A.TIC INDUSTRIES LTD. v.

H. H. DA VE, ASSTT. COLLECTOR OF CENTRAL EXCfSE AND

ORS.

February 14, 1975

ll [P. N. BHAGWATI, A. c. GUPTA AND N. L. UNTWALIA, JJ.]

Central Excise and Salt Act 1944-s. 3 ( 1) and 4(a)-Ad va/orem assessment -How made.

The appellant, which was. a manufacturer of dye-stuffs, sold its product to two wholesale buyers at. a uniform selling price described as "the ba'Sic selling price" less trade dis:ount of 18%. The wholesalers in turn sold the product to large consumers such as textile mills and distributors.

One wholesaler sold the dye-stuff to the distributors "t a higher price but allowd 10% discount while the other sold at a lower price and allowed 2-l-% discount.

The price charged by both however was so adjusted that the net selling price charged to the distributors was almost the same.

The excise duty chargeable under s. 3 (!) of the Central Excise and Salt A:t, 1944 was ad va/orem.

Section 4 providej .as to how the value of an article chargeable with duty at a rate depending on its value shall be determined for the purpose of assessment of excise duty.

Befor.e the excise authorities the appellants claimed that, for the purpose of assessing the excise duty the value of the dye--stuffs should be taken to be the price at which the a:ppellants sold the same to the two wholesale buyers less trade discount allowed to these wholesale buyers. The Superintendent of Central Excise nejected this contention and took, for the purpose of assessment, the price at which the wholesalers sold the dye-stuffs to the distributors.

He did not, however, allow any deduction in respect of the discount given by the whobalers to the distributors since it was not uniform.

On appeal the Assistant Collector of Central Excise confirmed the assessing authority's order. \Jn further ;:; ppeal, the Collector of Central Excise held that in determinin_g the

assssable value, the lower trade discount of 2t% allowed by one of the wholesalers to the distribu.tors only should be ducted. The appellant's revision application was rejected bv the Central Government on the ground that since th 0 dye-stuffs manufactured by the apjiellant were not avail;:; ble to an indpen dent buyer in open market conditions at prke at which these were sold by them to the wholesalers these prices could not be adopted as the basis -of ad va/orem assessment under s. 4 of the Act.

It was observed that these dye stuffs were ava:ilab!e to any independent buyer in open market conditions at the distributors' prices, that is, at the pri,:es charged by the wholesalers to the distributors and, therefore, these prices should form the basis of assessment after allowing the discount.

---Diss_gtisfied with the decision of the Central Government the appellant filed a petitioil\mder_iirt. 226 of the Constitution. The High Court held that where the entire producfioo--was sold by a mMJ.ufacturer to one or more favoured distributors there was no whcile"sale market in the senSe of open market at the site oi the factory where an independent buyer could purchase the gooqs in wholesale and the assessable value must therefore be taken to be the price at which favoured distributors sell the goods in wholesale ;:; nd if not in wholesale.

then, in retail.

The High Conrt accordingly upheld the view of the Central Government.

Allowing the appeal,

HELD: (I )(a) The assessable value af the dye-stuffs manufaciured by the appellants must be taken to be the price at which they v•ere sold by the appellants to the two wholesale dealers less 18% trade discount and not the price charged by the wholesale delers to the <iistributors.

[573F-G]

(b) Where a manufaclurer sells the goods manufactured by him in wholesale to a \\holesak der.ler at arm's kngth and in the usual course of busins;, the wholesale :ash price charged by him to the wholesale daler less trad~_ discoml would represent the value uf the goods for the pt•.rpose of assessment oE excise.

That would be the wholesale cash price for which the goods are sold at the faqory gate within the meaning of s. 4(a). The pric, e received )JY the whobaL~ dealer who purchases the goods from the .manufacurer and m his t1.'.111 sells the ·;-ame in wholesle to other dealers would be irrelevant to the deter:~1111atio11 of the value of the goods and the goods would not be chargeable to exrne on tlm ba, ic.

[573E-F]

I c) The value of the goods for the purpose of excise must take into ac.:ount only the manufacturing co; t. and the manufacturn_g profit and it mus-: not . b~ loaded with post-manufacturing cost or profit arising from post-manufactunng operation.

[572FJ

(d) Once the good'l have entered the stream of trade and are on their onward journey to the consumer, whether along a . s_hort or a lon1' c_ourse depending on the nature of the goods and the cond1tmns of trade, 'excise is not concerned with what happens subsequently to the goods.

[573B-C]

A. K. Roy v. Valtas Ltd., [1973] 2 S.C._R. 1088, followed.

C1v1L APPELLATE JURISDICTION : Civil Appeal No. 1868 of 1970.

From the Judgment and Order dated the 30th March, 11970 of the Gujarat High Court in S.C.A. No. 1219 of 1966.

N. A. P'alkhivala, Sol. J, Sorabji, Ashok Desai, D. B. Engineer, K. K. Master, and Ravinder Narain, for the appellant.

G. L. Sanghi and Girish Chandra, for the Respondents.

The Judgme:nt of the Court was delivered by

BttAGW ATI, .J .-This appeal, on certificate of fitness obtainl!d under Article 133 (1) (a) of the Constitution, is directed against a judgment of the High Court of Gujarat dismissing Special Civil Application No. 1279 of 1966 preferred by the appellantf challenging the assessments to excise duty of certain dye-stuffs manufactured by them. The facts giving rise to the appeal are few and may Ire briefly. stated as follows.

The appellants carry on business of manufacturing dye-stuffs in a factory situate in a small township called Atul in Bulsar District in th¥ State of Gujarat. The dye-stuffs manufactured by the appellants were, throughout the period relevant to this appeal, sold by them in whole.sale units to two wholesale buyers, numely, IC! (Indiai LtJ.

(heremafter referred to as ICI) and Atul Products Ltd. (hereinafter

reerred to as Atul) under respective agreements entered into by them

with ICI and Atul.

Seventy per cent of the dye-stuffs manufactured by the appel_Iants were sold to ICJ, while the remaining 30% to Atul. The pnce charged by the appellants to ICI and Atul was a uniform price described as athe oasic se::in.;, pri:e" ]-:-: tr"se diw:mnt of 18%. ICI and Atul, in their turn, resold the dve-; tuffs purchased by them from the ppel!_ants to two categorieo or buyers. One was the category of textile mills and othe; r large consumers, while the

A TIC INDUSTRIES v. ASST. COLLECTOR (Bhagwati, J.) 5 6 5

other was the category of distributors. The sales by ICI and Atul to the textile mills and other large consumers were at the basic selling price without any discount, but so far as the distributors were concerned, the sales to them by ICI and Atul were at a higher price, though with trade discount.

ICI charged a higher price but allowed 10% trade discount, while Atul charged a slightly lower price and allowed two and a half per cent trade discount. The prices were, however, so adjusted that the net selling prices charged by ICI and Atul to the distributors were almost the same. The distributors, in their turn, resold the dye-stuffs .purchased by them from ICI and Atul to the small consu1mers at a slightly high".r price referred to as "small

consumers price".

No discount was given by the distributors to the small consumers.

The position which, therefore, obtained during the relevant perid was that the appellants sold the dye stuffs manufactured by thm m wholesale units, 70% to ICI and 30% to Atul, at the basic selling price, bss trade discount of 18%: ICI and Atul in their turn resold a part of the dye stuffs in retail unjts to the textile mills and large consumers at the basic selling price and the balance in wholesale units to the distributors at higher selling prices with 10% trade discount in case of ICI and 2~% trade discount in case of Atul, the net selling prices charged by both of them, however, being the same; and the distributors, in their turn, re-sold the dye stuffs to small consumers in retail units at the small consumers price. It may be pointed ciut that though Atul initially charged a lower selling price and gave a trade discount of 2!%, it fell inO!ine with ICI and adopted the same selling price as JCI with trade discount of 10% from and after 1st May, 1963.

There was no excise duty on dye stuffs prior to 1st March, 1961, but with effect from that date excise duty was imposed for the first time on dye-stuffs, including those manufactured by the appellants.

The excise duty chargeable under the relevant entry in the first Schedule read with section 3, sub-section (1) of the Central Excise and Salt Act, 1944 was ad valorem, and it was, therefore, necessary to determine the value of the dye-stuffs manufactured by the appellants for the purpose of assessing the excise duty payable on them.

Section 4 of the Act provided how the value of an article chargeable with duty at a rate depending .om its value shall be determined for the purpose of assessment of excise duty. It said :

"Determinhtion of value for the purpose of duty.

Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value be deemed to be-

( a) the whole sale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production, or if a wholesa!e

(b)

market does oot exist for such article at such place, at the nearest place where such market exists, or

where such price is not ascertainable, the price at which an article of the like kind and quality sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of of the article chargeable with duty from dUCh factory or other premises for delivery at the place of manufacture or production or if such article is not sold or is not capable of being sold at such place, at any

other place nearest thereto.

EX'{J'lan.ation.-In determining the price of any artick under this sec1fon no abatement or deduction shall be allowed except in respect of trade discount and amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesad."

The question arose as to how ithe value of the dye stuffs manufactured by th~ appellants should be determined on a proper app!iq.tion of the rule laid down iri section 4. The appellants contended before the Excise Au.thorities that for the purpose of assessing the excise duty, the value of the dye stuffs manufactured by the appellants should .be taken to be the price at which the appellants sold the same in wholesale units to ICI and Atul, less a uniform trade discount of 18% which the appellants at the relevant time gave to these two wholesale buyers. This contention was niot accepted by the Superintendent of Central Excise who was the original assessing authority. He took the view that the value of the dye stuffs for the purpose of assessment

of excise duty should be taken to be the price at which ICI and Atul sold the dye stuffs to the distributors and no deduction should be allowed in respect of the discount given by them to the distributors since it was n'ot uniform, being 10% in case of ICI and 2!% in case of Atul. The appellants appealed against the assessment to the Assistant Collector of Central Excise, but the appeal was unsuccessful and the a£3essment was confirmed. That led to the filling of a further appeal to the Collector of Central Excise. This appeal resulted in some gain, little though it was, as the Collector of Central Excise held that in determining fueassessable value~ •trade discount of 2!% which was given by Atul to the distributors should be allowed to be deducted from the price charged by ICI to the distributors. This was, however, plainly illogical. If the price charged by JCI was taken as a basis, trade discount of 10% should have been allowed as that was the discount given by ICI to the distributors. Trade discount of 2!%

given by Attil on the lower price charged by it to the distributors could not be deducted from the price charged by ICI to the distrrbutors which was fixed at a higher fornre because of the lanrer trade discount 0f l 0% given bv it to the distributors. The assessable value determined by the Collector of Central Fxcise was a strange hvbrid.

The anflPllants oref Prr<'<l a revi<inn aooli<'ation to t11P Central Government against the order of the Collector of Central Excise. The Central

Government in revision rejected the main contention of the appellants that tne value of tile dye stuffs shoukJ be amved at the pnce at wmch the same were &01d by tbe appellant to ICI and Atul less 18% trade discount allowed to them. The reason for rejecting this contention was Lhat since dye stuffs rsanufactured by the appellants. "!'ere not "available to an independr:'11 i:>uyer in open market . C<?Dditlons at prices at which these are sc:!d by them to the .Sole D, iatribu.ors1 M/s !CI Ltd. and M/s Atul ProdJK;~S Ltd., these pr.tees cannot be aoopte~

as the basis of ad-valorrm assessUlent" under section 4 of tte Act.

The Central Government. however, observed that these dye stuffs were "available to any independent buyer in open market conditions

at the sole distributors' prices''., that is, at the price charged by ICT and Atul to the distributors and, therefore, these prices should form the basis of assessment after allowing discount of 10% on the prices charged by !CI from the beginning arid 21% on the prices har&i:d

by Atul upto 30th April, 1963 and 10% thereafter and on this basIS directed refund of the excise duty collected by the Excise Autho- rities. The appellants were obviously not satisfied with this rather trivial and insignificant success and since their main plea was negatived by the Central Government, they filed a petition in the High Court of Gujarnt under Art. 226 of the Constitution challenging the validity of the various orders made by the Excise authorities culminating in the order of the Central Government and seeking a writ directing the Union of India "to refund excess duty amounting to Rs. 1,26,229.80 illegally recovered from the petitioners and to forbear from recovering duty from the petitioners in respect of the said products otherwise than on the basis of the prices charged by the petitioners to the said wholesale buyers viz. ICI and Atul." The Division Bench which heard the petition took the view, following certain decisions of the Calcutta, Mvsore, Andhra Pradesh and Bombay High Courts, that where th~

entire production is sold by a manufacturer to one or more favoured d:stributors, there is no wholesale market in the sense of open market at the site of the factory where an independent buyer can purchase the goods in wholesale and in such a case the price at which the goods are sold by the manufacturer to the favoured distributors cannot be taken to be the assessable value of the goods but the assessable value must be taken to be the price at which the favoured distributors, in their turn, sell the goods in wholesale and if not in wholesale, then in retail. The Division Bench accordingly held that the price charged by t:12 :ippellants to ICI . and Atul less 18 % trnde discount could not be ado"lted for determining the assessable value of the dye stuffs since ICI ~1d Atul were favoured distributors and not independent buyers and the Central Government was right in taking the price charged by ICI less 10% trade discount and the price charged by Atul less 2!% trade discount as the assessable value because_ "that was the wholesale cash price at which the indeoendeo t buyers could get these goods in the nearest wholesale market at the relevant time.'' The aooellants being ae:!!rieved bv the decision of the High Court preferred the present appeal after obtaining certificate of fitness from the High Court. 1 5-470SupCI/75

Jt would be seen f; om the judgment of the High Court that .the only ground on which the High Court negatived the concntion of the appellants tlut the price charged by the appellants to lCl and Atul less 18 % trade cLscount shomd be taken as the assessable value W<1s that lCl and A'ul were favoured cl.istnbutors and apart from them, no independent buy::r could purchase the dye stuffs in wholesae marke< at or near the place or manufacture so as to attract the apphcability of the first part of section 4(a). This. ground of course, at one time, looked highly plausible, supported as 1t a.s by decs1ons of several High Courts. But now, after the recent dec1S1on o! this Court in A. K. Roy v. VoUas Ltd.(') it stands completely decimated. The facts of that case are a little interesting and requires to be not.iced Ill order to understand the true ratio of the decision.

The respondent in that case carried on inter alia. busim:ss of manufacturing air-conditioners, water-coolers and their component parts. It effected direct sales to consumers at list prices and the sale~ so effected came to about 90% to 95% of is production during the relevant period. It also sold its articles amounting to 5% to 10% of its production to wholesale dealers from different parts of the country in pursuance of agreements entered into with them. The agreements provided among other things that the dealers should not sell the articles sold to them except in accordance with the list prices fixed by the respondent and the respondent would sell the articles to them at the list prices less 22 % discount. The dealers were also r1quired under the agreements to give service to the units sold in their territory. Excise duty on the basis of ad-valorem value was imposed on air-conditioners, water-coolers and parts of water-coolers from March 1, 1961. The respondent claimed, in accordance with section 4(a), that the list prices after deducting the discount of 22 % allovred to the wholesale dealers should be taken to be 'the wholesale, cash price' for ascertaining the real value of the articles. This claim was resisted by the Excise Authorities and tiJe respondent was therefore constrained to file a writ petition in the High Court of Bombay. The High Court allowed the petition holding that the list prices at which the articles were sold to the wh0lesale dealers,. less 22 % discount allowed to them under the agteements, represented 'the wholesale cash price' and excise duty was accordingly chargeable under section 4( a). The Excise Authorities thereupon preferred an appeal by certificate to this Court.

The same argument was advanced before this Court on behalf of the Excise Authorities wliich has foud favour wi•h the High Court ia the presi:nt case. The Excise Authorities contended that the agreements with the whole-sale dealers conferred certain extra-commercial advantages upon them, and so, the sales to them were not sales to independent purchasers but to favoured ones, and, therefore, the

rice c~&rge:d would not reoresent the "wliolesale cash price" as mentioned m s. 4 (a) of the Act. They anmed that s. 4 (a) viualizE"s a

wliol~~:ile marlcet at the place of manufacture where a:ticles of like

{l) [197312 S.C.R. 1088.

kind and quaiity are sold or could be sold and that it also postulates a market where any wholesale purchaser can purchase the articles, and, as no articles of a like kind and quality were sold, at or near the place of manufacture, and as the wholesale sales were confined to tn<: favoured buyers, there was no wholesale market at the place of manufacture. It was further argued that "articles of a. like kind and quaiiy" is a phrase which suggests goods other than those under assessment and that one must disregard the price fetched by the sale of the goods themselves.

This argument was squarely negatived by the Court. Mathew, J., speaking on beh.alf of the Court, explained the true scope and meaning of section 4(a) and its applicability in a situation of this kind in. the following words :

"We do not think that for a wholesale market to exist, it is necessary that there should be a market in the physical sense of the term where articles of a like kind or quality are or could be sold or that the articles should be sold to so-called independent buyers.

Even if it is assumed that the latter part of s. 4(a) proceeds on the assumption that the former part will apply only if there is a wholesale market at the place of manufacture for articles of a like kind and quality, the question is what exactly is the concept of wholesale market in the context. A wholesale market does not always mean that there should be an actual place where articles are sold and bought on a wholesale basis. These words can also mean the potentiality of the articles being sold on a wholesale basis.

So, even if there was no market in the physical sense of the term at or near the place <'f manufacture where the articles of a like kind and quality are or could be sold, that would not in any way affect the existence of market in the proper sense of the term provided the articles themselves could be sold wholesale to traders, even though the articles

are sold to them on the basis of agreements which confer certain commercial advantages upon them. In other words, the sale to the wholesale dealers did not cease to be wholesale sales merely because the wholesale dealers had entered into agreement with the respondent under which certain commercial benefits were conferred upon them in considera· tion of their undertaking to do service 10 the articles sold, or because of the fact that oo other person could purchase the articles wholesale from the respondent. We also think that the aoolication of clause (a) of ~. 4 of the Act does not depend upon any hypothesis to the effect that at the time and place of sale, any further articles of like kind and quality should have been sold. If there is an actual price for the goods themselves at the time. and olace of sale and if that is a 'wholesale cash price'. the clause is not inannlicable for wa11t of sale of other goods of a like kind and quality.

The learned Judge then referred to the decision of the Privy Council in Ford Motor Company of llldia Limited v. Secretary of State for India in Council(') and pointed out that :

"This case is an authority for the proposition that mero existence of the agreements between the respondent and d1e wholesale dealers under which zertain obligations were undertaken by them like service to the articles, would not render Uie price any the less the 'wholesale cash price'. To put it in other words, even if the articles in question were 11old only to wholesale dealers on the basis of agreements and not to independent persons, that would not make the price for the sales anything other .than the 'wholesale csh . price'. The argument that what was relevant to determme the 'wholesale cash price' under cl. (a) of s. 30 of the S1a Customs Act, 1878, was the price of goods of a like kind

anid quality was negatived by the Privy Council by saying that goods under assessment may, under cl. (a) be considered as members of their own class even though at the time and place of importation there are no other members all/d that the price obtained for them may correctly represent the price obtainable for goods of a like kind and quality at the time and place of importation." Then, with reference to the decisions of the various High Courts, which had taken a different view, the learned Judge observed : "We do not think that these decisions, in so far as they hold that th1e price of sales to wholesale dealers would not represent the wholesale cash price for the purpose of s. 4(a) of the Act merely because the mam:afacturers had entered into agreements with them stipulating for commercial advantages, are correct", and proceeded to add :

"If a manufacturer were to enter into agreements with dealers for wholesale sales of the articles manufactured on certain terms and conditions, it would not follow from th:\t alone that the price for those sales would not be the 'wholt:lsale cash price' for the purpose of s. 4 (a) of the Act if the agreements were made at arms length and in the usual course of business.

There can be no doubt that the 'wholesale cash price has to be ascertained only on the basjs of transactions at arms length. If there is a special or favoured buyer to whom a specially low price is charged because of extm- . commercial considerations, e.g. because he is relative of the manufacturer, the price charged for those sales would not be .the 'wholesale cash pric§ fo~ !vying xcise uder section 4(a) of the Act. A sole dtstnbutor nnght or might not be a favoured buyer according as terms of the airree~ ment with him are fair and reasonable and were arrived a:t

on pure~ commercial basis. Once wholesale dealings at arms length are established, the getermination of the who1e-

(t) 65 I.A.Ji.

sale cash price for the purpose of s. 4(a} of the Act may not depend upon the number of such wholesale dealing.

The fact that the respondent sold 90 to 95 per cent of the articles manufactured to consumers direct would not make the price of the wholesale sales of the rest of the articles any the less the 'wholesale cash price' for the purpose of s. 4( a), even if these sales were made pursuant to agreements stipulating for certain commercial advantages, provided the

agreements were entered into at arms length and in the ordinary course of business."

"- it is not necessary for attracting the operations of s. 4(a) that there should be a large number of wholesale sales. The quantum of goods sold by .a manufacturer on wholesale basis is entirely irrelevant. The mere fact that such sales may be few or scanty does not alter the true position."

On this view, it was held that the respondent was liable to be charged with excise duty on the basis of the price payable by the wholesale d;:alers, after deducting 22% discount, under section 4(a). ·

This decision provides a complete refutation of the view taken by the High Court illr the present case. In fact, the present case is much stronger than the Volt11is case (supra). In the Voltas' case

(supra) , 90 to 9 5 per cent of the production was sold by the manufacturer in retail and only a small percentage, namely,, 5 to 10 per cent was sold in wholesale and yet the price charged by the manufacturer to the wholesale dealers less trade discount of 22% was taken as 'the wholesale cash price' for assessmeDlt of value under s. 4 (a). Here, on the contrary, no retail sales at all were effected by the appellants and the entire production was sold in wholesale to ICI and Atul under agreements entered into with them. Moreover, it was not in dispute between the parties that the agreements entered into by the appellants with ICI and Atul were made at arms length and in the usual. course of business. It was not the case of the Excise Authorities at any time that specially low prices were charged by the appellantS to ICI and Atul because of extra commercial considerations or that the agreements were anything but fair and reasonable or arrived at on purely commercial basis. The wholesale dealings between the appellants and ICI and Atul were purely commercial dealings at. anns length and the price charged by the appellants for sales in wholesale made to ICI and Atul less trade discount of 18% was, therefore, clearly 'wholesale cash price' within the mcanin11; of s. 4(a) and it did not make any difference that the wholesale dealings. of the appellants were confined exclusively to ICI and Atul and apart from these two, no independ'ent buyers could purchase the tlye stuffs in wholesale from the appellants. ·

The Excise Authorities. robbed of what they thought was a stron2 argument prior to the decision in Voltas' case (supra), then tried to

fall back on a subsidiary argument in an attempt to save the assessments. They contended that all that s. 4(a) provides is that the value of the article soui:ht to be charged to excise duty shall be deemed to be the wholesale cash price for which the article is sold or is capable of being sold and it does not say which wholesale cash price shall be taken to be the value of the article-that char1cd by the manufacturer to the wholesale dealer or that charged by the wholesale dealer who having purchased the article from the manufacturer sells it in wholesale to another dealer. The latter price, they pointed out,. would equally be the wholesale cash price within the meaning of s. 4 (a) as it would be the price at which the article is sold or in any event capable of being sold in the wholesale market and there is no reason why it should not be taken to be the value of the article for the purpose of assessment under s. 4(a). The contention, therefore, was that the price charged by IC[ and Atul to the dealers less trade discount allowed to them should be taken to be the assessable value of the dye stuffs and not the price charged by the appellants to ICI and Atul less trade discount of 18 % . This contention is without force and must be rejected. It violates two basic principles underlying imposition of excise duty.

 In the first place, as pointed out by J1:1athew, J., in Voltt~' case (supra), ''excise is a tax on the product10~ and manufacture of

gods-Section 4 of the. Act therefore provides that te real vah1e should be found after deducting the seUing cost and selhng profit and that the real value can include only the manufacturing cost and the manufacturing profit. The section makes it clear that excise iH levied only on the amount representing the manufacturing cost plus the manufacturing profit and excludes post-manufacturing cost and the profit arising from po~ manufacturing operation, namely, selling profit." The va:ue of the goods for the purpose of excise mu.st take into account only the manufacturing cost and the manufac1uring profit and it must not be loaded with post-manufacturing cost or profit arising from post-manufacturing operation. The price charged by the manufacturer for sale of the goods in wholesale would,. therefore. represent the real value of the goods for the purpose of assessment of excise duty. If the price charged by the wholesale dealer who purchases the goods from the manufacturer and sells them in wholesale to another dealer were taken as the value of the goods, it would include. not only the manufacturing cost and the manufacturing profit of the manufacturer but also the wholesale dealer's selling cost and selling profit and that would be wholly incompatible with the nature of excise. It may be noted that wholesale market in a par•icular type of goods may be in several tiers and the goods may reach the consumer after a series of wholesale transactions. In fact the more common and less expensive the good~. there would be greater possibility of more than one tier of wholesale transactions. For instance .. in a textile trade, a manufacturer may sell his entire production to a single wholesale dealer and the latter mw in his turn sell the goods purchased by him from the l)lanufacturer to different wholesale dealers at State level, and they may in their turn sell the goods to wholesale

dealers at the district level and from the wholesale dealers at the district level the goods may pass by sale to wholesale dealers at the city level and tnen, u1,1miite1y rrom tne who1esa1e aea1ers at the cty level the goods may reach the consumers. The only relevant price for ,; ssessment of value of the goods for the purpose of excise in such a case would be the wholesale cash price which the manufacturer receives from sale to the first wholesale dealer, that is, when the goods first enter the stream of trade. Once the goods have entered the stream of trade and are on their onward journey to. the consumer, whether along a short or a long course depending on the nature of the goods and the conditions of the trade, excise is not concorned with what harpens subsequently to the goods. It is the first immediate contact between the manufacturer and the trade that is made <lecisive for determining the wholesale cash price which is to be ue measure of the value of the goods for the purpose of excise . . The second or subsequent price, even though on wholesale basis, is not matenal. If excise were levied 01' the basis of second or subseq ue 1Jt wholesale price, it would load the price with a post manufacturing element, namely, selling cost and sellin~ profit of the wholesale dealer. That would be plainly contrary to the true nature of excise as explained in the Valtas' case (supra). Secondly, this would also violate the concept of the factory. gate sale which is the basis of determination of value of the goods for the purpose of excise.

There can, therefore, be no doubt that where a manufacturer

sell& the goods manufactured by him in wholesale to a wholesale dealer at arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade dis.c count would represent the value of the goods for the purpose of assessment of excise. That would be the wholesale cash price for which the goods are sold at the factory gate within the meaning of s. 4 (a). The price received by the wholesale dealer who purchases the goods from the manufac'urer anp in his turn sells the same in wholesale to other dealers would be irrelevant to the determination of the value and the goods wou!C: not be chargeable to excise on that basis. The conclusion is, therefore, inescapable that the assessable value of the dye stuffs manufactured by the appellants must be taken to be the price at which they were sold by the appellants to JCT and Atul less lo/c trade discount, and not the price charged by ICI and Atul to their dealers. ·. . ·

. We, therefore, allow the appeal, reverse the judgment of the High Court and quash and set aside the assessments to excise duty made by the Excise Authorities on the dye stuffs manufactured by the apellants. We direct the rspondents to refund to the appellants

forhw1th. the amount collected m excess of the correct du•y of excise lev1able 111 accorda~, ce with the princio1e laid down .in this judgment.

The respondents will pay to the appellants costs in this Court as well as in the High Court.

P.B.R.

Appt!al al/owtd.

A.TIC INDUSTRIES LTD

H. H. DAVE, ASSTT. COLLECTOR OF CENTRAL EXCISE AND ORS

February 14, 1975

P. N. BHAGWATI

A. c. GUPTA

N. L. UNTWALIA, JJ.

Central Excise and Salt Act 1944

s. 3

s. 3

Section 4

Central Government

s. 4

s. 4(a)

Gujarat High Court

N. A. P'alkhivala

Sorabji

Ashok Desai

Ravinder Narain

G. L. Sanghi

Girish Chandra

Article 133

High Court of Gujarat

Atul

Bulsar District

Gujarat

IC! (Indiai LtJ.

ICI

Atul Products Ltd.

ICJ

Seventy per cent of the dye-stuffs manufactured by the appelIants were sold to ICJ, while the remaining 30% to Atul.

Atul

Atul

ICI

JCI

1st May, 1963

1st March, 1961

section 3

Central Excise and Salt Act, 1944

Section 4

section 4

CI Ltd.

Atul ProdJK;~S Ltd.

section 4

ICT

CI

30th April, 1963

High Court of Gujarnt

Art. 226

Union of India

Atul

section 4(a)

March 1, 1961

section 4(a)

High Court of Bombay

section 4( a)

s. 4

s. 4

Mathew

section 4(a)

s. 4(a)

s. 30

Customs Act, 1878

s. 4(a)

s. 4

section 4(a)

s. 4(a)

section 4(a)

Voltas

s. 4

s. 4(a)

s. 4(a)

s. 4

s. 4(a)

IC

Voltt~

Section 4

Valtas

s. 4

JCT


STATE OF MAHARASHTRA

SINDHI @ RAMAN February 19, D75 [V. R. KRISHNA IYER AND R. S. SARKARIA, JJ.l

Sec, 374 a11d Sec. 465 of the Cr. P. Code 1898-When does a trial co11c/ude if tli.o. Sessions Judg~ T?asses eat~ sent enc~ and refers to High Court for con- B firmatwn-Whether It is continuatzon of trial-Interpretation of statute-Liberal consm1ction to avoid rep11gna11cy with principles of natural justice.

The responclent \lias sentenced to death by the Additional Sessions Judge for double murder. He did not. file any appeal. The tri..I Judge made u reference to the High Court .• for confirmation of death ; entence.

Twc adv,)cates were appointed Amicu> Cu.iae to defend the respondent. After interview with the respondent the advocates reported to th~ High Court that the respondent appeared to b~ imane. He was examined by a Medical !Board consisting of 3 Psychiatrists. According to the Medical Board he wa; not C capable of rati(mal thinking or bhaviour. The High Court came to th~: concl1*sion that the resoondent was clearly of unsound mind.

The High Court, therefore, postponed the proceeaings in the confirmation case.

On l1ppeal to this Court by State, it was contended; (I) The provision regarding postponing the proceedings if an l1ccmed is found to be of unsound mind as contained in section 465 <>f the Criminal Procedure Code is confined to the trial stage and does not apply to the proceedings before the High Court on referenc~ as the same are post-trial proceedings.

(2) In proceedingi on reference under section 334 the accused has no right of audiern;:e before the Hi2h Court.

(3) The High Court was wrong in delegating its powers to determine wht; ther the respondent was of unsound mind to the Medical Board.

HELD : (i) As far as an accu$etl person sentenced to death is concerned, his trial does not conclude with termination of the proceedings in the Court of Session: since: the death sentence riassed by the Court of Session is subject E to confirmation by the High Court, the trial cannot b~ deemed to have concluded till an executable sntence is passed by a competent court. The confirmation proceedings are in subitance a continuation of the trial.

Expr, ssion "at his trial" occ.t•,; ring in section 465 has to be liberally construed in a manner which is not repugnan! to the fundamental principles of natural justice.

(5790-E; 5800-Ej ·

(2) in coafirmation proceedings the High Court cannot arbilr::riiy refuse to hear the accused either in :>erson or throu1h counsel. It is wrong to ; tate F that the High Court accepted the ipse dixit of the medical expens.

These experts. gave detailed and cogent re<isons in support of their opinion.

The High" _Court meticu!ouslv considered their evidence and thereafter recocdcd its own findings on the crucial issues.

[581B-D] The decision in Vi1•ian Rodrick v. Swte of' West Bengal [1969] 3 S.C.C. 176, followed.

The decision in cases of J111nma11 & Ors. v. State of Punjab A.LR. 1957 S.C. 469 and Surjit Singh a11d Anr. v. State of Punjab. Criminal Appeal No. rJ G of 1968 decided on 15-10-1968 applied.

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 158 of 1971-

Aooeal bv Special Leave from the Judgment & OAfer dated the 3rd July, 1970 of the Bombay High Court in confirmation case No. 20 of 1969.

H D. JI. Patel and M. N: Shroff, for the Appelant.

B. R . .Agaiwala, for the Respondent.

• •

The Judgment of the Court was delivered by

SARKARIA, J.-The principal question raised in this appel by speciaJ leave is : Whether Section 465 of the Code of Criminal Procedure, 1898, is applicable to proceedings in reference under s. 374 pending befor~ the High Court for confirmation of the death sentence awarded to an accused by the Court of Session ?

It arises out of these circumstances.

Sindhi alias Raman was tried, convicted and sentenced to death on 13-8-1969 by the Additional Sessions Judge, Greater Bombay for the double murder of two brothers, Lal Chand Jagannath Yadav and Dullar Jaggi Yadav in Chi*havali Farm at Malad on the night between the 25th and 26th of August, 1968. Sindhi did not appeal against the order of his conviction. But the trial Judge made a reference under s. 374 of the Code to the High Court for confirmation of the death sentence. The reference came up for hearing towards the end of 1969.

On 22-10-1969, the prisoner expressed a desire to be present a.t the hearing of his case before the High Court.

Two Advocates, namely Shri D. M. Rane wi'h Shri Mengde as the Senior were appointed as amicus curiae to deend the condemned prisoner in the High Court. After interviewing the prisoner in Jail on 8-1-1970 and 9-1-1970, the Advocate reported to the High Court that the accused was not able to communicate with them intelligently and rationally as he appeared to be insane. Counsel submitted an application to the Bigh Court requesting that the accused be got examined by a Board <1f psychiatrists in order to determine as to whe'her he. was or was not of unsound mind. The application was opposed on behalf of the State inter alia on the ground that s. 465 applies on! y to a trial before a court of Session. The High Court rejected this contention, and by its order, dated 14th January, 1970. directed the Surgeon-General, Bombay t-0 constitute a Special Medical Board of three psychiatrists on the lines indicated in Rule 850 of the Bombay Jail Manual, to examine the accused and "determine whether the accused is of unsound mind, and, secondly whether in consequence of his unsoundr ncss of mind, he is ircapable of making his defence in the proceedings before us". The Board was accordin..gly constituted. The Board deputed Dr. Balakrishna Laxman Chandorkar, Suoerintendent of the Mental Hospital to interview the accused. Dr. Chandorkar, consequently, had fourteen interviews with the accused and also examined the latter physically. The accused was sent, under Dr. Chandorkar's directions, to several hosoitals for special examinations. Dr. Chandorkar 11athered the past historv of the accused, also. in so far as it was relevant to de.termine the issue referred to him.

The conclusion reached b•1 Dr. Chandorkar. which he reported to the Bord on H 28--2-1970. was that the accused ws suffering from Paranoid Schizoohrenia and was of unsound minci and. in conseaueilce. he

wa~ incaoablc of making his defence. On receiving the reoort of Dr.

Chandorkar, the Special Medical Board also examined and interviewed the accused on five occasions. Their conclusion, as communicated to the Hil, lh Court, was :

"(I) Sindhi Dalwai alias Raman Raghav (Prisoner) is of unsound mind. He is suffering from a psychosis called chronic paranoid schizonphrenia or paraphrenia, the latiler being nn old krm for chronic paranoid schizophrenia plus auditory hallucinations. He is dangerous to the society and hence certifiably insane.

(2) Sindhi knew the nature of the act i.e. he knew that

h~ was killini: human beings.

( 3 J He did know that what he did was wrong and contrary to the law of the land but he firmly believed that what he was doing was right and in tune with the law of "kanoon"'' whose law according to him was obligatory for him to follow.

( 4) There is such a degree of unsoundness of mind 1-.2suiling in such a degree of defect of reason that he is

inapable of co-operating with and instructing his defence counsel in the conduct of the trial and court proceedings and he is incapable of making his defence in the proceedings before the High Court. The reasons for this incapability an: :

(a) Complete lack of insight into his ill!less;

(b) firm and unshakable delusions that only the law of

"Kanoon" matters and the law of this world does not apply to him and hence his inability to participate in the court proceedings;

( c) his comple•e lack of realization of the gravity of the

crime and the seriousness of his death sentence;

( d) his judgment is so much influenced by his delusions and hallucinations that he is incapable of rational

thinkin~ and behaviour."

After examining Dr. Marfatia, the Chairman of the Board and Dr. Chandorkar, the Men1al Spcialist, as court witnesses, the High rt~: .

"Tbe prisoner is clearly of unsound mind and in conseiquence thereof he is unable to make his defence. Therefore

proceeclins in the confirmation case will have to be postponed and in the meantime it will be necessary to direct that the State Government do detain the prisoner in safe custody in Ycravda Central Prison.''

It is against this order. dated 3-7-1970, that the State has come in arypaJ before this Court.

Mr. Patel. learned Counsel for the appellant, assails the order of the High Court, postponitlg the proceedins under s. 465 Criminal Procedure Code, on these grounds :

(i) The operation of s. 465, is, in terms, confirmed to the trial stage. The section does not apply to pro ceedings before the High Court, on refe1:ence under s. 374, as the same are post-trial proceedmg:;;

(ii) The question as to whether the accused person has

th~ mental capacity to defend himself or not, arises only at the pre-conviction stage before the Comm1 ttal Court or the trial court, because it is only at that stage the accused person has a right to be heard and lead evidence in defence. But in proceedings on referen.ce under s. 374, the accused person has no right of audience before the High Court, not even where the High Court directs a further enquiry or the taking of additional evidence under s. 375, rtor where any appeal of the accused filed through the .iailor under s. 420, comes up for hearing along with the reference. It is another matter that the High Court has the power, even in such proceedings to hear the accused. For this argument support has been sought from certain observations of Madgaonkar A.J.C. in G, ul v. Emperor(l).

In this connection, learned Counsel has pointed out that at the commencement .of the trial before the Court of Session, also, a question was raised Z.:'i to the mental capacity of the accused and thereupon, the trial Judge after making .a due enquiry in accordance with the provision~ of s. 465, recorded a clear-cut finding that the accused was then of sound mind and capable of understanding the nature of the proceedings and making a defence. This finding of the trial Judge. it is, s•resscd, was not assailed before the Hi!!h Court. and still stands unchallenged. -

Learned Counsel <1lso tried to disinguish the decision of this Court in Vivian Rodrick v. Sto, te of West Benga/(2) on the ground that in that case the convict had preferred an appeal against the order of his conviction, and, consequently, the observations of this Court in regard to the aryplicability of s. 465 Cr. P.C. to proceedings in reference <'re merely obiter. In the al'ernative, it is submitted that those observations need reconsidration in the light of the arguments now advanced before us. ..

Section 465 of the Code of Criminal Procedure 1898 ruris thus : ' . ' " (I) If any person committed for trial before a Court of

Sessiol'l or a High Court appears to the Court at his trial to be of unsound mind and consequently in- ______ cpable of making his defence, the jury, or the

(I) AIR 19cl Sird 84.

(2) fl 9691 3 S.C.C.176

Court shall, in the first instance, try the fact of such unsoundness and incapacity, and if the jury or Court, as the case may be, is satisfied of the fact, the Judgr~

shall record a finding to that effect and shall postpone further proceedings in the case and the jury, if any, shall be discharged.

(2) The trial of the fact of the unsoundness of mind and incapacity of tht accused sh~IX be deemed to be part of his trial before the C':)Urt."

" I It will be seen that s. 465, in terms /elates to unsoundney; s of accused's mind and his consequent incpacity to make .defeii1:e, at the time of trial only. The question therefore is : Does the trial on a mur<ler charge end with the conviction and pronouncement of :death sentence on the accused by the Court of Session ? Or, docs it continue till the reference under s. 374, is disposed of by the High Court ? Answer to this question was given by this Court, sp<:aking through Govinda Menon J., as far back as 1956 in Jumman and ors.

v. State of Punjab(') in a telling passage thus :

' "It is clear from a perusal of these provisions (ss. 374, 375, 376 and 377, Cr. P.C.) that in such circumstances the entire case is before the High Court and. in fact it is a colllinuation of the 1rial of the accused on the same evidence and any additional evidence and that is why the High Conrt is given power to take fresh evidence if it so desires. . . . . . . . . . but there is a difference when a refe· rence is made under s. 374, Criminal Procedure Code, and when disposing of an appeal under s. 423, Criminal Pro-· cedure Code, and rhat is that lhe High Court has to satisfy itself as to whether a case beyond reasonable doubt has

ben made out against the accused persons for the infliction of the penalty of death. In fact the~ proceedings before the High Court are a reappraisal and the reassessment of the entire facts and Jaw in order that the High Court should be satisfied on the materials about the guilt or innocence of the accused persons. Such beinl! the case, it is the duty of the High Court to consider the proceedings in all their asvects and come to independent conclusion on the mate-. rials. apart from the view expressed by the Sessions Judge."

(emphasis supplied)

The same position was reiterated with emphasis by this Court i11 Surjit Singh and anr. v. State of Punjaib(2).

Even in Gui v. Em?eror (supra), cited by Mr.

Patel, Madgonkar A. J. C. exoressed himself in a similar strain. What he said more than half a century back still retains its freshness and relevance, and may be extracted : --------

(!) AIR 1957 S.C. 469.

(2) Criminal Ap!)~1\ No. 77 of 1968 decided on 15-10-1968

MAHARASHTRA v. SINDHI (Sarkatia, !.) 579

"The worth and sanctity of human life are a test and mark of civilised societies and are increasingly reflted in 1

the criminal jurisprudence of E'ngland and of India. ·· In

India, the Legislature has provided in confirmation pr0ceedings a final safeguard . . . . . . . . . . "This may perhaps increase our responsibilities and add to our labours; but no one would shirk the one or grudge the other" even in ll

cas~ where the liberty, much more where the life, of the \ subject is concerned.

This duty of judgment is, however laid i111 the first insta, nce upon the Jury a:id the Trial Judge ........ But equally and with all this weight, this Court in confirmation must finally weigh for itself the whole evidence i111 , the light of all the arguments and confirm or otherwise according to its own final conclusion on the guilt or innocence of the sentenced person in the disch2rge of the duty laid upon it by law."

From the above conspectus, it emerges clear that so far as an -accused person sentenced to death is concerned, his trial does not conclude with the termination of the proceedings in the Court of

Seasion.

The reason is that the death sentence passed by the COurt of Ses:; ion is subject to confirmation by the High Court.

A trial cannot be deemed to have concluded till an executable sentence is passed by the competent court.

Viewed from that stand-point, the confinnR1tion proceedings under ss. ,374, 375_ and 376, Chaptec XXVII of the Code of 1898, are, in substance, a continuation of the trial.

Nor is 'it correct to say that in such confirmation proceedings the High Court can arbitrarily refuse Jo hear the accused either in person or through Counsel or other agent.

In Vivian Rodrick's case (supra), the appellant was convicted under s. 302, Penal Code by the Court of Session and sentenced tci death.

The Sessions Judge made a reference under s. 374 for confirmation of the death sentence.

The convict appealed against the order of his conviction and sentence.

The High Court dismissed the appeal, accepted the reference and confirmed the conviction and the sentence. In an appeal by special leave brought before this Court, it was inter alia contended that the proceedings taken in the appeal before the High Court were void for non-compliance of s. 465.

What this court said in repelling that contention, beirtg equally applicable to what has been canvassed before us on behalf of the appellant. may usefully be extracted :

"We are of the view that it is not nssary for us, in this case. to exoress any ooinion on the rm!icabi!i•v. or otherwise, of the provisions of s. 465, Cr. P. . to appeals.

For, on the facts of the case. we are inclihed to acceot the alternative con'ention of Mr. Rana that in the face of the medical evidence and in view of the fact that the

appellant was contestili.g his convition. for murder and the

sentenc<: of death imposed on him, 1t would have bee:n prop.::r 1f tne u1v1sion ne1wh whicn hard his ppeal had postponed the hearing of the appeal tll such ttme as the .. appe1lant was aeclared nt to c011t.::; t ms appeal ..... .

Whatever may be the legal position regarding te pplicat bility of s. 465 Cr. P.C. to appeals, we are not mclmed o

agree with toe propos1tton enunciate.d by th.e larn1:.~ Judges that there is no bar to hearing nd d1sposrng of an <1ppeal, even if the accused-appellant 1s of unsomd mind or even insane at the time when the appeal 1s taken i1p for hearing ...... in our. opinion, when t?c r~- port is that an accused appellnt . JS of unsound n:md, t is reasonable to infer that he JS mcapablc of makmg lns dcfcn:e The C<.rnrt. i:1 the circurnstrnces is bound to afford him the same' protection to which he would be entitled h~1d he been of unsound mind at the time of the trial.''

In the present case no appeal was filed by the prisoner bef?re the High Court.

It is therefore unnecessary for us to examme

whcthe~ the provisions of s. 465, in terms, or, in principle, apply, to an appeal by the condemned prisoner before the High Court. '.3uftke it to say that the expression "at his trial" occurring in s. 465 ktas to be liberally construed in a malll11er which is not repugnant to the fundamental principle of natural justice conveyed bv the maxim audi alteram partem, audiatur et altera pars. \

In the light of what has been said above we negative the legal con1cntions raised by the appellant-State.

 The next contention of Mr. Patel is that the High Court left the decision of both the points, viz., ( 1) whether the accused was of unsound mind and (2) whether in consequence he was incapable

ef m, king his defence, almost entirely to the Medical Board. Such F delegation which gives the proceeding the colour of trial by Doctors is nt permissible under the law.

Reference on this point has been :eiade to R. v. Pondole(1).

On merits also, it is maintained, the findings on the aforesaid issues, are wrong. as the accused fully :k'nllw that he had been tried and sentenced to death for the murdei'~ 611 ouestion..

Ern111i~is has been laid on the fact that the aecused had on 18-12-1969 expressed in writing through Jailor, his G desire to be present in the High Court at the time of the hearing of -his case.

Counsel hs referre:d extensivelv to the statements of Doctor Chandorkar an~ . Dr. Marfatia and contended that everything

abot the mental cond1t1on of the accused even according to these 111ed1cal xperts was normal excepting that he was suffering from the delu_s.10n that he had been ordained bv some higher "Kanoon" to co!Il~Jt these murders.

According to Mr. Patel, insanity judge:d H by cltrncal standards is different from insanity determined by legal

(1) [1959] All E.R. 418.

MAHARASHTRA v. S!NDHr (Sarkaria, J.) 581 ,

standards.

It is ur&ed that since the accused fully knew the nature of the. criminal acts he had committed and the proceeding against him, it could not be said that he was incapable of makirig nis defence.

It is true that the High Court had by its order dated 14-1-1970, referred both the issues in rc:gard to the mental cap<1city of the accused to the Medical Board, and has given due weight to their opinion.

But it is not correct to say that the High Court accepted the ipse dixit of the medical experts.

It examined Dr. Marfatia and Dr. Chandorkar as court w1tnsses. These experts gave detailed and cogeillt reasons in support of their opinion.

The High Court meticulously com; idered their evidence and thereafter recorded it~ own findings on the crucial issues.

We nave ourselves examined

.. the evidence rendered by these two mental experts in .the High Court.

We are satisfied that the conclusion; arrived at by the High Court' in regard to the mental capacity of the accused on the ba!is of this evidence is correct.

In the result, the appeal fails and is dismissed.

P.H.P Appeal dismissed:

STATE OF MAHARASHTRA

SINDHI @ RAMAN

February 19, D75

V. R. KRISHNA IYER

R. S. SARKARIA, JJ

Sec. 465

section 465

section 334

section 465

Aooeal

H D. JI. Patel

M. N: Shroff

B. R . .Agaiwala

SARKARIA

Section 465

Code of Criminal Procedure, 1898

s. 374

Sindhi alias Raman

Lal Chand Jagannath Yadav

Dullar Jaggi Yadav

Malad

25th and 26th of August, 1968

Sindhi

s. 374

D. M. Rane

Mengde

s. 465

14th January, 1970

Bombay

Balakrishna Laxman Chandorkar

Chandorkar

Chandorkar

Sindhi Dalwai alias Raman Raghav

Marfatia

Ycravda Central Prison

Patel

s. 465

Criminal Procedure Code

s. 465

s. 374

s. 374

s. 375

s. 420

Madgaonkar

s. 465

s. 465

Section 465

Code of Criminal Procedure 1898

s. 465

s. 374

Govinda Menon

ss. 374, 375, 376 and 377

s. 374

Criminal Procedure Code

s. 423

Madgonkar

Chaptec XXVII of the Code

Vivian Rodrick

s. 302

Penal Code

s. 374

s. 465

s. 465

Rana

s. 465

s. 465

s. 465

Marfatia

Patel


MADHO LIMAYE A v.

THt: SUPERINTENDENT, TIHAR JAIL, DELHI & ORS.

February 19, 1975

[K. K. MATHEW. v. K. KRISHNA IYER AND P. K. GOSWAMI, JJ.]

Consti1111io11 A rtide 32-Hah!'ll.1 Corpu.1-Punjab Jail Manual-Racial discrimi11atirl11 berween Indian and E11ro.nea11 p:isoners-Whet!ier quetion raised B cnn he drrennined if detenu released.

The petitioner filed the present Habeas Cot pus. etition challengig hi.s detention.

The petitioner also challenged the prov1S1ons of the p, niab Jail Manual which creates artificial discrimination between Indian and European pri)OlhTS in the matter of treatment and diet.

The resnondent contended that since the oetitioner has been released the petition ha;; become infructuous.

The petitioner cited various authorities of this Court as well as of the Supreme Court of Un;•ed States that where issues of great moment affecting liberty of the citizen are involved the decision should not be avoided even though the immediate prohibition which led to the filing of the writ pe, ition has for the time being disappeared.

HELD : The Court would not decide ihe issue fer two reasons.

Firstly, the petitioner is no longer in prison and, secondly, the Learned. Solicitor General assured the Court that he would draw attention of the Punjab Government to the need for revision of the imougned rules from the point of view of racial equality. The court hoped that the State Government would take up the reform of the law, eluminate the vice of inequality and update the regulations to be in keeping with the spirit and letter of the paramount Jaw.

[5830-E]

Petition dismi.ssed.

ORIGINAL JIJRISDICTION : Writ Petition No. 318 of 1970.

Petition under Article 32 of the Constitution of India.

Santok Singh, for the Petitioner.

L. N. Sinha and R. N. Sachthey, for Respondents Nos. 1 & 3.

The Judgment of the Court was delivered by :

KRISHNA IYER, J.-Shri Madhu Limaya, M.P. moved this petition F while he was prisoner, imbued more by the pro bona publico spirit than perhaps by his own invidious lot in jail. The gravamen of this - public grievance in that a Jong silver jubilee span of years having elap-- sed after India became a 'Sovereirrn Democratic Re;111h1ic. it is obnoxious that racial discrimination, smacking of colonial hangover, should stubbornly resist arts. 14 & 15 of the Constitution and survive in the Punjab .fail Manual. Tf it were so, it were a matter to G blush f~. but the preliminary objection raised bv the Snlicitor General is thc1t the petitioner having been freed from prison years ago, this Court should not be invited into an academic exercise on a constitutional issue. Of course, he concedes that the C-ourt is not deprived of jurisdiction by the cessation of incarceration. An inflexible rule that as soon as a custodial term or prohibitory order expires the Court will not investifl'ate its legality may well immmli:cc ephemc- H rat illcg1lity against judicial review on unwitting infraction of the amplitude of the Court's powers. But there are cases and cases.

MADHU-LIMAYE v. SUPDT. T!HAR JAIL (Krishna Iyer, ].) 583

Mr. Santok Singh, for the petitioner, has brought to our notice decisions of this Court and of the Supreme Court of the United States to press home his point that issues of such great moment afiecting the liberty of the citizens should not be avoided even though the immediate proh101t1on which has led to the writ pet1t10n nas, tor Ilic time being, disappeared (See Carroll v. Commissioners of Princess Anne( 1) and Umted States v. Phosphate t:xpurr Assa("); also Maanu Limaye v. Ved Mi.rti(8) and Himat Lal K. Such v. Comm1. of Police, Ahmedabad(4).

The thrust of the charge of unconstitutionality made by Sri Madhu Limaye consists in the artificial discr:mination between Indian and European prisoners in the matter of treatment and diet, gomg by t11c rules he has set out in his petition. Jt is true that many laws which do not square with the equality enshrined in Arts. l 4 and 15 die l1ard until pronounced dead by the Court Prima f acie the rules quoted are neither fair on their face nor equal in their bosom, as between Indians and Europeans. This white-complex has no right to remain extent in the rules, according to counsel for the petitioner. We have drawn the attention of the Solicitor General to what appears to be an obsolete but overlooked discrimination. We arc not incli, ned to examine this matter more indsively for two reasons. The petitioner is no .longer in prison. Even so may-be the matter can be competently scrutinised from the constitutional angle by this Court. But the learned Solicitor General assures us that he will draw the attention of the Punjab Gm'ernment to the need for rvision of the impugned rules from the point of view of racial equality. In the light of this submission we hope the State Government will tac up the reform of the law, lop off dead wood, eliminate the vice of inequality and update the regulations to be in keeping with the >.pirit and letter of the paramount law.

In view of this attitude of the Solicitor General, counsel for the petitioner himself expressed th<1t he was not kc:cn on going on with the case. We hope that the above observations would be sufficient for the high purpose the petitioner has in view. ' We accordingly dismiss the petition.

P.H.P.

Petition dismissed

(I) 21 L. Ed. 2d. 325.

(3) A.I.R. 1971 S.C. 2481. 6-470SupCI/75.

(2) 21. L Ed. 2nd. 344 ..

(4) [1973] I S.C.C. 227, 232

MADHO LIMAYE

THE SUPERINTENDENT, TIHAR JAIL, DELHI & ORS

February 19, 1975

K. K. MATHEW. v. K. KRISHNA IYER

P. K. GOSWAMI, JJ.

Supreme Court of Un;•ed States

Punjab Government

Article 32

Constitution of India

Santok Singh

L. N. Sinha

R. N. Sachthey

KRISHNA IYER

Madhu Limaya

India

arts. 14 & 15

Santok Singh

Supreme Court of the United States

Madhu Limaye


PRATAP SINGH A v.

RAJINDER SINGI'l & ANR.

February 20, 1975 [M. H. BEG, Y. v. Cf-V\NDRACHUD AND A. c. GUPTA, JJ.]

Representation of the People Act, 1951-s. 123(5)-Corrupt praclice- B When the Supreme Court appreciates oral evidence-Whether oral testimony , could not be accevted unless corroborated in material particulars-A witness ,,' need not be proved to be a perju; er before his evidence is discarded--How a court should evaluate evidence in a case of corrupt practice.

The respondent, in his election petition before the High Court, alleged a number of ':orrupt practices hit by , s. 123(4), (5) and (6) of the Representation of the People Act, 1951 against the appellant. who was the duly elected candidate

to the State Assembly.

The High Court allowed the petition and set aside the C e1ection. , On appeal to this Court it was contended that the High Court overlooked the_ well established principle that the charge of corrupt practice must be treated as quasi-criminal in character which has to be proved beyond reasonable doubt.

Allowing the appeal and remitting the case to the High (:ourt,

HELD : (I )(a) The judgment of the High Court rests largely on appreciation of 'oral evidence. It could not, therefore, be easily, disturbed by this OJ, urt even D in first appeal on facts in election cases.

[587B]

(b) But if the High Court overlooks serious infirmities in the 1vidence adduced to support the case accepted by it or misreads evidence or igr1ores tht: principle that a charge of corrupt practice, in the course of an election, is a grave one which, if established, casts a serious reflection and impose's a oisability upon the candidate l)eld guilty of it, so that the Court must be satisfied beyond reasonable doubt about its veracity, this Court will not hesitate to E interfere.

[587C]

In the instant case, the High Court did nothing more than to rather mechanically accept the oral_and documentary evidence given to support the cliarge of corrupt practice.

There was no consideration or discussion of a number of infirmities' both in the oral and documntary evidence to support the charge.

This is so be1; ause the High Court has held the view that a mere consideration of probabilities, withou, t applying a strict standard of proof beyond reasonable' doubt to a charge of corrupt practice was enough. There is no indication any- F where in the judgment that the stricter standard of proof, which is applicable to such charges, was kept in view by the High Court.

[588G-H] ,

Rahim Khan v.

Khurshid Ahmed & Ors. [1974] 2 S.C.C. 660 @? 666, followed.

2(a) It is difficult to accept the contention of the appellant that oral testimony could not be accepted in an allegation of corrupt practice unless it is G corroborated by other kinds of evidence in material particulars.

There is 'no such general inflexible rule of Jaw or practice which could justify a wholesale condemnation or rejection of a species of evidence which i~ legally ac!missible and can be acted upon under the provisions of the Evidence Act in every type of case. if it is, after pr.oper scrutiny,. found to b~ reliable or wprthy of aC<'.eptance.

There 1s no presumpt10n that a witness deposing on oa:th m the witniss box is -untruthful unless he is shown to be speaking the truth. The ordinary presumption is, that a witness deposing solemnly on oath before a judicial tribunal is a

Witness of truth unless the contrary is shown.

The evidence in an election ff petition cannot be equated with that of an accomplice in a criminal case~ whose testimony has, according to a rule of practice, though not of law, to be corroborated in material particulars before it is relied upon.

[589D-E & FJ

PRATAP SINGH v, RAJINDl!R SINGH (Beg, J.) 58 5

(b) It is not required by our law of evidence that a witness must' be proved lo b~ a perjurer before h'B evidence is discarded. It rp.ay be enough, if his evidence appears to be quite improbable or to spring '.from such tainted or biased or dubious a source as to be unsafe to be acted upon without corroboration from evidence other than that of the witness himself. [589F]

(c) There are no golden rules for i!f.Praising hnman te&timony. The extraction of what should constitute 11'.e credible foundation of judicially sound judgment i~ an art which nothing except S(IUDd common sense and prudence combined with ·:xperience can tea:h. (5890] ·

(d > In judging the evidence of a grn•; c charge, prudence dictates that belief in its ool'Ttness should form to basis of a judicial verdict of guilt 0Dly if that belief reaches a convictiOn beyond reasonable doubt. [S90BJ I .

(c) In deciding whether the stricter standard of proof is satisfied in a case of alleged corrupt practice, resting •1pon oral evidence only; the Courts should

b~ particularly astute and not omit to examine falrly the effect of every existing

>ubtanti<~I ground which •:ould introduce a reasonabTe doubt in a case. [590C]

In the i'lstant case the appellant's contention that the motor drivers would

b~ prepared to commit perjury at the instance of the respondent who was the Jefeated Minister and that because the respondent had been welcomed and garlanded by the President of the Motor Truclc Drivers' Union, the evidence of motor drivers was easily available to him cannot be accepted either as a general rule in election cases, or, on the facts of this particuhr case. It is not reo.sonable to carry a suspicion to the extent of attribl'ting to every witness

rrcaring in support of' the respondent's case a tendency or desire to ·:ommit perjury. The law does not discriminate against or frown upon a former Minister or \iew every witness produced by him with 6Uspicion because he had been a Minister.

On the other hand, it is reasonable to believe that a rerson who haq occupied the responsible position of a Ministec would be less inclined to suborn witnesses or conspire to produce perjured evidence. [S90E-G]

(f) Where the examination-in-chief and cross-examination of a witness are most unsatisfactory the 1:Cibuna1 is not powerless in the preformance of its duty to ascertain the truth. There is not only s. 165 of the Evidence Ai:t. which

nables the Court to put any question it likes to a witness, but there are also

provisions of O.XVI, r. 14 CPC. The High Court adopted a standard of proof which is not strict enough in appraising the worth of evidence produced to 'UPPOrt a charge of corrupt practice.

(5920-H]

CRIMINAL APPELLATE

JURISDICTION : Criminal Appeal No. 808 of 1973.

From the judgment and order dated the 30th March, 1973 of the Punjab & Haryana High Court in Election Petition No. 14 of 1972.

R. K. Garg, S. C. Aganvala, V. J. Francis an(! R. C. K. Kaushik, for the appellant.

T. :s'. Krishnamurthi Iyer, K. C. Agarwa/a, M. M. L. Sriraslava and 'E. C. Agarwala, for respondent No. 1.

A. T. M. Sampath, for respondent No. 2.

The Judgment of the Court was delivered by H BEG, J.-Pritam Singh, the appellant before us under Section ll6A ot the Representation of the People Act, 1951 (hereinafter referred . to as 'the Ad), was elected at an election held on 11-3-1972 for the Haryana State Legislative Assembly, the result of which was declared ' 7-470SCl/75

on 12-3-1972. The Respondent Balbir Singh questioned this election by means of an election petition alleging that the election wa> void as the appellant had committed corrupt practices hit by Section 123. sub. s.4. 5 al1.d 6 of the Act. The petition was allowed by a learned Judge of the High Court of Punjab & Haryana, solely on the ground that the corrupt practice, provided for as follows, in Secfr.:m 123(5) of the Act, was committed by the appellant:

"123(5). The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the C'Onsent of a candidate or his election agent, or the use of such vehicle or vessel for the free c0nvcyance of any elector (other than the candidate himselr, the members of his family or his agent) to or from any po1ling station provided under section 25 or a place

c fixed under sub-section (I) of section 29 for the poll :

Provided that. the hiring of a vehicle or vessel by an elector or by several electors at their joint costs for the purposes of conveying him or them to and from any such polling 3tation or place fixed for the poll shall not be deemed to be a corrupt practice under this clause if the vehicle or vessel so hired is a vehicle or vessel not propelled by mechanical J)owcr :

Provided further that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost for the purpose of going to or coming from any such pQlling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause".

The appellant assails the judgment of the High Court on th.: following main grounds with which ·.·c will deal scriatim :

1. That, the High Court em:d in relying upon legally unproved .:ntrics in what is called a Pukar book or register showino: both the 11iring out and then payments for the use of certain trucks on 11-3-

1972, the date of election, for purposes of election.

2. That~ the Register itself is inadmissible in evidence under a1w provisicn of the Evidence Act. -

3. That, the entries in the Pubr Register arc suspicious indicating that the Register itself, or, atleast, the entries involved were

not contemporaneous but fabricated after the election was over.

4. That, the High Court erred in relying upon the evidence of d13llans by the police on 11-3-1972 of drivers oi trucks said to have been ued by tl:c appellant when the best evidence in th!.! possession of the police relatmg to :hese challans was not forthcoming so that the

chaans apcarcd to have been manouvcred for the purpose 'Of supportmg a talse case.

:i. That, the High Court erred in relying upon merely uncorroborated oral testimony of Motor uuck drivers in acccptit1~ the respondent's case which was not rally cormborated as the alleged C..'rrnborative evidence was nt cvi<lcnce at all in the eye of law.

.G.

PRATAP SINGH v. RAJI~DER SINGH (Beg, J.) 587

6. That, the High Court overlooked the well established principle that the charge of a corrupt practice in the course of an election must be treated as quasi-criminal in character which has to be proved beyond reasonable doubt.

We will deal with these objections in the reverse order, starting with the last mentioned ground of attack on the High Court's judgment. The judgment rests largely on appreciation of oral evidence. It could not, therefore, be easily disturbed by us as has been repeatedly pointed out by this Court even in first appeals on facts in election cases. If the High Court overlooks serious infirmities in the evidence

adduced to support the case accepted by it or misreads evidence m ignores the principle that a charge of corrupt practice, in the coursl.! of :.\fl election, is a grave one which, if established, casts a seriousreflection and imposes a disability upon the candidate held guilty <•f it, so that the Court must be satisfl.cd beyond reasonable doubt about its veracity, this Court will not hesitate to interfere.

Learned Counsel for the appellant has relied upon the decision of this Court in Rahim Khan v.

Kh11rshid Ahmed & Ors.,(') whm: Krishna Iyer, J., speaking for this Court, said (at p. 666) :~

"An election once held is not to be treated in a lighthearted manner and defeated candidates or disgruntled electors should not get away with it by filing election petitions on unsubstantial grounds and irresponsible evidence, thereby introducing a serious element of uncertainty in the verdict already rendered by the electorate. An election is a politically sacred public act, not of one person or of one official, but of the collective will of the whole constituency.

Courts naturally must respect this public expression secretly wri•tcn and show extreme reluctance to act aside or declare void an election which has already been held unless clear and cogent testimony compelling the Court to uphold the corrupt practice alleged against the returnecl candidate is adduced. Indeed, election petitions where c'0rrupt practices arc imputed must be rr.gar<lcd as proceedings of a quasi-criminal nature wherein strict proof is necessary. The burden is

therefore heavy on him who assails an election which has been concluded".

In Rahim Khan's case (supra) our learned brother Krishna Iyer also warned us in the words of Sydney Harris (at p. 666):

"Once we assuage our conscience by calling something a necessary evil', it begins to look more and more necessary and Jess and less evil".

He then proceeded to observe (at p. 666) :

"For this very reason the Court has to be stern so as induce in the canclidatcs, the parties and workers that temper and truthfulness so appropriate to the process ........ "

I ·-.

(1) 1974 2 sec p. 6<io@ r. 666.

After poiliting out the difficulty of laying down any ast iron or rigid rules for testing the veracity of witnesses, this Court said (at p. 672) there:

"We regard it as extremely uJisafe, in the present climate of kilkenny-cat election co:npetitions and partisan witnesses wearing robes of veracity, to upturn a hard won eke- . toral victory merely because lip se:rvicc to a corrupt practice

has he<!il. rendered by some sano:timonious witnesses. The Court must look for serious assurance, untying circumst2.nces or tJnimpeachablc documents to uphold grave charges of corrupt practice which might not merely cancel the clccti1)n

result, but extinguish many a man's public life".

In that case, this Court found the charge of a corrupt practice to be established upon oral and documentary evidence given to support it.

In . the case before us, we find that the High Court accepted the evidence of Uggar Sain, P.W. 24, because, i11ter a/ia, it was supported by a "Pukar Register" kept by the Union of truck drivers of trucks hired in the order said l!o be determined by their places in the Register. It relied on this evidence despite certain serious objections to the entries in the Register showing payments for the trucks said 1:1 have been used by the appellant. The High Court, however, held that the testimony of Uggar Sain found sufficient corroboration not only from _ the entries in Pukar Register but also from the testimony of Khandu Ram, P.W. 25, Harish Lal, P.W. 26, Jai Gopal, P.W. 27, Chokba Namad, P.W. 28, Gurbachan Singh, P.W. 37 and Rajindcr Si1 ; i1, P.\V. 38, each of whom had deposed that he was paid a sum of Rs. 150/- on 10-3-1972 for performing election duty for the appellant for carrying voters on 1 l-3-1972. The learned Judge observed about these drivers:

"None of them is shown to be interested in the petit.ioncr or ngainst the returned candidate nor was the deposition of any one of them shaken in cross-examination and I do 11ot see any good reason for discarding their sworn word.

As would be seen later, they actually plied their trucks for the returned candidate on the 1 lth of March, 1972 ... a fact which clinches the matter against him".

The denial of the returned candidate were rejected by the lear:ned Judge on the groWld that these were made by a highly interested party. After having been taken through the judgment we are not satisfied that the learned Judge did anything more than to rather mechanically accept the oral and documentary evidence given to support the charge. We cc:rtainly do not find there any consideration or cli5¢ussion of a number of infirmities which have been placed before us both in the oral and documemary evidence adduced to support the charge. We think that this is so bccai:ise the learned Judge seems to have held the view that a mere consideration of probabilities without applyt.lg d strict standard of proof beyond reasonable dobt to a . cha<ge of corrupt practice was enough here.

PRATAP SINGH v. RAJINDER SINGH (Beg, I.) s 9

After going through the evidence relating to the use of each truck, and repeating, rather mechanically, that this evidence on. behalf of the petitioner was acceptable in each instance given, the learned Judge concluded :

"As a result of the discussion of the evidence under this issue, I hold that the retumed candidate hired and used trucks Nos. HRR 5155, HRR 5161, HRR 5077, HRR 5013, and HRR 597, for the free conveyance of electors to V'arious polling stations and thus committed the corrupt practice defined in clause ( 5) of scctio•,1 123 of the Act".

We find no indication anywhere in the judgment th_at the stricter standard of proof, which is aplicable to such charges, was kept in view by e learned Judge. \ ;

The fifth ground of objection set out above seems to proceed on the erroneous assumption that oral testimony cannot be accepted when a corrupt practice is set up to assail an election unless it is corrob<J.. rated by other kinds of evidence in material particulars. We are not aware of any such general inflexible rule of !•aw orpractice which could justify a wholesale condenmation or rejection of a species of evidence which is legally admissible and can be acted upon under the provisions of Evidence Act in every type of case if it is, after proper scrutiny found to be reliable or worthy of acceptance. There is no presumption, either in this country or •anywhere else, that a witness, deposing on oath in the wiraess box, is untruthful unless he is shown to be, indubitably, speaking the truth.

On the other hand, the ordinary presumption is that a witness deposing solemnly on oath before a judicial tribunal is a witness of truth unless the contrary is show:i.

It is not required by our law of evidence that a witness must be proved to b.:! a perjurer before his evidence is discarded. It may be enough if his evidence appears to be quite improbable or to spring from such tainted or biased or dubious a source as to be unsafe to be acted i..pon without corroboration from evidence other than that of the witness himself.

The evidence of every witness in an election case cannot be dubbed as intrinsically suspect or defective.· It cannot be equated with that of <an accomplice ii,1 a criminal case whose testimony has, according to a rule of practice though not of law, to be corroborated in material particulars before it is relied upon.

TI1is Court pointed out in Rahim Khan's case (supra) that there arc no golden rules for <appraising human testimony. In assessing its worth Judges can err honestly just as witness ca',1 make honestly mistaken statements under oath. The extraction of what should constitute the credible foundation of judicially sound judgment is an art which nothing except sound common sense and prudeace combined with experience can teach. A sound judgment must disclose a fair attempt to "separate the grain from the chaff" as it has often been said.

 Section 3 of the Evidence Act lays down : "A fact is said to be proved when after considering the matters before it, the Court either believes it to c; xist or on-

SUPRD!E COURT REPORTS [1975] 3 s, c.R,

sidcrs its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists".

Hence it has sometimes been argued that the same standard of . proof applies to all types of cases. Such a contention seems plausible.

Hut, what has to be borne in mind is that, i'.1 judging the evidence o[

a grave charge, prudence dictates that the belief in its correctness should form the basis of a. judicial verdict of guilt only if that belief

r1aches a convU:tion beyond reasonable doubt. If prudence is the real tc!st, it prescribes differing standards of proof in differing circumstances.

Its requirements preclude any Procrustcwa bed of uniformly rigid rules for each type of case.

The circumstances under whic~ reasonable doub.t may or may not

.::ist in a case cannot possibly qc exhaustively catalogued. All that one can say is that in deciding whether the stricter stand•ard of proof is satisfied in a case of alleged corrupt practice, resting upon oral evidence only, the Courts should be particularly astute and not omit to examine fairly the effect of every existing substantial ground which could introduce a reasonable doubt in a case. In doing so, the Court has also to beware of bare suspicion, based on popular prejudices o:r belief sought to be introduced merely to bias the Court against a witness or a partly of a particular type.

In the case before us, we find that the learned Counsel for the ;1ppcllant has repeatedly referred to the fact that the respondent, whose cllcction petition succeeded before the learned J udgc, was a defeated former Minister of the ruling Congress party. Learned Counsel wanted us to infer that, because the respondent had been welcomed and garlanded by the President of the Motor Truck Drivers' Union of Ganaur, the evidence of motor drivers was easily available to him. In other words, we were asked to assume that the motor drivers would be prepared to conunit perjury, at tne instance rf the President of the Motor Truck Drivers' Union, only to please a former defeated Minister.

We do not think that: it is reasonable to carry such a suspicion to the extent of attributing; to every witness appearing in support of the respondent's case a tendency or desire to commit perjm y.

The law docs not discriminate against or frown upon a former Minister, belonging to any party, whether in or out of power, so that it must view every witness produced by him with suspicion simply because he had been a Minister. On the! other hand, we think that it would not be unreasonable to believe that a person who has occu!Jied the responsible position of a Minister will be less inclined to suborn witnesses or conspire to produce perjured evidence just because he is defeated in an election which is not the only test of a person's worth or resoectab; litv in society. We think that a person who has held a responsible office will be. acting _imprudntly if he spoils his public image by deliberately producmg pequrcd evidence.

We are not prpared to uphold the 5th contention of the appellant that, eit1er as a general rule. in election cases, or on the :facts of this par•icular case, the evidence of the motor drhcrs must be , necessarily rejected simply berruse it is oral tcstimonv of drivers of trucks who had formed a Union which had once invited

Ii.'

PRATAP SINGH r. R,\JINDER SINGH (Beg,}.) 591

aod garlanded the rcspo, ndent.

We, however, think that tho evidence had to be more carefully scrutinized than the High Court wa!'. disposed to do it.

As was pointed out in Rahim Klu111's case (supra), evidence considerc'; J unsafe to be acted upon by a judicial Tribunal r.ccd not be necessarily false. '

Turning to the 4th ground of objection, relating the prosecutions of truck drivers by the Police for alleged offences said to have taken place on 11 . 3 . 1972, we find that the High Court accepted the allc gation that the drivers were challancd on 11. 3. 19n without commeriting on some conflicting evidence as to the date on which the motor drivers were challaned. In reply, it has been contended that witnesses who could have given more evidence on this question were not only given up by the petitioner respondent but also by the appellant as. the date of chal!ans was accepted or not questioned on behalf of the ;; ippcllant. Our attention is invited to a Miscellaneous application No. 216-E/72 dated 19.10.1972 where learned Counsel for the appellant not merely stated that he did not want to examine either the Mohrir Constable of Police Station Ganaur or a Clerk of the office of the Superintendent of Police, Rohtak, but prayed that "the above two wit

ncsses may kindly be informed telegraphically not to appear on

23. 10. 72".

It is, therefore, argued, not without force, that the date of the challans was not seriously disputed by the appellant before the High

Co~Jrt so that this question should not be allowed to be argued before us.

It was also contended on behalf of the respondent that there had been some tamperin_g with the record in the Magistrate's Court which explained the contrary evidence given bv Subash Chander, P.W.11, the Ahalmad of a Magistrate's Court, showing that the chaltan was dated 17-3c 1972. It was orally prayed that \VC should summon and .:xamine, at this stag; c, the original record from the Court of the Magistrate concerned, However, as no argument appears to have been addressed on this questicn in the High Court we think that this as a matter which the High Court can and should itself examine after summoning the record from the Magistrate's Court as we propose to send the case back to it for reconsideration after taking some further evidence.

It has been argued on behalf of the respondent that there s enough evidence of the motor truck drivers and of the voters carried as weil as documentary evidence, i, ncluding a log book of a driver, to show that the truck used on behalf of the respondent were carrying V'1ters to the election booth, and were, therefore, challaned 0,1 11-3-1972 because carrying of passengers in truck was not permitted.

It was admitted that no entry was made in the general diary of Ganaur Police Station, according to the rules, but this, it was contended for the respondent, is not conclusive as relevant entries relating to some petty offences are often missing. These arc, however some of the matters which the High Court can and should consider. ' It appears to us that a number of points, on the worth of various items of evidence, which have been raised for tht' 1st time t6 question

SUPRUIE COURT REPORTS

(1975) 3 S.C..R.

the authenticity of the evidence relating to the prosecution of driver~ of trucks, said to have been carrying voters for the appellant were

not advanced before the High Court.

We think that we ought tt1 have the benefit of scrutiny of the whole evidence on this question by

the High Court and its findings thereon.

We are not prepared to proceed on the assumptio!l that the respondent could easily get evidence fabri.cated as he had been n minister. ·

We may now deal with the first three grounds cif objection, all relating to what is called the Pukar Register.

It is true that Uggar Sain, P.W. 24, who was called to prove the Pukar Register, did not actually depose in whose handwriting the entries in it were made or what could or could not be properly ente:rcd here. The trend of cross-examination, however, shows that it pro- C cee<led on the assumption that Uggar Sain, P.W. 24, was actual!v making entries in it.

But, neither this fact was proved in the cxamina:tion-in-chief nor was the course of business, according to which entries could be made in the Register, including entries of alleged payments by the respondent, proved.

A number of question raised before us, throwing some suspicion on the authenticity of the entries in this Pukar R1!gister and the dates on which they could be or were D made seem to us to be entirely new.

They were not suggested to P.W. 24, Uggar Sain, who might have had some explanations for these suspicious features.

Nor do all these defects seem to have been mentioned in the course of arguments before the High Court. For example, the truck numbers of trucks said to have been sent to the appellant do not appear against the name of the appellant but seem inserr.ed afterwards above the place where they would be expected to E be found.

The exact meaning or effect of such a feature could. only have been brought out by cross-examination of Uggar Sain, P.W. 24 on behalf of the appellant.

As regards the admissibility of the Pnkar Register and evidence of prosecution of the truck drivers, we are unable to accept the submission that these are inadmissible under the Evidence Act.

Even F though the course of business under which the Pukar Register was kept was not proved, we think that documents, such as the Pukar Regis1tcr all, d those -relating to the prosecutions of the drivers, who were said t() be ami11t voters on 11. 3 .1972, could be proved under section 11 of the E~ Act.

We think that, in view of the importance of the evidence Ugg, ar G Sain, P.W. 24 both his examination-in-chief and his cross-examination are must unsatisfactory.

We may here observe that the election Trib1, mal is not powerless in such cases in the performance of its duty to ascertain the truth.

There is not only Section 165 of the Evidence Act which enables the Court to put any question it likes IQ a witness. but there are also the provisions of order XVI, Rule 14, Civil Procedure Code which lay down : H

"Subject to the provisions of this Code as to attendance and appearance and to any law for the time being in force,

.A

.; PRATAP SINGH 1. RAJL'IDER SINGH (Beg, J.) . 593

where the Court at any lime thinks it necessary to examine . any person other than a party to the suit am! not called as a

witness by a party to the suit, the Court may, of its own motion, cause such person to be summoned as a witness t<i give evidence, or to. produce any dcicument in his possessiOn, on a dav to be appointed, and may examine him as a v.itncss or require hini to produce such document".

We think. that the ascertainment of a numbr of essential facts relating to the charge was n.eithcr regular nor sufficiently detailed in the case now before us.

We find that the High Court proceeded on the assumption that facts which ought to have been technically proved had been sufficiently prqved.

It too 'readily accepted the evidence, both oral and documenL'lry, without examining all the. defects of it . which have been sought to be placed before us.

We are left with an unavoidable impression that important aspects of the case were neither satisfactorily brought out clearly by the evidence in the case nor examined by the High Court despite the voluminous evidence led by the parties and the lenithy judgment delivered by the T'ibunal. We also find that t~.e Court adopted a standard of proof which is not strict enough in appraising the worth of evidence produced to support a charge of corrupt' practice. As it is not the practice of this Court to reassess evidence or to perform the duties of the Trial Court, even in election first appeals, un!ess no other course is left open to it, we think that this is a fit case in which we should send back the case for reconsideration by the High Court after recalling such witnesses as may be considered necessary by it, '; ind, in particular, Uggar Sain, P.W. 24, so that at least !he Pukar Register, assumed to have been duly proved, may be proved in accordance with law.

We think that the objections to the proof of this. document, and of entries in it <lo not go beyond objections to the mode of proof.

The entries in it could be accepted as sufficiently rlible on1¥ after a much more rigorous examination of their maker than the parties or the Court subjected him to.

W~ think that we should noil give a finding upon the reliabili~ of these entries before the , allegedfy suspicious features have been specifically put to P.W. 24, Uggar Safn, who was assumed to have made the entries without even asking 'him whether he did make them. !

. . Jn the result,. we set aside the judgment .md order of the High-

Cortt.!oo,, we t~d the case to it f?r dispoShl in accordance with law after adtluctJo'!./lf such further evidence as may be necessary in the intereslO"bf:iustice, In view of our order remanding the case to

··-~· .. ···- ., . .,. .--· the High Court it is unnecessary to consider the three Civil Miscel-

" •

- ·•

laneous Petitions for urging addition grounds, for condonation o{ delay in filing the application for urging additional grounds, and for

rcrmission to file a ct:rtified copy of the summary register for 2 !3-1972 and 22-3-197'.?. of the Court of Judicial Magistrate 1st CJ.ass, Sonepa.t. These applications are, therefore, dismissed. Parties

may, however, make appropriate applications in the High Court. 'fl1c costs of this litigation in the High Court as well as in this Court will abide the result. The appellant will continue to function as an elected member subject to the result of the Election Petition.

P. It R.

Appeal allowed

PRATAP SINGH

M. H. BEG

A. c. GUPTA, JJ.

Representation of the People Act, 1951

s. 123(5)

Supreme Court

s. 123(4)

Representation of the People Act, 1951

s. 165

CPC

R. K. Garg

S. C. Aganvala

R. C. K. Kaushik

Krishnamurthi Iyer

K. C. Agarwa

M. M. L. Sriraslava

E. C. Agarwala

A. T. M. Sampath

H BEG

Representation of the People Act, 1951

Balbir Singh

Section 123

section 25

section 29

11-3-

1972

Krishna Iyer

Rahim Khan

Krishna Iyer

Sydney Harris

Uggar Sain

Khandu Ram

Harish Lal

Jai Gopal

Chokba Namad

Gurbachan Singh

Rajindcr Si1

of March, 1972

s 9

Section 3

Motor Truck Drivers' Union of Ganaur

Rahim Klu111

11 . 3 . 1972

11. 3. 19n

Rohtak

Subash Chander

17-3c 1972

Ganaur Police Station

11. 3 .1972

section 11

Ugg

ar G Sain

Section 165

Civil Procedure Code

PRATAP SINGH

RAJL'IDER SINGH

Uggar Safn