under the corresponding provision of this Order."

The order of 1955 also included several new provisions regarding conditions which may be introduced in licences and others which would be deemed to be so introduced. Conditions relevant here

may be noticed.

"5. Conditions of Licence. (I) The licensing authority issuing a licence under this Order may issue the same subject to one or more of the conditions stated below:-

(i) that the goods covered by the licence shall not be disposed of, or otherwise dealt with, without the written permission of the licensing authority or any person duly authorised by it;

(ii) that the goods covered by the licence on importation shall not be sold or distributed at a price exceeding that which may be specified in any directions attached to the licence;

(iii) that the applicant for a licence shall execute a bond for complying with the terms subject to which a licence may be &ranted. (2)

A . '

STATE v. KANORIA (Hidayatullah, I.) 941

(3) It shall be deemed to be a condition of every such licence, that:

(i) no person shall transfer and no person shall acquire by transfer any licence issued by the licensing authority except under and in accordance with the written permission of the authority which granted the licence or of any other person empowered in this behalf by such authority.

(ii) that the goods for the import of which a licence is granted shall be the property of the licensee at the time of import and thereafter upto the time of clearance through Customs. ·

(iii) the goods for the import of which a licence is granted shall be new goods unless otherwise stated in the licence.

( 4) The licensee shall comply with all conditions imposed or deemed to be imposed under this clause."

Conditions 5 (I) (i), (ii) and (iii) and 5 (3) (i) are the same as conditions (a) (i) to (iv) of the 1948 Order but 5 (3) (ii) and (iii) and 5 (4) are new. Conditions 5 (3) (i), (ii) and (iii) become a part of every licence and further the licensee has to comply with all the conditions imposed or deemed to be imposed under clause 5. The effect of these clauses has to be considered in relation to the licence granted in this case but in this context the provisions of clause 7 are also relevant and the clause may be set down here:

"7. Amendment of Licence.--

The licensing authority may, of its own motion or on application by the licensee, amend any licence granted under this Order in such manner as may be necessary to make such licence conform to the provision of the Act or this Order or any other law for the time being in force or to rectify any errors or omissions in the licence; Provided that the licensing authority may, on request by the licensee, amend the licence in any manner consistent with the Import Trade Control Regulations." ·

942 SuPUME OOUJ.T UPOlTS

(196•) 3 S.C.R.

Much of the argument in tits case is based on the dates of these notifications and of the amendment of the section 5 of the Act, considered in relation to the dates on which the several facts in this case took place. The Presidency Magistrate applied the Order of 1955 because the licence was "revalidated" on June 27, 1956, and according to him, this was apparently done under powers derived from clause 7 of that Order. According to the Presidency Magistrate the Company had imported the plant and machinery for its own use (vide No. 7 of the licence) and this was an express condition of the licence.

He also pointed out that the licence was expressly made subject to such restrictions as might be imposed from time to time and the Order of 1955 imposed conditions which made the transfer of machinery an offence being a breach of subclause (3) clause (5) of the 1955 Order. The High Court held that s. 5 of the Act as it stood on December 13, 1956 when the alleged offence was committed, did not make breach of a condition of a licence an offence and, therefore, there was no offence.

The Division Bench relied principally on the observations of Sen and Mitter JJ. in C. T. S. Pillai v. H. P. Lohia and Anr.(1) to the following effect :

"It is clear, therefore, that the section penalises only contravention of any order made or deemed to have been made under the Act. But the question is whether contravention of a condition imposed by a licence issued under the Act or issued under a statutory order made under the Act is also an offence under section 5, Imports and Exports (Control) Act, 1947. Although license is granted under a statutory order made under the Act and conditions may be imposed in the license under another statutory order made under the Act, it is difficult to hold that the license or the conditions in the license amount to an order made or deemed to be made under the Act.

Notification No. 23. l.T.C./43 dated 1-7-1943 merely provides that no goods shall be imported except goods covered by sr.ecial license issued by an authorised officer.

Notification No. 2-1.T.C./48 dated 6-3-1948 authorises a licensing officer to impose one or more conditions prescribed in that order and a licensing officer, therefore, may impose a condition in view of the provision of Notification No. 2-1.T.C./48. But if the licensee contravenes the condition imposed by the license it can hardly be said that he has contravened the order under this Act, that is, the Notification No. 2-1.T.C./48. The order No. 2-1.T.C./48 does not directly impose any duty but it gives power to the licensing officer to impose certrain conditions. But contravention of condition im-

(1) A. I. R. 1957 Cal. 13.

\ H

' F

) H

STATE v. KANORIA (llidayatullah, J.) 943

posed by the licensing officer cannot prima facie be regarded as contravention of the notified order itself. ...

When there is a special license covering certain goods and there is a condition imposed in the special license it cannot be said that by breach of the condition imposed in the special license it cannot be said that by breach of the condition there has been any breach of Order 23- I.T.C./43 or ofthe subsequent Notification No. 2-I.T.C./

48. It may be mentioned that the difficulty apparently was realised in Pakistan and therefore the Imports and Exports (Control) Act, 1947, was first amended by an ordinance and then by the Imports and Exports (Control) Act, 1950, of Pakistan. Section 3(2) of that Act provides that 'no goods of the specified description shall be imported or exported except in accordance with the conditions of a license to be issued by the Chief Controller or any other Officer authorised in this behalf by the Central Government. The penal section, section 5, refers not only to contravention of an order or Rule made under the Act but also to the contravention of any condition imposed by the License ....... .

It is clear that unless the penal section itself includes the contravention of a condition of the license as an offence, it is not possible to hold that the licensees by merely committing breach of a condition imposed by a license has committed the offence which consists in contravention of an order made or deemed to be made under this Act. In this view, therefore, although the reasons given by the learned Magistrate have not been considered by us as sound, it is clear that the prosecution of the opposite party under s. 5 of Imports and Exports (Control) Act, 1947, must fail".

These observations were referred to by the majority decision of this Court in East India Commercial Co. Ltd., Calcutta

v. Collector of Customs, Calcutta (1) in the following words :-

" ........ The Criminal Revision (No. 1124 of 1953) came up before a division Bench of the Calcutta High Court, consisting of Mitter and Sen. JJ., and the learned Judges, by their judgment dated March 3, 1955, dismissed the revision holding that there had been no contravention of the order made or deemed to be made under the Act. The learned Judges construed s. 5 of the Act and held that the said section penalised only a contravention of an order made or deemed to have been made under the said Act, but did not penalise

(!) [196'1 3 S.C.R. 338 at 356, 369, 372.

944 SUPkBME COUllT RBPORTS

the contravention of the conditions of licence issued under the Act or issued under a statutory order made under that Act, and dismissed the revision.

It will be seen from this order that it does not pro- B vide for a condition in the licence that subsequent to the import the goods should not be sold. Condition (v) of cl. (a) only empowers the licensing authority to impose a condition from an administrative point of view. It cannot be suggested that the condition, with which we are now concerned, is a condition imc posed from an administnrtivc point of view, but it is a condition which affects the rights of parties.

It follows from the above that the infringement D of a condition in the licence not to sell the goods imported to third parti~. is not an infringement of the order ............... .

The Division Bench considered that the earlier Calcutta case was approved.

Following the above observations the learned Judges applied them to this case. They noted that the breach of a condition became an offence only after the 17th of March,

1960 when Act 4 of 1960 was passed and as it could not be an offence before, even if the Order of 1955 deemed certain conditions to be a part of the licence, their breach was not an offence.

They distinguished the decision of the Bombay High Court in State v. Abdul Aziz( ) on the ground that the licence in that case was granted on January 2, 1956, that is to say, after the coming into force of the Order of 1955. The Division Bench therefore held that no offence was committed.

Adverting also to the fact that there was confusion as to which of the two-the Company or Motilal Kanoria-was the accused the learned Judges held that the Presidency Magistrate was further wrong in convicting Kanoria although the prosecution was really against the Company.

The questions that arise in this case are really two and they arc :

(a) whether by disposing of the plant and machinery without permission an offence was H committed; and

(I) A.I.II.. 1962 l!om. 24.

STATE v. KANORIA (Hida, vatullah, J.) 945

(b) if so, by whom ?

 In our judgment both these questions must be answered in favour of the State of West Bengal. It was overlooked in the High Court that under the proviso to clause 12 of the Order of 1955 the licence, although granted before that Order was brought into force, came under its terms. The words of that proviso refer to a _'licence issued' under any of the earlier orders as somethiag dime or action taken under the corresponding provision of the 1955 Order. The corresponding conditions were those we have extracted from the Order of 1955 and set down earlier. By the terms of the licence (item No. 7) the licensee undertook to use the goods himself.

He further bound himself by "any other prohibitions or regulations affecting the importation of the goods/ which may be in force at the time of their arrival" and not to transfer the licence "except under a letter of authority from the authority who issued the licence or from any Import Trade Controller". The goods arrived long after the Order of 1955 came into force.

By the operation of the revalidation under clause 7 and the conditions of the licence, even as they were, the provisions of the Order of 1955 were attracted. As clauses 5(3) and ( 4) became a part of the licence, their breach was a breach of the Order and an offence was, therefore, committed.

It was decided in Abdul Aziz v. State of Maharashtra(') (on appeal from the case sub. nom. State v. Abdul Aziz of the Bombay High Court) that if the licence was issued under the Order of 1955,) &- the provisions of sub-cl. ( 4) of cl. 5 made it obligatory upon the licensee to comply with all the conditions imposed or deemed to be imposed under clause 5 and that the contravention of any condition of a licence amounted to the contravention of the provision of sub-cl. (4) of cl. 5 of the Order and consequently to the contravention of the order made under the Imports and Exports (Control) Act and therefore the licensee became liable to the penalty under s. 5 of the Act. The only distinction between Abdul Aziz's case and this lies in the fact that the licence in the former was given after, and in this case before, the coming into force of Order of 1955.

But this distinction loses significance when the provisions of clause 12 of the Order of 1955 are read in conjunc-' • lion with the licence itself. Between them they bring into operation clause 5 of the Order of 1955 and the result reached by this Court in Abdul Aziz's case obtains here also. The fact that the licence was revalidated presumably under clause 7 of the Order of 1955 further fortifies the above conclusion. The submission of Mr. D. N. Mukherji that this extension was under the last paragraph of the licence is not the whole of the matter. A power might have been reserved by that paragraph but it could only be

(I) (1964] I S.C.R. 830,

SUPREME COURT REPORTS

(1966) 3 S.C.R.

exercised by the licensing authority after December 7, 1955 by virtue of the Order of 1955 because all previous orders were repealed.

There was thus an offence under s. 5 of the Imports and Exports (Control) Act for the breach of clause 5 of the Order of 1955. / Mr. D. N. Mukherjee seeks to distinguish between the transference of the licence and that of the machinery. This argument is not acceptable to us. The licence created its own conditions that the goods would be used by the licensee and the transfer of goods in circumstances is tantamount to transfer of the licence. It would be refining matters too finely to distinguish between the transfer of the licence and the transfer of the goods. Even if a distinction can be drawn the licence was for the actual use of the licensee. When the goods were sold condition No. 7 was broken and so would be a breach of the 1955 Order which had come Into force.

The final question is whether Kanoria can be said to have committed any offence and whether he was prosecuted at all{ .' The section as amended in 1960 makes the abetment of contra- ' Yention an offence. If the amendment applied because the pro- D secution was after the amendment (a point we need not decide) Kanoria would be definitely guilty at least of abetment. Jn our opinion it is not necessary to decide this point because Kanoria is guilty as a principal offender and the section as it originally stood, must apply to him. The section said "if any person contravenes any order made or deemed to have been made". . . . . . . .

E "he shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with both." The question is whether Kanoria was such a person.

Kanoria was responsible for the issuance of the licence and for the transfer of the goods I b covered by the licence.

He wrote every document connected with these two matters. He was, therefore, responsible princi- F pally along with the Company. In fact the Company could not have committed the offence of contravention if Kanoria had not acted as he did. Abctment, of which the section now speaks, is an act of a different kind. The act of Kanoria was not abetting any one else but one which by itself led to the contravention of the Order of 1955 and he was, therefore, liable principally.

The complaint no doubt was not clear as to who was really meant G to be prosecuted but it described Kanoria as an accused. Under the Explanation to s. 537 of the Code of Criminal Procedure no error omission or irregularity in the complaint should have led 11 to a 'reversal of the finding that Kanoria was guilty unless there was a failure of justice. The objection that he was not named as an accused throughout the complaint and that he was thus H not an accused could have been raised at the trial but it was not.

On the contrary Kanoria entered a plea of not guilty on his own behalf and also stood examination as an accused. It is obvious

I '

H

STATE OF WEST BENGAL

MOTILAL KANORIA

March 15, 1966

P. B. GAJENDRAGADKAR

K. N. WANCHOO

M. HIDAYATULLAH, J.

C. SHAH

s. 5

Code of Criminal Procedure, 1898

s. 531

s. 32

cl. 5

s. 5

s. 5

s. 5

cl. 12

[1963] 3 S.C.R. 338

(1964] 1 S.C.R. 830

cl. 12

cl. 7

CRrnlNAL APPELLATF JCRtSOICTIO:-

R.

Dhehar

B. R. G. K. Aclwr

Hidayatullah

Art. 134

High Court of Calcutta

Motilal Kanoria

s. 5

Mo1ilal Kanoria

Calcutta

Mukhram Lachminarayan

Molilal Kanoria

Motilal Kanoria

India

New Delhi

February 4, 1955

February II. 1955

Konnaggar

May 26, 1955

Reserve Bank of India

Aachen

Germany

June 19, 1956

May 31, 1957

December 13, 1956

Shalimar Wood Products (P) Ltd. of

Shalimar Wood Products

July 30, 1958

Sawal Ram Kanoria

Shalimar Wood Products.

s. 5

Chief Presidency Magistrate, Calcutta

Lachminarain Jute Manufacturing Company

s. 5

December 17, 1955

Kanoria

s. 5

s. 5

s. 3

Central Government

Section 5

Sea Customs Act, 1878

Section 3

s. 3

st July, 1943

s. 3

6th March, 1948

section 3

Government of India

1st July, 1943

December 7, 1955

Schedule IV

clause 5

clause 7

section 5

June 27, 1956

clause 7

s. 5

Sen

Mitter

section 5

Pakistan

Section 3(2)

section 5

s. 5

Calcutta High Court

Sen.

March 3, 1955

s. 5

17th of March,

1960

Bombay High Court

January 2, 1956

State of West Bengal

clause 12

clause 7

cl. 5

clause 5

cl. 5

s. 5

Abdul Aziz

clause 12

clause 5

clause 7

D. N. Mukherji

SUPREME COURT REPORTS

(1966) 3 S.C.R.

s. 5

clause 5

D. N. Mukherjee

s. 537

Code of Criminal Procedure