COMMISSIONER OF INCOME TAX, MADRAS v.

M/S. MADURAI MILLS CO. LIMITED March 9, 1973

[K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R, KHANNA, JJ.]

Income-tax Act, 1922, s. 12B-Capital Gains-Voluntary liquidation of private limited company-Distribution of assets to shareholder.-- Surplus received by shareholders whether attracts tax on capital gains-- Distribution of assets whether amounts to sale, exchange relinquishmenti or transfer within meaning of s. 12B.

Interpretation of statutes-Proviso which existed in original law dropped in amended law-Inference to be drawn,

Three private limited companies in which the assessee held ahatel went into voluntary liquidation in December 1959 In the course ot the liquidation proceedings the liquidators made dislribution in the year of account relevant to the aaaeasment year 1961-62, and the assesaee company got cash or assets in lieu of the amounts due in respect of the three compariies. The Revenue took the view that by reason of the distribution of assets of the three private companies under liquidatiol> by the liquidators there had been a capital gain which was assessed by the Income-tax Officer at Ra. 95,944/-. The Appellate Assisl$t Commissioner up\leld the order of the Income-tax Officer.

He took the view that the surplus arose out of the .exchange of aharea held by the assessee company in the three companies and therefore the surplus ought to be brought to tax. In further appeal the Tribunal held that there was no exchange or transfer of shares and assets in question but the transaction could be viewed as a relinquishment. The Higb Court held, in reference, that where a liquid.tor distributes the assets

of the company which ha8 gone into voluntary liquidatiop he ia performing a legal function and there is no element of sale, transfer, exchange or relinquishment involved in such distribution. The Revenue appealed to this Court,

Dismissing the appeal,

HELD : (i) The distribution of the assets of the companies in liquidation does not amount to a transaction of sale, exchange, reJiD .. quishment or transfer So as to attract section 12B of the Act.

When a shareholder reoeives money repr..., nting his share on distribution of the net assets of the company in liquidation, he receives that money in satisfaction of the right which belonged to him by virtue of his holdin.e the shares and not by operation of_ GDY transaction which amounts to sale, exchange, relinquishment or transfer. In the ckcumstances it was difficult to hold that the assessee company was liable to pay tax on capital gains as contemplated by section l 2B of tho Act in respect of the amount of Rs. 95,944/- [6670)

(ii) If the language of sub-section (!) of section 12B of the Act is clear and does not warrant the inference that distribution of assets on liquidation of a company constitutes sale, transfer qr exchange the said" trllllSaction of distribution of assets would not chan_ge its character and acquire the attributes of sale, transfer or exchange because of the omission of a clarification in the first proviso to aub..ection ( l) of section 12B of the Act, even though such a clariJlcation was there In

the !hi.rd provis<> of the sction inserted by the earlier Act (Act 22 of 1947). It is well settled that considerations 'stemming from legislative history must pot be 'allowed to override the pMn words of a statute.

A proviso cannot be construed as enlarging the scopz of an enactment \Vhen it can be fairly and p.r:operly construed with'out attributiniz to it !hat effect. Further if the language of the enacting part of the statute is pla~ <ind unamb'iguous and does not contain the provisions which are said to occur in it~ one cannot derive those provisions by implication from a proviso. [6690]

Commissioner. of Income-tax U.P. v. Bankey Lal Vaidya . [197_11 79 I. T. R. 594 and Commissioner of Income-Tax v. Dewas Cine Cor• poration [1968] 68 I.T.R. 240, applied. ·

Commissioner of Income-tax v. Associated Industrial Developnient Co. P. Ltd. [1969] 73 I.T.R. 50 and Commissioner of Income Tax

v. R. M. Amin, [1971] 82 1.T.R. 194, approved. ·

Anderson v. Commissioner of Income Tex. [1960] 39 I.T.R. 123, distinguished. ' CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1394 of 1970. '\

,. D Appeal by certificate from the judgment and order dated

February 28, 1969 of the High Court at Madras in Tax Case No .. 124 of 1965. ·.', s. C. Manchanda, P. L. Juneia and R. N. Sacluhey, for the appellant.

S, T. Desai and T. A. Ramachandran, for the respondent'.

The Judgment of the Court was delivered by

KHANNA, J.-This appeal on cetificate has been filed by the Commissioner of Income Tax against the judgment of Madras . High Court whereby that court answered the following question

referred to it under section 66 (1) of the Indian Income Tax Act, 1922 (hereinafter referred to as ilie Act) in the ngative in favour of the assessee respondent :

"Whether orl the facts and circumstances of the case, the Tribunal was right in holding that the sum of Rs. 95,944/- is liable to tax under Section 12B(2) ?" . ·

The matter relates to assessment year 1961-62. The assessee is a public limited company carrying on the business of manufacture and sale of yam. The assessee held shares in the following companies as under : .

(1) Indian Mills Supply Company (Private) Limited,

2,760 shares of the face value of Rs. 100/-

(2) Harveys (Private) Limited, 1,000 shares of the

face value of Rs. 1001-.

664 SUPREME COUil.T REPORTS

[1973] 3 S.C.R.

( 3) Pendyan Weaving Mills (Private) Limited, A 1,800 shares of tile face value of Rs. 100/-.

The above three companies went into voluntary liquidation in December, 1959.

In the course of the liquidation proceedings, the liquidiators made diS'tribution in the relevant year of account and the assessee company got cash or assets in lieu of cash of the amount of Rs. 4,57,858, Rs. 1,41,739 and Rs. 1,83,175 in respect of Indian Mills Company (Private) Limited, Harveys (Private) Limited and Pandyan Weaving Mills (Private) Limited respectively.

The revenue took the view that by reason of the distributton of assets of the three private companies under liquidation by the liquidators, there had been a capital gain of Rs. 96,735.85 in respeot of Indian Mills Supply Company (Private) Limited and Rs. 41,168.88 in respect of Harveys (Private) Limited making a total of Rs. 1,37,904.73. Out of that, loss amounting to Rs.

41,960.56 in respect of Pandyan Weaving Mills (Private) Limited was deducted, leaving a balance of Rs. 95,944.00. The assessee company at fir!ll showed the sum of Rs. 95,944.00 as capital gains but subsequently it filed a statement showing a loss of Rs. 59, 104 on the basis that the cost of shares distributed by the liquidators should be taken at the figure at which they had been acquired by the companies which distributed the shares.

The Income-tax Officer assessed the assessee company to capital gain at the sum of Rs~ 95,944. Aggrieved by the order of the Income-tax Officer the assessee filed appeal before the Anpella e Assistant Commissioner and on being unsuccessful there, filed further appeal before the Income Tax Appellate Tribunal. The main contention which was raised on behalf of the assessee was that the transaction in question involved. lio sale, exchange, relinquishment or transfer and as such, the amoulit in que!llion was not capital 2ain under section 12B of the Act. The Appellate AssiS'tant Commissioner was of the view that the surplus arose out of the exchange of shares held by the assessee company in the three comnanies and therefore the surplus ought to be brought to tax. The T'ibunal held that there was an exchange or transfer of shares and assets in question. The transaction, according to the Tribunal, could also

be viewed as a relinquishment.

The assessee was conseauently held liable to pay tax on the sum of Rs. 95,944 u'1der section 12B of the Act.

The question reproduced above was thereafter, on the application of the assessee, referred to the High (', ourt.

The High Court while answering the question in the ne11ative

held that when a liquidator distn'butes the a•sets of a comnny which has gbne into voluntary liquidation, he is performing a legal H function and there is no element of sale, transfer, exchane or relinquiShment involved in such distribution.

The judgment of the Hil!h Court is reported in (1969) 74 T.T.R. 623.

Before dealing farther, we may mention that capital gains were charged for the first time by the Income Tax and Excess Profit Tax (Amendment) Act, 1947 (Act 22 of 1947) which inserted section 12B in the Act. It taxed capital gains aising after March 31, 1946. The tax on capital gains was virtually abolished by the Indian Finance Act, 1949 which confined the operation of that section to capital gains arising before April 1, 1948. Capital gains tax was, however, revived with effect from APril 1, 1957 by the Finance (No. 3) Act of 1956. Sub-section(l) of section J2B along _with its first proviso was as under :

"The tax shall be payable by an assessee under the head 'capital gains' in respect of any profits or gains arising fom the sale, exchange, relinquishment or trans.fer, of a capital asset effected after the 31 't day of March,

1956. and such profits and gains shall be deemed to be income of the previous year to which the sale, exchange, relinquishment or transfer took place : Provided that any distribution of capital assets on the total o• partial partition of a Hindu undivided family or under a deed of gift. bequest or will, shall not for the purnoses of this section be treated as a sale. exchange, relinquishment or transfer of the capital assets " Sub-section (2} of section 12B prescribed a statutory rrmula for purpose' nf computation of capital gains.

Sub-sec•ion ( 3) of section 12B was as under :

"Where aqy capital asset became the prr>uerty of the assessee by succession, inheritance or devolution or on anv distribution of capital a<sets on the total or partial nartition of a Hindu undivided fnmily or on the dissolution "f a firm or other association of persons_ or on the liquidation of a company or under a deed of gift, or transfer on irrevocable trust, its actual cost allowable to him for the pumoses of this section shall be its actual cost to the previous owner thereof. and the provisions of

subsection (2) shall apply accordingly; and where the actual cost to the previous owner cannot be ascertained, the fair market value at the date on which the capital asset became the Property of the previous owner shall be deemed to be the actual cost thereof ...... " Perusal of sub-section ( 1) of section 12B renroduced above shows that the liability to pav tax on account of capital gains can arise onlv if the assessee makes profit' or gains ari<ing frnm the sale, exchange. relinquishment or tramfer of a capital asset effected after March 31. 1956. The question with which we are cnncerned is whether the distribution of assets of the companies which

had gone into voluntary liquidation by ihe liquidators to the A assessee company resulted in a transaction which amounted to sale, exchange, relinquishment or transfer.

Mr. Manchanda on behalf of the appellant has argued in this Coun that the transaction in question amounted to sale or transfer.

We, however, find ourselves unable to accede to this contention.

The act of each of the liquidators in distributing the assets of. the B company which had gone into voluntary liquidation did not result in the creation of new rights. It merely entailed recognition of legal rights which were in existence prior to the distribU; tion. Ac cording to observations on page 512 of Buckley's Commentaries on the Companies Act, thirteenth edition, a liquidator is only a trustee in. the sense that the property of the company ceases upon c the winding up to belon11; beneficially to the company and passes into his custody, to be applied by him as directed by the 9tatute.

It is further observed on page 513 :

"The question whether a liquidator in a voluntary winding up is a trustee within the meaning of the Trustee Act, 1925, and as such entitled to the benefit of ss. 30

and 61 of that Act, was dis£_ussed, but not decided, in Re Windsor Steam Coal Co.(") Semble, a liquidator is in the position of a trustee for the members when distributing surplus assets in specie in a winding up, so that no beneficial interest passes in the property conveyed or transferred, within the Finance (1909-1910) Act, 1910, s. 7 4 ( 6), and ad va/orem stamp duty under that section is not payable on conveyances or transfers of the property to the members."

When a shareholder receives money representing his share on distribution of the net assets of the company in liquidation, he receives that money in satisfaction of the right which belonged to him by virtue of his holding the shares and not by operation of any transaction which amounts to sale, exchange, relinquishment or transfer. In the circumstances, we find it difficult to hold that the assessee company is liable to pay tax on capital gains as contemplated by section 12B of the Act in respect of the amount of Rs. 95,944.

In the case of Commissioner of Income-tax U.P. v. Bankey Lal Vaidya(') (to which one of. us was a patty) the reapondent who was a karta of a Hindu uadivi.ded family, entered into a partnership with D to carry on the 1*Jsiness of manufacturing and selling pharmaceutical products and literature relating thereto.

On the dissolution of the partnership, ks assets, which included

goodwill, machinery, furniture, medicines, library and copyright

11) [1929) I Ch. UI.

(2) [197l] 7' 1.T.R. !94.

in respect of certain publications, were valued at Rs. 2,50,000.

Since most of the assets were incapable of physical division, it was agreed tha1t the 11$Sets be taken over by D and 1he respondent be paid his share. of the value of the assets in money and accordingly the respondent was paid Rs. 1,25,000. Question arose B, whether the sum of Rs. 65,000 being part of the amount received by the respondent could be brought to tax as capital gains under section 12B of the Act. It was held by Shah J., speaking for the Court, that the 31Tangement between the partners of the firm amounted to a distribution of the assets ol the firm on dissolution and that there was no sale, exchange or transfer of the respondent's c share in the capital assets to D. The sum of Rs. 65,000, it was accordingly held, could not be taxed as capital gains. The receipt of money by the respondent was, in the opinion of the Court, nothing but a receipt of his share in the distributed assets of the company.

D Reliance in that case was placed, as has been done also in the present case, on behalf of the revenue upon the case of James

Anderson v. Commissioner of Income Tax.( 1) The said case was distinguished and was found to be of not much avail to the revenue. In that case the assessee who held a power of attorney from the executor of a deceased person, sold certain shares and securities belonging to the deceased for the purpose of distributing E the assets amongst the legatees. The excess realised by sale was treated by the department as capital gains. The contention of the assessee was that since the sale of the shares and securities fell within the purview of the third proviso to section 12(B)(l), it could not be treated as a sale ol capital assets but this contention

was rejected by this Court. James Anderson's case, in our opinion, is not of such assistance to the revenue as in that case there was no distriblUtion of capital assets between the legatees. On the contrary, the assessee had in pursuance of the authority given to him by the executor of the deceased sold the shares and securities and the said sale had resulted in capital gain. In the present case there has been no sale of receipt of price but only a distribution of the assets of the companies which had gone into voluntary liquidation. Such a transaction does not amount to sale, exchange, relinquishment or transfer of the assets. The revenue, in the circumstances, cannot derive much assilltari.ce from that case.

In the case of Commissioner of lllCOIM Tax v. Dewas Cine Corporation(' this Court while dealing with section 10(2) (vii) of the Act observed that the exwession "sale" in its ordinary mean

in11; is a transfer of property for a 1>rice, and adjustment of the rights of the partnen In 'a dissolved firm by allotment of its assets

(ll [1960] 39 I.T.R. 123 .

(2) (1968] 68 I.T .R. 2'40.

....

is not a transfer nor it is for a price. In that case the assets were distributed among the partners and it was contended that the assets mustin law be deemed to be sold to the individual partners in consideration of their respective shares, and the difference bet ween the written-down value and the price realised should be in eluded in the total income of the partnership under the second proviso to section J.0(2)(vii). This Court in this context observed that a partner ruay in an action for dissolution insist that the assets of the partnernhip be realised by. sale of its assets, but property allotted to a partner in satisfaction of his claim to his share, could not be deemed in law to be sold to him.

In Commissioner of Income Tax v. Associaled Industrial Development Co. P. Lt4.(1) a Division Bench of the Calcutta High Court held that the amount received by a shareholder on the liquidation of a company was not assessable to capital gains as there was no sale, c; Jtchange, relinquishment or transfer of the capital assets.

Similar view has also been taken by the Gujarat High Court in Commissioner of Income Tax v. R. M. Amin.(').

We are, therefore, ol the view that distribution of the asset& of the companies in liquidation does not amount to a transaction of sale, exchange, relinquishment or transfer so as to attract section ' 12B of the Act.

Mr. Manchanda on behalf of the appellant has invited our attention to the third proviso to sub-section (1) of section 12B as originally enacted by the Income Tax and Excess Profit Tax (Amendment) Act wherein it was stated, inter alia, that any dis• tribution of capital assets on the dissolution of a firm or other association of persons or on the liquidation ol a company shall not for the purpose of section 12B be treated as sale, exchange or transfer of capital assets. It is urged that the omission of such distribution of capital assets in the first proviso to sub-section ( 1 ) of section 12B, as revised by the Finance (No. 3) Act of 1956, would show that the legislature wanted the distribution of capital assets on dissolution of a firm or other association of persons or the liquidation of a company to be treated as sale, exchange or transfer. This contention, in our opinion. is not well-foiinded. It appears to us that the cases of the distn"bution of capital assets on dissolution of a firm or other association Of persons or liquida

tion of a company were mentioned in the third proviso under the earlier Act, as a matter of clarification to allav fears even thoudi the language ol sub-section (I ) of section 12B was not intended to aOPlV to such cases. Provis'ls, as mentioned on nage 221 of Craies on Statute Laws, Sixth Edition, are often inserted to allay fears.

A proviso is inserted to guard against the particular case

(I) (1969] 73 l.T.R. 50.

12) (1971] 82 l.T.R. 19<4.

( ..

) .\ •

C.I.T. v. MADURAI MILLS (Khatfna, J.) 669

of which a particular person is apprehensive, although the enactment was never intended to apply to his case or to any other similar case at all. .

We have already stated earlier that the distribution of assets by a liquidator on the voluntary winding up of a company cannot constitute sale, transfer or exchange for the purpose of sub-section

(1) of section 12B of the Act. If the language of sub-section ( 1) of section 12B of the Act is clear. and does not warrant the infercn.ce that distribution of assets on liquidation of a company constitutes sale, transfer or exchange the said transaction of distribution of assets would not, in our oPinion, change its character and acquire the attributes of sale, transfer or exchange because of the omission of a clarification in the first proviso to sub-section ( 1) of section 12B of the Act. even though such a clarification was there in the third proviso of the section inserted by the earlier Act (Act 22 of 1947). It is well-settled that considerations stemmir1g from legislative history must not be allowed to override the plain words of a statute (see Maxwell on the Interpretation of Statutes, Twelfth Edition, page 65). A proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and properly construed without attributing to it that effect. Further, if the language of the enacting part of the statute is plain and unambiguous and does not contain the provisions which are said to occur in it, one cannot derive those provisions by implication E from a proviso (see page 217 of Craies on Statute Law, Sixth .

Edition).

In the light of what has been discussed above, the difference between the language of the first proviso to section 12(B)(l ), as inserted bv Finance (No. 3) Aot of 1956 and the third p•oviso to section 12(b)(l). as inserted by Act 22 of 1947, cannot be of such material help to the revenue.

Reference has also been made by Mr. Manchanda. to sti<Jn 46 of the Income Tax Act, 1961 which contains a provision for chargin1t with capital irains the money or assets . received by a sha•eholder on •he l; quidation of a t:omPony. The liability under that section arises from it< express Provisions. It cannot, however, be sai<l that such a liahilitv would also a<ise even in the absence of such provisions un<ler the Aot of 1922.

The appeal consequen•ly fails and is dismis5ed With cos.ts.

i . .

G.C.

Appeal dismissed.

COMMISSIONER OF INCOME TAX, MADRAS

S. MADURAI MILLS CO. LIMITED March

K. S. HEGDE

P. JAGANMOHAN REDDY

KHANNA, JJ.

Income-tax Act, 1922

s. 12B

s. 12B

section 12B

section 12B

section 12B

C. Manchanda

P. L. Juneia

R. N. Sacluhey

T. Desai

T. A. Ramachandran

KHANNA

Madras

section 66

Indian Income Tax Act, 1922

Section 12B(2)

Harveys (Private) Limited

Pendyan Weaving Mills (Private) Limited

Indian Mills Company (Private) Limited

Pandyan Weaving Mills (Private) Limited

Income Tax Appellate Tribunal

section 12B

section 12B

section 12B

March 31, 1946

April 1, 1948

APril 1, 1957

31 't day of March,

1956

section 12B

section 12B

section 12B

March 31. 1956

Manchanda

Buckley

Commentaries on the Companies Act

ss. 30

and 61

Windsor Steam Coal Co.(") Semble

s. 7

section 12B

section 12B

Shah

section 12(B)(l)

James Anderson

section 10(2)

Calcutta High Court

Gujarat High Court

section 12B

section 12B

section 12B

section 12B

section 12B

section 12B

section 12B

section 12(B)(l )

section 12(b)(l)

Income Tax Act, 1961


MUSTAQ AHMED MOHED HUSSAIN

MUKHTAR HUSSAIN ALI HUSSAIN

THE STATE OF GUJARAT

March 13, 1973

(A. ALAGIRISWAMI, 1. D. DUA AND C. A. VAIDIAL!NGAM, JJ.]

Code of Criminal Procedure s. 421-Power of l(igh Court to 'dismiss appeal in limine-When may be exercisted-Higl] Court must record reasons and it is not sufficient to sa, v 'dis1nissed'.

Jn this appeal by special leave the short question requiring determination was whether the High Court of Gujarat was justified in dismissing in limine with one word 'dismissed' the appellants' appeal against their conviction by the Sessions Judge, Jamgar for offences under s. 420 read with ss. 511 and 34, I.P.C. and under s. 474 read with s. 34, JJ!dian Penal Code,

Allowing the appcal,

HELD: Section 421 Cr.P.C. no doubt empowers the appellate court to dismiss the appeal summarily but before doing so it is bound to peruse with care and attention the. petition of appeal and the copy of the judgment or order appealed against. The order . of SUlllIOOry dismissal can be passed only if the court considers that there is no sufficient ground for interference. This conclusion has to be arrived at judicially after a proper scrutiny of the petition of appeal and the impugned judgirumt or order.

[673G]

The power of dismissing appeals in limine should be exe'rdsed sparingly and with judicious caution so that no case raising arguable points, \Vhether of law or of fact requiring re-appraisal of evidence, goes without requisite scrutiny. The requireme; at of recording reasons for summary dismissal. however concise, serves to ensure proper functioning of the judicial process.

Reasons are, therefore. advisedly required by the decisions of this Court to be given for rejecting an appeal summarily under s. 421 Cr. P. C. [6740]

The contention that when the trial court records a well reasoned judgment, then, even though arguable points on the question of the credibility of witnesses are raised, it is unnecessary for the court of appeal to deal with all these points and record Its own reasons for agreeing with the conclusions of the trial oourt, was unacceptable.

Unless the challC!llge can be held to be prima facie unimpressive and unarguable the High Coun would be well-advised to go into the points canvassed a'1C) record 'its reasons. Such a Course would be in accord with the st itutorv intendment, and also of assistance to this Court in more satisf: ctorilv dealing with appeals under Art. 136 of the Cqnstitution. [6770]

In the present case the trial court's judgment mentioned several di.scTepancies in the prosecution evidence.

The appetlant.s were not unjustified in claiming to have the evidence on the record re-examined by the Hih Court for coming to its own conclusions.

The points raised in the petition of appeal could' by no means be said to be unarguable.

Without expressing any opinion on the merits of the case the Court sent the case back to the High Court for a fresh \l<cision in the fight of this Court's obe, ei'vation.

U. /, S. Chopra v. State of Bombay, [1955] 2 S.C.R. 94, Queen Empress v. Ram Narain & anr., l.L.R. 8 All. 514, Mohamad Ayub Abbas Raut v. The State of Maharashtra, Crl. A. No. 145 of 1961 decided on March 2.5, 1963, Mushtak HusMlin v. The Stale of Bomba, y, [1953) S.C.R. 809, Bhagat Singh v. State of Rajasthan, Cr!. A. No. 38 of 1969 decided on September 17, 1969, Shankar Beldar v. The State of MahGrashtra, Or:!. A. No. 95 of 1969 decided on September 18, 1969, K. K. lain v. State of Maharashtra A.LR. 1973

S.C. 243, /iwan Prakash v. State of Milharashtra, A.LR. 1973

S.C. 278, Shaikh Mohd. Ali v. State of Maharashtra, [1972] 2 S.C.C. 184 end Rajertdrapaul Ran=aran Dass Sharma v. The State of Maharashtra, Cr!. Appeal No. 264 of 1972 decided on Febh!ary 23, 1973, referred to. ·

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 9 of 1973.

Appeal by special leave from the judgment and order dated July 31, 1972 of the Gujarat High Court in Cr. Appeal No."596

of 1972.

K. K. Sinha and S; K. Sinha, for the appellants.

Urmila Kapoor, B. D. Sharma and S. P. Nayar, for the respondent.

The Judgment of the Court was delivered by

DuA, J.-In this appeal by special leave the short question requiring determination is whether the High Court of Gujarat was justified in dismissing in limine with one word "dismissed" the appellants' appeal against their conviction by the Sessions Judge, Jamnagar for offences under s. 420 read with ss. 511 and 34, 1.P.C. and under s. 474 read withs. 34, Indian Penal Code.

Both the appellants were charged on five counts in the court of the Sessions Judge relating to offences, inter alia of forging railway receipts purporting to be valuable security, being in pos• session of forged receipts knowing them to be forged and of dishonestly or fraudulently using the forged receipts as genuine knowing them to be forged, in furtherance of 1 he common intention of cheating the Indian Railways or attempting to cheat them.

The points which arose lor determination in the trial court as statlld in its judgment were :

" ( l ) Whether the prosecution has proved that on or about 7-8-71 at Jam.nagar accused no. l Mustaq Ahmed Mohmed Hussein and accused no. 2 Mukhtar Hussein Ali Hussein Sayed in furtherance of c0mmon intention of both to cheat the Indian Railway by using forged

J : . .. ,

railway receipts actually forged three railway receipts mark 6/ A, 6/B and 6/C purporting to be valuable security and thereby committed an offence punishable under section 467 read with section 34, I.P. Code?

(2) Whether the prosecu1ion has proved that on or before 7-8-71 said accused nos. 1 and 2 in furtherance .

of the common. intention of both to cheat Indian Railway forged railway receipts mark 6/ A, 6/B and 6/C intending that they shall be used for the purpose of cheating they thereby committed the offnce punishable under section 468 read with section 34 of the Indian Penal Code ? ( 3) Whether the prosecution has proved that said accused nos. 1 and 2 on or about 7-8-71 in furtherance of common intention of both to cheat Indian Railway fraudulently or dishonestly used as genuine •he three railway receipts marked 6/ A, 6/B and 6/C which they knew or had reason to believe at the time they used them to be the forged documents and thereby committed the . · . offence under section 471 read with section 34, J.P.

Code? · ( 4) Whether 1he prosecution has proved that on or about 7-8-71 bath the said accused nos. 1 and 2 were in possession of the forged railway receipts purporting to be valuable security knowing . the same to be forged and intending that the same shall be fraudulently used as genuine documents and thereby committed an offence punishable under s. 474 read with section 34, J.P.

Code ? ( 5) Whether the prosecution has proved that on or about 7-8-71 accu, ed nos. 1 and 2 were at J"mnagar and in furtherance of common intentfon of both "f them to cheat Indian Railway attempted to cheat Western.

Railway by dishonestly inducing the railway employees, i.e ... the goods clerk at Jamnagar railway station to deliver them Coal Wagons in question and thereby commit- . 1ed the offence punishable under section 420 read with section 34 and s. 511 of the Indian Penal Code?" On ooints nos. 1 to 3 the decision of the. trial court went in favour of the appellants and against the prosecution but on paints nos. 4 and 5 the anpellant~ were held guilty and convicted. They were sentenced under s. 420 read with ss. 511 and 34, I.P.C. to rigorous imorionment for three years and a fine of Rs . .1,000/- with further rigorous imorisonment for nine month~ in case of default in payment of fine.

A similar sentence was imposed on each one of them for the offence under ss. 474/34, l.P.C. - Both,

. . .

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MUSTAQ AHMED V. GUJARA~ (D1ia, },) 673

the sentences were ordered to run concurrently. It appears from the judgment of the trial court which covers about forty pages of exhaustive discussion on the poin1s raised .hat a large number of witnesses were examined at the trial and the court entertained considerable doubt with respect to the prosecution story on several aspects of the various charges framed against the appellants.

On appeal in the High Conn the appellants challenged all the adverse findings of the trial court, as they were entitled to do under s: 410 read withs. 418, Cr. P.C., and assailed the appraisal and evaluation of the evidence of the prosecution witnesses by that court.

More than 20 grounds were taken in the memorandum of appeal in which the testimony of the various eye-witnesses wa:; C criticised and ilie approach of the learned Sessions Judge in this respect assailed.

As already pointed out, the High Court dismissed the appeal in limine with one word "diomisscd" without indicating whether it also edorsed the line of reasoning and approach of the trial court in evaluating the testimony of the

various witnesses and its manner of dealing with the arguments advanced by the prosecli1ion and the defence. .

In this Court it was seriously contended on behali of the appellants that the High Court hd gravely erred in summarily dismis- sing the appeal in limine without disclosing even broadly i1s reasons for rejecting the various grounds of attack against the appraisal of the prosecution evidence by the trial court. This, according 1o

the appellants learned counsel, is against the consistent and uni-· form view expressed by this Court that in arguable cases the High

Court,· while dismissing the appeal, broadly indicate its reasons in support of its conclusions. The judgment of the High Court has, in this case, resulted in failure of jus1ice to the appellants' prejudice, said the counsel.

In our view, the appellants' grievance is well-founded.

The right of appeal conferred by s. 410 read with s. 418, Cr. P .C. entitled the appellants to question the conclusions of the trial court both on matters of fact and of law. They had a right to ask for a review of the entire evidence and to challenge the appraisal of the evidence by the trial court and its conclusions based on such appraisal. Section 421, Cr. P.C. no doubt empowers the appellate court to dismiss the appeal summarily but before doing so it is bound to peruse with care and attention the petition of appeal and the copy of the judgment or order appealed against The order of suminarjr dismissal can be pas•ed only if the court considers that there is no sufficient ground for interference.

This conclusion has to be arrived at judicially after a proper scrutiny, of the petition of the appeal and the impugned judgment or order. ln U. f. S. Chopra v. State.of Bombay( 1) Bhagwati J., speaking

(11 (10551 2 S.C.R. 94.

SUPR~ME COURT REPORTS

(1973] 3 S.C.R,

for the majority expressed the view that the hearing under s. 421 is intended for the purpose of detem1ining whether a prima facie case for 1he appellate court's interference is made out. The whole purpose of the hearing accorded to the appellant or his counsel, even after calling for the record of the case, under this section, is to determine whether there is a prima facie case for !he appellate court's interference and it is not within that court's province at that stage to fully consider the evidence on the record and hear arguments with a view to deteffiline whether the conviction could be sustained or the sentence passed could be reduced. No doubt the question directly arising in that case was somewhat difierenbut the observations with respeet to <the purpose of the hearing under s. 421, Cr. P.C. would be equally applicable to the consideration of the present contr0versy. If such be the real purpose of hearing contemplated biy s. 421, then, the power of dismissing appeals in limine should, in our view, be exercised sparingly and with judicious caution so that no case raising arguable points, whether of law or of fact requiring re-appraisal of evidence, goes withoU't requisite scrutiny. The requirement of recording reasons for summary dismissal, however concise, serves to ensure proper functioning of the judicial process.

Reasons are, therefore. advisedly required by the decisions of this Court to be given for rejecting an appeal summarily under s. 421, Cr. P.C.

Sinlilar view was taken by the Allallabad High Court as far back as 1886 in Queen Empress v. Ram Narain & Anr.('). Although that was a case in which the appeal had been dismissed by the Sessions

Jude. the considerations prevailing in such a case may equally well apply to cases where the High Court dismisses an appeal in limine for the reason, inter alia, that this Court may, when approach by the aggrieved party to exercise its power under Art. 136 of the Constitution, have <the benefit of the views of the High Court. With speakinJ!: orders justice is also seen to be done.

Turning now to the decisions directly dealing with the point raised by the appellants, this Court has consistently and uniformly held that in cases raising arguable points the High Courts would be well-advised to make speaking orders indicating their reasons, however concise, inducinJ!: them to dismiss the appeals in limine.

The learned counsel Oil behalf of the State, Mrs. Uffilila Kanur. without disputing that where arguable and substantial questions of faot or law are raised on appeal the High Court is, according to the decisions of this Court, expected to write a speaking order however brief, dealing with and disnosine of the points canvassed

before it submitted that in the present case there were no arguable or •ubstantial points involved and, therefore, the High Court was justified in dismissing the appeal In limine without indicating its

Tl T.L.R. 8 All. 514.

reasons therefor. She, however, .referred us specifically to an unreported decision of this Court in Mohammad Ayub Abbas Raut

v. The State of Maharashtra(').

According to the learned counsel, this decision has not been noticed 1:fy this Court in its later decisions disapproving the dismissal i11 /imi11e by the High Courts of appeals from judgments of learned Sessions Judges.

This argument,. on first impression, appeared to suggest that the learned counsel wanted us to re-examine the numerous decisions of this Court uniformly disapproving the practice, prevailing in some High Courts, of too readily dismissing in limi11e, with one word "dismissed", appeals from the Sessions Courts even where arguable points of fact or law are apparent on the face of the impugned judgment or order.

Mrs. Kapur, however, soon clarified her position by submitting that he only wanted to contend that in the present case this Court should not interfere with the High Court's judgment as there were no arguable or substantial points involved in the appeal and Mohd. Ayub (supra) was only cited as a precedent to support this contention. According to her the judgment of the trial court is detailed and well-considered, sound reasons having been given in support of its conclusions : it was accordingly unnecessary for the High Court to specifically <lea! with the various points raised in the petition of appeal and to record its reasons for rejecting various grounds of challenge can- ' vassed before it.

In our view, Mohd. Ayub Abbas Raut (supra) does not in any way cast a doubt on the soundness of the various reasons which have consi!!lently prevailed with this Court firmly disapproving dismissal in /imine with one word "dismissed" of appeals before the High Courts from the judgments of Sessions Courts which raised arguable . points of fact or law. The view expressed in earlier decisions was not dissented from. Indeed no reference was F made to them. On the contrary it was observed that on the findings of the trial coUrt not considered erroneous by the High Court the latter was justfied in dismissing the appeal in limine as it bad full power to do so in exercise of its discretion under s. 421, Cr.

P.C. That the High Court has power to dismiss in limine bas always hleen accepted by this Court. What this Court has consistently and uniformly laid down is that where arguable points ol fact or law are raised then the High Court Would be well-advised G

to indicate its reasons for dismissing the appeal in limine. This view is now firmly established and there has never been any dissent.

No doubt, even now we come across stray cases from some Hi!!h Courts in which, either in ignorance of the legal position firmly settled by this Court in a string of authorities, or erroneously thinking that there is no arguable point of fact or

(I) Crl. A. No. 145of1961 decided on March 25. 1963.

law involved in an appeal under s. 410, Cr. P.C. from the judgment of Sessions Court, actually and prima facie raising arguable pomts on the question ot appreciation of evidence, appeals are dismissed in limine with one word "d, missed" without indicating its reasons. It is because of such cases that we consider it necess; uy once again to refer to some of the decisions of this Court in which the legal position has been declared and e-stated.

ln Mushtak Hussein v. The State of Bombay( 1) Mahajan J~ (as he then was) observed :

"With great respect we are however CO!litrained to observe that it was not right for the High Court -to have dismissed the appeal preferred by the appellant to that court summarily, as it certainly raised some arguable points which required considera'lion th0ugh we have not thought it fit to deal with all of them. In cases which prima facie raise no arguable issue that course is, of course, justified, but this Court would appreciate it if in arguable cases the summary rejection order gives some indication ol the views of the High Court on the points raised. Without the opinion of the High Court on such points in special leave petitions under article 136 of the Constitution this Court sometimes feels embarrassed if it has to deal with those matters without the benefit of that opinion." In Bhagat Singh v. 'State Of Rajasthan(') Bhargava and Hegde JJ ., sent the case back for re-decision as the appeal had n dismissed summarily.

The same Bench in Vishwanath Shankar Beldar v. The State of Maharashtra(') adooted a similar course. The view expressed in Mush•ak Hussein (supra) was reiterated in K. K. lain v. State of Maharashtra(').

In Jiwan Prakash v. State of Maharashtra(•) this Court had drawn the attention of the High Courts to as many as 13 cases in which this Court had consistently sent the matters bak for re-hearing.

In Shaikh Mohd. Ali v. State of Maharashtra(') Shelat J.; soeaking for the Court aain emnhasised that a High Court would not be justified in dismissing summarily and with<'lut a speakinl? order an appeal raising arguable questions either factual or legal. Rofe•ence in this decision was made to Murhtak Hunein <•upra) and Jiwan Praka•h (supra).

Si".ce then O" .several f'CC&<ions again this Court ha~ re•ffirm~ this view. The moll! recent dee!-· &ion in which this Court felt con•trai"e<l to rem•"d th~ ca•e to the Hi h Court for a fresh decision is Rajendrapaul Ramasaran

(11 [1953) S.C.R. 809 .. 121 Crl. A. No. 3R or 1969 decided on September 17. 1969.

m Crl. A. No 9S or 1969 decided on September 18. 1%9. 141 A.l.R. 1973 S:C. 243. (S) A.l.R. 1973 S.C 2'8.

(6) (1972) 2 s.c.c. 784.

MUSTAO AHMED v. GUJARAT (Dua, /.) 677

Dass Sharma v. The State of Maharashtra(''). In that decision various aspects have again been considered to impress upon the High Court the inexpediency and impropriety of disposing of with one word "dismissed" the appeals before it which raise arguable points.

The contention that, when the trial court records a well-reasoned judgment, then, even though arguable points on the question ol. credibility of witnesses arel raised, i1: is unnecessary for the Court of appeal to deal with all these points and record its own reasons for agreeing with the conclusions of the trial cou~. is unacceptable. The right of appeal conferred on a convicted person gives him a right to challenge the reasoning and finding on the appraisal of evidence both or!!_l and documentary by the trial court and unless the challenge can be held to be prima facie unimpressive and unarguabfo the High Court would be well-advised to go into the points canvassed and record its reasons. Such a course would be in accord with the statutory intendment, and also of assistance to this Court in more satisfactorily dealing with appeals under Art. 136 of the Constitution.

The judgment of the trial court in the present case clearly shows that in order to arrive at a safe conclusion the entire evidence en the record has to be closely scrutinised. The trial court devoted several pages for the purpose of proper appraisal of the evidence, discarding some of the contentions of the prosecuting counsel, as unsupportable on the material on the record.

That court also noticed some discrepancies in the evidence of some of the witnesses for the prosecution, considered them to the minor and, therefore. immaterial. Further found defects in the wor]>ing of the Railways as regards the movement of goods wagons and, according to the trial court, had !here been a proper system of checking and tallying at the relevant railway stations, what has unfortunately happened in the present case would perhaps have been avoided.

On appraisal of the evidence, the offences under ss. 467 and 468, I.P.C. )Vere held not proved, thre being no reliable evidence on those points. Again, on the actual fraudulent or dishonest use of forged documents also the trial court felt that the prosecution evidence fell short of the main ingredients and only an attempt had been made by the accused persons to use the forged documents with the result that they were acquitted of the charge under s. 471 _ I.P.C.

The trial court also seems to have taken into account the suspicious conduct of the appellants in coming to the conclusion about their guilt under s. 420, I.P.C. read with ss. 415 and 34. I.P.C. and under ss. 474/34, I.P.C.

This discussion clearly shows that the appellants were not unjustified in claiming to have the evidence on the record re-examined by the High Court

(!) Crl. Appeal No. 264of1972 decided on February 23. 1973. ll-761 Sup.C. I. /74

for coming to iis own conclusions, of course, after considering the views of the trial court and giving due weight to that court's reasoning and conclusion. Recording ol reasons by the High Court for its conclusion on all the relevant aspee'ts was thus necessary because even the trial court had not completely and unr<:servedly accepted the evidence led by the prosecution and the charges pressed against the appellants. The points raised as disclosed in the petition of appeal could by no means be said to be unarguable. Without expressing any opinion on the merits of the case, we are constrained to allow this appeal and send the case back to the High Coul'I for a fresh decision in the light of the observations made above.

Had the High Court recorded its reasons in support of the order dismissing the appeal perhaps this remand could have been avoided and the appellants saved the further delay in the :final disposal of their appeal by the High Court. The appeal is accordingly allowed and the case sent back for a ; fresh decision.

<tC.

Appeal allowed.

THE STATE OF GUJARAT

March 13, 1973

A. ALAGIRISWAMI

1. D. DUA

Code of Criminal Procedure

s. 421

High Court of Gujarat

s. 420

ss. 511 and 34

I.P.C

s. 474

s. 34

Penal Code

Section 421

Cr.P.C

s. 421

Art. 136

[1955] 2 S.C.R. 94

K. K. Sinha

K. Sinha

Urmila Kapoor

B. D. Sharma

S. P. Nayar

DuA

Sessions Judge, Jamnagar

s. 420

ss. 511 and 34, 1

s. 474

Indian Penal Code

Indian Railways

Jam.nagar

Mustaq Ahmed Mohmed Hussein

Mukhtar Hussein Ali Hussein Sayed

section 467

section 34

section 468

section 34

Indian Penal Code

section 471

section 34

s. 474

section 34

J"mnagar

section 420

section 34

s. 511

Indian Penal Code

s. 420

ss. 511 and 34

I.P.C

ss. 474

MUSTAQ AHMED V. GUJARA~

s. 410

s. 418

Section 421

Bhagwati

s. 421

s. 421

s. 421

s. 421

Allallabad High Court

Art. 136

Uffilila Kanur

Kapur

Mohd. Ayub

Mohd. Ayub Abbas Raut

s. 421

March 25. 1963

s. 410

article 136

Bhargava

Hegde

Mush•ak Hussein

Shelat

Murhtak Hunein

Jiwan Praka•h

Rajendrapaul Ramasaran

Art. 136

ss. 467 and 468

I.P.C

s. 471

I.P.C

s. 420

I.P.C

ss. 415 and 34

I.P.C

ss. 474

I.P.C


PHUL RANI & ORS.

NAUBAT RAI AHLUWALIA

March 14, 1973

[J. M. SHELAT ANDY. V. CHANDRACHUD, JJ.]

Delhi Rent Control Act-S. 14(1)(e)-Whether on the death of the plaintiff during pendency of-an ejectment application, the cause of acdon would survive to hi.9 legal representatives.

The plaintiff after two notice• to quit, filed an ejectment application against the defenda:nt under S. 14(l)(e) of the Delhi Rent Control Act 1958. The possession was sought on the ground of personal requirement, The _Additional Rent Controller, dismissed tbiet application on a preliminary ground of invalid notice.

During the p<llldency of an appeal against that decision, the plaintiff died. Appellants 1 to 4 who are widow, son and two married daughters of the Qeceased, applied for being brought on the .record of the appeal as his legal representatives. The def<ittdant opposed that application on the ground that . the son and daughter of a deceased daughter of the plaintiff ought also to have been impleaded to the application, and since that was not done, the appeal had. abated. The Rent Control Tribunal allowed these two persons also to be impleded as appellants and remanded the ejectment application fo_r a decis'ion on merits. These heirs are now appellants 5 and 6. The second appeal filed by Ibo tenant against the order of remand was dismissed by the High Court.

As the order of remand passed by the Rent CoJttrol Tribunal wu not stayed. during the pendency of the second appeal, the Additional Rent COJDtroller proceeded .with t)le ejectment application and paaaed . ; an order of eviction against the tenant.

The tenant appealed against that deciskln and contended for the first time that the right to sue did not survive to the heirs of the plaintiff. The Rent Control Triblpl Tejected the contention and confirmed the . drder of eviction on merits. ln an appeal, the High Court took the view that the right to sue did not survive IO the heirs of the plain(df and on that ¥rouind dismissed the ejectment applicati0n. The correctness of that decision is challeng·

ed by the plaintiff's heirs before this Court. The question for decision was whether the cause of action could survive to his legal represcnta tives.

Dismissing the appeal, HELD : (i) In some cases '*'<Jer the rent Acts, the lllQJ(im actio personali! moritur cum persona bas been attempted to be applied on the death of a necessary party to a suit or proceeding. This oft-quoted maxim, however, is generally misunderstood. The plain. meaning of that common law 111axim is that a penonal action dies with the parties to the cause of action. Ito the preaent ca..,, it is obvious that the death of the plaintiff will not cause the ejectment ptoc•edings to abate if the right to sue survives. That is the formula contained in Order 22, Rule 1 of the. Code of Civil Procedure. [681FO, 6820] However, from the pleadings in the ejectment application, the pl•intllf has founded his right to relief on hD personal requireme, t>t.

So, if the appellants were pennitted to continue the proceedings, the 114 will assume a complexion wholly beyond the compass of the original cause of action, and without a fundamental alteration of the pleadings,· the appellanta would not be able to continue the proceedings. There fore, the appeal must fail.

[683CJ

Moiilal Pannalal v. Kai/ash Narain, A.LR. 1960 M.P. 134; Amar Nath Bihari v. Jai Dayc.I Puri 1971 (7) Delhi Law .'.fimes 363; S1J1t. Dhan Devi and Anr. v. Bakshi Ram and Anr., A.LR. 1969 Punjab & Haryana 270; Vas Dev v. Sohan Singh.& Ors. [1968] 40 Delhi Law Times 392; Dr. Muhammad Ibrahim v. Rehamin Khan & Ors., [1947] 2 M.L.J. 419; ond Rameswar Dayal & Ans. v. Sohankil & Anr., [1963] A.L.J. 198, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1879 of 1971.

Appeal by special leave from the Judgment and order dated May 24, 1971 of the Delhi High Court at New Delhi in S.A. No. 178 0f 1970.

Bishan Narain and .0. N. Mahindroo for the appellant.

P. N. Lekhi and M. K. Garg, for the respondent.

The Judgment of the Court was delivered by

CHANDRACHUD, J.-The plaintiff, who in a Rent-Act applic~- tion against his tenant sought possession of certain premises on D the ground of personal requirement, died pending the application.

The question for decision is whether the cause of action would survive to his legal representatives or whether, as contended by the tenant, the application must abate.

On June 28, 1962 a flat at New Rajinder Nagar, New Delhi was leased by the plaintiff to the defendant. On failure of the de- E fondant to comply with two notices to quite plaintiff filed an ejectment application under seclion 14 ( 1 )( e) of the Delhi Rent Control Act, 1958 ("the Act"). Possession was sought from the tenant on the ground that the premises were required by the plaintiff "for occupation as a residence for himself and members of his . family".

The Additional Rent Controller, Delhi, dismissed the application on the preliminary ground that the notices to quit were not valid.

Plaintiff filed an appeal against that decision but during its pendency he died on August 22, 1968. Appellants 1 to 4 who are the widow, son and two married daughters of the plaintiff applied for being brought on the record of the appeal as his legal representatives.

The tenant opposed that application on the narrow ground that the son and daughter of a deceased daughter of the plaintiff ought also to have been impleaded to the application and since that was not done, the appeal had abated. By its order dated December 13, 1968 the Rent Control Tribunal, which was seized of the appeal allowed these two persons also to be impleaded as appell3ll!s. By a further order dated January 2, 1969 the Tribunal set aside the decision recorded by the Additional Rent Controller on the preliminary issue and remanded the ejectment application for a decision on merits. These two "heirs"' are now appellant 5 and 6. Second appeal 107 of 1969 filed by the tenant against the order of remand,; was dismissed by the High Court of Delhi on February 20, 19'70. ·

As the order of remd passed by the Rent Control Tribanal was not stayed during''.the pendency of the Second Appeal, the Additional Rent Controller proceeded with the ejectment appli-'.

cation and had in t_h"e meanwhile passed an order of eviction against the tenant. By his judgment of February 14, 1969 he held that the plaintiff's widow (appellant 1), his son ( appel!.uit 2), the son's wife and three minor daughters of tl)at couple re- quired the premises bona-fide for their occupation. ' .

I ' The tenant appealed against that decision and contended for the first time in appeal that the right to sue did nc; it survive to the heirs of the plaintiff. The Rent Control Tribunal rejected that contention and confirmed the order of eviction on merits.

In an appeal filed by the tenant (S.A.O. No. 17g-·:of 1970) the High Court of Delhi took the view that the pght to sue '.did I not survive to the heirs of the plaintiff and on _that ground it ·· dismissed the ejectment application, leaving i:t open to the heirs to bring a fresh proceeding founded on their own requiremmts.

The correctness of that decision is challenged by the plaintiff's heirs in this appeal 1jy special leave.

The survival of the right to sue on the death of a plaintiff is a problem that has often to be solved on a permutation of several facts and circumstances. But it would be out of place in this judgment to embark upon an abstract disquisition of the que:; tion as to in what classes of cases, the right to sue survives in favour of the legal representatives. In some cases undr the Rent Acts, the ma.'tiru actio-persona/is moritur cum persona h_as been attemp ted to be applied on the death of a necessary party to a suit or proceeding but that oft-quoted maxim is oft misunlierstood. The plain meaning of that common law maxim is that a personal ction dies with the parties to the cause of action.

Its purort, until sweeping changes were made in the previous law by the Law Reform (Miscellaneous Provisions) Act, 1934 was that no executor or administrator could, subject to certain exceptions, sue er. be sued (or any tort committed against or by the deceased . in his life-time. The action for a tort had to be Hegun in the joint

life'time of Pie wrongdoer and the person injured. (See Salmond on the Law of Torts 15th Edn. p 569; Halsbury Laws of England 3rd Edn. Vol. 16 p. 483 paragraph 985).

Nor do we find relevance in th~ provisions of section 306 of the Indian Succession Act, under which all !lemands whatsoever . and all rights to prosecute or defend any action or pecial procP.eding existing in favour of or against a person at the time ol his' A decease, survive to and against his executors or administrators; except causes of action for defamation and assllult, or other personal injuries not causing the death of the party and except also cases "where, after the death of the party, the relief sought could not be enjoyed" or granting it would be nugatory. We can duly press iQto service and that too indirectly, the analogy of the first part otthe last excepion in an effort to find whether. after the death of the plaintiff in the instant case the relief sought could not be enjoyed by his legal representatives.

Though the plaintiff died during the pendency of ti\e appeal, it is as if he died during the pendency of the suit because the suit was dismissed on a preliminary issue concerning the validity of the notices to quit and was remanded in appeal for trial on the merits. It is patent and would be a truism to say that th.l death of the plaintiff will not cause the ejectment proceedings to abate if the right to sue survives.

That is the formula contained in Order 22 Rule 1 ol the Code of Civil Procedure, a formula simple in its wording but 1;1ot simple in its application. The ''right to sue"

as said succinctly in Saraj Chandra v. Nani Mihan('r) means 'the right to bring a suit asserting a right to the same relief which the deceased plaintiff asserted at the time of his' i:leath". Thus contracts involving the exercise of special skill like a promise to paint a picture <!.o not bind the the . representatives of the promisor nor do

they create in them a right thai can survive the death of the promisor.

The solution to the problem whether the appellants can continue the proceedings in their capacity as the legal representatives of the plaintiff lies in the pleadings of the plaintiff for thoso alone can reveal the true nature of the right asserted 1iy the plaintiff in the ejectment proceedings.

In column 18 (a) of the efectment application the ground for evicting the tenant is stated thus :

"The premises are required bonafide by the petitioner for occupation as a residence for himself and members of his family and that the petitioner has no other reasonable suitable residential accommodation."

In column 19, the "other relevant infonnation" is stated to be G that the plaintiff had a large family consisting of his wife, son, daughter-in-law and 3 minor grand-daughters, and that the family had only 2 rooms in its possession, which were wholly inadequate for its requirements.

Thus, the requirement pleaded in the ejectment application and on which the plaintiff has founded his right to relief is his H requirement, or to use an expression which will effectively bring

II) 36 Cal. 799 at p, 801.

•...

out the real point, his personal requirement. If the ejectment application succeeds-we will forget for a moment that the plaintiff is dead-the premises in the possession of the tenant may come to be occupied by the plaintiff and the members of his family but that does not make the requirement pleaded ih the application any the less a personal requirement of the plaintiff. That the members of his family must reside with him is his requirement, not theirs. Such a personal cause of action must perjsh with the plaintiff.

If the appellants were permitted to continue the proceedings, the /is will assume a complexion wholly yond the compass of the original cause of action. Indeed, it is difficult to see how, without a fundamental alteration of the pleadings, appellant~ could continue the proceedings. Such an alteration will fall beyond the scope cf amendment of pleadings, permissible under a most liberal interpretation of order 6, Rule 17 of the Code of Civil procedure.

Plaintiff, who owned the premises, was entitled under section 14(1)(e) of the Act to ask for possession thereof on the ground that his wife and the other members of his family dependent on him must live with him but that there was not enough space at his disposal to accommodate them.

Section 14(l)(e) provides t<> the extent material for the present purposes, that the Controller may make an order for possession on the ground "that the premises let for residential purposes are required bonafide by the landlord for occupation as a residence for himself or for any member of his family dependent on him, if he is the owner thereof. ......• and that the landlord. . . . . . . . has no other reasonably suitable residential accommodation". If the plaintiff were alive, the main issues for determination in the ejectment proceedings would have been : ( 1 ) whether the plaintiff requires the premises for his occup- ation and for the occupation of his• wife, son, daughter-in-law and 3 grand-children; (2) whether the aforesaid requirement is bonafide and (3) whether the plaintiff has no other reasonably suitable residential accommodation.

The appellants' emergence in the proceedings will require the determination of wholly different and distinct issues. Their requirements, not that of the plaintiff, and the availability to them-not to the plaintiff-of other reasonably suitable residential accommodation will now form the centre of conflict. It is relevant on this aspect to remember that amongst the appellants are 2 married daughters of the deceased plaill'tiff and 2 children of a deceased daughter of his. Their requirement would be basically different from that of the plaintiff and an examination of facts and circum&tances in regard thereto will open up a new vista of inquiry. The plaintiffs right to sue will thereafter not sllrvive to the appellants and they cannot glean the benefit of the original right to sue.

Several decisions were cited b:fore us but those falling within the following categories are to be distinguished :

(i) cases in which the death of the plaintiff occurred after a decree for possession was passed in his favour; say, during the pendency of an appeal filed by the unsuccessful tenant;

(ii) cases in which the death of the decree-holder landlord was pleaded as a defence in execution proceedings; and

(iii) cases in which, not the plaintiff but the. defendant-tenant died during the pendency of the proceedings and the tenant's heirs took the plea that the ejectment proceedings cannot be continued against them.

Cases of C.he first category are distinguishable becase the decisions therein are explicable on the basis, though not always so expressed, that the estate is entiiled to the benefit which, under a decree, has accrued in favour of the plaintiff and therefore the legal representatives are entitled to defend further proceedings, ILke an appeal, which constitute a challenge to that benefit.

Jn Motilal Pannalal v. Kai/ash Narain, (') for example the landlord who had obtained a decree for possession on the ground of personal necessity under section 4(g) of the Madhya Bharat Control of Accommodation Act, 1955 died during the pendency of the appeal filed by the tenant. It was held 1hat the decree would ensure for the benefit o[ his son and widow. In Amar Nath Rihari v. Jai Dayal Puri(') the death of the landlord occurred after the Rent Control Tri1*Jnal had held in appeal, reversing the judgment of the Controller, that the premises were required by , the landlord for the use of himself and his wife under section 14 (1 )( e) of the Act. It was held that the wife was a member of the landlord's family and as "the need of the landlord for the premises was assessed to be both for himself and his wife",_ the cause of action consisted of the need of both and therefore it survived to the widow.

The judgment of the High Court in the instant case was cited before the learned single Judge but was distinguished by him on the ground that the requirements of the legal representatives here were not determined by the Controller. prior to the death of the plaintiff. The point pf distinction could be that the decree for possession passed in favour of the landlord could be defended by his legal representatives for the bj:neflt of his estate.

In Smt. Dhan Devi and Anr. v.

Bakhshi Ram and Anr. (') an application for ejectment was filed by the landlord under the

(1) A.l.R. 1960 M.P. 134.

(2) 1971 (7) Delhi Law Times 363.

(3) A.J.R, 1969 Pb, & Haryana 270,

East Punjab Urban Rent Restriction Act, 1949. The ground on which possession was sought by the landlord was that he required the land for his own use as he wanted to construct a building for the purpose of his office. The Rent Controller allowed the application and the appeal filed. by the tenant against that decision was dismissed by the District and Sessions Judge.

The tenant then B filed a r11visional application to the High Court, during the pendency of which the landlord died.

On the tenant's application the widow and an adopted son of the landlord wer~ brought on the record but it was urged on behalf of the tenant that the ground of ejectment was personal to the landlord and therefore the applic

cation for ejectment had abated on his death.

This contention was iejected on the ground that the word "landlord" in the East Punjab Act includes his successors-in-interest and that the rights of a landlord-decree-holder nnder an order of eviction obtained by him are heritable and devolve after his death on his legal representatives.

Cases of the second category are distinguishable because the decisions therein are, by and large, based on the principle that an executing court has no jurisdiction to go behind the decree. It must execute the dree as it finds it, save in exceptional cases as, for example, where the decree on the face of it is without jurisdiction.

In Vas Dev v. S. Sohan Singh & Ors.( 1) a case under section 14(1)(e) of the Delhi Rent Control Act, the landlord obtained an order of eviction on the ground of personal requirement but he died before the order for eviction could be executed. His ROns

and daughters filed an execution application, to which the tenants ra.ised an objection that the order of eviction ing personal to the landlord, was incap'able of execution after his death. It was held I' by a learned single Judge that the provisions of section 14(1 )(e) have to be satisfied at the time of the passing of the order ,, f eviction and that the executing court had no right to go behind

the decree in order to find out whether the requirement continue at the time ot execution. A contrary decision in Dr. Muhammad Ibrahim v. Rahiman Khan and Ors. (2 ) may be said to tum on the G peculiar language of the particular provision of the Madras House Rent Control Order, 1945.

Cases of the third category are governed by totally different considerations.

The landlord's right to evict the tenant on the grounds available under the Rent Act docs not come to an end with the death of the tenant. That right is enlorceabile against H those in whom the tenant's interest resides for the time being. In Rameshwar Dayal and Anr. v. (Smt. Mohania Died) After her

(I) 1968 (4) Delhi Law Times 391.

(2) 1947 (2) M.LJ.

Sri Sohan Lal and Anr. (') which was a case linder the U.P.

(Temporary) Control of Rent and Eviction Act, 1947 the landlords obtained permission under section 3 of that Act to bring a suit for ejectment on the ground that , the shops in possession Of the tenant were in a dilapidated condition and required reconstruction. The landlords thereafter brought a suit, during the pendency of which lhe tenant died. The tenant's son and widow were then brought on the record but the suit was dismissed on the ground that the notice to quit was defective. The landlords brought another suit against the son and widow without obtaining a fresh permission under section 3. It was held that the suit could be filed against the heirs on the basis cl the permission obtained against the tenant Clearly, the permission to evict related to the condition of the premises which did not change with the death of the tenant.

We have referred to some of the decisions in the three categories, not with a view to de<termining their correctness but only in order to show that they rest on different principles or could be explained in reference to such principles. We are concerned with a mattr not involving the application of any of those principles.

For reasons already stated, we are of the view that considering the nature of the claim made in the instant case and the '*1ndle of facts which constitute the plaintiff's cause of. action, ))is right to sue will not survive to his legal representatives.

In the result, the appeal fails but there will no order of costs.

s.c.

Appeal 'dismissed.

Cl) 1963 A.L.J. 198.

PHUL RANI & ORS

NAUBAT RAI AHLUWALIA

March 14, 1973

M. SHELAT ANDY. V. CHANDRACHUD, JJ.

Delhi Rent Control Act

S. 14(1)(e)

S. 14(l)(e)

Delhi Rent Control Act 1958

Order 22, Rule 1

Code of Civil Procedure

CIVIL APPELLATE JURISDICTION

Bishan Narain

N. Mahindroo

P. N. Lekhi

M. K. Garg

CHANDRACHUD

June 28, 1962

New Delhi

Delhi Rent Control Act, 1958

Additional Rent Controller, Delhi

August 22, 1968

December 13, 1968

January 2, 1969

High Court of Delhi

February 20, 19'70

February 14, 1969

Salmond

section 306

Indian Succession Act

Order 22 Rule 1

the Code of Civil Procedure

order 6, Rule 17

the Code of Civil procedure

section 14(1)(e)

Section 14(l)(e)

section 4(g)

section 14

section 14(1)(e)

section 14(1 )(e)

Sohan Lal

Control of Rent and Eviction Act, 1947

section 3

section 3


PATIRAJI

MAMTA & OTHERS

March 15, 1973

[J. M. SHELAT AND Y. V. CHANDRACHUD, JJ.]

U.P. Zamindarl Abolition and Land Reforms Act, 1950, s. 20(b)(i)- AdivlJSI rights under-Who is entitled to.

The appellant filed a suit under s. 20(b)(i) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, on the basis that her name was recorded as an occupant in the Khasra of 1356 Fasli, that she bad therefore become an Adivasi, and was consequently entitled to p<l680S8ion of the la!!ds from which she was unlawfully dispossessed by the respondent& The suit was dismissed but was allowed in appeal by the Additional Com missioner.

A further appeal by the r.Spondents to the Board of Revenue having been dismissed, they filed a writ petition in the High Court which was allowed on the ground that the entry in favour of the appellant was for a part of the year only and that therefore she was not entitled to the Adivasi rights.

Dismissing the appeal to this Court,

HELD : Under the section the Adivasi rights can be claimed by those persons only who are recorded as o=p.,, ts for the whole of the Fasli year

1356. The rights conferred by the section are available also to trespassers.

It could not have been the policy of the Act that everyone of thooe fleeting trespassers who might be found in occupation at the time of the tri annual inspections, should be given recognition and be made eligible for the acquisition of Adivasi rights. It is neither logic nor good sense that the last entry-holder should be so recognised, because, such a construction would on1y encourage greater lawlessnes~ amongst trespassers, every one of whom will make a frantic attempt to be last in the queue. Therefore, there is no justification for construing the provision with greater liberality , than the language warrants. Special rigllts having been conferred by the Act they ought to be subject to the special Jimitatioos imposed by t~

Act.

[689CD, A; 690AB]

The Fasli year 1356 commenced on July I, 1943 and ended on June 30, 1949; and the appellant's name was entered as an occupant only from February 24, 1949. As the entry doea not show that the appellant was in occupation of the land throughout the year she was not entitled to the Adivasi rights under the section.

[690E]

Shyam Sunar Lal v. Mangali and Or!., [1963] A.L.J. 286, Ram Chander and A.nr. v. Chootu 19'57 A.L.J. 24 (Revenue) and Glrdhari v.

Raghubir Singh etc. 1958, A.L.J. 183 (Revenue) approved.

CIVIL APPELLATE JURISDICTION ; Civil Appeal No. 1324 of 1967.

Appeal by special leave from the judgment and order dated October 31, 1966 of the Allahabad High Court in Special Appeal

No. 344 of 1966.

Jagdish Swarup and R. K. Bhatt, for the appellant

C. B. Agarwala and C. P. Lal, for the respondents.

~BB

SUPREME COURT REPORTS [1973] 3 s.c.R.

The Judgment of the Court was delivered by

CHANDRACHUD, J.-The question which arises for considera- 1ion in this appeal is whether rthe appellant Patiraji is entitled to the

"'Adhivasi" rights under section 20(b)(i) of the U.P. Zam\ndari Abolition and Land Reforms Act, 1950 ("the Act").

One Ram Adhar and the respondents were co-tenants of certain lands srtuated at Bibiganj, District Sultanpur. On the death of Ram Adhar on February 24, 1949 the appellant took proceedings under the U.P. Tenancy Act, 1939 for a declaration that she was the widow of Ram Adhar and as such, had become a co- . tenant along with the respondents.

The appellant succeeded before the Assistant Collector but in appeal, the Additional Commissioner and then fue Board of Revenue took a contrary view, holding that the appellant was not the widow of Ram Adhar. The judgment of the Board of Revenue is dated July 1, 1954.

In the meanwhile, the Act had come into force on July 1,

1952. The appellall!I then brought the present suit, treated as one under section 20(b) read with secltion 232 of the Act. The case of the appellant is that her name was recorded as an occupant i11 the Khasra of 1356F, that she has therefore l)ecome an Adhivasl under section 20(~) (i) and is consequently entitled to possession <>f the lands from which she was unlawfully dispossessed by the respondents. The trial court dismissed the suit but the Add, itional Commissioner allowed Patiraji's appeal and decreed her suit. Res'

pondents carried an appeal against '.he decision of the Additional Commissioner to the Board of Revenue but that appeal was dis' missed.

The respondents then filed a writ petition in the High Court of Allahabad, which was allowed by a learned single Judge of that court. He held that. the entry in favour of the appellant appeared in the Khasra of' 1356F for a part of the year only and therefore she was not entiled to the Adhivasi rights. Special Appeal No. 344 of 1956 against'the judgment was dismissed by a Division Bench in limine on October 31, 1956. This is an appeal by special leave against that decision.

The sole foundation of the appellant's claim is an entry which appears in the Khasra of 1356F, which is to the following effects-

"Ram Adhar Pandey Bakasht Waris Baqa biz Smt.

Patraji Motwafli Bewa Ram Adhar P anedv Tarikh 24-2-49 Se", that is to say "Ram Adhar Pande in cultivation heir in possession Smt. Patiraji widow of deceased Ram Adhar Pandey from 24-2-49".

The importance of this entry consists in the special benefit which such entries confer under section 20(b)(l) of the Act :

"20. Every person who ............. .

PATIRAJI v. MAMTA (Chandrachud, J.) 68&

(b) was recorded as occupant

(i) of any land ........ in the Khasra or Khatauni al 1356F. . . . . . . . shall ..... . be called Adhivasi of the land and shall, subject to the provisions of thjs Act, be entitled to take or retain possession thereof."

None of the four explanations to section 20 is relevant for the present purpose.

Looking at the provision contained in section 20(b){i), it seems "> us plain that the Adhivasi rights can be claimed by those persons only who are recorded as occupants for t!ie whole of the Fasli year 1356. It is important to remember that ithe rights conferred by section 20(b ){i) are available even and mostly to trespassers.· Clearly therefore, there is, in the first i, nlllance, .no justification for construing the provision with greater liberality than thelanguage IJlllfrants. Special rights conlerred by the Act ought to be subject to the special limitations imposed by the Act.

Apart from this aspect, any other view of section 20(b)(i) would make it unworkable in practice and would set the pace for lawlessness amongst trespassers. If different persons 'are in occupation of a land during different parts of the year, whom shall the court recognise as an Adhivasi and by what test shaH the court pick and choose ? Under the Uttar Pradesh Land Records Manual, the Lekhpal, has to make three field-to-field inspections of every village in his halka, beginrung respectively on August 15th, January 15th1and April 15th cl every year. (Rule A-55). On the basis of these inspections, the Lekhpal has to make entries in the 'Khasra', that is to say in the field-book, in form No. P-A-3

(Rule' A-60). If a person other than a tenure-holder as classified in Part I or Part II of the Khatauni, is found to be in actual occupation, his name is to be recorded in the 'Remarks' column (column No. 21) as "baqabza so and so" (Rule A-71, para 3). It may so happen, and decided cases show that it does so happen, that different persons are found to be in possession of a land at the time of the tri-annual inspeotiQns. The Lekhpal has to enter their names as occupants, mar be in the remarks columri, but the picture emerging at the close of the year will reveal that different persons were in occupation of the land-some one during the Kharif season, some one during the Rabi season and some one probably

taking charge, on the sly, of a /Jona vacantia. When the trujl owner is away, the trespassers will play and the law which governs then1 is might'is right. It cannot be the policy of the Act that everyo11e of these fleeting trespassers must find recognition and be made eligible for the acquisition of Adhivasi rights. None of them, in .

our opinion, can qualify for these valuable rights. It was urged

690 SUPREME COURT REPOl'-TS (1973] 3 s.c.R.

that 1he last entry-holder should be recognised as an occupant to the exclusion of others but there is' neither logic nor good sense in such a course. The last holder may have been in possession for a fra<ltional part of the year and such possession may adventitiously coincide with the April visit of the Lekhpal.

Besides, such a -construction, as said already, will only encourge greater lawlessness amongst trespassers.

Every one of them will make a fra11tic attempt to be last in the queue.

Rightly therefore, the High Court of Allahabad and the Board of Revenue; U.P. have been uniformly taking the view that the right conferred by section 20(b)(i) can be availed of by those persons only who are recorded as occupants for the entire Fasli year 1356 and not by those who are recorded as occupants for a part of 'i:he year. (See Shyam Sunar Lal v. Mangali and Ors. (1) Ram Chander and Anr. v. Chhotu;( 2 ) Girdhari v. Raghuir Singh .etc.(8 ) It would seem that the Board of Revenue struck a discorda.nt note in the instant case only, but it is necessary to point out that the Board rested its decision on the circumstance that the appellant was the "sole heir" of Ram Adhar. In making that assumption the Board was in error, because in the earlier proceedings it was held that the appellant was not the widow of Ram Adhar and she traced on other line of heirship.

It is clear from the entry on which the appellant relies that her name was entered as an occupant as from February 24, 1949.

The Fasli year 1356 concerned on July 1, 1948 and en<)ed on June 30, 1949. As the entry does not show that the appellant was in occupation of the land iliroughout the year, she is nqt entitled to the Adhivasi rights under section 20(b) (i) of the Act.

Some attempt was made to contend that the appellant was shown as a joint occupant along with the Adhar during the life time of the latter and therefore she must be held to have been in possession for the whole year. An uncertified copy of the entry to which counsel drew our attention does not bear out this submission and in fact such a contention was never raised at any earlier stage. .

In the result we confirm the judgment of the High Court and -dismiss the appeal with costs.

V.P.S.

(t) 1963 A.L.J. 286.

(2) 1957 A.L.J. 24 (Revenue).

(3) 1958 A.LI. 183 (Revenue).

Appeal dismissed.

PATIRAJI

MAMTA & OTHERS

March 15, 1973

M. SHELAT

Y. V. CHANDRACHUD, JJ.

s. 20(b)(i)

s. 20(b)(i)

June 30, 1949

February 24, 1949

CIVIL APPELLATE JURISDICTION

Jagdish Swarup

R. K. Bhatt

C. B. Agarwala

C. P. Lal

CHANDRACHUD

Patiraji

section 20(b)(i)

Abolition and Land Reforms Act, 1950

Ram Adhar

Tenancy Act, 1939

Ram Adhar

July 1, 1954

July 1,

1952

section 20(b)

section 20(~)

Patiraji

High Court of Allahabad

October 31, 1956

Ram Adhar Pandey Bakasht Waris Baqa biz

Ram Adhar Pande

Ram Adhar Pandey

section 20(b)(l)

section 20

section 20(b)

section 20(b )

section 20(b)(i)

section 20(b)(i)

July 1, 1948

section 20(b)