IUMALAYA HOUSE CO. LTD. BOMBAY

CHIEF CONTROLLING REVENUE AUTHORITY

February 1, .1972 [K. S. Hl!GDB AND P. JAGANMOHAN REDDY, JJ;]

Indian Stamp Act (2 of 1899), Sch.I; art. 23-Dtterml"'1ion of.value of consideration by Revenue-How should be done.

'The lessee of a plot of land from Government sub-leased it and tho sub-lessee built a building on it consisting of flats, shops and officles. 11" .sub-lessee assigned the rights of occupation of those &ts etc. under various

agreements. 1bereafter, the appellant-company was incorporated and the .sub-lessee pwported to assign all his rights in the building to the appellant- -company. In the pre3111blo to tho deed it was recited that the company bad been formed foi" the bettor admiJligtration of .the building and for the , protection of the interests of tho persons occupying the flats etc., and that tho su!Hessee had ugroed to assign to tho appellant-company all his interests in the land and the building. The consideration mentioned in 1he document waa nil and the document bore a stamp of 12 amr.is. When it waa presented for registration, the authority impounded the deed, held <hat the appellant<, bmpany was formed of and for the pei"SOns who b&d

purch3aed the fiats etc., that tho real consideration for the aasigrunent wos made up oartly of what was paid by the occupiera of the flats etc., and

determined the stamp duty and penalty under s. 40 of the Stamp Act, 1899. . .

On a reference to the High Court it was held, that the article in the Schedule to the Sbmp. Act applicable is 23.

On the question of .consideration, however, while one Judge held that the consideration was 'nil' as mentioruod in the deed, the majority held that the Revenue was not bound to accept the quantum of consideratiOll mentioned in the deed,

that the deed incl:>rporated into itself the various agreements entered into between !he sub-lessee and the persons to whom rights were assigned in f

the flats etc., and that the consideration was the total amount payable to <he sub-lessee by those assignees.

Allowing the appeal to this Court,

HELD : (I) Before the terms and conditions of an agreement 03D be "Said to have been incorporated into another document, it must be shown

that the parties intended to do so. In the present case, the mere reference

. G to the earlier transactions in the deed did not amount to an incorpOration ;; n it of the te'rms and conditions of those transactions, ~338 F-H]

(2) In view of s. 27 of the Stamp Act the parties to a; docwnent are required to set forth in the document fully and. truly, the coilsideratioo

(if any) .ind all other facts and c)ircumstances affecting the chargeability of that document with duty. But a failure to do so is merely pllJ!isl>al!le under s. 64 of the Stamp Act.

There is no provision empowemjg the H Revenue authorities to make an independent inqwry of the ·.value of the -property conveyed for determining the duty, even usuming that the .charging words in art. 23 do not mean that the Revenue 111118t b&ve regard

only to what the parties to the instrument have elected to state the consideration to be, but can assess the duty upon the value of the consideration as disclosed upon an examination of the terms of the instrument as a whole. [339 A-DJ

(3) There is a Jong line of decisions of the High Courts holding that the Legislature had not empowered the Revenue to make an independent inquiry M regards the valuation of the right sought to be assigned. Thal

view IS correct and the question must also be held to be settled bY stare decisls. (340 D-FJ

Ramen Chetty v. Mohomed Ghouse, I.L.R. 16 Cal. 432, Sakhart:m Shankar v. Ranu:handra Babu Mohire, I.L.R. 27 Bom. 279, Muhammad Muzafjar A.Ii, In re. IL.R. 44 All. 339, Sri Siloart:olfn Ramal/a & Anr. v.

State of Bihar, I.L.R. 39 Pat. 228 and Bharpet Mohammad Hussain Sahib & A.nr. v. District Registrar, Kurnool, I.L.R. [1964] A.P. ) , approved.

( 4) In any event, there was no basis for holding that the consideration for the deed was the '<IIllOllnt eceived by the sub-lessee from tloe persons to whom he assigned rights in the fiats etc, Those penona ccquired an independent right and title.-whether perfect or notn before the impounded deed was executed, and their rights did not 11ow from the impounded deed. (340 F-0]

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 660 of 1967 and 58 of 1972. Appeals by certificate/ special leave from the judgment and decree dated August 11112, 1964 of the Bombay High Court in Civil Reference No. 6 of 1959.

S. T. Desai, P. C. Bhartari, J. B. Dadachanj{, 0. C. Mathur and Ravinder Narain, for the appellant (in both the appeals).

V. !J. Desai and B. D. Sharma, for respondent No. 1 (in both

e appeals).

The Judgment of tl1e Court was delivered by Hegde, l. Both these appeals, the former by certificate and the later by special leave arise from the decision of the High Court of Bombay in a reference under section 54 _of the Bombay Stamp Act.

I .

When Civil Appeal No. 660 of 1967 came up for hearing on a previous occasion, objection was raised as to the maintainability of the appeal on the ground that the High Court was not compe- G tent to grant a certificate in the case under Art. 133 of the Consti• tution. At that stage, the appellant sought a.n adjournment of the

appeal so as to enable it to move this Court for special leave against the impugned decision. That prayer was allowed by this Court.

Thereafter the appellant sought and obtained special leave of this Court to appeal against the decision in question. Hence Civil H Appeal No. 58 of 1972 came to be filed. In view of this aPJlCI!]., we may now proceed on the basis that Civil Appeal No. 660 of 1967 stands withdrawn and the same is disposed of accordingly.

Hereafter we shall only deal with Civil Appeal No. 58 of 1972.

The facts leading up to this appeal are as follows :- On November 18, 1950, plot No. 79 at Palton Road, Bombay, admeasuring about 1,368 square yards was leased by the Government of Bombay for a period of 999 years from June 26, 1942 to one Lily Investment Corporation Ltd. On December 11, 1950, the said Lily Investment Corporation Ltd, gave a sub-lease of the said plot of land to Uttamchand Tulsi\las for a term of 999 years (less one day), from June 26, 1942. Thereafter Uttamchand constructed a building called "Himalaya House" on that plot consist ing of several flats, shops and offices. Under various agreements, he appears to have assigned the right of occupation in those flats, shops and offices t.o several persons. One such agreement was with one Motiram Shewarama Vallicha.

That was in respect of one flat.

That agreement is in the record. As the High Court has placed considerable reliance on that document, it is necessary to quote the relevant clauses therein viz. 2, 5 and 16. Those clauses read thus:

"2. That the Party hereto of the Second Part hereby agrees to acquire the block bearing No. 12 on the ground floor of the said building for the total sum of Rs. 10,000 (Rµpees ten thousand only).

S. That the possession of the said block shall be delivered to the party hereto of the Second Part provided all the amounts due under this agreement and particularly indicated in condition No. 3 hereof are paid by the party hereto of 1jhe Second Part to the Party hereto of the First Part and upon the delivery of such possession the party hereto of the Second Part shall be entitled to the use and occupation of the said block without hindrance PROVIDED NEVERTHELESS that nothing contained in these presents shall be construed as a demise in law of the said leasehold lands or any part thereof or the buildings thereon, such demise to take place only upon the transfer by a formal conveyance to a Co-operative Society or Incorpora1)ed body to be formed as hereinafter agreed.

16. That the party hereto of the First Part shall form a co-operative society or any other incorporated body recognized in law and the partY hereto of the Second Part shall join such co-operative society or any other incorporated body.

The party hereto of the First Part agrees to convey transfer or assign to the said society or any other incorporated body as the case may be the aforesaid lands and buildings provided that the costs and expenses in connection with the

requisition of such society or incorporated body, as well as the costs of preparing, approving, engrossing and stamping the Assignment, Transfer, or Deed of Conveyance required to be executed by the party hereto of the First Part shall be borne by such society, or the incorporated body as the case may be."

On June 28, 1955, the appellant company was incorporated and registered under the provisions of the Indian Companies Act,

1913. On December 30, 1955, Uttamchand purported to assign all his rights in the building to the appellant company under a deed.

In the preamble to that Deed after tracing Uttamchand's c

tille to the property, it is recited "AND WHEREAS the Assignee Company has been formed for the better administration of the said building and for the protection of the interes.ts of the persons

occupying flats, offices and shops therein AND WHEREAS the Assignor has agreed to assign to the Assignee all his interests in the said piece of land and building." Clause 1 of that Deed provides as under :- "l. The Assignor (i.e. Respondent No. 2) doth hereby

for no consideration assign into the Assignee (i.e. the Appellant Company) ALL THAT the piece of land comprised in the before recited Lease together with the buildings a!]d erections now standing and being thereon togeher with all rights easements and appurtenances thereto belonging and together with all the right title and interest whatever of the Assignor in the building known as Himalaya House EX- CEPT AND RESERVED as in the before' recited Lease more particularly mentioned TO HOLD the same unto the Assignee or .all the residue now unexpired of the term of years granted by the before recited Lease SUBJECT to the rent reserved by and to the Agreements convenants and conditions contained in the before recited Lease henceforth on the part of the Assignee to be paid observed and perforn1ed." .

The said document bore a stamp of annas 12 only. When the G same was presented for registration, the Sub-Registrar of Bombay impounded the same and sent it to the Assistanf Superintendent of Stamps, Bombay .. That officer by his letter dated June 26, 1956 mfonned the appellant company that "as it was formed of and for the erson~ who had purchased the flats in lhe buildi'ng, the real cons1deral!on for the Assignment was made up partlv of H what was paid by the flat holders and the status of the appellant company was tat of the nominee of the flat holders so far as the Assignment was concerned." He further stated that in the absence of any mention of consideration in the document, the then value 9-887 Sup; CI/72 . '

of the premises was an index of the consideration. He purporting A to act under section 40 of the Indian Stamp Act, determined the stamp duty at Rs. 95,997 after valuing the building at Rs.

16,00,000. Further he imposed a penalty of Rs. 20,000. He called upon the appellant company to pay the stamp duty as well as the penalty. On reeipt of that communication, the appellant company applied to the Chief Controlling Revenue Authority to B revise othe order of the Assistant Superintendent of Stamps or in the alternative refer the matter to the High Court for its opinion.

Thereafter the Chief Controlling Revenue Authority made the reference referred to earlier to the High Court. He submitted two questions for the opinion of the High Court, viz :

"(!) Whether Himalaya House Co. Ltd. the Assignee in the Assignment dated 30th December 1955 is tlie nominee of the several flat holders who have purchased the flats in the Himalaya House and whether the Assignment in queStion is a Conveyance or a sale for a price whkh has passed from the hand of the flat holders long before t.he date of assignment.

( 2) Whether it was competent to the Assistant Superintendent of Stamps, under section 40 of the Indian Stamp Act, 1899 (now section 39 of the Bombay Stamp Act, 1958) to go beyond the terms of the document when i4 is mentioned in E the doc.ument that no. consideration is passed and assess the stamp duty in the manner mentioned by him in his order dated the 26th June 1956."

The matter came up for hearing before a bench of Jihree Judges of the Bombay High Court presided 0ver by the learned Chief Justice.

F At the hearing, the learned Judges opined that the questions submitted by the Chief Controlling Revenue Authority were not appropriate and, therefore, they recast those questions as follows:- '

"l. Under which article in Schedule I to the Stamp Act should the "Assignment Deed in question be stamped?

2. If Article 23 applies in this case, what is the consideration for the Assignment Deed ?"

All the Judges unanimously held that the Article applicable to the case is Article 23 in the FirsU Schedule to the Indian Stamp Act, which will be !lereinafter referred to as "the Stamp Act". But H while answering the second question, the learned Chief Justice and Naik. J. opined that "the consideration for the Assignment Deed is

the total amount which was payable to the Assignor Tulsidas . under the agreements between him and the persons to whom he had, under those agreements, given the right to occupy the fiats, offices and shops in the building." But Mody J. differed from his colleagues and came to the conclusion that "the consideration is as mentio, ned in the Deed .of Assig11I11ent itself i.e. no consideration."

All the Judges unanimously came to the conclusion that the consideration mentioned in the document is nil. This conclusion is obvious because Cta)I_se 1 of \he Assig11I11ent Deed says that the Assignor assigns his rights 'for no consideration'. All of them were also unanimous in their conclusion that for finding out the consideration, the concerned authorities (who will be hereinafter referred to as 'Revenue') cannot tra•,'\ll outside the document;_ it

should be 'as set forth therein'. But the majority took the view that the Revenue was not bound to accept the quantum of consideration mentioned in the document; it could determine the same by taking into consideration the facts available from the impounded document.

They fur(her held that the impounded document incorporates into itself the various agreements entered into between Uttamchand and the various persons to whom he had assigned certain rights _in rsQCct of flats, offices and shops referred to earlier. In their view, t; he consideration paid by those persons to

Uttamchand formed part of the consideration for the Assignment Deed in question. Naik J. went a little further and held that alternatively the Deed in question can be considered as a "gifti" under Art. 33 of Schedule I to the Stamp Act Mody J. opined that there is no basis to ho!d that the agreements entered into between Uttamchand and the various persons to whom the fiats, offices and shops had been assigned were similar to the agreement entered into between him and_ Motirmn Shewarama VaJlicha. He held that on the basis of the mate!ial before the Court, it wasnot possible to cc;>me to the conclJ!SJ'?n that they had entered into agreements witl1 Uttamchand sumlar to the agreement , entered into

between Uttamchan4 and Motiram Shewarama Vallicha.

He further eld that on a P!ain reading of the Assignment Deed, it is

ot Pc;>SS1ble to come to the conlusion that !he terms and condi

lions Ill !he agreements entered mto by Uttamchand with those to

horn he hll; d assigned fiats, offices and shops,.were incorporated mto. the Ass1gnl'llent D_eed. . ·

None of the Judges upheld the conclusi<>n of the Assistant Superintendent of Stamps that the appellant company is a nominee of the persons to whom !he flats, offices and shops had been assigned; nor did they agree with his conclusion that if in a document, the value of the rights assigned is not mentioned, it is permissible for the Revenue to assess their value independently.

SUPREME COURT RE!'OR.TS

[1972] 3 S.C.R.

The contention tha_t the appellant company is a nominee of the various persons to whom flats, offices and shops had been assigned was not pressed before us; nor was it urged before us that the Revenue is competent to make an independent assessment of

the value of the rights assigned.

Though at one stage, it was feebly suggested that the Deed of Assignment may be considered as a giit but that contention was not elaborated; nor do we see any merit in that contention because in the first place, it does not purport to be a gift; secondly, the valuation of "gift" under Article 33 of the First Schedule has to be made on the same basis as the valuation of a "conveyance" under Article 23 of that Schedule. Article 3 3 specifically says 1; hat the duty payable on a gift deed will be "same as a conveyance for a consideration equal to the value of the property as set forth in such instrument."

For the purpose of this case, we shall proceed on the assumption, without deciding, that the charging words in Article 23 of the Stamp Act_ "where the amount or value of the consideration for such conveance as set forth therein" do net mean that the Revenue must have regard only to what the parties to the instruments have elected to state the considetation to be, but the duty must be assessed upon the amount or value of the consideration for the transfer as disclosed upon an examination of the terms of the instrument as a whole. We are of the opinion that the learned Chid Justice and Naik J. were not justified in holding tha~ the

D"u of Assignment incorporates into itself the various. agreements entered into between Uttamchand and the persons to whom he assigned flats, offices and shops.

The only reference to tlhose pc.rsons in the Deed of Assignment is in the preamble .wherein it is stated ''AND WHEREAS the Assignor having erected a building known as Himalaya House on the said piece of land had granted to certain persons the right to occupy flats. offices and shops in the said building AND W~REAS llhe Assignee Company has been formed for the better administration of the said building and for the protection of the interests of the persons occupying the ilats. ofllces and shops therein." These clauses merely refer to the earlier transactions. They do not' incorporate into the Assignment Deed the earlier agreements. with the persons referred to therein.

Mere reference_ to some earlier transactions in a document does not amount to an incorporation in that document, of the terms and conditions relating thereto.

From the language used in the Assignment Deed, it i~ not possible to come to the conclusion that the tem1s and conditions of the earlier transactions have been made a part of that Deed. Furllher barring one particular agreement, other agreements were not before the Court.

Therefore, it is not possible to know what the terms and conditions p[ those agreements were. Before the terms and conditions of an

agreement can be said to have been incorporatd into another document, the same must clearly show that the parties thereto intended to incorporate them. No such intention in available in this case.

It was urged that in view of section 27 of the Stamp Act, it was permissible fo~ the Revenue to look into the terms and conditions of the agreements entered into by Uttamchand with the various persons to whom he had assigned fiats, offices and shops •. particularly in view of the fact that the impounded document makes reference to those agreements. We are not able to accept that contention.

Section 27 prescribes that "The consideration (if any) and all other facts and circumstances affecting the churgeability of any insrument with duty, or the amount of the duty with which it is churgeable shall be '.ully and truly set forth therein." It is true that in view of this provision, the-parties to a docu-. ment are requireµ to set forth in the document fully and truly the consideration (if any) and all other facts and circumstances affecting the chargeability of that document with the duty or the amount of the duty with which it is chargeable. But a failure to comply with the requirements of that section is merely punishable under section 64 of the Stamp Act. No provision in the Stamp Acf em powers the Revenue to make an independent inquiry of the value of the property conveyed for determining the duty chargeable.

Article 23 is the Article that governs the charging of stamp duty on "conveyance". That Article' to the extent relevant for our pre sent purpose reads :

"23. Conveyance (as defined by section 2(10) no~ being a transfer charge or exempted under section 52- Where the amount or value of the consideration for such conveyance as set forth therein .......... " This Article bas come up for consideration before various High Courts on a number of occasions. In Ramm Chetty v. Mohamed Ghouse( 1) the Calcutta High Court held that in determining whether a document is sufficiently stamped for the purpose of deciding upon its admissibility in evidence, the document itself as it stands, and not any collateral circumstances which may be shown in evidence must be looked at. In Sakharam Shankar and Others v. Ramchandra Babu Mohire, (') it. was held that in determining the question whether a particular docwnent is sufficiently stamped, the Court should look at the instrument as ii stands. A Full Bench of the Allahabad High Court in the matter of Muhammad Muzaf]ar Ali(') held that if in a deed of gift the value of the property dealt with is not set forth, the deed does not require any stamp, and it is not within the competence of the Collector to have the said property valued in order to assess the duty

(I) (!LR 16 Cal 432). 2 (!LR 27 Bom 2791.

Pl (!LR 44 All. 339).

payable. If, however, the value of the property is intentionally omitted with a view to defraud the Revenue, a prosecution will lie

undr section 64 of the Stamp ct. A Division Bench of the Patna High Court in Sri Sitaram Rama/ia and Another v. State oj Bihar(') held 1that die Collector had no power under section 40 of the Stamp Act to embark upon an inquiry with regard to the market value of the properties covered by the document! and require the payment of further stamp duty in accordance with his finding as to valuation and, therefore, that the impugned orders of the Collector, Commissioner and the Board were ultra vires and were liable to be set aside under Article 227 of the Constitution.

Therein the Court was c.!Jnsidering the scope of section 5 8 of the Stamp Act which requires that an instlrument of settlement should be stamped with the same <, luty asl a bond "for a sum equal to the mnount or value of th~. property settled as set forth in such settlement."' The Court observed that the words 'as set forth in the settlement" in the section refer back to the word "value" and not to the words "property settled". Recently the same view was taken by the A, ndhra Pradesh High Court in Bharpet Mohammad Hussain Sahib and Another v. District Registrar, Kurnool(2). No decision taking a contrary view was brought to our notice. The question arisin_g for decision in this case is settled by stare decisis.

We are entirely in agreement with the view expressed in those decisions. Even if we had bleen inclined to place a different interpretation on Article 2}, we would have hesitated to do so in view of the long line of decisions to some of which we have already ma!le reference. The Legislature may have had good reasons for not empowering the Revenue to make an independent inquiry as regards the valuation of the right sought to .be assigned.

Under any circumstance, there was no basis to hold that the consideration for the impounded Deed is the total amount received by Uttamchand under the agreements, entered into between him and the persons (o whom he had assigned certain rights in the fiats, offices and shops in the building. Those persons had an independent right of their own. Their rights did not flow from the impounded Assignment Deed. Whether the title obtained by them was perfect or not, there is no denying of the fact thllt they had acquired valuable rights even before the impounded Deed was executed.

For the reasons menti, oned above, we allow this appeal and in place of the answers given by ihe High Court, we answer the question formulated by that Court 11hus :

"I. The Article applicable in this case is Article 23 in H the First Schedule to the Stamp Act, and

<I) (ILR 39 Pat • 228).

(2) !LR. (1964) A.P. I. )

2. the consideration is .as mentioned in the Deed of

Asslgome.nt itself i.e. no consideration."

The first respondent shall pay the costs· of the appellant ip Civil Appeal No. 58 of 1972. There will be no order as to costs in Civil Appeal No. 660 of 1967.

V.P.S.

IUMALAYA HOUSE CO. LTD. BOMBAY

CHIEF CONTROLLING REVENUE AUTHORITY

February 1, .1972

P. JAGANMOHAN REDDY, JJ

Indian Stamp Act

art. 23

s. 40

Stamp Act, 1899

s. 27

s. 64

art. 23

Muhammad Muzafjar

olfn Ramal

Bombay High Court

S. T. Desai

P. C. Bhartari

B. Dadachanj

. C. Mathur

Ravinder Narain

V. !J. Desai

B. D. Sharma

Hegde

High Court of Bombay

section 54

Art. 133

November 18, 1950

Bombay

Government of Bombay

June 26, 1942

Lily Investment Corporation Ltd.

December 11, 1950

Lily Investment Corporation Ltd

Uttamchand Tulsi\las

Uttamchand

Motiram Shewarama Vallicha

June 28, 1955

Indian Companies Act

December 30, 1955

Clause 1

June 26, 1956

section 40

Indian Stamp Act

Himalaya House Co. Ltd.

section 40

Indian Stamp Act, 1899

section 39

Bombay Stamp Act, 1958

26th June 1956

Schedule I

Article 23

Article 23

Indian Stamp Act

Naik

Mody

Art. 33

Schedule I to the Stamp Act

Motirmn Shewarama VaJlicha

Article 33

First Schedule

Article 23

Article 3

Article 23

section 27

Section 27

section 64

Article 23

section 2(10)

section 52

Calcutta High Court

Allahabad High Court

Muhammad Muzaf]ar Ali

section 64

Patna High Court

section 40

Article 227

section 5

Article 2

Article 23

First Schedule


STATE OF U.P.

SAYED ABDUL JALIL February 1, 1972

[S. M .. S!KRI, C.J., A. N. RAY AND M. H: BEG, JJ.]

A1aho1n111edan law-Order of Muslim ruler of Princely State a.Uotting .l1ouse-lf would n1J1ount to a gift of the corpus-Whether operates tu a grnnt of life e:-.tate or a revocable licenct-lndian Evidence Act ( 1 o/ 1872), s. 92 proviso (6)-Admissihilit, v of other el'idtnce.

Pursuant to an order by a Muslim ruler of an erstwhile princely-State, th..: respondent \VUs allotted a house o:ind he \\'as Jiving in it.

After the merger of th~ princely-State with the appellant-State, rent was demanded from the resondent and he filed a suit for a declaration that he was the o\vner in possession of the house; and in the 3(tefnative; that he was a licensee entitled to remain in possession for life without payment of any rent.

The High Court, in sec~:md appeal, held that the use of the Urdu words 'inteqal' and 'atta' showed that the Ruler intended the order to be a valid declaration of gift under Mohammedan Law and that when the respondent took possession of the house, he became its owner. The High Court also held that no other evidence was admissible for deciding on the Ruler's intention. -

Allowing the appeal to this Court,

HELD : ( 1) There being no mention in the order either of riahts of ownership or those of a life .. estate holder, the mere use of the two words, did not determine what was meant' to be granted. The word 'inteqal' is used in connection with a transfer of property, but in the context of its use here, it could only indicate that the respondent was to )lave chanae or tramfer his residence in the physical sense.

The word

1atta' iS: used to denote all kinds of grants including a. mere permission to live in house.

Therefore. assuming tbat the order reduced the terms of a grant to writing, oral and other eYidence was both necessary and. admissible under s. 92, proviso (6), Evidence Ac~, to resolve the latent ambiguity.

The evidence adduced in the case, however, is more consistent with the view tht the Ruler meant to resolve the immediate financial difficulty of the respondent by giving him free residential accommodation than with a conferment of the ownership of or a life interest in the house. [346 B-H]

( 2) There wos no declaration of any gift either of the corpus or the usufruct and the admissible evidence relating to the nature of the transac- tion, which the High Court should have considered, showed, tht the transaction amounted to nothing more than a grant of '1 licence revocable at the grantor's option. From the mere expenditure by the respondent of money over some necessary repairs, an inference of a larger gfant O'Jnnot be drawn. [347 C-EJ

CML APPELLATE JUP.ISD!CTION : Civil Appeal No. 279 of 1967.

Appeal by special leave from the judgment and decree dated September 15, 1966 of the Allahabad High Court in Second Appeal No. 222 of 1960.

G. N. Diks/1it and 0. P. Ran.a, for the appellants.

E. C. Agrawala, for respondents Nos. 1, 2, 4 and 5.

The Judgment of the Court was delivered by

Beg, J. There are two appeals by Special Leave before us, Leave, against the Judgment a.nd decree of a learned Judge of the Allahabad High Court allowing a plaintiff's se.cond appeal

The plaintiff's case was that the Governmeur of Rampur had given him a house "under the orders of His Highness the Nawab of Rampur, passeq on 23rd June, 1945". It appears that, after the merger of Rampur State in Uttar Pradesh in 1949, when Rampur became a district of Uttar Pradesh, this house was given by the Governme.nt of Uttar Pradesh to the Municipal Board of

R&mpur, Defendant-Appellant, which c!emanded rent from the plaintiff by notice.

On the plaintiff's refusal to pay, the house was attached on 23rd February, 1955.

The plaintiff deposited a sum of Rs. 100under protest. He then filed his suit, on 26-10-56, for a declaration that he is the ownr in possession of the house, and, in the alternative, that he is a "licensee" entitled to remain in possession of the house for life without payment of rent. -

The defendants, the State of Uttar Pradesh, the Municipal Board of Rampur, and the Public Works Department at Rampur, ·

dmed the alleged gift of either the ownership or of a life-intere!ll in the house to the plaintiff.

They also pleaded that there was no relationship of landlord and tenant between the plaintiff and the defendants.

Their case was that, if any permission to reside in the house, was given to the plaintiff by the ruler of the State

of Rampur before the merger of Rampur with Uttar Pradesh, it was valid and effective only so long as the plaintiff Was in the service of the former ruler of Rampur.

They set up a claim to "damages for use and occupation in the form of rent from the plaintiff at Rs. 10/- per month from 1-4-1953 to 30-1-1954".

According to them, the plaintiff's licence, if any, automatically te•minatec! when the State of Rampur merged with the State of Uttar Pradesh. The defendants had also pleaded that IM alleged gift, which was not governed by Mahomedan law, could not be upheld because no registered deed of gift was executed to transfer a house the value of which was far in excess of Rs. 100/-.

The Trial court as well as the first Appellate Court had found, after an examination of all the evidence, including the alleJ?ed

order dated 23rd June 1945, of His Highness the Nawab of A Rampur (Exhibit 1), a Jetter dated 30th June l.949 {Exhibit A-10) from a Minister of Rampur State to "the Secretary (Build in gs), fixing rent for the house and the oral evidence that the

plcintiff had not proved either of the two alternative claims set up by him.

A learned Judge of the Allahabad High Court had, upon the plaintiff's second appeal, reversed the concurrent B findings of fact recorded by the Courts below because the learned Judge thought that "the order of the Nawab of Rampur dated 23rd June 1945'', constituting a valid declaration of a gift, by the owner of the house, followed by the plaintiff's admitted actual possession of the house conferred ownership of the house upon the plaintiff-respondent according to Mahomedan law.

The c learned Judire also held that nothing beyond his order of the Nawab could be looked into for deciding what was intended by the Nawab and that the use of the words "inteqal" and "atta" in the following extract from the order in Urdu determined the in•cnt of the Nawab conclusively. "Ap ki sakunat ke waste Abdul Karim Sahib wala makan atta farmaya gaya hai.

Ap. aj' D hi us me muntaquil ho jayen . . . . . . Ap un se mil kar inteqa makan ki karrawai kariye".

The questions arising before us for decision are : firstly, wbether the alleged gift is governed by Mahomedan Law; secondly, whether the requirements of Mahomedan Jaw for establishing a gift of the house or of its usufruct for life to the plaintiff could be E held to have been satisfied in this case; and, thirdly, whether nothing beyond the order of 23-6-1945 could be looked into to determine the Nawab's intention.

One could legitimately presume that a gift by the Nawab of Rampur, a Muslim, would be governed by the rules of Mahome- F dan Jaw if the Nawab was dealing with his own private property.

In the case before us, we find that the plaintiff himself has pleaded that he acquired his right and title to the house in dispute from the Government of Rampur State, although the action of the Governmerii was said to be "under the orders dated June 23, 1945, of His Highness the Nawab of Rampur". Upon an exami G nation of the alleged order, which has been treated by the learned Judge of the Allahabad High Court as a. valid declaration of a gift of the house by its owner, governed by Mahomedan law, we find that it is only a piece of information sent to the plaintiff who is described as "Nigran Shikar Mahi" or "Supervisor of Fishing." The communication, translated in English in the paper book of this Court, reads as follows : H

''His Highness has pssed orders that you should immediately vacate the house in which you reside an.d

A pay up to the landlord all his dues. Abdul Karim wala house has been given to you for your residential purpose. You should shift to that house this very day.

The Executive Engineer (Buildings) has been intimatto allot the said house to you immediately. Please contact him arid take steps to vacate the house".

B The plaintiff himself had produced Agha Khan, the Assistant Military Secretary of the Nawab of Rampur, who had signed and sent the communication, set out above, to the plaintiff. His. evidence shows !hat the Nawab of Rampur had probably given some oral order to get the private houe in which the plaintiff was C living vacated, and "to give" another house to him for residence.

Under cross-examination, the witness stated that, by using the -vord "inteqal" in the writing, he meant to convey that "the plaintiff should leave that house and live in the house in dispute." This witness, who was not owner of the house, could not gift the house in dispute to the plaintiff.

He could o.nly "give" the house

to the plaintiff in the sense that he could, under the Nawab's orders, obtain its allotment for the plaintiff. He said that its previous occupant, a mechanic, was also occupying it, without payment of any rent, with the Nawab's permission. The implication of such a statement could only be that the plaintiff had a similar permission. He did not depose that the Nawab had asked him to inform the plaintiff that the Nawab was making a gift of the house to the plaintiff. The witness stated that the house belonged to the Government of Rampur.

All this evidence is consistent with th~ view that the Nawab meant to do nothing more than to resolve the immediate difficulty of the plaintiff, by giving him some free residential accommodation in a house owned by the Government so that the plaintiff could clear up his F dues to his landlord, rather than with the conclusion that the Nawab intended to confer the ownership of the house on the plaintiff.

It is well established that a document must be read as a whole. In a document meant for a transfer of ownership, the purpose is generally stated clearly to be that the property given will be owned and possessed \J.enceforth by the donee in such a way that he could use it or deal with it as he liked. The only 'karawai' or proceeding, to which a reference is made in the document. seemed to be "allotment" of accommodation or transfer of plaintiff's residence into another house, owned by the State, for which appropriate steps were to be taken. by a Government official. The communication savs, as translated, that the Executive Engineer (Buildings) had been informed that the house in question was to be "allotted" to the plaintiff. If the laintiff was to become its owner, that would have been commumcated to the

Executive Engineer.

A transfer of ownership would, in the ordinary course, be expected to be evidenced by much more clear l!l)d unequivocal language.

Tl)e appropriate proceeding after a gift is that of mutation in Municipal records. No evidence was given of any mutation in a Municipal record showing transfer of ownership of the 'corp_us' for which the term 'milkiyat' is used.

It is true that, as the learned Judge observed, the word 'Inteqal' is used in connection with a transfer of property. This is so when it occurs in juxta-position wifu 'Jaidad'. _In lhe document before us, the following words indicate that transfer which the Nawab had in mind was that of the plaintiff himself to another residence in the physical s"nse: "Ap aj _hi us me muntaqil ho jayen." This mening is further emphasised by the use of the words "sakunat ke waste" (for residential purpose) which was the only stated object of the "inteqal." Again, the word "atta" is used to denote all kinds of grants. The grant may be of a license or of ownership of property. The word "atta" could be used by a courtier, as a matter of form, to indicate anything granted by the Nawab whether it be mere permission to live in _ a house or something more.

If the intention of the Nawab was to grant ownership, the language used to communicate it would not have left it in doubt. - It is significant that the plaintiff, who stated in his evidence that the gift was meant to have been made "in lieu of old services", had not mentioned this object of the alleged donation in his plaint. It is also evident that he was not sure of his own rights or position because_ he took up an alternative case of a gift -of the right to live in the house for life. We do not find the word 'hibba' or gift used at all in this document. Nor is the word "amree:' or any other similar word; which could connote a lifeestate, used in the document. There being no mention eit!ier of rights of ownership or those of a life-estate holder, the mere u; e of the words '.'inteqal" and "atta" does not determine, as the learned Judge assumed, what was really meant to be granted or transferred. We think that oral and other evidence, besideS the document under consideration, was both necessary and admissible under ProViso (6) to Sec. 92 of the Indian Evidence Act to resolve a latent ambiguity caused by the two vague words used in it and to show how its language was related to _the existing facts even if one were to assume that the information contained in it was meant to reduce the. terms of a grant to the foi'In of writing.

Upon the view we are taldng of the facts of this Cll$C, it is not necessary for us to embark on any detailed discussion of essentials

U.P. STATE V. ABDUL JAL!L (Beg, !.) 347.

of a gift under the Mahomedan law. It is enough to point out that even if the rules of Mahomedan law were to be applied to the transaction before us the very first of the three conditions of a valid gift, given in Mulla's 'Principles of Mahomedan Law"

(16th Edn. p. 141) that of "a declaration of gift by the donor" -is lacking here. Such a declaration must indicate, with reasonabl1: clarity, what is really gifted. It is also not necessary for us to deal with the distinction between separable gifts of the 'corpus' und the 'usufruct', recognised by Mahomedan law, which references to Amjad Khan v. Ashraf Khan(<) and Nawa- ;, ish Ali Khan v. Ali Raza Khan(') would disclose.

After an examination of all the admissible evidence, relating to the nature of the transaction set up by the plaintiff, which should have been ccnsidered, we are satisfied that the plaintiff failed to prove either a grant of the 'corpus' or of the 'usufruct' of the house to him for his life by its owner. The transaction before us would amount to nothing more than the grant of a license, revocable at the Grantor's option to reside in the house so long as the grantor allowed the licensee to do so. Such a grant is known as "areeat" in Mahomedan law (See: Mulla's Principles of Mahomedan Law, Sixteenth Edition, page 166). The tenns of the alleged grant, even if they are to be found only in the communication sent to . the plaintiff, are not, read in the context in which they occur, capable of raising an. inference of a larger grant. The mere expenditure of small sums o.f money over necessary repairs, alleged by the plaintiff, could not convert it into an irrevocable license.

Consequently, we allow this appeal and set aside the judgment and decree of the High Court. We do not think that this is a fit case in which the appellant should get the costs of this litigation as the plaintiff had some grounds to be misled by the communication received by him.

The parties will, therefore, bear their own costs throughout.

V.P.S.

Appeal allowed.

(I) A.l.R. 1929 P.C. p. 149. (2) A.l.R. 1948 P.C. r. 134.

STATE OF U

SAYED ABDUL JALIL

February 1, 1972

A. N. RAY

M. H: BEG, JJ.

s. 92

s. 92

G. N. Diks/1it

P. Ran.a

E. C. Agrawala

Beg

Rampur

23rd June, 1945

Rampur State

Uttar Pradesh

Municipal Board of

R&mpur

23rd February, 1955

State of Uttar Pradesh

Municipal Board of Rampur

State of Rampur

Allahabad High Court

Mahomedan

Mahomedan Jaw

Mahome- F dan Jaw

Government of Rampur State

June 23, 1945

Agha Khan

Government of Rampur

Sec. 92

Indian Evidence Act

Mulla


ANAL CHANDRA BANARJEE

THE STATE OF WEST BENGAL February 2, 1972

[J. M. SHELAT AND H. R. KHANNA, JJ.]

Preventive detention-Vagueness of ground--Omission to nzention locality where incident occurred--Or-Specify the group lvith which 1he petitioner came into clash-Petitioner prevented froni effectivel_v making representation-West Bengal (Prevention of Violent Activities) Act, 1970.

The petitioner was detained under s. 3 (i) and (iii) of the West Beng:il (Prevention of Violent Activities) Act, 1970.

The first and the second ground of detention served on him mentioned two incidents of t\left and throwing of bombs with intent to kill said to have been dommitted in the yard of Naibati Railway Station. The third and the last ground was that on January 13, 1971 between 12 and 12.20 hrs. the petitioner along with

his associates "being armed with bombs, swoh:ls, lathis, etc. entered in a clash with another group with a view to kill them" and that bis "violent activities cre.ated a serious panic in the Ststion area ruid disturbed public ordel'." The petitioner contended, inter alia that ground No. 3 was vague and uncertain and was couched in such indefinite langll'!lge that it would be itppossible for the petitioner to effectively make a representation and therefore his detention was invalid.

In his representation the petitioner had merely denied all the three grounds and maintai.ned toot he had no concern with any of the three incidents alleged in the grounds of detention.

In bis written arguments submitted to this Court the petitioner stated that the allegations in respect of all the grounds were made against him by the Naib:i.ti Railway Police and that they were false. In the reply affidavit. of the state the averment for the first time made was that the alleged incident in ground No. 3 took place not in Naibati Railway Station area but at another railway station.

Allowing the petition,

HELD : (I) Ground No. 3 is vague by reason of its om1Ss1on to mention the locality. It is clear that the petitioner was under the impression, in the absence of the place or the locality where the incident was

said to have taken place having been mentioned, tht the said incident had taken place either in Naibati Railway Station or the area under the jurisdiction of Naibati police. Therefore, apart from ground No. 3 beina vague by reason of its omission to mention the locality, there was in the context of the other two grounds a likclthood of the petitloneir being under G a wrong impression that •<!'Ording to the District Magistrate the incident there alleged had taken place in the Naibati Railway Station area. That being so, the omilision to mention the IOC21ity prevented. the petitioner from effectively making a representation. [352 DJ

(2) Tlie omission to specify the group with whom the petitioner and his a5sociates came into clash also renders that ground vague and indefinite, resulting once again in disabling the petitioner from effectively making H a representation. [352 BJ

ORIGINAL JURISDICTION: Writ Petition No. 274 of 1971.

A. c. BANERJEE v. WEST BENGAL (She/at, J.) ~49

Under f\rticle 32 of the Constitution of India for a writ in the nature of habeas corpus.

N. N. Goswami, for the petitioner.

D. N. Mukherjee and G. S. Chatterjee, for the respondent.

The Judgment or the Court was delivered by

Shela!, J. The order of detention, dated April 7, 1971, passed a, llainst the petitioner horein and in pursuance of which the petitioner was arrested and detained in jail the next day, recites that it was passed under sec .. ( 1) and (3) of the West Bengal (Prevention -of Violent Acilvitj_es) Act, President's Act 19 of 1970, !he ground for which was' tlfa~ the District Magisll'll'te, 24 Parganas, who Jl\ISSed it, was satisfied that it was necessary to detain the petitioner with a view to prevent him fromacting in a manner · i:>rejudicial to the maintenance of public order.

The grounds of detention sel'Vect on him at the time of his arrest narrated three incidents in which he was said to have been involved.

The first ground was that on November 13, 1970 he, together with some others, committed theft of copper traction wire from a wagon lying in Naihati South Yard, and that when the railway police and the railway protection force on duty rushed at the spot, the petitioner and his associates threw '-bombs at them, with intent to kill them.

The second ground was that on December 23, 1970, the petitioner and his associates were removing 29 pieces of rail from the same railway yard and when the members of the railway protection force attempted to stop them frogi doing so, the petitioner ljnd his said associates threw bombs at them with intent to kill tllem. The third and the las! grourid was as follows :

''That oil 13-1-71 in . between 12.00 and 12.20 hours, you alon11; with your associaties being armed with bombs, swords, lathis, etc. entered in a clash with another E!OUP with a view to kill them. Your violent aotlvities created a serious panic in the station area and disturbed the public order."

Fro~ ilie Dym Dum Central 1 ail where the petitioner was det$ed he made a representation, dated April 29, 1971, to the State Government. That representation together with the record of the case was placed before the Advisory Boatd, who it appears,

also heard the petitioner in person. 'l)o representation, dated April 29, 1971 was in oneral terms .in which the petitioner denied the said grounds alleged against himi and maintained that ho was a law 'abidin11; citir.en who never indulged in activities of the kin~~Red a11; ainst him. The Board, after sldering the

SUPREME COURT REPORTS [1972] 3 s.c.R.

said represe11tation, the said record of <the case and after hearing him, as aforesaid, reported that there was, in its opinion, sufficient cause for his deten1ion. It seems that thereupon 1the Government confirmed the said detention order and directed continuation of bis detention thereunder. So far there does not appear to be any difficulty as all the steps following the petitioner's arrest appear to have been taken by the detaining authority in compliance with the provisions of the Act.

But two questions have been raised before us on behalf of the petitioner.

The first was raised by the petitioner himself in the written arguments submitted by him to this Court from jail and the second was raised by his counsel during the course of the hearing of the petition.

The point raised by the petitioner was in regard to ground No. 2 in the grounds of detention in which it wa~ alleged that the petitioner participated in the incident said to have iaken place on December 23, 1970.

The petitioner's allegation was that on January I, 1971 the Naihati G.R.P. police appeared beJore the Magistrate, Sealdah, stating that the petiiioner was arrested in a police case referred to as Naihati G.R.P.

Case No. 11, dated November 23, 1970 under secs. 148, 379 and 307 o( !he Penal Code and sec. 6 ( 3) of the Explosive Substances Act, but that the Magistrate, a(ter considering the facts and circumstances of the case, released him on bail.

That case, according to the petitioner was still pending. The contention was that the authorities, having elected to institu'te proceedings against him under the Code of Criminal Procedure, could not, while those proceedinl1)S were s!ill pending, also fake parallel p, roceedings under the present Act thereby placing, firstly, the petitioner under a double jeopardy, and secondly, conducting investigation in that case witho\!.t that investigation being under the courts supervision and control. The argument was that if the petitioner were to kept under preventive detention under the present Act it would not be necessary as it would otherwise ~. for the police to ask for remand orders and produce the petrtioner before the Magistrate whenever such orders were prayed for.

The detention order and the detention thereunder, it was argued, were on the aforesaid two grounds invalid,

The second conten1ion concerned the third ground of the grounds of detention and related to the alleged incident, dated January 13, 1971, when the petitioner and his associates who were armed with bombs, swords, Iathis etc. were said to have clashed wrth another group. In the written arguments submitted by the petitioner from jail, the petitioner made a general denial stating that, if such an incident had occurred and he had been involved in it the police were bound to file a case against him but that no such case was filed which indicated that he had nothing to do with -tl)e alleged incident, and had been falsely involved

A. C. BANARJEE V. WEST BENGAL (She/at, /.) ' 351

in it. Counsel appearing for him raised another point, and that was that ground No. 3 was vague and uncertain and was couched in such iµdefipite language that it would be impossible for the

petitioner to eff.ectively make a representation.

We prl)Ceed to consider •this contention first bc:cause in the view we take concerning it it would not be necessary for us to go into the contention regarding ground No. 2 of the grounds of detention.

Ground No. 3, no doubt, specifies the date and the time when the incident alleged therein was said to have taken place.

It also alleges that the petitioner and his associates were armed during the alleged incident with weapons such as bombs, swords, lathis etc., and that they had a clash "with another group", and that incident "created a serious panic in the sta!ion area".

The ground does not state what the authority meant by "another group", nor does it s!ate in which "station area" the said alleged incident was said to have taken place resulting in panic.

It will be seen that the first and the second grounds mentioned two incidents of theft said to have been committed in the yard of the Naib, ati railway siation. The question is, ill Jhe absence of any particulars as to the place where the incidenf .alleged in in the !hird ground took place, what would the expression "station area" mean to the petitioner, and whether the petitioner would not get the impression that the District Magistrate meant thereby Naihati railway station or Naihati police station area.

In his representation, the petitioner merely denied all the three grounds and maintained that he had no concern with any of the three incidents alleged in the grounds of detention. In his written arguments submitted to this Court he, firstly, denied having anything to do with the incident of January 13, 1971 a, nd then proceeded to state that all those allegations were made falsely against him by the Naihati railway police, and that they were false because if the said alleged incidents had in fact occurred, the police were bound_ to launch proceedings against him.

He further asserted that at any rate, !he local police, that is, the Naihati police, were bound to make some record of them in the general diary maintained by the said police station. It is, thus, clear tha!

the petitioner was under the impression, in the absence of the place or the locality where the said incident was said to have taken place, according to the District Magistrate, either in Naihati railway Station or the area under the jurisdiction of Naiha'.i polk.~

station.

H Such an impression, it appears, was likely because when read in the context of the first and the second grounds, the reader of the third ground in the absence of any particulars as regards the l0-L887 Sup Cl/72

SUPREME COURT REPORTS

(1972) 3 S.C.ll.

locality where the said allel!; ed incident took place, might well infer thait the locality there alleged must be Naihati railway station area.

That such was !he impression of the petitioner appears from the assertion made by him in para 6 of his writren argilments

that the allegations in respect of all the grounds were made against him by Naihati Railway police, and !hat those were false because neither they nor the Naihati Police made any reference to them in the l!; eneral diaries maintained by ithem, nor lodged any complaint against him. In para 7 of the affidavit in reply of the State, the avrment for the first time made was tha!I: the alleged incident of January 13, 1971 took place not in Naihati Railway Station area but at Palta Railway Station which resulted in "panic in the said station area and disturbed public peace and tranquillity".

Apart, thus, from ground No. 3 in the grounds of detention beinl!: vague by reason of its omissjon to mention the locality, there was in the context of the other two grounds a likelihood of the petitioner. beine; under a wro~ impression that according to

!he District Magistrate the incident there alleged had taken place 0 in Naihati Railway Station area. That being so, it is obvious that the petitioner could not make a correct and proper representation which must mean that the omissio.n to mention the locality prevented him from effectively making a representation.

The omission to specify the group with whom the petitioner and his a_ssociates came into clash also renders fuat ground vague

E . and indefinite, resulting once ag.ain in disabling the petitioner from efi'e!:tively making a representation. Suppose that the petitioner wan!ed to maintain that on January 13, 1971 he was never at or near Palta Railway Station or that the group with whom he was said to have clashed was his own group or was friendly with him, and therefore, there was no possibility of any such clash.

He could . not obviously have been able o do so in the absence 11 of particµlars about the locality and ithe name or description of the said 1troup.

The result of those Omissions being to prevent the petitioner from effectively making representation, his detention under the said order must be found to be invalid.

The petition, for the G reasons aforesaid, succeeds and is allowed.

Accordingly we direct that the petitioner be released from jail and set at liberty

forthwith.

K.B.N.

Petition allowed.

ANAL CHANDRA BANARJEE

THE STATE OF WEST BENGAL

February 2, 1972

M. SHELAT

H. R. KHANNA, JJ.

Prevention of Violent Act

s. 3

Prevention of Violent Act

January 13, 1971

Naib:i.ti Railway Police

Naibati police

Constitution of India

N. N. Goswami

D. N. Mukherjee

G. S. Chatterjee

Shela

November 13, 1970

December 23, 1970

Naihati G.R.P. police

Penal Code

sec. 6

Explosive Substances Act

Code of Criminal Procedure

A. C. BANARJEE V. WEST BENGAL

Naihati railway police

Naihati police

SUPREME COURT REPORTS

(1972) 3 S.C.ll

Naihati Railway police

Naihati Police


MUNICIPAL CORPORATION, BHOPAL, M.P.

MISBABUL HASAN & ORS.

February 12, 1972

[S. M. Sum, C.J., A. N. RAY AND M. H. BEG, JJ.]

Madhya Pradesh Municipal Corporation Act, 1956C-Ss. 432 and 433- Whether the Sti;.te Government can change the service conditions of the Corporation emp/uyees by framing rules without following the procedure laid down under the Act.

The respondent employee was appointed a Lower Division Clerk and after 5 years of service, the Administrator of the Municipal Corporation, purporting to carry out the orders of tht State Government, passed a general .order dated 21st December 1967, statin~ that the age of compulsory retirement of all servants Of the Corporation (other than Class IV servants) should be 55 years.

The respondent bad entered into service of the Municipal Board of Bhopal long ago.

In 1967, the Board became a Corporation under the Madhya Pradesh Municipal Coryoration Act, 1956. As a result of the continuance of the service conditions of the employees of the former Municipal Board; the petitioner wss to retire t the age of 60 (by notifica tion dated 11th November, 1947), but in 1955, the Government of Bhopal by a Notification, applying the service regulations of Central Government employees, reduced the retiring age of the respondent to 58.

Under the Corporation Act of 1956, question relating to service conditions of the employees of the Corporation were to be regulated by bye-laws unde' S. 427 (1-C){b) of the Act and not by rules to be made by Government. The State Government by a Notification in 1967 further reduced the retirement age of all employees (except IV Grade employees) to 55 years.

The validity of the Order dated 21st December 1967 of .the Administrator was challenged by the respondent on the ground that the

procedure laid down by the Act for amending a bye-hw was not followed, 1 and the High Court accepting this contention quashed the Government Notification dated 22nd December 1967 as well as the general order reducing the age of retirement. On appeal, it was contended that the procedure laid down in S. 432 of the Corporation Act was not mandatory but was merely meant to give the Corporation concerned an opportunity of putting forward it• views by means of a' representation it may like to make with regard to any proposal to the Government to modify or repeal any bye-law so that the administrator, acting on behalf of the Corporation, could forego the right of, the Corporation to make any representation. The State, in its appeal contended that the rule making powers of the Government under S. 433 are very wide and the Government can make a rule if the Corporation foiled to make a bye-law. The view of the High Court that the matter did not fall under S. 433 of the Act waJ assailed. Dismiss ing the . appeals,

, HELD : (I) The procedure laid down in S. 432 of the Act ls only applicable where there is an existing bye-law which appears to the Government to stand in need of modification or repeal wholly or in part.

Therefore, the impugned notification does not fall under S. 432 of the Act.

!358 GJ

(2) Assuming that the impugned notification purported to publish a rule made under S. 433 of the Act, the condition precedent of previous publication in the Gazette for an amendment of a rule, laid down by S .. 24 of the Madhya Pradesh General Clauses Act 1957 had not been followed in the present case. Therefore no valid alteration in the ege of retirement of the employee-respondent was made in accordance with law. The impugned notification is bad and quashed. (359 C, 360 DJ ..

CML APPELLATE JURISDICTION: C.A. Nos. 2004 of 1970 and 319 of 1971.

Appeals by Special Leave from the judgment and order dated the August 26, 1970 of the Madhya Ptadesh High Court in Miscellaneous Petition No. 302 of 1968.

C. K. Daphtary and Rameshwar Nath, for the Appellant (in C.A. No. 2004 of 1970).

1. N. Shroff, for the Appeliant (in C.A. No. 319 of 1971).

S. K. Gambhir, for Respondent No. 1 (in both the Appeals).

Rameshwar Nath, for Respondent No. 2 (in C.A. No. 319 of 1971).

The Judgment of the Court was delivered by

Be&, J, The.r~ ar!' two appeal.s by gpecial Leave before us, one by the Mumc1pal Corporation, Bhopal, and another by the E State of Madhya Pradesh, against the Judgment and order of a Division Bench of the Madhya Pradesh High Court allowing a Writ Petition filed by the Respondent employee of the Bhopal Municipal Corporation (hereinafter called the 'Corporation').

The employee's case was : He was born on 1st July, 1912, appointed a Lower Division Clerk in April, 1962, promoted as a . F Upper Division Clerk in February, 1964. . A general order dated 21 December, 1967, (Annexure 'A') had been passed by the Administrator, Municipal Corporation, purporting to carry out the orders of the Government of Madhya Pradesh which had decided that the age of compulsory retirement of all servants of the Corporation, other than Class IV servants, should be 55 years.

G The employee was informed of it by a communication dated 22nd December, 1967, (Annexure B). The Municipal Corporation of Bhopal, which was formerly only a Municipal Council, became a Corporation when provisions of the Madhya Pradesh Municipal Corporation Act, 1956 (!J.ereinafter referred to as 'the Act') were applied to it from 2Sth August, 1967, by an ordinance the pro- H visions of which were the.n embodied in an Act.

Although the Petitioner had entered service of the Municipal Board of Bhopal, as a result of the continuance of the service conditions of the

A employees of the former Municipal Board, which had thus bee come a Corporation, !he petitioning employee was to retire at the age of 60 as laid down in Notification No. 30 of 11* November 1947 (Anµexure C). But, in 1955, when Bhopal was a Part 'C', State, the Government of Bhopal had issued a notification dated 4th February 1955 applying the service regu- B latioiis of Central CJ!>vernment employees in Part 'C' States. In this way, the petitioning employee's correct age of retirement was

58. Under the Act of .1956, questions relating to service conditions of the employees of the Corporation were to be regulated by bye-laws under Seciion 427(1-C)(b) of the Act and not by rules to !le made by the Governmei; it.

The Government of Madhya Pradesh had, however, issued a Notification in the Gazette of 22nd December, 1967, purporting to reduce the age c

of retirement of firs! and second and third grade employees from 60 years to 55 years by amending the Government Notification No. 30 dated 11th November 1947.

It was not clear to the petitioning employee whether the orders of 21st December, 1967, were in pursuance of any Gazette Notification or whether they have been passed after a proper amendment of their bye-laws in accordance with the procedure laid down in Section 432 of the Act. In any case, the validity of the order of 2 lst December, 1967, was challenged.

The Judnt under appeal shows that it was argued on behalf of the petitioning employee that the procedure laid down by the Aet for amending a bye-law was not . followed.

The Madhya Pradesh High Court had accepted this contention and rejected the argument, put forward on tiehalf of the Corporation and its Administrator, that the amendment in question was governed by the provisions of Section 433 of the Act. It had, therefore, quashed the Notification dated 22nd December, 1967, which purported to have been made in exercise of pawers vested in the Government under Section 432 of the Act, as well as an order dated 30th"December, 1967, (Annexure R-1), the relevant part of which reads as follows :-

"In pursuance of the Notification No. 10678/ 4251/XVIlI-U-II, dated the 22/12/67, Shri Misbahul Hasan, UDC Account Section, who has attained the age of compulsory retirement, is hereby sanctioned 120 days Earned Leave w.e.f. 1/1/1968 as Jeavo Preparatory to retirement.

He will stand retired w.e.f. l/5/1968 on expiry of the leave sanctioned to him, stated above".

Mr. Daphtary, appearing on behalf of the Corporation Appellant, has contended tat the procedure laid down In Section 432

of the Act was merely meant to give the Corporation concerned A an opporturiity of putting forward its yiews by means of any representation it may like to make with regard to any proposal of the Government to modify or repeal any bye-law. The learned Counsel submitted that, as the Corporation had no objection whatsoever to the amendment of the age of retirement of Class I and II and III ernPloyees, it was not open to the petitioning em- 8 ployee to raise any objection on the ground that the prescribed procedure had not been followed.

This argument proceeds on the assumption that there was already a bye-law regulating the age of retirement of employees of Clf!SSes I, II, and III of the Corporation, and that the Government was purporting to follow the procedure laid down by Section 432 of the Act in amending c that bye-law.

We may here reproduce the provisions of Section 432 of the Act which run as follows :

"432. Government may modify or repeal byelaws.-

(1)

(2)

(3)

If it shall at any time appear to die Government

that any bye-law should be modified or repealed either wholly or in part, it shall cause its reasons for such opinion to be communicated to the Corporation and prescri\!e a reasonable period within which the Corporation may make any representation with regard thereto which it shall think fit..

After receipt and consideration of any such representation or, if in the meantime no such representation is received, after the expiry of the prescribed period, the Government may at any time by notification in the Gazette, modify or repeal such bye-law either wholly or in part.

The modification or repeal of a bye-law under sub-section (2) shall take effect from such date as the Government shall in !he said notification direct or, if no such date is specified, from the date of the publication of the said notification in the.

Gazette, except as to anything done or suffered or omitted to be done before such date".

It is admitted by both sides that, at the relevant time, the powers of the Corporation were vested in the Adminisrator under the provisions of Section 43 2 sub-s (1) of the Act.

The only question, according to the Corporation, is whether the Adminis- 8 trator, acting as the Corporation, should not forego the right of the Corporation to make any representation with regard to a

proposal of the Government to amend a bye-law. In other words, the modification or amendment of a bye-law under Section

432 of the Act was a matter of concern only to the Government and to the Corporation and to nobody else. If, therefore, there was any infringement of its technical procedural requirements, it was only for the Corporation and nobody else, according to this contention, to raise the objection.

The broad proposition put forward before us is tl_iat the requirements of a procedure intended for the benefit of a party could be dispensed with if that party itself chooses that t~_is should be done.

It is pointed out that the only object of the procedure provided by Section 432 was that the proposals of the Government may be duly considered by the Corporation so as to enable it to represent its views. There was no obligation upon the Corporation to make a representation. If the Corporation did not choose to make a representatiefn, after the Government had sent its reasons for its opinion to the Corporation and had asked for the representation within a prescribed period, the failure of the Corporation to make any representation would, far from depriving the Government of the power to issue a notification modifying .or repealing a bye-law

wh91ly or in part in accordance with its opinion, enable it to do so. The mere order in which a proposal is made and assent to it is given by the Corporation, it was urged, should not make any difference a8 there was substantial compliance with prescribed procedure.

In the appeal filed on behalf of. the State of Madhya Pradesh, the main contention is that the rule making powers of the Govermnent under Section 433 of the Act are very wide so that the State could make rule "for the purpose of carrying into effect the

provisions of the Act". It is urged th_at the Act imposed a duty and conferred a power upon the Corporation to frame bye-laws relating to conditions of service of its employees as laid down in Section 427 (1-C) (b) of the Act.

The Government could make a rule if the Corporation failed to make bye-law on a subject. The correctness of the view of the High Court, that the matter did not fall within the purview of Section 433 of the Act, was assailed. ·

Another contention put forward on behalf of the State of Madhya· Pradesh was that the petitioning employee had not impleaded either the State or the Government of the Madhya Pradesh, so that a Notification of the State Government could not be .held void without impleading a necessary party.

We may observe here that this giound is not taken in the Special Leave Petition of the State of Madhya Pradesh by means of which its appeal has come up before us. No such objection was taken on behalf of the Corporation in the Special Leave Petition filed by

SUPREME COURT REPORTS (1972] 3 S.C.ll.

it.

Nor was any such argument advanced on behalf of tho A Corporation before the High Court.

Paragraph 12 of the Special Leave Petition filed on behalf of the Corporation discloses that the High Court had itself considered 1t necessary to hear the State Government. . It had, therefore, given time to the

State Counsel, b:f. an order dated 16th April, 1970, to file a return to the petition of the employ~. But, the State Counsel B had neither filed any return nor put in any appearance. Thus, the State had obtained due opportunity to oppose the petition, but it had not chosen to do so.

Therefore, we are unable to

entain any such objection at this stage.

Another question attempted to be raised before us, by ihe learned Counsel for the State of Madhya Pradesh, was based on C assertions which were neither made in the High Court by any party nor in this Court in the two Special Leave Petitions. the submission rests on materials said to exist on the records of the State Government which, it was stated, show that the proposal

had actually come from the Administrator himself, that the particular amendment sought be made by the Government. If this p was the correct position, the State Counsel should have appeared before the High Court and placed the whole record before the Court so that the facts which had a material bearing on the question, whether the procedure laid down by Section 432 of the Act had been followed in substance or spirit or not, may be gone into and decided.

E The High Court had proceeded on the assumption that tJi.e procedure laid down in Section 432 of the Act was applicable.

Learned Counsel for the Corporatio, Q also made his submllai.oD primarily on that assumption. If that procedure had been really applicable, we think that the question whether the object of that procedure had been served and whether rthe Corporation could r forego its rit to make a representation or not would have deserved scnous consideration provided it was supPortecl by vice which disclosed that there was substantial compliance with Section 432 of tho Act.

After having heard Counsel for both sides, we .are unable to hold that this is a case governed by the procedure lai!i down 0 in Section ii32 of the Act at all. That procedure is only applicable where there is an existing bye.law which appears to the Govern ment to stand in need of modification or repeal wholly or in part.

Jt is only then that tho Government had to cause its reasons for entertaining the opinion that the bye-law in question should be modified or repealed, to be communicated to the Corporation. 8 We are not at 8.11 satisfied about tho exact position of the Allan No. 30 of 1947. It has not been shown to us, by references to

the relevant records and provisions, that this Allan could be

A deemed to be a bye-law as contemplated by the Act. I\ seems

that the Corporation was aware of this defect because the main argument on behalf of the Corporation itself before the High Court was that it was a rule made by the Government and noL that Section 432 was applicable and substantially complied with. And, the main argument on behalf of the State Government before us B now also is that the impugned notification is covered by Section 433 of the Act. In view of Section 427 ( 1-C) (b) of the Act,. the High <:; ourt had held that, having regard to the specific provisions on the subject, the general rule making power under Section 433 of the Act was inapplicable to the subject-maller.

C Assuming, however, <that the modification of the age of retirement could be made bya rule made under Seclion 433 cf the Act and not me!,'..ely by a bye-law, as contemplated by the Act, we find thail a condition precedent for an amendment of a rule has not been followed here. Section 433 of the Act enacts : "The State Government may after previous publication in the "Gazette make rules for the purpose of carrying into effect the provisions of this D Act''. Section 24 of the Madhya Pradesh General Clauses Act, 1957, lays down:

"24. Provisions applicable to making of. rules or bye-laws, c:tc., after previous publication.- 0Where, by

any Madhya Pradesh Act, a power to make rules or bye-laws is expressed to be given subject to the condition or the rules or bye-laws being made after previous publication, then the following provisio11s shall apply, namely:-

(a) the authority having power to make the rules or bye-laws shall, before making them, publish a draft of the proposed rules or bye-laws for the in• formation of persons likely to be affected thtreby;

(b) The publication shall be made in such manner as

(c)

(d)

that authority deems to be sufficient, or if the condition with respect to previous publication so requires, in such manner as the Government prescribes;

there shall be published with the draft a notice

specifying a date on or after which the draft will be taken "into consideration;

the authority having power to make the rules or

bye-laws; and where the rules or bye-laws are to be made with the sanction, approval or concurrence

o! another authority, tht authority also &\1all consider any ob.lectfon or sugge&tion which may be

reived by the authority having power to make the rules or bye-laws from any person with respect !o the draft before the date so specified;

( e) the publication in the Official Gazette of a rule or

bye-law purporting to have been made in exercise of a power to make rules or bye-laws after previous J publication shall be conclusive proof that the rule or bye-law has .been duly made".

The legislative procedure envisaged by Section 24, set out above, is in consonance with notions of justice and fair play as it would enable persons likely to be affected to be infom1ed so tliat C they may take such steps as may be open to them to have the wisdom of a proposal duly debated and considered before it becomes law.

This mandatory procedure was not. sho,1h1 to have been complied with here.

The result is that we are unable to hold, on the material on record, that a valid alteration in the age of retiremnt of the em- D ployec respondent was made in accordance with law. The }ligh Court had 11ot expressed any opinion on the question wliether the contenlion of the employee-respondent, that his age of retirement was the one laid down as 58 for Central Government employees, was correct. As no contention had been advanced on this question before us and none seems to have been advanced on it before the High Court, we refrain from dealing with it. .E

The result is that both these appeals must fail and are hereby dismissed with one set of costs.

Appeals dismissed.

MUNICIPAL CORPORATION, BHOPAL, M

MISBABUL HASAN & ORS

February 12, 1972

A. N. RAY

M. H. BEG, JJ.

Ss. 432 and 433

Municipal Board of Bhopal

11th November, 1947

Government of Bhopal

S. 427

21st December 1967

22nd December 1967

S. 432

S. 433

S. 433

S. 432

S. 432

S. 433

Madhya Pradesh General Clauses Act 1957

Madhya Ptadesh High Court

C. K. Daphtary

Rameshwar Nath

N. Shroff

S. K. Gambhir

Rameshwar Nath

Bhopal Municipal Corporation

1st July, 1912

21 December, 1967

Government of Madhya Pradesh

22nd December, 1967

Municipal Corporation of Bhopal

2Sth August, 1967

Bhopal

4th February 1955

11th November 1947

21st December, 1967

Section 432

2 lst December, 1967

Madhya Pradesh High Court

Section 433

Section 432

Misbahul Hasan

Daphtary

Section 432

Section 432

Section 432

Section 43

Section

432

Section 432

State of Madhya Pradesh

Section 433

Section 427

Section 433

State of Madhya· Pradesh

Government of the Madhya Pradesh

SUPREME COURT REPORTS (1972] 3 S.C.ll

State of Madhya Pradesh

Section 432

Section 432

Section 432

Section 432

Section 433

Section 427

Section 433

Section 433

Section 24

Madhya Pradesh Act

Section 24