MAHANT HARNAM SINGH, CHELA OF

BHAI NARAIN SINGH

GURDIAL SINGH & ANR.

February 24, 1967

[K. N. WANCHOO, R. S. BACHAWAT AND V. BHARGAVA, JJ.]

Code of Civil Procedure (Act 5 of 1908), s. 92-"Persons hal'ing interest in the trusf', meaning of.

The appellant was the Mahant of a Gurdwara which was maintained for a sect known as Nirmala Sadhus and was registered as one of the branches of the principal institution of Nirmala Sadhus.

All its Mahants. including the appellant were Nirmala Sadhus. The institution owned land, which was donated to it by the inferior owners of the village. It also ran a free kitchen for providing food for visitors. The respondents, who were Sikhs, .filed a suit un&!:r s. 92, Civil Procedure Code, for the removal of the appellant from his office.

They sought to establish that they bad such interest in the public trust as would entitle them to institute the suit, by showing : ( 1) that they .had interest in the tru; t property in their capacity as representatives of the owners of the land, and as the representa!ives of the residents of the village; and (2) that the institution was a Sikh

Gurdwara meant for all persons following the Sikh faith.

The trial court dismissed the suit, but the High Court decreed it.

In appeal to this Court,

HELb: (1) The respondents who were merely Lambardars and residents of the village, had, in those capacities, no such interest as would entitle them: to institute tl.e ouit. (743 GJ

The mere capacity as Lambardars did not entitle them to claim that they were representatives of the inferior owners of land, when they themselves were not inferior owners of any land, nor successors-in-interest of

'lll1Y inferior owners who donated the land. [742 F-0]

The free kitchen was not being run for the general residents of the village who could, as of right, claim to be fed therein. Nor did the residents of the village ba\"e any clear interest in the particular trust entitling them to file such a suit, and mere residence in the village did not create such an interest. [743 A-BJ

Vaidyanat/Ja Ayyar v. Swaminaz/Ja Ayyar, 51 I.A. 282, applied.

( 2) The Nirmala Sadhu.•. though they started as a section of Sikhs, became later followers of Vedanta philosophy, adopted the customs of Hindu Sastras, the dress of Indian faqirs, and worshipped at Samadhis.

Therefore, they could not be regarded as Sikhs at all, and the respondents, who Wl'fC Sikhs could not be held to have such an interest in the trust as would entitle them to f\le the suit. (745 E, H; 746 A-D; 747 B-C]

Hein Singh v. Basantda..f, Shironiani Gurd•vara Prabandhak Comnrittee

v. Ram Pars/Jad, 63 I.A. 180, referred lo.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1377 of 1966.

740 SUPIUIMB C.OUllT UPOl.TS

(1967) 2 S.CJl.

Appeal from the judgment and cl= dated September 7, 1962, of the Punjab High Court in Regular First Appeal No. 29(P) of 1956.

Nawrit Lal, for the appellant.

I. M. Oberoi, S. K. Mehta and K. L. Mehta, for respondent No. I.

The Judgment of the Court was delivered by Blwgava, J. This appeal under cer'Jficate granted by the Punjab High Court at Chandigarh, has been filed by Harnam Singh appellant against a decree passed by the High Court, decreeing a suit under section 92 of the Code of Civil Procedure, after setting aside the dismissal of the suit by the District Judge, and removing the appellant from the office of the Mahant of an institution descri~ in the plaint as 'Gurdwara Jhandawala.' The suit was brought by two plaintiffs after obtaining permission from the Advocate-General. One of the plaintiffs/respondents, lshar Singh, died and his legal representatives were not brought on the record. However, in view of the nature of the suit, no objection was raised before us about the maintainability of this appeal on this ground and, consequently, we refrain from dilating on this aspect.

The respondents claimed in the plaint that there is one Our Granth Sahib at village Jhandawala in the name <'f Gurdwara Jhandawala which is managed by Mahant Hamam Singh appellant as a Mohatmim, and that he is in possession of the 'Dera' and agricultural land belonging to Guru Granth Sahib, Gurdwara Jhandawala. The Gurdwara was alleged to be a !'blic religious place which was established by the residents of the village, and it

wa~ pleaded that this religious institution was a public trust create<l by the residents of the village for the service of the public to provide food to the visitors from the Lungar (free kitchen) to allow the people to fulfil religious beliefs and for worship, et.:. The plaintiffs/respondents stated that, in the capacity Gf representatives of owners of lands situated at village Jhandawala and of residents of village Jhandawala, they submitted an application for permission to institute this suit on the ground that the appellant was indulging in various undesirable activities and was misusing the funds of the trust which justified his removal from the office of the Mahant.

The respondents claimed that, in their capacity of representatives of the owners of the land situated at village Jhandawala and of residents of village Jhandawala, rhey were entitled to institute this suit under s. 92, C.P.C.

The suit was contested by the appellant on various grounds, amongst which the principal one, with which we are concerned, is that the plaintiffs/respondents had no such interest in this public

HAllNAM SINGH v. GuRDIAL SINGH (Bhargava, /.) 741

A trust as would entitle. them to insti1ute the suit. At the initial stage, the appellant did not admit that there was a public trust in existence at all, but the trial Court held that the institution was a public trust of a religious character ; and that finding was not challenged on behalf of the appellant before the High court. The two principal grounds, on which the dismissal of the suit by the B District Judge was sought to be justified before the High Court, were that the plaintiffs/respondents had no right to institute the suit under s. 92, C.P.C., for want of interest in the trust, and that the respondents had failed to prove that the appellant had indulged in any such activities as would justify his removal from the office of the Mahant.

C: In this appeal, we heard learned counsel for the parties on the first question as fo whether the plaintiffs/respondents had any stJch interest in this trust which could entitle them to institute the suit under s. 92, C.P.C. As has been mentioned above, in the plaint the claim was that the plaintiffs were interested in the capacity of representatives of the owners of the land situated at D village Jhandawala and of residents of village Jh:mdawala. On behalf of the plaintiffs/respondents, the pleading was that this Gurdwara was established as a publi~ trust on behalf of the residents of the village, but, during the course of evidence, even the plaintiffs them8elves admitted that, before the residents of the village donated any property at all to this institution, the institu- E tion was already in existence. According to the plaintiffs, the institution was then known as Guru Granth Sahib Dera Bhai Saida Ram, and Bhai Saida Ram was tµe Mahan! of the institution. On February 19, 1904, Shamilat land belonging to the inferior proprietors of the village measuring- '.l2 bighas and 12 biswas was donated to Guru Granth Sahib known as Dera Bhai Saida Ram by way of charity.

That gift was subsequently confirmed in a muation order of the F revenue authorities on !st Ju_ly, 1905. Some time later, it appears that Mahant Mehtab Singh Sadli Nirmala b<c&me the Maham of this institution, and he was succeeded_.by his Chcla, Mahant N:.rain Singh. On 20th July,. 1926, Mahant Nawin Singh, describing himself as the Chela of Mahan! Mehtab Singh, executed a will bequeathing his rights in the Dera to his Chela, Harnam Singh G appellanL It also appears that a constructicn, described as Qurdwara, was built over an area of 8 kanals and 17 marlas out cf 1he land donated to the Dera by the inferior cwners of the vill::ge.

This suit under s. 92, C.-P.C., was instituted on 21st Septen, ber,

1953 on the allegation that the appellant had >larted indulgi11g in activities which unfitted him for the positicn cf the Mahn., as he had been responsible for abduction cf wcrncn, harboming of H dacoits, irurlversa.ion of the trust income, clo$ure of the Langar stoppage of religious activities and perpetration of immoral acts.

LJSup.CI/67-2

• During the trial of the case, it appears that the plaintiffs at- Icmpted to show their interest in the trusf property on one other alternative ground. The plaintiffs were admittedly Sikhs by religion, and the claim put forward was that this Gurd•vara was a religious institution meant for Sikhs, and, in fact, evidence was also sought to be led on behalf of the plaintiffs to show that the Mahants of this institution were not Sadh Nirmalas, but were Sikhs. One of the plaintiffs/respondents specifically stated to that effect, b4t there is a concurrent finding by the District Judge and by the High Court that all the Mahants of this institution, from Bhai Saida Ram to the wesent Mahant Harno.m Singh appellant, have been Sadh Nirmalas. The trial Court held that Sadh Nirmalas re not Sikhs and that this institution was not a Sikh institution at all. The High Court disagreed and held that Sadh Nirmalas are a section of the Sikhs and, consequently, that Sikhs had interest in this institution because of its being a Sikh Gurdwara. The High Court thus found in favour of the respondents that they had an interest as required by s. 92, C.P.C., because they were Sikhs and that the institution was a religious institution of Nirmala Sadhs who were a section of Sikhs. It was also mentioned by the High Court that the villagers having made the original donation of land which is the nucleus of the institution, the plaintiffs/respondents could not be said to be devoid of interest in the trust of whose property the appellant now asserts himself to be the sole owner. The correctness of this decision was the main point canvassed before l'S on behalf of the appellant.

As we have indicated earlier, in the plaint the plaintiffs claimed interest in the trust property in their capacity of representatives of the owners of the land situated at village Jha;--:!dwala and of residents of village Jhandawala. The findings of fact recorded show that the land, which was donated to this institution, was given by the inferior owners of this village out of their joint land. The plaintiffs/respondents .did show that they were Lambardars in the village, but no attempt has been made at any stage to prove that any of the two plaintiffs was an inferior owner of .:ny land situated in this village, or that he was a descendant or a successor-in-interest of any of the inferior owners who donated the land to this institution in the year 1904. The mere capacity as Lambardars does not entitle the plaintiffs/respondents to claim that they are representatives of the inferior owners of the land who donated the land to this institution. The second ground of Claim was that the plaintiffs/respondent8 were residents of village Jhandawala, but, again, there is no pleading and no evidence tendered to show that the residents of village Jhandawala in general had any such interest iu. thh tmst which could entitle them to institute such a suit. ihe

only allegation was that a I; angar us~~ to be run in this institution where free kitchen was provided to visitors. It was nowhere stated

HARNAM SINGH v. GURDIAL SINGH (Bhargava, /.) 743

that any such free kitchen was being run for the general residents of village Jhandawala who could, as of right, claim to be fed in the Langar. Mere residence in a village where free kitchen is being run for providing food to visitors does not create any interest in the residents of the village of such a nature as to claim that they can institute a suit for the removal of the Mahan!. The nature of the interest that a person must have in order to entitle him to institute a suit under s. 92, C.P.C., was first examined in detail by the Madras High Court in T. R. Ramachandra Aiyar and Another v.

Parameswara1< Unni and 5 Others(!).

After the dismissal of the suit under s. 92, C.P.C., by the District Judge, the case came up in appeal before Wallis, C. J., and Kumaraswami Sastri, J., wh" delivered dissenting judgments. The appeal was dismissed and then came up before a Full Bench of three Judges under the Letters

Patent. Three different judgments were delivered by the members of the Full Bench, Abdur Rahim, Oldfield and Coutts Trotter, JJ. Wallis, C. J., when dealing with the appeal at the earlier stage, expressed his opinion that to entitle him to sue under s. 92, C.P.C., it is not enough that the plaintiff is a Hindu by religion, but he must have a clear interest in the particular trust over and above that which millions of his countrymen may be said to have by virtue of their religion; and this opinion was expressed even though the word "direct" in s. 92, C.P.C., had been omitted. It is not necessary to refer to other opinions expressed by the learner! Judges in that case in view of the decision of their Lordships of the Privy Council in Vaidyanatha Ayyar and Another v. Swaminatha Ayyar and Another(2), where they approved the opinion expressed by Sir John Wallis, C.J., in the case cited above, and held : "They agree with Sir John Wallis that the bare possibility, howver remote, that a Hindu might desire to resort to a particular temple gives him an interest in the trust appears to defeat the object with which the Legislature inserted these words in the section. The object was to. prevent people interfering by virtue of this section in the ad ministration of charitable trusts merely in the interests. of others and without any real interests of their own." Agreeing with the view expressed by the Privy Council, we hold that in the present case the plaintiffs/respondents, who were merely Lambardars and residents of village Jhandawala, had, in those capacities, no such interest as could entitle them to institute this suit.

The alternative ground, on which the High Court accepted the claim of the plaintiffs/respondents that they had an interest in this institution entitling them to institute the suit because it is a Sikh Gurdwara meant for all persons following the Sikh faith, was not spccifica:ly taken by the plaintiffs in the plaint. However, it appears that, during the trial of the suit as well as in the appeal before the High Court, the claim of the plaintiffs that they hacl an

(I) l.L.R. 42 Mad. 360.

(2) 51 I.A. 282.

interest entitling them to institute the suit was aciually pressed and examined on this ground. The District Judge rejected this claim. but the High Court held in favour of the plaintiffs en its view that Nirmala Sadhus were Sikhs. It appears frcm the judgment of the High Court that, in arriving at this dccisicn, the Ccurt relied on on!:, two iteil)S of evide:1ce consisting of scme obEervations made in Sir Edward Maclagen's Census Report and in Macauliffe's Treatises on the Sikh Religion. The High Court made a reference to a judgment of the Bhide, J., in Kirpa Singh v. Ajaipal

Singh 'Ind Others( I) in which this question whether Nilmala Sadhus were Sikhs was examined in great detail. An error, howcvu, appears to have been committed by the High Court in taking frcm that judgment a few extracts from Sir Edward Maclagan's Census Report and Macauliffe's Treatises on the Sikh Religicn and relying on those extracts without examining the entire material that was discussed by Bhide, J. in his elaborate and well-considered judgment.

Bhide, J., referred to various books which gave the history and description of Nirmalas and.rightly held that, though the origin of Nirmalas was somewhat obscure, it arrears to be clear that they wece originally the followers of Guru Gobind Singh, but the important point for consideration was whether thfy had beccme distinct from the general body of the Sikhs and had ceasfd to be regarded as such.

The quotation from Macauliffe's book "The Sikh Religicn" relied upon by tee High Court, is to the fclkwing c!ffct :

"There are two great divisions of Sikhs, Sahijdhari and

Singh~. The latter are they who accq:t the b!ptim inaugurated by Guru Gobind Singh, which will be described in the fifth volume of this work. All ether Sikhs are called Sahijdharis. The Singhs, after the tirre cf Guru Gobind Singh, were all warriors, the Sahijdharis those who lived at ease, as the word denotes, and prnctised trade or agriculture. In _the Singhs are included the Nirmalas and Nii1angs. The Sahijdhari ir:ckdc the Udasis founcied by Sri Chand, son of Guru Nanak."

Reference was also m2ce to an article written by Mac2uliffe on "Sikhism" in the Calcutta Review in 1881 where he defcribfd Nirmalas as only nominally Sikhs. The extract frcm Sir Edward Mac1o911n's Census Report, on which reliance was placed, runs as foll\IWS ;

"It is said that Guru Go bind Singh sent three fcllc; wers named Karam Singh, Har Chand and Mihr Rai to Benares ti:> acquire a knowledge of Sanskrit, when the Pandits of

(I) l.L.R. II Lah. 142.

HAllNAM SINGH \I. GURDIAL SINGH (Bhargava, J.) 74 5

that city refused to come themselves to Gobind Singh; and that, on their return tlie Guru blessed them as being the only learned men among the Sikhs and called them Nirmala. They were allowed to take the pahul and founded the order of Nirmala Sadhus. They are almost always celibate, and almost always in monasteries. Their principal Akhara is at Hardwar and it is said that their societies throughout the province are periodically visited by a controlling council.

They have three considerable monasteries in the Hoshiarpur District at Munak, Adamwal and Alampur Kotla and by our returns they appear to be strong in Gurdaspur, where they are mainly returned as Hindus and it• Ambala, Ferozepore and Amritsar where they are mainly returned as Sikhs. It is supposed that they are to be found in some numbers in Patiala, but our tables would intimate that they are as strong in Faridkot.

They are looked on as unorthodox by most true Sikhs,

nd it will be observed that more of them are returned in the census as Hindus than as Sikhs."

We are unable to agree that these passages relied upon by the High Court are enough to lead to an inference that Nirmala Sadhus are Sikhs and th; tt they still retain the essential characteristics of the Sikh faith. It is true that, in their origin, Nirrnala Sadhus started as a section of Sikhs who were followers of Guru Gobind Singh, but, subsequently, in the period of about 300 years that has since elapsed, they have veered away from the Sikh religion.

That is why, af1er givirig their historical origin, Macauliffe expressed the opinion that Nirmalas were only nominally Sikhs.

In Maclagan's Census Report also it was mentioned that Nirmala Sadhus are treated as Sikhs in some places, while in other places they are returned as Hindus. He has mentioned the Districts in Punjab where they are returned mainly as Hindus, and others where they were considered as Sikhs. Faridkot, the District within which the institution with which we are concerned is situated, is mentioned as a place where they are regarded as Hindus and in the Census they have been retJrned as such. In these circumstances, we do not think that this material by itself, which the High Court culled out of the judgment of Bhide, J., could properly lead to the inference that Nirmalas are Sikhs.

Bhide, J., quoted Sir Edward Maclagan's Census Report in greatet detail and mentioned how in that Census Report there was a description that the Nirrnala Sadhus were at first devoted to the regulations of Gobind Singh, but their taste for Sanskrit literatur.e led them to imbibe the principles of the Vedanta and to read0pt many of the customs of the Shastras. They gave up the use of -,, cat anr' spirits and they adopted the dress of the Indian

'faqir' whkh was strictly prohibited , to the Lrue followers of Guru Gobind Singh. They had so far deviated from the orthodox Sikhs that they Were hardly distinguishable from the Udasi followers of Nanak; They were looked on as unorthodox by most true Sikhs and it was also observed that more of them were reti:rned in the Census as Hindus than as Sikhs. Then the "Glossary of the Tribes and Castes of the Punjab and N.W.F. Province" by H. A.

Rose contained a statement that the Nirrnalas, hav; ng adhered to the study of the orthodox Hindus scriptures, had lost touch with Sikhism. In Oman's "Mystics, Ascetics, and Saints of India" Nin.1alas were described as followers of "Vedanta philosophy".

From all these authorities an inference clearly follows that Nir malas have a close affinity to Hindus and in the Census Report for the Punjab for the year 1891 a large number of Nirmalas actually declared themselves as Hindus. Bhide; J., on these materials, rightly came to the conclusion that Nirrnala Sadhus are not Sikhs.

Further, in this case, there was material showing that this institution at Jhandawala was registered as one of the branches of foe principal institution of Nirmala Sadhus known as the Panchayati Akhara situated at Kankhal near Hard war. There was further evidence showing that in this institution the worship is primarily of a Samadh which is against all ten'ets f the Sikh religion. Nirmala Sadhus, it appears, as a class worship at Samadhs which goes to show that they can no longer be regarded as people following th<) Sikh religion. In their beliefs and practices, the Nirmala Sadhus are now quite akin to Udasis, and there is a series of cases which has 1aid down that members of the Udasi sect are not Sikhs. We need only mention the view expressed by the Privy Council in Hem Singh and Others v. Basant Das and Another, Shiromani G1rdwara Parbandhak Committee v.

Ram Parshad & Others('), holding that "parallel with the growth of this movement, there seems from the time of Sri Chand, Nanak's son, to have been a sect of Udasis who, while using the same sacred

writings as the Sikhs, ':ept up much more of the old Hindu practices, followed asceticism, were given to the veneration of Samadh&

0 'ld tombs, and continued the Hindu rites concerning birth, marriage, and Shradh .... the Udasis, so far as the matter can be decided by beliefs and practices, are, from the point of view of Sikhs, schismatics who separated in the earliest days of the movement and never merged thereafter." Relying on these observations of the Privy Council, the Lahore High Court in Bawa lshar Das and Others

v. DY',· Mohan Singh and Others(2) held : "It is clearly established in tht present case that this is an Udasi institution and that the Sikhs have nothing to do with it except that they may have gone there to listen to the reading of the Sikh scriptures, which is also done by the Udasis." These decisions clearly indicate the principle

(l} 63. I. A. 180.

(2) A.I.R. 1939 Lah. 239.

HARNAM SINGH v. GHRDIAL SINGH (Bhargava, !.) 74 7

that, though the Sikh Guru Granth Sahib is read in the shrines managed by the members of the Udasi sect, that was not enough to hold that those shrines were Sikh Gurdwaras. In the case before us, the mere fact that at some stage there was a Guru Granth Sahib in this Dera cannot thus lead to any conclusion that this institution was meant for, or belonged to, the followers of the Sikh religion. Clearly, the Dera was maintained for. an entirely distinct sect known as the Nirmala Sadhs who cannot be regarded as Sikhs and, consequently, in their mere capacity of followers of Sikh religion residing in village Jhandawala, the plaintiffs/respondents could not be held to have such an interest as could entitle them to institute the suit under s. 92 of the Code of Civil Procedure.

The judgment of the High Cour< has to be set aside on this ground.

In view of the fact that we are holding that this suit was not instituted properly by persons interested as required bys. 92, C.P.C.,

we consider it unnecessary to express any opinion at all on the second main point decided against the appellant by the High Court, viz., that there were sufficient grounds for the removal of the appellant from the office of the. Mahant. In this case, it is not at all necessary to record any finding on that aspect of the case and, consequently, we refrain from commentin;; on the finding recorded by the High Court on this question.

The appeal is allowed with costs. The decree of the High Court is set aside and the decree passed by the District Judge is restored.

V.P.S.

Appeal allowed.

GURDIAL SINGH & ANR

February 24, 1967

K. N. WANCHOO

R. S. BACHAWAT

V. BHARGAVA, JJ.

Code of Civil Procedure

s. 92

s. 92

Civil Procedure Code

Nirmala Sadhu.•.

SUPIUIMB C.OUllT

Nawrit Lal

I. M. Oberoi

S. K. Mehta

K. L. Mehta

Blwgava

Harnam Singh

section 92

the Code of Civil Procedure

lshar Singh

Jhandawala

Mahant Hamam Singh

s. 92

C.P.C

s. 92

C.P.C

s. 92

C.P.C

Jh:mdawala

Bhai Saida Ram

February 19, 1904

Guru Granth Sahib

Mahant Mehtab Singh Sadli Nirmala

Some time later, it appears that Mahant Mehtab Singh Sadli Nirmala b<c&me the Maham of this institution, and he was succeeded.by his Chcla, Mahant N:.rain Singh.

Mahant N:.rain Singh

20th July,. 1926

Mahant Nawin Singh

! Mehtab Singh

s. 92

21st Septen, ber,

1953

Sadh Nirmalas

Bhai Saida Ram

Mahant Harno.m Singh

s. 92

C.P.C

s. 92

C.P.C

Madras High Court

s. 92

C.P.C

Wallis

Kumaraswami Sastri

Abdur Rahim

Oldfield

Coutts Trotter

s. 92

C.P.C

s. 92

C.P.C

John Wallis

Nirmala Sadhus

Bhide

Nilmala Sadhus

Edward Maclagan

Macauliffe

Nirmalas

Guru Gobind Singh

Sahijdhari

Chand

Guru Nanak

Guru Go bind Singh

Karam Singh

Har Chand

Mihr Rai

Benares

HAllNAM SINGH

GURDIAL SINGH

Bhargava

Gobind Singh

Guru

Nirmala

Hardwar

Munak

Adamwal

Alampur Kotla

Gurdaspur

Ambala

Ferozepore

Amritsar

Patiala

Faridkot

Nirrnala Sadhus

Maclagan

Punjab

Nanak

H. A.

Rose

Nirrnalas

Oman

Nir malas

Nirrnala Sadhus

Lahore High Court

s. 92

the Code of Civil Procedure

C.P.C

Mahant


COMMISSIONER OF INCOME-TAX BIHAR AND ORISSA A

MANAGER, COURT OF WARDS ESTATE, BETI'IAH

February 24, J 967

[M. HIDAYATULLAH, J. M. SIIELAT AND 0. K. MITTER, JJ.]

Practice and Procedure-Tax liabi/iry-LiabiUty dependent on

OIUcome of litigation-Assessment made while title suit was pending-Hlgli Court setting aside assessment-Propriety of-Procedure to bt foUowtd.

During the pendency of a s1•it by a penon claiming lb be the heir of the Bettiah estate which was in the possession of the Manager, Court C of Wards, the Income Tax Officer made an assessment on the Manager.

Jn those proceedings the State of Bihar and the Manager claimed that the estate had ves!ed in the State by escheat and therefore the income was not liable to tax.

The Jncome4ax Officer. the Appellate Assistant Commissioner and the Tribunal held that as the litigation was pendin&

: could not be soid of the estate that the same had vested in the Stale by e; cheat. The High Court on relcrcnce held that the income tax authorities could not impose the tax.

Setting aside the judgment of the D High C<iurt this Court in appeal.

HELD : The proceedings should be made final after the disposal of the litigation and the H'gh Court could call for a supplementary statomCDt of the case if necessary [750 DJ

CJv11. APPELLATE JURISDICTION : Civil Appeal No. 1172 of 1965.

Appeal from the judgment and order dated December 17, 1963 of the Patna High Court in Misc. Judicial C':,.: No. 566 of 1960.

R. H. Dhebar for R. N. Sachthey, for the appellant.

S. P. Varma, for the respondent.

The Judgment of the Court was delivered

0Jy

Mitter, J., This is an appeal from a judgment and answer of the High Court of Judicature, Patna, on a certificate granted by it under s. 66-A(2) of the Income-tax Act of 1922 corresponding to s. 261 of the Income-tax Act of 1961.

The Tribunal referred two questions of law to the High Court under s. 66(1) :

"l. Whether on the facts and circumstances of the case, co~1!d assessment be made upon the Manager of Court of Wards, Bcttiah Estate, in respect of the income from the Bettiah Estate ?

2. If the assessment could be made on the Manager of the Court of Wards in respect of the income from the

74•

C.I.T. v. COUJ.T OF WARDS (Mitter, J.) 749

Bettiah Estate, was it chargeable to tax at maximum rates under s. 41 (I) of the Income-tax Act?" The facts of the case are as follows :- Maharani Janki Kuer wl:to was the last holder of the Bettiah Estate in Bihar died on November 27, 1954~ For many years past before her death, the estate was under the management of the Court of Wards and continued under such management even after her death as it was not known whether she had left any heirs. Under s. 13 of the Bengal Court of Wards Act (IX of 1879)

"Whenever, on the death of any ward, the succession to his property or any part thereof is in dispute, the Court may either direct that such property or part thereof be made over to any person claiming such property, or may retain charge of the same until the right to possession of the claimant has been determined under Bengal Act VII of 1876, or until the dispute has been determined by a competent Civil Court." "Court" here means the Court of Wards.

One Suresh Nandan Sinha filed a suit claiming the eotate on the allegation that he was the nearest heir of the deceased Maharani. After the death of the Mahar:mi, the Income-tax Officer made an assessment on the Manager of the Court of Wards as representing the estate of Bettiah, the assessment relating to the assessment year 1956-57 the accounting year being the financial year 1955-56. The Government of Bihar claimed that the estate had vested in the State Government by escheat and the Manager, Court of Wards put forward that claim before the Income-tax authorities. Tbere was a further contention raised by the Manager that even if the assessment was made on him representing the estate, the income should not be taxed at a maximum rate under s. 41 ( 1) of the Income-tax Act, 1922. As the litigation was pending, the Income-tax Officer and the Appellate Assistant Commissioner both held that it could not be said of the estate that the same had vested in the State by escheat and they also held that the income was taxable at the maximum rate.

The same plea was raised before the Arriellat" Tribunal and the Tribunaf observed that as no notification had been issued by the Government on the death of the Maharani or later to the effect that the estate had vested in the State of Bihar by escheat, there was no certainty as to whq would be found to be the ultimate heir in view of the pending litigation.

The High Court on the case stated, referred to Arts. 289 and 296 of the Constitution and taking note of the contentions urged on behalf of the parties observed :

"In the circumstances of the nresent case,"it is manifest that the Income-tax authorities cannot v"lidly impose a tax upon the Manager, Court of Wards,

7 50

SUPREME COURT REPORTS

[1967] 2 S.C.R.

Bettiah Estate, merely because a tille suit has been filed with regard to the heirship of the Bettiah Estate without deciding the question as lo whether the claim of the State of Bihar that the properly has vested in it by eschca1 is established or not."

On this view, the first question was answered in favour of the :i,; es>ec and no :mswer was given to the second question beca~

it was academic.

It was asserted on behalf of the respondent-and not denied hy the appellant-that the suit of Surcsh Nandan Singh had been uismisscd, but an appeal had been preferred therefrom and was pending. On the fact~ as the same appear to us at present, it is not possible to bold that the estate of Bcttiah has escheated to the Stale of Bihar. It is obvious that in case of such cscheat there c:m be no assessment to income-tax.

The positio!l will be clarified af:cr the appeal by Surcsh Nandan Sinha is disposed of. In this view of the matter, the judgment of the Patna High CQun is set asid'. The proceedings should be finalised after the disposal of the licigation and the High Court may cll for a suppkmcntary statclllC!ll of case, if it thinks necessary.

The qt.estion as to whether the estute has cscheatcd to the State of Bihar is tcft open, and the costs of this appeal will abide by the ultimate decision of

the High Court.

Jn case it he found that the escheat bad taken

plcc, the appellant before us will have to pay the costs of this :ippcal and if there is no escheat, the Commissioner will have the

cnts of this appeal.

Y.P.

February 24, J 967

M. HIDAYATULLAH, J.

0. K. MITTER, JJ.

State of Bihar

Patna High Court

R. H. Dhebar

S. P. Varma

0Jy

Mitter

s. 66

Income-tax Act

s. 261

Income-tax Act

s. 66(1)

s. 41

Income-tax Act

Maharani Janki Kuer

Bihar

s. 13

Bengal Act VII of 1876

Suresh Nandan Sinha

Maharani

Bettiah

Government of Bihar

s. 41

Income-tax Act, 1922

State of Bihar

Arts. 289 and 296

Surcsh Nandan Singh

Bcttiah

Surcsh Nandan Sinha

Patna High CQun


TATA

ENGINEERING AND LOCOMOTIVE

COMPANY

LTD.

ASSISTANT COMMISSIONER OF COMMERCIAL TAXES

& ANR.

February 24, 1967

(M. HIDAYATULLAH, J. M. SHELAT AND G. K. MITTER, JJ.]

Constitution of India, Art. 226-Princip/es for exercise of High CoHrt's polver under-Existence of alternative rentedies when not a bar.

The appellant company manufactured trucks, bus cbasis etc. in Bihar State.

Some of the goods so manufactured were sent to the stockyards maintained by the company in various State> outside Bihar. The goods in the said stockyards, according to the company, had not been appro~ priated to any contract and remained the property of the company.

Therefore, in proceedings for the assessment of Sales Tax before the Assistant Commissioner of Commercial Taxes, Jamshedpur the comr ny contended that the sales effected from these stockyards were taxable neither under the Bihar Sales Tax Act., nor under the Central Sales Tax Act.

Th~ contention was rejected by the Assistant Commissioner who demanded Rs. 1,73,84,273 as tax.

The company thereupon filed a petition under Art. 226 of the Constitution questioning the jurisdiction of the Taxing Authority.

The High Court refused to give relief because oadequate alternative rernedie" under the taxing statute were available and had not been exhausted and dismissed the petition in limine.

By special leave the company appealed.

HELD : The jurisdiction of the High Court under Art. 226 of the Constitution cannot bP. a substitute for the ordinary_ remedies at Jaw.

Nor is its exercise desirable if facts have to be found on evidence.

But there are exceptions.

One such exception is when action is being taken under an invalid law or arbitrarily without the sanction of law. In such a case the High Court raay interfere to avoid hardship to a party which will be unavoidable if the quick and more efficacious remedy envisaged by the article were not allowed to be invoked.

As the appeals required paxment of tax at least in part the High Court ought to have taken 1unsdiction in this case at least to issue a rule nisi to see what the Assis .. tan! Commissioner had to say. (755 E-0, 756 C-D]

Thansingh v. Supdt. of Taxes (1964] 6.S.C.R. 654 and Himmat/al

v. State of M.P. [1954] S.C.R. 1122, referred to.

Clv1L APPELLATE JURISDICTION : Civil Appeal No. 1604 of 1966.

Appeal by special leave. from the judgment and order dated April 20, 1966 of the Patna High Court in C.W.J.C. No. 252 of 1966.' N. A. Palkhiwala, S. P. Mehta, Ravinder Narain and 0. C.

Mathur, for the appellant

Niren De, Addi. Solicitor-General and U. P. Singh, for the respondents.

The Judgment of the Court was delivered by Hidayatullah, J The appellant is a public limited Company whid1 manufactures the well-known Tata Mercedes-Benz trucks, bus chassis, their spare parts and other accessories al Jamshcdpur in the State of Bihar and they arc sold to the Govcrr._ncnt of India, the State Governments, State Transport Corporations and others.

In the course of its business the appellant Company sells its products, particularly the trucks and bus chassis, to dealers in various parts of India and the dealers resell them to consumers all over India.

According to the appellant Company, its sales in the Indian market are of three kinds :

(a) Sales inside Bihar State;

( h) Sales in the course of inter-State trade and commerce; and

(~) Sales effected from their stockyards located m

States other than Bihar.

The present appeal concerns sales in the last category and the question arises in the followin3 circumstances.

The appellant Company tiled returns for the quarter ending on June 30, 1965, under the B1har Sales fox Act and the Central Sales Tax Act respectively. including in the former <a:cs to consumers in Bihar State and m the latter sales in the course of inter-

Stale 1rade or commerce. and paid full tax due on such sales.

The appellant Com!lany did not include sales from the stockyards, in any of its returns.

On November 12, 1965 the Assistnt Commissionr of Commercial Taxes, Jamshedpur sent a notice (No. I 1234) informing li1e appellant Company that the returns appeared to bz incorrect as all sales were not included and directed the appellant Company to include ail its sales in revised returns and all returns to be filed in future. The appellant Company demurred that sal.:s

from their stocky:irds in other St:ites were neither sales in the State of Bihar, nor sales in the course of inter-Slate trade or commerce and were thus not taxable in Bihar.

This plea was noi a"<.:cptcd and revised returns !or the quarters ending on June 30 and September 30, 1965 were ordered to be filed. The ap!"'llant Company filed amended returns under pro!cst and wi<hout prejudice to its contentions.

At the same time the appclian: Companv disclosed the en; ire procedure of saks eJtstockv:..rds and relied unon s. 4 (2) of the Central Sales Tax Ac! i~' exclude such sales.

The appellant Company also inquired whdher these sales were 10 be treated as sales in Bihar for the purrn, cs of the Bih:ir Sales Tax Act or as sales in the course oi in!cr-Statc trdc ancl commerce for purposes of the Central

D -

II -

TATA ENG. co. v. ASST. COMMR. (Hidayatullah, I.) 7 53

A Sales Tax Act, but no reply was given. The appellant Company furtlter asked for an opportunity to produce declarations from its customers, who are also registered dealers, with a view to claiming a rebate, but . this opportunity was denied.

The appellant Company objected to the assessment for a period of six months unoer a tax legislation, which it claimed; was intended to operate B yearly but to no effect.

According to the revised returns filed under compulsion, the lireak-up of the sales was as follows : The total gross turnover was Rs. 33,99,23,595. The appellant

Comean~ claimed to deduct (a) sales from tockyards at extra State pomts (Rs. 15,09,24,204); (b) sales m the course of exoorl out of India (Rs. 34,83,671); and (c) sales effected in Bihar on which Bihar Sales Tax was payable (Rs. 3,64,79,20.9).

C The balance Rs. 14,90,36,510, according to the appellant Company, consisted of sales (Rs. 14,33,02,855) to registered dealers taxable at 2 % and sales of the balance to unregistered dealers taxable at 10%. The tax for the period April l, 1965 to September 30, 1965 was computed at R, s. 34,05,028. The appellant Company stated to have paid against it Rs. 34,45,699 as tax in D the Government Treasury and denied any further liability.

The Assistant Commissioner after turning dnwn the requests for adjournments proceeded to assess the appellant Company.

The gross turnover for the two quarters was taken to be Rs. 35,13,60,725.

The difference (Rs. 1,14,37,129) arose because tax in other States was also added to the sale prices.

Deducting the sales made in Bihar State (Rs.'3,64,79,209) and the sales in the course of export (Rs. 34,83,671) the balance (Rs. 31,13,97 ,844) was held taxable at different rates.

Rs. 12,94,81,387 for which C and D forms were produced from registered dealers were taxed at 2 % and the balance (Rs. 16,23,61,334 plus local taxes Rs. 1,14,37,129 abovementioned) at 10%.

The total tax was computed to be R5. 2,07,81,273 from which deducting the tax already paid, a demand for the sum of Rs. 1,73,84,273 was made. The order of assessment was passed on March l, 1966 and the amount of arrears of tax was made payable on or before March 15, 1966.

The appellant Company asked for time to make the payment and it was extended to March 21, 1966.

The appellant Company filed a petition under Art. 226 of the Constitution of India in the Patna High Court for directions or orders or writs, including a writ in nature of certiorari calling for the records and quashing the orde1 of the Assistant Commissioner. By the petition the jurisdiction of the Assistant Commissioner to make the assessment and the demand of tax in respect of stcckyard sales were questioned. Of the grounds urged, the following were questions of jurisdiction :

" (a) The assessment on the Petitioner for two quarters is illegal as the Central Sales Tax is a yearly tax.

(b) Respondent No. 1 erred in assuming jurisdiction to tax the outside sales by wrong interpretation of evidence;, concrary to the overwhelming evidence on record.

(c)

(d)

( e) Respondent No. 1 failed to appreciate that in law sale took place only at the stockyard where the vehicle was appropriated to a particular contract and that the sale did not occasion inter-State movement of the vehicle.

( f) Respondent No. 1 has relied on section 84 of the Contract Act even though the same was repealed in 1930 and thereby erred in applying a wrong provision of law.

(g)

The petition came up for hearing before Narasimham C.J. and Ahmad J. on April 20, 1966 and vas dismissed at the threshhold.

The order of the High Court was : E

"The petitioner has not exhausted the internal remedies provided in the Sales Tax Act by way of appeal, revision or reference and statement of a case to this Court.

We are not satisfied that this is a fit case for this Court to exercise its extraordinary jurisdiction at this stage.

The petition is dismissed summarily,

Sd/- R L. Narasimham Sd/- Anwar Ahmed".

A rc4ues1 for ccrtificacc co appeal to this Court was chcn mauc.

The High Court pointed out that an appeal against the order of assessment was possible on payment of 20% of the assc"cu ta.~.

As this came to Rs. 40,00,000 and odd only and Rs. 33, 97,000 hau alreauy been paid. the High Court held thac the ("ompany ought to appeal first sice the payment of tit~ balance (Rs. 6,00.000) was well within the capacity of the appclbnt Com pany and was not so onerous as to merit intericrence by w1y of extraordinary powers of the High Court.

The application for ccr1ificatc was accordingly dismissed.

The appellant Company.

TATA ENG. co. V. ASST. COMMR. (Hidayatul/ah, /.) 7 5 5

however, obtained special leave from this Court and this appeal was filed.

The learned Additional Solicitor General, who appeared for the Assistant Collllllissioner, raised a preliminary objection that the appellant Company could not be heard as it had not exhausted the remedies available under the taidng statutes which gave right of appeal and revision and finally for mvoking the advisory juf!Sdiction of the High Court. He also relied upon Tizaminglz v.

Supdt. of Taxes(1) in support of the order of the High Court.

The preliminary objection really dcies no more than try to check in advance the points which the appellant Company is seeking to raise in !his appeal. Whether one looks at the matter from the point of view of the appeal proper or from the point of view of the prelia;!inary objection raised before us, the question is

the same. namely, whether the High Court ought in this case to have exercised jurisdiction and if it took jurisdiction whether any settled principle governing Art. 226 would have been departed from.

The power and jurisdiction of the High Court under Art. 226 of the Constitution has been the subject of exposition from this Court. That it is extraordinary and to be used sparingly goes without saying.

In spite of the. very wide terms in which this jurisdiction is conferred, the High Courts have rightly recognised certain limitations on this power. The jurisdiction is not appellat.e and it is obviou5 tliai it cannot be a substitute for the ordinary remedies at law. Nor is its exercise desirable if facts have to be iound on evidence. The High Court, therefore, leaves the party aggrieved t9 take recourse to the remedies available under the ordinary law if they are equally efficacious and declines to assume -jurisdiction to enable such remedies to be by-passed. To these there are certain exceptions. One such exception is where action is being taken under an invalid Jaw or arbitrarily without the sanction of Jaw. In such a case, the High Court may interfere to avoid hardship to a party which will be unav_oidable if the quick and more efficacious remedy envisaged by article 226 were not allowed to be invoked. In our judgment the present is an example of the exceptional situation above cont.emplated just as

Himmatlal v. State of M.P.(') was :mother instance which came before this Court.

The power and jurisdiction of the Assistant Commissioner, Jamshedpur, were exercisable in respect of sales to consumers in Bihar State and to transactions of sales fu the course of inter- State trade _and commerce.

They could not be utilised to tax sales outside the State of Bihar. The appellant Company claimed

(I) [1964] S. C. R. 654.

(2) (1954] S. C. R. 11.22

exemption in respect of sales efieted from teir stockyards in the vanous States, no doubt fed from Bihar but run by the Col'lpany locally. The Company asserted that the goods in the stockyarus we1e still those of the appeUant Company and neither the property in them had passed to any one nor had they been appropriated to a contract of sale. The question was whether in law such sales could be regarded as in the course of inter-state trade or commerce or outside sales, subject of course to the claim of the Company being found on n:cord to be good. There is nothing to show that any further evidence beyond documents produced to illutrate sample sales was neceary. Nor did the learned Additional Solicitor General suggest that this was going to be an issue of fact rather than of law.

It would certainly have avo!dcd circuity of action and proved altogether more satisfactory if the High Court had considered whether the sample transaction as illustrated by the documents, disclosed a transaction of sale outside the State of Bihar and not in the course of inter-State trade or ccmmcrce.

On that de; iencted the payment of tax of the order of R~. I, 73,00,000 and odd for two quarters alone.

We arc clearly uf opinion that the High Court ought to have taken jurisdiction in this case at least to issue a rule nisi to see what the Assistant Commissioner had to say.

The High Court could always decline to decide the case if disputed questions of fact 1equiring finding thereon arose, but so far as we can see, no such question was likely to arise.

We accordingly set aside the order of the High Court and remit the case for further consideration after issuing a rule niri so that the Assistant Commissioner may file a return to the claim put forward by the appellant Company.

The appeal will be allowed but we make no order about costs.

G.C.

Appeal allowed.

TATA

ENGINEERING AND LOCOMOTIVE

COMPANY

February 24, 1967

M. HIDAYATULLAH, J.

M. SHELAT

G. K. MITTER, JJ.

Constitution of India

Art. 226

Bihar State

Bihar

Central Sales Tax Act

Art. 226

Art. 226

Patna High Court

N. A. Palkhiwala

S. P. Mehta

Ravinder Narain

C.

Mathur

Niren De

U. P. Singh

Hidayatullah

India

June 30, 1965

November 12, 1965

June 30 and September 30, 1965

s. 4

Sales Tax Act

Sales Tax Act

September 30, 1965

s. 34

March l, 1966

March 15, 1966

March 21, 1966

Art. 226

Constitution of India

section 84

Narasimham

Ahmad

April 20, 1966

L. Narasimham

Anwar Ahmed

Art. 226

Art. 226

article 226


P~"NALAL

MURARILAL

February 21, 1967

[K. N. WANCHOO, R. S. BACHAWAT AND V. BHARGAVA, JJ.]

Indian Limitation Act (9 of 1908), Art. 164-"Knowledge of the dee re~'', meaning of.

The appellant had dealings with the respodent i~ respect of a ruqqa and a mortgage.

The respondent filed two smts against the appellan.t for recovery of the moneys due on the ruqqa and the mortgage respectively.

The summons in the suits was not duly served on the appellant and the suits were decreed ex-parte. The appellant then filed an application to set aside the ex-parte decree in the suit on the ruqqa. The court passed an order on 16th Augtlst 1958,. setting aside that ex-parte decree and also informed the appellant, who was present in court on that day. of the passing of the ex-parre decree in the mortgage suit. On 16th April 1959, the appellant filed an application for setting aside the ex-parre decree in the mortgage suit. The trial court and the High Court held that the a, Pplication was barred by limitation under Art. 164 of the Indian Limitation Act, 1908, as more than 30 days bad expired after the appellant had knowledge of the ex-parte decru.

In appeal to this Court,

HELD: The application was rightly dismissed.

Under Art. 164 of the Limitation Act, the period of 30 days is counted, when the summons is not duly served, from the date when the applicant had knowledge of the decree; and the expression "knowledge of the decree" means knowledge of the particular decree which is sought to he set aside.

It is a question of fact in each case whether the information conveyed is sufficient to impute the knowledge, and, the test is not what the infom..ation would mean to a stranger, but what it meant to the defendant in the light of his previous dealings with the plaintiff a&d the facts and circumstances known to him. [759 B; 760 B-D]

Pundlick Rowfi v. Vasantrao Madhav Rao 11 B.L.R. 1296; Kumud Nath Roy Chowdhury v. lotindra Nath Chowdhury 1.L.R. 38 Cal. 394; Bapurao Sltaram Karmarkar v. Sadhu Bhiva Gholap I.L.R. 47 Bom. 48S and Batu/an v. S. K. Dwlvedi, I.L.il. 33 Patna, 102S, approved.

CML APPELLAli JURISDICTION: Civil Appeal No. 866 of 1964.

Appeal by special leave from the judgment and order dated April 7, 1964 of the Allahabad High Court in F.A.F.O. No. 367 of 19.59.

S. G. Pntwardhan, Rameshwar Nath and Mnhinder Narain and Prnyag Das Agarwal, for the appellant.

J. P. Goyal and Raghunath Singl1, for the respondents.

L3Sup Cl/67-3

758 SUPllEME COURT llEPOllTS

[1967] 2 S.C.R.

The Judgment of the Court was delivered by .

Bacbawat, J.

This appeal incidentally raises a question of mterpretatmn of art. 164 of the Indian Limitation Act, 1908. The respondent instituted two suits against the appellant in the court

of the First Civil Judge, Kanpur. Suit No. 25 of 1958 was for the recovery of moneys due on a morti,; age for Rs. 50,000. Suit No. 22 of I ~58 was to recover a sum of Rs. 8,000 due on a ruqqa.

On May 15, 1958, both the suits weu decreed ex-parte.

The apellant filed an application to set aside tht: ex-parte decree passed in Suit No. 22 of 1958. This application was numbered as miscellaneous case No. 104 of 1958. On August 16, 1958, the First Civil Judge, Kanpr. passed' an order setting aside this ex-/Jaru decree on lcrtain conditions. The order sheet in O.S. No. 22 of 1958, Misc. Case No. 104 of 1958 on August 16, 1958 stated :

"Heard parties counsel, accept the applicant's affidavit an\! hold that due to non-service applicant was

prevented from being present.

Allowed on condition of payment of Rs. 150--as costs within a month and on condition that allotment shall continue.

Sd/- K. N. Goyal 16-8-58 Applicant i.~ hereby infonned of connected decree of 25 of 1958 as well.

Sd/- K. N. Goyal

16/8." An appeal by the appellant from this order was dismissed on September 25, 19~8. On February 5, 1959, an advocate employed by the appellant to file a civil revision petition against

the appellate order, obtained a certified copy of the order dated F August 16, 1958. On February 24, 1959, a civil revision petition was filed by the appellant against the appellate order.

On April 16, 1959, the appellant filed an application in the court of the First Civil Judge, Kanpur, under 0.9, r. 13, C.P.C .. for the setting aside of the ex-parte decree passed in Suit No. 25 of 1958.

The Civil Judge dismissed the application.

An appeal G from this order filed by the appellant was dismissed by the High Court.

Both the courts held that the summons in Suit No. 25 of 1958 wa, not duly served on the appellant but as mare than 30 days hi.d expired after the appellant had knowledge of the ex-parte decree, the application was barred by limitation under art. 164 of the Indian Limitation Act, 1908. The appellant now appeals to this Court by special leave.

H Under 0. 9, r. 13, C.P.C., a decree passed ex-parte against a .defendant is liable to be set aside if the summons was not duly

served or if the defendant was prevented by any sufficient cause from appearing when the suit was called on for hearing. If the summons is not duly served, the defendant suffers an injury and

he is entitled ex-debito justitiae to an order setting aside the ex-puite decri:e provided he applies to the court within the prescribed period of limitation. Under art. 164 of the Indian Limitation Act, 1908, the period of limitation for an application by a defendant for an order to set aside a decree passed ex-parte was 30 days from "the date of the decree or when the summons was not duly served, when the applicant had knowledge of the decree".

The onus is on the defendant to show that the l!JJ.I>.lication is within nme and that he had knowledge of the decree within 30 days of the application. If the defendant produces some evidence to show that the application is within time, it is for the plaintiff to rebut this evidence and to establish satisfactorily that the defendant had knowledge of the decree more -than 30 days before the date of the application.

In Pundlick Rowji v. Vasantrao Madhavrao('), Davar, J., held that the expression "knowledge of the decree" in art. 164 means knowledge not of a decree but of the particular decree which is sought to be set aside, a certain and clear perception of the fact that the particular decree had been passed against him.

On the facts of that case, Davar, J., held that a notice to the defendant that a decree had been passed against him in the High Court Suit No. 411 of 1909 in favour of one Pundlick Rowji with whom he had no dealings was not sufficient to impute to him clear knowledge of the decree in the absence of any information that the decree had been passed in favour of Pundlick Rowji as. the assignee of a promissory note which he had executed in favour of another party.

This case was followed by the Calcutta High Court in Kumud Nath Roy Chowdhury v. Jotindra Nath Chowdhury(').

In Bapurao Sitaram Karmarkar v.

Sad bu Bhiva Gho/ap (3), the Bombay High Court held that the evidence of two persons who had been asked by the plaintiff to tell the defendant about the decree and to settle the matter was not sufficient to impose knowledge of the decree on the defendant within the meaning of art. 154. Macleod, C.J. said :

"We think the words of the article mean something more than mere knowledge that a decree had been passed in some suit in some Court against the applicant. We think it means that the applicant must have knowledge not merely that a decree has been passed by some Court against him, but that a particular decree has been passed against him in a partkular Court in favour of a particular person for a particular sum.

A judgment-

(!) 11B.L.R.1296.

(2) l.L.R, 38 Cal, 394, 403.

(3) I.L.R. 47 Born. 4R5.

7 60

SUPREME COURT REPORTS

(1967] 2 S.C.R

debtor is not in such a favourable position as he used to be when he had thirty days from the time when execuuon was levied against him. But we do not think that the Legislature meant to go to the other extreme by laying down that time began to run from the time the judgment-debtor might have received some vague information that a decree had been passed against him." This decision was followed in Batu/an v. S. K. Dwivedi(') and other cases. We agree that the expression "knowledge of the decree" in art. 164 means knowledge of the particular decree which is sought to be set aside. When the summons wru. not duly served, limitation under art. 164 docs not start running against the defendant because he has received some vague inform!ltion that some decree has been passed against him.

It is a question of fact in each case whether the information conveyed to the defendant is sufficient to impute to him knowledge of the decree within the meaning of arl. 164. The test of the sufficiency isnot what the information .vould mean to a stranger, but what it meant to the defendant in the light of his previous dealings with the plaintiff and the facts and circumstances known to him. If from the information conveyed to him, the defendant has knowledge of the decree sought to be set Rside, time begins to run against him under art. 164. It is not necessary that a copy of the decree should be served on the defenda:-t. It is sufficient that the defendant has knowledge of the material facts concerning the decree, so that he has a clear perception of the injury suffered by him and can take effective steps to set aside the decree.

In this case, in his application for setting aside the ex-parte decree, the appellant stated that he got the information of the passing of the ex-parte decree in suit No. 25 of 1958 for the first time from the respondent on April 13, 1959. It has been shown conclusively that this statement is false. The respandent filed an affidavit stating that the appellant was directly mformed of the passing of this ex-parte decree by the First Civil Judge on August 16, 1958. This statement was not denied by the appellant. The courts below concurrently found that the appellant was personally present in the court of the First Civil Judge on August 16, 1958 when the karned judge informed him that an ex-parte decree had been passed against him in Suit No. 25 of 1958. The appellant was informed that suils Nos. 22 and 25 of 1958 were connected suits. The appellant knew that he had dealings wi:h the respondent in respeet of a ruqqa and a mortgage.

He knew that the suit No. 22 of 1958 was filed on the ruqqa. From the information conveyed to him by the Civil Judge on August 16, 1958, it must have been clear to the appellant that an ex-parte decree had been passed against him in favour of the respondent in suit No. 25

(I) I.LR. ~3 Pat. M2S, tOS0-8.

A of 1~58 on the basis of the mortgage.

The appellant had thus on August 16, 1958 clear knowledge of the decree passed against him in suit No. 25 of 1958 which he now seeks to set aside. Time began to run against him from August 16, 1958 under art. 164 of the Indian Limitation Act, 1908. The application filed by him on April 16, 1959 was, therefore, clearly barred by limitation B and was rightly dismissed by the courts below.

In the result, the appeal is dismissed with costs.

V.P.S.

Appeal dismissed.

MURARILAL

February 21, 1967

K. N. WANCHOO

R. S. BACHAWAT

V. BHARGAVA, JJ.

Indian Limitation Act

Art. 164

16th Augtlst 1958

16th April 1959

Art. 164

Indian Limitation Act, 1908

Art. 164

Limitation Act

CML APPELLAli JURISDICTION

Allahabad High Court

S. G. Pntwardhan

Rameshwar Nath

Mnhinder Narain

Prnyag Das Agarwal

J. P. Goyal

Raghunath Singl1

Bacbawat

art. 164

Indian Limitation Act, 1908

August 16, 1958

April 16, 1959

First Civil Judge, Kanpur

C.P.C

art. 164

Indian Limitation Act, 1908

C.P.C

art. 164

Indian Limitation Act, 1908

Davar

art. 164

High Court Suit No. 411 of 1909

Pundlick Rowji

Calcutta High Court

Kumud Nath Roy Chowdhury

Bombay High Court

art. 154

Macleod

art. 164

art. 164

art. 164

April 13, 1959

art. 164

Indian Limitation Act, 1908