STATE OF. UTTAR PRADESH

BHOOP SINGH VERMA

January 24, 1979

[JASWANT SINGH, R. S. PATHAK AND A. P. SEN, JJ.]

Termination of simpUciter-No 1departmental enquiry is necessary under law in such cases.

The respondent was appointed as a Sub-Inspector of police in a temporary pool in 1955.

He was discharged from service on July 13, 1957.

A Writ Petition filed by him in the Allahabad High Court was allowed on August 4, 1959 and consequently he was re-instated in service on December 15, 1959.

Thereafter, on January 21, 1960 his services were .terminated on the ground that they were no longer required by the State. A suit for declaration that the said order of termination was null and void was decreed in his favour by the trial court which was affirmed in. appeal and also by the High Court in second appeal.

Allowing the State appead. by special leave the Court,

HELD : 1. The considerations which prevailed with tho High Court in reaching its findings on the application of Article 311 (2) of the Constitution nnd the bona {ides of the superior authority in making the impugned order of tern1ination simpliciter are not warranted in law.

[1130D1

2. The order terminating the services wa-; an order of termination simpliciter passed in accordance with the rules applicable to temporary Government servants.

After the original , order of , discharge was quashed by the High Court, the respondent was reinstated, alJowed increment in pay and one month's salary in lieu of notice under the 'general rules for termination of services of temporary government serva-nts was also given.

[1128F-G]

3. It 1'1as open to the superior authority to terminate the respondent's services on the ground on which it did so. And the eyidence disclosed no personal motive had influenced the order or th&t it was passed by way of punishment. A departmenta) enquiry is not required under the law. Instead of instituting disciplinary proceedings against the government servant, the suitability for retention in service could be decided. [ll28H, 1129A, El

State vf U.P. v. Ram Chandra Trivedi', [1977] 1 SCR 462; Chan1pakTal Chimanlal SIFJh v. The Union of India, [1964] 5 SCR 190, Jagdis!z Mitter v.

Union of India, A.l.R. 1964 S.C. 449 and State of Puniab & Anr. v. Shri Sukh llai Bahadur, [1968] 3 SCR 234; referred to.

Union of India & Ors. v. R. S. Dhaba, (1969] 3 SCC 603, Stme df Bihar & Ors. v. Shiva Bhikshuk Mishra [1971] 2 SCR 191 and R. S. Sial v.

Th• State of U.P. and Ors., [1974] 3 SCR 754; applied.

The State of Hihar v. Gopi Kishore Prasad, A.l.R. 1960

SC 689 and . Madan Gopal v. The State of Punjab, (1963] 3 SCR 716; distinguished.

. _,._ -

' "

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 252 of 1969.

Appeal by Special Leave from the Judgment and Order dated 19-8-68 of the Allahabad High Court in Civil Appeal No. 254/65.

G. N. Dikshit and M. V. Goswami for the Appellant.

S. C. Manchanda, S. C. Patel and Trilok Singh Arora for the Respondent.

The Judgment of the Court was deliver, ed by

PATHAK, J.-This appeal by special leave is directed against the judgment and order of the Allahabad High Court dated August 19, 1968 dismissing a second appeal arising out of a suit for declaration.

The respondent was appointed as a Sub-Inspector of Police in a temporary post in 1955. He was discharged from service on July 13,

1957. A writ petition filed by him in the Allahabad High Court was allowed on August 4, 1959, a'nd accordingly on December 15, 1959 he was reinstated in service.

Thereafter, on January 21, 1960 his services were terminated by the Deputy lnspector General o[ Police, Agra Ran~, Agra.

On March 13, 1963 the respondent instituted a suit for a declaration that the order dated January 21, 1960 was illegal and void and

that he continued as Sub-Inspector of Police in the Uttar Pradesh Polio.e Service. It was alled that on a false complaint made against him in respect of the custody and detention of one Smt. Phoolmati, an enquiry bad been made in cohsequence of which the appellant had been arbitrarily and illegally discharged from service on July 13,

1957. It was pleaded that although he was reinstated .on the success .of his writ petition in the High Court, his services were tenninated a mere five weeks later although no ground had arisen since for doing

so. It was asserted that the order of January 21, 1960 was passed as a simple order of termination in order to avoid a departmental enquiry under section 7 of th~ Police Act, which enquiry if held would l)ave enabled him to expose the falsity of the alleg:ations levelled against him.

The suit was contested by the appellant, who maintaill".,, d that the termination of the respondent's services was not by way of punishment nor motivated by malice, and that it was a simple termination of the services of a temporary government servant on the ground that they were no longer required by the State. The .suit was decreed by the learned Munsif, Etah and the decree was affirmed in appeal and &xond appeal.

The High Court, in second appeal, took the view that whern ah enquiry was instituted by a superior authority into a misconduct alleged against a govemn1ent

A servant, the resulting termination of servioe was by way of punishment because it attached a stigma or amouned to a reflection on the competence of the government servant and affected his future career.

The High Court held that the fi'ndings recorded during the enquiry on the original complaint against the respondent were nsponsible for the order terminating the respondent's services, and it affirmed that the B order was vitiated by mala fides.

Attacking the findings of th;, High Court, learned counsel for the appellant contends that i:n the first place the order terminating the respondent's services had not been made by way of punishment, bu~ wa,; an order of termination simplicit•er passed in accordance with the rules applicable to temporary government servants.

In the second place, it is said, if the order is attributed to the complai'nt against the respondent concerning his. conduct relating to Smt. Phoolmati it was open to the Deputy Inspector General of Police to take the circumstances of the case into account for the purpose of considering the suitability of the respondent for continuing in service.

Learned counsel for the respondent points out that an enquiry had been originally instituted against the respondent which had resulted in an order terminating his services and, he urges, after the order of the High Court quashing his discharge on the ground of violation of Article 311 (2) of the Constitution it was obligatory on the superior authority, in case it prcr posed to terminate the respondent's services, to institute a proper and complee departmental enquiry, providing an opportunity to the respondent to lead evidence and be heard in his defence, and only thereafter could it make an order against the respond•ent.

We are of the opinion that the appellant is right on both counts.

Considered &s an order made without reference to the earlier proceeding against the respondent, the impugned order cannot be regarded as one of punishment.

After the original order of discharge was quashed by the High Court, the respondent was reinstated in service.

He was even allowed an increment to his salary.

The Deputy Inspector General of Police made the impugned order subseqnently terminating his services on the gronnd that they were no longer required.

The services were terminated on payment of one month's salary in lieu of notice under the "general rules for termination of service of temporary government servants".

The Deputy Inspector General of Police was examined as a witness in the suit, and throughout he maintained that he terminated the respondent's services because they were not required any more and that in making the order he did not intend to punish the respondent. The evidence also discloses that no personal motive had influenced the order. It was open to the superior authority to terminate the respondent's services on the ground on which it did so.

Assuming, howe.ver, that the impugned order was made in the background of the allegations against the respondent concerning his behaviour with Smt. Phoolmati, we see no reason in law why a departmental enquiry should be necessary before the respondent's services could be terminated.

It appears from the material before. us that it was merely a preliminary enquiry which was made by the Superintendent of Police into the allegations made against the respondent's conduct concerning the woman.

No departmental enquiry by way of disciplinary proceedings was instituted, no charge was framed, and the formal procedure charactedsing a disciplinary proceeding was never adopted.

The Deputy Inspector General of Police passed the original order dated July 13, 1957 discharging the respondent from the police force on the ground that he had behaved in a reprehensible manner, was not likely to make a useful police officer and was nnfit for further retention in a disciplined force.

The original order plainly attached a stigma to the respondent's record of service, and it is because of the specific grounds set forth in the termination order that the High Court consiqered the respondent entitled to the benefit of Article 311 (2) of the Constitution, and quashed the order.

Now the order having been quashed, the position reverts to what it was when the Deputy Inspector General of Police received the report of the Superintendent of Police on the preliminary enquiry made by him.

There was nothing to pre.vent the Deputy Inspector General from deciding that instead of instituting disciplinary proceedings against the government servant he should consider whether the government servant was suitable for retention in service.

The case law on the point has been considered elaborately by one of us (\Jaswant Singh, J.) in State of U. P. v. Ram Chandra Trivedi(') and reference has been made in this behalf IQ Champaklal Chimanlal Shah v. The Union of India('), Jagdish Mitter v. Union of India(') and State of Punjab & Anr. v. Shri Sukh Raj Bahadur('). It is apparent from the facts of this case that if the impugned order be considered as made in the light of foe allegations against the respondent concerning the woman, the conduct of the respondent constituted a motive merely for making the order and was not the foundation of that order.

In this connection what has been stated by this Court in Union of India & Ors. v. R. S. Dhaba.(') State o, I Bihar & Ors. v. Shive Bhikshuk Mishra(") and R. S. Sial v. The S.We of V.P. & Ors. ( 7) appears relevant.

That it was not intended

(l) [1977] 1 S.C.R. 462.

(3) A.I.R. 1964 S.C. 449.

(5) [1969[ 3 s.c.c. 603.

(6) 11971] 2 S.C.R. 191.

(7) [l.9'14) 3 S.C.R. 754.

-----·-··-

to take punitive action against the respondent for his misbehaviour with Smt. Phoolmati is evident from the circumstance that thereafter the rcspondent was allowed an increment to his salary and was regarded as in service for all purposes.

The High Court, it seems to us, did not have regard to all the facts and circumstances of the case, and appears to have assumed that the respondent's services were terminated as a measure of punishment.

The High Court relied on The State of Bihar v. Gopi Kishor'e Prasad(') and Madan Gopal v. The State of Punjab('). Both cases are distinguishable.

In theformer, the govermnent servant was discharged from service because he was found to be corrupt and the order terminating his services branded him a dishonest and incompetent officer.

In the latter, the government servant had been served with a charge-sheet that he had demanded and received illegal gratification and the Court found that the proceeding, consequent to which the termination order was made, was intended for the purpose of taking punitive action.

We are satisfied that the considerations which prevailed with the D High Court in reaching its findings on the application of Article 311 (2) of the Constitution and the bona fides of the superior authority in making the impugned order. are not warranted in law and on the material before

us.

Accordingly, the appeal is allowed, the judgment and decree of the High Court dated August 19, 1968 are set aside and the respondent's suit is dismissed, but in the circumstances without any order as to costs .

S. R.

(!)A:l.R.. 1960 s.c. C-39.

(2) (1963]3 S.C R. 71 •

• 4 ppeal allowed.

STATE OF. UTTAR PRADESH

BHOOP SINGH VERMA

January 24, 1979

R. S. PATHAK

A. P. SEN, JJ.

July 13, 1957

Allahabad High Court

December 15, 1959

January 21, 1960

Article 311

[1977] 1 SCR 462

[1964] 5 SCR 190

[1968] 3 SCR 234

[1971] 2 SCR 191

[1974] 3 SCR 754

(1963] 3 SCR 716

G. N. Dikshit

M. V. Goswami

S. C. Manchanda

S. C. Patel

Trilok Singh Arora

PATHAK

July 13,

1957

August 4, 1959

March 13, 1963

Phoolmati

section 7

Police Act

Etah

Article 311

Article 311

\Jaswant Singh

[1977] 1 S.C.R. 462

1971] 2 S.C.R. 191

Article 311

August 19, 1968


K. L. SUBBA YY A v.

STATE OF KARNATAKA

January 24, 1979

[S. MtJRTAZA FAZAL ALI AND A. D. KOSHAL, JJ.J

Msore Excise Act, s. 54, non-compliance of provisions under, if vitiate,\' conviction-Sa. 53 and 54, purpose.

Tlie appellant was convicted under s. 34 of the l\1ysore Excise Act and sentenced tu three months R.I. and a fine of lls. 100/- for being in possession of 48 bottles of liquor, recovered from the car being driven by him.

It was contended that the provisions of s. $'4 had not been complied with, and the search was made without jurisdiction. + Allowing the appeal, the Court,

HEID : 1.. The Inspector who searched the car of the appellant had not made any record of any grou.Qd on the basis of \Vhich he had a reasonable belief that an offence under the Act, was being committed, before proceeding D to search the car, and thus the provisions of s. 54 were not at all complied with, thereby rendering the entire s$rcb without jurisdiction and, as a logical corollary, vit; ating the conviction. [1132H, ! 133A-B]

2. Both, Sections 53 and 54 contain valuable safeguards for the liberty of the citiz.en in order to protect them from ill founded or frivolous prosecution or harassment. [11338] E

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 10 of 1974.

Appeal by Special Leave from the Judgment and Order dated 2?-11-1973 of the Kamataka High Court in Criminal Appeal No. 221/ 73.

S. S. Javali and B. P. Singh for the Appellant.

M. Veerappa and J. R. Dass for the Respondent.

The Judgment of the Court was delivered by

FAZAL ALI, J.-In this appeal by Special Leave the appellant has been convicted under section 34 of the Mysore Excise Act and sentenced to three months' rigorous imprisonment and a fine of Rs. 100/- for being

in pcissession of 48 bottles of liquor which were recovered from a car which was being driven by the appellant.

Mr. Javali appearing for the appellant has raised a short point before us.

He has submitted that R the Inspector of Excise who searched the car along with the panchas had no jurisdiction to do so because he did so without complying with

1132 SUPREME C'OURT REl'OR"l S ll 9791 2 S.C'.R.

A the provisions of section 54 of the. Excise Act.

Jn our opinion, the contention is well-founded and must prevail, Section 53 runs thus :

"If a Magistrate, upon information and after such inquiry (if any) as he thinks necessary, has reasons to believe that an offence under section 32, section 33, section 34, section 36 or section 37 has been, is being or is likely to be committed, he may issue a warrant-

(a) for the search of any place in which he has reason to believe, that any intoxicant still, utensil, implement, apparatus or materials which are used for the commission of such off_ence .or in respect of which such has been, is being, or fo likely to be, committed, are kept or concealed, and

(b) for the arrest of any person whom he has reason to believe to have been, to be, or to be lJkely to be engaged in the commission of any such offence."

D Thus this section relates to a contingency where the Statute enjoins

that any inspector before searching a place must obtain a warrant from the magistrate.

Section 54 is a special provision which arises in urgent cases where it may not be; possible for the officer concerned to get a warrant from the Magistrate.

Section 54 runs thus :

"Whenever the Excise Commissioner or a Deputy Commissioner or any police officer not below the rank of an officer incharge of a police station or any Excise pfficer not below such rank as may be prescribed has reason to believe that an offence under section 32, section 33, section 34, section 36, or section 37 has been, is being, or is likely to be committed, and that a search wq_rrant cannot be obtained without affording the offender an opportunity of escape or of concealing evidence of the offence;, he may after recording the grounds of his belief-

(a) at any time by day or by night enter and search any place and seize anything found therein which he has reason to believe to be liable to confiscation under this Act; and

(b) detain aud search and, if he thinks proper, arrest any person found in such place whom he has reason to believe to be guilty of such offence as aforesaid."

In the instant case, it is admitted that the inspector who searched the car of the appellant had net made any record of any ground on the basis

. "'!-·

. .,

K. L. SUBBAYYA v. KARNATAKA (Fazal Ali, J.) 1133

<Jf which he had a reasonable belief that an offence under the Act, was A being committed before proceeding to search the car and thus the provisions of section 54 were not at all compiled with.·

This, therefore, renders the entire search without jurisdiction and as a logical corollary, vitiates the conviction. We feel that both sections 53 and 54 contain valuable safeguards for the liberty of the citizen in cirder to protect them from ill-founded or frivolous prosecution or harassment.

The point was taken before the High Court which appears to have brushed aside this legal lacuna without making any real attempt to analyse the effect of the provisions of section 53 and 54. The

Hih Court obl; erved that these two sections were wholly irrelavant.

With due respect, we are unable to approve of such a cryptic approach to a legal question which is of far reaching consequences.

It was, however,. suggested that the word "place" would not include the car, but the

defurition of the word "place" under the Act clearly includes vehicle which would include a car. Thus the ground on which the argument of . the petitioner bas been rejected by the High Court cannot be sustained by us.

We are satisfied that there has been a direct non-compliance of the provisions of section 54 which renders the search completely without jurisdiction.

In this view of the matter, the appeal is allowed, the conviction and.sentence pa'ssed on the appellant is set aside and he is acquitted of the charges framed against him.

M.R.

Appeal allowed .

K. L. SUBBA YY

STATE OF KARNATAKA

January 24, 1979

S. MtJRTAZA FAZAL ALI

A. D. KOSHAL, JJ

Msore Excise Act

s. 54

s. 34

s. 54

Sections 53 and 54

Kamataka High Court

S. S. Javali

B. P. Singh

FAZAL ALI

section 34

Javali

section 54

Section 53

section 32

section 33

section 34

section 36

section 37

Section 54

Section 54

section 32

section 33

section 34

section 36

section 37

section 54

sections 53 and 54

section 53 and 54

section 54


DILBAG SINGH

STATE OF PUNJAB

January 25, 1979

[V. R. KRISHNA IYER, D. A. DESAI AND A. P. SEN, JJ.]

Sentence-Senteucing power under Section 248(2) and s. 235(2) of the CrimiMl .Procedune Code, 1973 (Act II uf 1974)-Ne.ed for non-imtilution alised sentendng and value of presentencin~ investfgation reports while exer~ cising the right to sentence-Guidelines to be l1:iid down--Purpose of s. 366 of Criminal Procedure Code highlighted.

In the ci!sc of a trial before a court of 5cssion, under s. 235(2) Criminal Procedure Code "if the accused is convicted, the Judge sJlali, unlf'ss he pro-- ceedi in accordance with the provisions of s. 360, hear the acCUled on the question of sentence, and then pass sentence on him according to law." Similarly, in the case of trial of warrant cases by Magistrates, under s. 248(2) of the Code, ''where the Magistrate finds the accused guilty, but does not proceed in accordance with the provisions of s. 325 or s: 360, he shall after hearing the accused on the question of sentence, pass sentence upon him according to law."

Section 361 of the Code mandates that "where ia any case, the court could! have dealt with :-

(a) an ac..cused person under s. 360 or under thC .Provisions of the Proba- E lion of Offenders' Act, 1958 (Act XX of 1958) or;

(b) a youthful offender under the Children Act, 1960 (Act LX of 1960)- or any other law for the time being in force for the treatment, training or rehabilitation of youthful offenders, but has not doneso, it shall record in its. judgment, the special reasons for not having done so." Thus, under the Criminal Procedure Code, 1973, recourse to the provisions of s. 360 is a must.

• In a trial aogaint four persons charged by the Police with offences under ss. 302, 324, 323 IPC, including constructive liability under s. 34, two were, acquitted by the trial , court and two were convicted. The appellant was sen-· tenced to rigorous imprisonment for one year and a fine of Rs. 200 /- for causing simple injury to one Arjan Singh. He was held vicariously guilty under ss. 324/34 JPC and awarded two :, rears rigorous imprisonment and a fine of Rs.' 1000/-. Jn addition he was convicted under s. 323 IPC, for causing hurt to the daughter of the deceased and on this count punished with RI. for one year together with a fine of Rs. 200/·.

Releasing the appellant on probation, the Court

HELD : 1. Enacted law is guilty of inaction; because its obscure presence on the statute book escapes the vigilance of the Bar. Where. even the Court ignores what is vital to the little man the guarantee of sentencia.g legality-- becomes a casualty. [1135H, 1\36A]

\o jii .. ,_,

, I •

' I y

' ,

DILBAG SINGH v. PUNJAB (Krishna [er, J.) 1135

2. To jail an accused is mechanical farewell to the finer sentencing sensi- A tivity of the Judge of salvaging lai redeemable man by non-institutionalised; treatment. If the judge has before him a complete and accurate pre-sentence; investigation report which sets forth the conditions, circumstances, background, and surrounding of the accused and the circumstances underlying the offence which has been committe~ the judge could then impose sentence with greater assurance that he has adopted the proper course. The purpose of s. 360 of the Code is pre<:isely this and the goal of s. 235(2) is just this.

[1138H, B

1140B-C]

3. Sentencing legality is violated when the judge shirks. And the Bar is often alien to correcti9nal alternatives and concentrates its ammunition on culpab1Jity and extenuatory scaling down of h11prisonment.

[1189F]

4. Calling pre-sentence investigation reports, bestowal of intelligent care C on the choice between institutional and non-institutional disposition like probation, C'll!ditional release and such community .Jllethods must form part of innova1"'e sentences.

But this should be based on careful study of the convict and his potentiality for reform; not guess-work, nor insensitive assessments. [1137B-El

Williams v. New York, 337 U.S. 241, 249; quoted with approval.

CRIMINAL APPELLATE JURISDICTION : Criminal Appeat No. 313 of 1978.

Appeal by Special Leave from the Judgment and Order dated 22-3-78 of the Punjab and Haryana High Court in Criminal Appeal

No. 189/75.

A. S. Sohal and S. K. Jain for the Appellant.

Hardev Singh for the Respondent.

The Judgment of the Court was delivered by

KRISHNA IYER, J. Every litigative, appeal has a docket number but beneath the paper lurks a human factor, often forgotten in the forensic pugil!istics but now and then brought to the lore, as in this criminal appeal limited to the issne of appropriate sentence.

Surely, 'the law must keep its promises.' Justice Holmes expressed

the obvious when he said this, but the breach of promise by the law on delivering criminal justice is daily experience, from police arrest to G prison trauma. The locus in tWs case is on the sentencing alternatives in the Criminal Procedure Code; and the grievano.e pressed by counsel, when traditional grounds on the merits failed, was that the compassion of s. 360 professionally suffering benign neglect, be kindled and he be

relased. Enacted law is guilty of inaction, because its obscure presence on the statute book escapes the vigilance of the Bar.

Where H even the court ignores what is vital to the little man the guarantee of

16-119 SCI/79

;1 I A sentencing legality becomes a casualty.

This case is an mstance in point.

Now the brief story which enlivens the 'sentencing' submissions.

Four villagers of rural Punjab, of whom the appellant is one, set upon Arjau Singh, a small official, while on his way back home. The sound a and fury of the attack with sticks brought out the ill-starred, innocent Srimati Rakhi, Arjau Singh's brother's wife.

Her daughter too came to the spot attracted by the fracas.

Arjan Singh received blows, being the angry target of the assailants. But poor Rakhi, who came in accidentally, was hit on the head with a takua by Jagir Singh, one of the accused. She eventually died; and her daughter and Arjan Singh were C hurt by the beating.

I!'

Four persons were charged by the police with offences under s. 302, 324 and 323 I.P.C. including constructive liability under s. 34. Two of them were acquitted by the trial court and the other two were convicted but appealed to the High Court. The man who dealt the fatal cut was Jagir Singh.

His conviction under s. 302 I.P.C. and award of life imprisonment by the Sessions Court was converted into one under s. 304 Part I, I.P .C. with a consequential reduction of sentence to seven years' rigorous imprisomnent.

His conviction on certain other counts was maintained but we are not concerned with him at all, since the appellant in this Court is the other accused Dilbag Singh. His role was lesser and related to causing simple injury to Arjan Singh for which he was sentenced to rigorous imprisonment for one year and a fine of Rs. 200/-. He was held vicariously guilty under ss. 324/34 I.P.C. and awarded two years' rigorous imprisonment and a fine of Rs. 1000/-. In addition he was convicted under s. 323 I.P.C. for causing hurt to the daughter of the deceased and on this count punished with R.I. for one year together with a fine of Rs. 200/-.

Having declined leave on the question of guilt, we confine our attention to the contentious on the sentence. We proceed on the footing of the facts found and ask ourselves whether any basic flaw in sentencing technology affords appellate intervention and re-designing of reformatory treatment in the conspectus of circumstances present in the case.

The courts in our country consult the pu'nitive tariffs prescribed in the Penal Code, consult the prison period awarded in practice for sucb offences and with margina~ variations mechanise the process.

Judged by that test, conviction under s. 324 I.P.C. read with s. 34 plus substantive guilt under s. 323 I.P.C. is visited with two years for the former and one year R.I. especially when the incident has ended in death. But penal humanitarinism, strategies of non-institutional rehabilitation and

• •

,( ..

a complex of other considerations in making an offender a non-offondcr have revolutioniz.ed the judicial repertory in re-socializing the criminal.

The sentence hearing for which the Criminal Procedure Code, 1973 provides in s. 248(2) and 5. 235(2) has hardly received the seriou• concern of the Courts despite the International Probation Year and therapeutic accent in penological literature. 'If the criminal law as a whole is the Cinderella of jurisprudence, then the law of sentencing is Cinderella's illegitimate baby'.

Pre-sentence instigation reports, bestowal of intelligent care on the choice between institutional and no& institutional disposition and habitual neglect of new avenues open to the. court have constrained us to grant leave in the case so that guidelines may be laid down and probation and community-oriented methods lying in the legal limbs may be re-activated. Our prisons are overcrowded, our prisoners are subjected to iatrogenic incarceration, our penal drills are self-defeatingly callous to correctional measures and our jail budgets bu!ge without countervailing community benefits because the Bench and the Bar have dismissed as below judicial visibility such patterns as probation, conditional release.

The time has come for Courts to abandon the Monroe Doctrine towards penology and concern itself with innovative sentences.

But this involves careful study of the convict and his potentiality

for reform, not guess-work nor insensitiv0 assessments.

Therefore, \.ve directed, right at the start, the Chief Probation Officer, Punjab, to ma!<c E a report to this Court "as to the social circumstances and other relevant factors bearing on the consideration of eligibility of the petitioner to probation." That report has been received and its contents mdicate competent advertence to pertinent criteria which we may briefly sum up.

The appellant is 32 years old. His behavioral attitude is stated to be "obedient and law-respecting in nature".

The officer goes on to state that the prisoner's character is fairly good, that he is upright, alert and interested in rural games. Of course, he seems to b, wrestle~ of the locality which is good if it is practised as a game but dangerous if he exercises his muscles on other people's flesh.

More importantly are the social ii1fluences that bear upon restraint and good behaviour.

He is a ptty farmer who left school in his teens, has ~'n acres of land belonging to the joint family of himself and five brothers and the mother. Being a cultivator and living in the joint family circumstances the officer finds no adverse remarks against him in the locality. On te other hand, the report refers to his great respect for the former Sarpanch of the village. His family circumstances evoke commiseration !>.:cause his father is dead having been murdered in 1960. His mother is alive

and has !o be maintained by himself and his two brothers wiJ,1 ar•· truck drivers and the third a jawan. He has his own nuclear family to mai'ntain with a young wile and four children. A pitiable factor is that his elder daughter is paralytic from birth. His social position shows that he belongs to a lower middle class fami'.y, lives by agriculture, loves his mother and brothers and has earned the good-will of his neighbours who think that the occurrence was induced by an irritating land issue and temporary intoxication. A sense of remorse has overcome him according to the Probation Officerwho says that he is a first offender a'nd not a recidivist. It is a painful fact, as noted in the report that this criminal case has cost him a tidy sum, loss of prestige and even family separation. '

In the unrefined English of the Probation Officer we may summarise his assessment of the offender :

"It was met of an accident as offender-client Dilbag11 Singh s•eems to be law abiding and God fearing.

His one D weakness is wine and that is the route cause of the pre,; ent diviation, otherwise on the whole offender's behaviour is normal and adjustable. The offender is in curab'.e stage as crime has not gone deep into him- He can be adjustable amicably within his 'normal and natnral environmental factors.

The client can easily be reformed as he is neither professional II criminal nor exhibits any tendency to future deviation."

The social milieu, the domestic responsibilities, the respect for the former' Sarpanch he shows, the general goodwill he commands arc plus points. The tragic fact of his father's murder and the running misfortune of his young daughter's paralysed limbs are sour facets of his life.

F The circumstance that he is gainfully employed as agriculturist and his brothers, though in diverse occupations, remain joint family members, are hopeful factors.

The aggressive episode which led to his conviction was induced by the company of his cousin who serves a seven year sentence and the inebriation due to drinking habit.

This simple villager responsible and gentle, sad and burdened, repentant and drained G of his little wealth by the criminal case, has a long way to go in lire being in his early thirtys. The drinks vice was the minus point. Many a peaceable person, on slight irritation, suffers bellicose switc\1-over under alcoholic consumption.

How does judicial discretion operate in this skew of circumstances?

H To jail him is mechanical farewell to the finer sentencing sensitivity of the judge of salvaging a redeemable man by non-institntionalised treatment.

The human consequences of the confinement process here will

> ,

be no good to society and much injury to the miserable family and, above all, hardening a young man into bad behaviour, with prestige punctured, family injured, and society ill-served.

Nor was the crime such, so far as his part was involved, as to deserve Jong deterrent incarceration.

Our prison system, until humane and purposeful reforms pervades, surely injures, never improves.

Prison justice has promises to keep, and ethological changes geared to curative goals are still alien-from dress and bed, refusal of frequent parole and insistence of mechanical chores, bonded labour, nocturnal tensions, and no scheme to reform and many traditions to repress-such is the zoological institutional realism and rehabilitative bankruptcy which inflict social and financial costs upon the State.(') It is wasted sadism to lug this man into counter-productive imprisonment for one year.

Long years ago, Franklin D. Roosevelt, in a forward-looking speech on John Day, said :

"If the criminal's past history gives good reason to believe that he is not of the naturally criminal type, that he is capable of real reform and of becoming a useful citizen, there is no doubt that probation. viewed from the selfish standpoint of protection to society alone, is the most: efficient method that we have.

And yet it is the least understood, the least developed, the least appreciated of all our efforts to rid society of the criminal."(')

The appellant has served a substantial part of his sentence in jail because of judicial innocence of the normae in the area of noninstitutional disposition. It is easy to imprison, hard to individualise punishment.

Sentencing legality is violated when the judge shirks.

And the Bar is often alien to correctional alternatives and concentra- F tes its ammunition on culpability and extenuatory scaling down of imprisomnent.

The observations of the United States Supreme Court in Williams

v. New York (337 U.S. 241, 249) lay the right stress on prc-sen(cnce

reports: G

"have been given a high value by consienl ious judges who want to sentence persons on the best available informati0n rather than on guess-work and inadequate infor-

(1) Report by K. F. Rustamji, Member, National Police Commission on the deplorable conditions in Indian Jails.

(2) "Sentencing and Probation -National College of the State Judiciary, Reno, Nevada pp. 337.

mation.

To deprive sentencing judges of this kind of information would undermine modern penological procedural policies that have been cautiously adopted throughout the nation after careful consideration and experimentation." -

Judge F. Rayan Duffy has written :

"If the judge has before him a complete and accurate pre-sentence investigation report which sets forth the conditions, circumstances, background, and surroundings of the defendant, and the circumstances underlying the offense which has been committed, the judge can then impose sentence with greater assurane that he has adopted the proper course.

He can do so with much greater peace of mind."(')

The purpose of s. 360 of the Code is precisely this; the goal of s. 235 (2) is just this.

And yet, the exacting art is more honoured in the breach than in the observance if we many wrongly use a D Shakespearean passage to drive home our point.

We stress the legal position so that subordinate courts may not treat conviction as the terminal point but the end of one chapter. We are mindful of the complexity and remove the impression that easy resort to s. 360 is right.

No; it is wrong.

Two quotes set the record straight.

"Imprisonment is the appropriate sentence when the offender must be isolated from the community in order to protect society or if he can learn to readjust his attitudes and patterns of behaviour only in a closely controlled environment."(')

"The consequences of a sentence are of the highest order. If too short or of the wrong type, it can deprive the law ol its effectiveness and result in the premature release of a dangerous criminal.

If too severe or improperly conceived, it can reinforce the criminal tendencies of the defendant and lead to a new offence by one who otherwise might not have offended •o •erionsly again. '

The decision which is presented at sentencing is also enormously complex. It properly is concerned, and often predominantly, with the future which can be predicted for the particular offender.

But auy single-valued approach to sentencing is misdirected.

A seuteuce which is not in some ---

(1) "Sentence and Probation" pp. 362, 363.

(2) Senlcncing &.

Probation 342.

fashion limited in accordance with the particular offence can lead to a system of incomparable brutality.

Per contra, a sentence or pattern of sentence which fails to take due account of the gravity of the offence can seriously undermine respect for law."(')

In this case, after perusal of the report of the Probation Officer, counsel for the State, Sri Hardev Singh, with fair candour and shared correctness, consented to a release of the prisoner under S. 360. We agi"ee. But one fact needs emphasis. The close nexus between violence and alcohol is a call to the State in every criminal investigation to identify the role of alcohol in the commission of the offence and in every prisoner's treatment to provide for anti-alcoholic therapy.

To fail here is vicarious guilt of the State to Society. We direct release of the appellant forthwith.

He will enter into a bond before the trial court together with Shri Dilbag Singh S/ o Babu Singh as surety in the amount of Rs. 1000/- within two weeks of his release to keep the peace, be of good behaviour, to abjure alcohol and not to commit offence for a period of three years and to appear and receive sentence, if called upon in the meantime. The appeal is allowed with this direction which is the Q.E.D. of sentencing justice.

V.D.K.

Appeal allowed.

(!) Ibid 336.

DILBAG SINGH

STATE OF PUNJAB

January 25, 1979

V. R. KRISHNA IYER

D. A. DESAI

A. P. SEN, JJ.

Section 248(2)

s. 235(2)

Procedune Code, 1973

s. 366

Criminal Procedure Code

s. 235(2)

Criminal Procedure Code

s. 360

s. 248(2)

s. 325

Section 361

s. 360

Children Act, 1960

Criminal Procedure Code, 1973

s. 360

ss. 302, 324, 323

IPC

s. 34

Arjan Singh

ss. 324

s. 323

IPC

s. 360

s. 235(2)

S. 241, 249

A. S. Sohal

S. K. Jain

Hardev Singh

KRISHNA IYER

Holmes

s. 360

Punjab

Arjau Singh

Srimati Rakhi

Rakhi

Jagir Singh

s. 302, 324 and 323

I.P.C

s. 34

s. 302

I.P.C

s. 304

Dilbag Singh

ss. 324

I.P.C

s. 323

I.P.C

Penal Code

s. 324

I.P.C

s. 34

s. 323

I.P.C

s. 248(2) and 5

Dilbag11 Singh

Franklin D. Roosevelt

United States Supreme Court

S. 241, 249

K. F. Rustamji

F. Rayan Duffy

s. 360

s. 235

s. 360

S. 360

Babu Singh

V.D.K.


PRAKASH COTTON MILLS (P) LTD. v.

B. SEN & ORS.

January 25, 1979

[P. N. SHINGHAL AND 0. A. DESAI, JJ.J

Customs Act, 1962 (52 of 1962) Ss. 14 & 15-cope of-Goods imported and stored in warehouse-Section amended increasing the rate of' duty-

Ll'V)' c, f duty whethe1 should be on the basi~ when goods were warehoused or when cleared.

As a result of devaluation of Indian Currency in June. 1966, Ss. 14 & 1.5 of the Customs Act were amended by the Customs (Amendment) Ordinance, 1966--which was later replaced by an Act-with effect from July 7, 1966.

Section 15(1) provides that the rate of duty, rate of exchange and tariff valuation applicable to any imported goods shall be the rate and valuation in force . . . . . (b) in the case of goods cleared from a \Va.rehouse under s. 68, on the date on which the goods were actually removed from the warehouse.

D The appellant stored on December 22, 1965 in the Customs warehouse, goods imported by him under a licence, and cleared them on various dates between September I, 1966 and February 20, 1967.

Under protest, they paid customs duty nt the enhanced rates in accordance with the amended provisions.

Later, they claimed rebate alleging that since the consignments had been received, stored and assessed to duty much before the promulgation of the Ordinance, they were liable to pay duty at the rate prevailing on the date of ware~ E housing,

Their appeals and revision were unsuccessful.

In appeal to this Court it was contended that the material change in s. 15 being only the substitution of the words "the rate of duty, rate of exchange" for the words "the. rate of duty'' the customs authorities were not entitled to take into account the new rate of exchange at the appreciated value of currency in respect of the consignments stored in the warehouse prior to the coming into force "'of the Ordinance.

Dismissing the appeal,

HELD : The customs authorities were right in taking the view that the rate of duty applicable to the imported goods should be determined accordi11g to the law prevalent on the date they were actually removed from the warehouse.

Section 15 ( 1) (b) clearly requires that the rate of duty, rate of exchange and tariff valuation applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actually removed from the warehouse. Under s. 49 an importer may apply to the Assistant Collector of Customs for permission to store the imported goods in a warehouse pending their clearance and he may be permitted to do so; and s. 68 provides that an importer of any warehoused goods may cloor them if the import duty leviableon them has been paid. That is why clause (b) of sub-section (,!) of s. 15 makes a reference to s. 68.

[1!46D, 1145H--1146C]

In the instant case the goods were removed from the warehouse after the A Ordinance canie into force on July 7, 1966. [1146Dl

ClvIL APPELLATE JURISDICTION : Ci'vil Appeal Nos. 1997 and 2219 of 1969. 1992-

Appeals by Special Leave from order dated 16-1-69 and 19-3-69 of the Govt. of India, Min. of Finance Dept. of Revenue in Orders Nos. 8637-8642/68 and 1408/69.

Y. S. Chitale, J. B. Dadachanji and D. N. Misra for the Appellant in all appeals.

S. Markrmdeya and Girish Chandra for the Respondents in all the C appeals. '

The Judgment of the Court was delivered by

SHINGHAL J. These appeals by special leave arise out of an order of the Central Government dated Jannary 16, 1969 by which six revisional applications of the appellants were dismissed, and a similar order D dated March 19, 1969, in the remaining case. As the basic facts and the law governing them are quite similar, it will be sufficient to deal with the common point in controversy before us on the basis of the admitted facts, and to dispose of the appeals together.

The appellants obtainted licences for the import of 102 cases of 3,000 Kgs. of nylon yarn.

The yarn was shipped to Bombay on the basis of a letter of credit in favour of the foreign suppliers.

When the shipment arrived, the appellants received the bill of lading and other documents of title from the bankers on or about August 23, 1965, and paid for the same.

They lodged the bill of entry the same day, and it has been claimed that the goods were assessed for duty by the customs authorities at a certain figure.

The appellants stored the goods in the warehouse on December 22, 1965.

They cleared 32 cases for "home" consumption on May 10, 1966, and there is no controversy in regard to it.

The currency was devalued on June 6, 1966, and the Customs (; Amendment) Ordinance, 1966, was promulgated on July 7, 1966, by which sections 14 and 15 of the Customs Act, hereinafter referred to as the Act, were amended.

The Ordinance was replaced by the Customs (Amendment) Act, 1966. The appellants cleared 12 cases of the aforesaid consignment on or about September 1, 1966. Another 12 cases were cleared on October 10,

1966, and 46 cases were cleared in two lots on or about December 30, 1966 and February 20, 1967.

Their grievance was that the cases were allowed to be cleared on payment of "enchanced" duty

, ..

according to the amended provisions of the Act.

They paid the duty under protest and applied for refund of the excess payment on the ground that the amended law was not applicable as the consignments had been received, stored and assessed to duty before the promulgation of the Ordinance. The application~ of the appellants for refund were rejected by the customs authorities, and their appeals were dismissed by the Appellate Collector of Customs on the ground that the amended sections 14 and 15 of the Act were applicable to the consignments in question.

The appellants filed revision applications before the Central Government, but they were dismissed by the aforesaid common impugned order dated January 16, 1969. They have therefore approached this Court for a redress of their grievance.

The facts relating to Civil Appeal No. 2219 of 1969, are quite similar, except that the consignment in that case was of 63 cases of nylon yarn, which were stored in the warehouse on December 14, 1965, and were cleared on May 25, 1967. In that case also, the appellants paid the duty under the provisions of the amended se<:- , tions under protest, and unsuccessfully applied for refund of the socalled excess duty.

They failed in their appeals to the Appellate Collector of Customs and their application for revision was rejected by the Central Government on March 19, 1969.

It will thus appear that the controversy in these two sets of cases relates to the short question whether the customs authorities were justified in applying the rate of duty (to the imported goods in question) according to the rate prevalent on the date of their actual removal from the warehouse.

It will be recalled that the Customs (Amendment) Ordinance, 1966, was promulgated and came into force on July 7, 1966, and was replaced by the Customs (Amendment) Act, 1966. The amendments in question were by way of substitution of sections 14 and 15 of the Act by the new sections. It has been argned by Mr. Chitale for the appellants that the material change was that made in subsection ( 1) of section 15 of the Act by substituting the words "The rate of duty, rate of exchange" for the words "The rate of duty".

He has therefore argned that the customs authorities were not entitled to take the new "rate of exchange", at the depreciated value of the currency, into consideration in respect of the consignments in question as they had been shipped to Bombay and stored in the warehouse before the amended section 15 came into force.

The learned counsel tried to argue that the orders of assessment of the customs duty were also made before the amendment Ordinance

was promulgate<! on July 7, 1966, but he did not pursue that line of argument because he was not in a position to produce the so-called assessment orders. But, as we shall show, even if it were assumed that any such order or orders had been made before July 7, 1966, that could not possibly affect the correct rate of duty applicable to the imported goods.

A reference to sections 14 and 15 of the Act will show that while section 14 deals with the valuation of goods for purposes of assessment, it is section 15 which specifies the date for determination of the rate of duty and tariff valuation of imported goods.

The amended section reads as follows,-

"15 (1) The rate of duty, rate of exchange and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force,-

(a) i'n the case of goods enterd for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section;

(b) in the case of goods cleared from a warehouse under section 68, on the date on which the goods are actually removed from the warehouse;

( c) in the case of any other goods, on the date of payment of duty :

Provided that if a bill of entry has been presented before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have. been presented on the date of such entry inwards.

(2) The provisions of this section shall not apply to baggage and goods imported by post.

(3) For the purpooes of section 14 and this section-

( a) "rate of exchange" means the rate of exchange determined by the Central Government for the conversion of Indian currency into foreign currency or foreign currency into Indian currency;

(b) "foreign cuw, ncy" and "Indian currency" have the meanings respectively assigned to them in the Foreign Exchange Regulation Act, 1947."

It fa thus the clear requirement of clause (b) of sub-section (1) of section 15 of the Act that the rate of duty, rate of exchange and U1riff

valuation applicable to any imported goods shall be the rate and valuation in force on the date on which the warehoused goods are actually removed from the warehouse.

A cross-reference to section 49 of the Act shows that an importer may apply to the Assistant Collector o!

Customs for permission to store the imported goods in a warehouse pending their clearance, and he may be permitted to do so. The other relevant provision is that contained in section 68 of the Act which provides that the importer of any warehoused goods may clear them for "home consumption" if, inter alia, the import duty leviable on them has been paid.

That is why clause (b) of sub-section ( 1) of section 15 of the Act makes a reference to section 68. It is therefore quite clear that the rate of duty, rate of exchange and tariff vaLuation shall be those in force on the date of actual removal of the warehoused goods from the warehouse. As it is not in dispute before us that the goods, which are the subject matt.or of the appeals before us, were removed from the warehouse after the amending Ordinance had come into force on July 7, 1966, the customs authorities and the D Central Government were quite right in taking the view that the rate of duty applicable to the imported goods had to be determined according to the law which was prevalent on the date they were actually removed from the warehouse, namely, tho amended sections 14 and 15 of the Act.

There is therefore no force in the argument that the requirement of the amended section 15 should have been ignored E simply because the goods were imported before it came into force, or that their bills of lading or bills of entry were lodged before that date.

As we find no force in these appeals, they are dismissed with costs.

N. V. K.

Appeals dismissed.

PRAKASH COTTON MILLS (P) LTD

B. SEN & ORS

January 25, 1979

January 25, 1979

[P. N. SHINGHAL AND 0.

0. A. DESAI, JJ

Customs Act, 1962

Ss. 14 & 15

Ss. 14 & 1

Customs Act

July 7, 1966

Section 15(1)

s. 68

December 22, 1965

February 20, 1967

s. 15

Section 15

s. 49

s. 68

s. 15

s. 68

Y. S. Chitale

J. B. Dadachanji

D. N. Misra

S. Markrmdeya

Girish Chandra

SHINGHAL

Bombay

August 23, 1965

May 10, 1966

June 6, 1966

sections 14 and 15

Customs Act

September 1, 1966

October 10,

1966

December 30, 1966

sections 14 and 15

Central Government

January 16, 1969

December 14, 1965

May 25, 1967

March 19, 1969

sections 14 and 15

Chitale

section 15

section 15

sections 14 and 15

section 14

section 15

section 46

section 68

section 14

Foreign Exchange Regulation Act, 1947

section 15

section 49

section 68

section 15

section 68

sections 14 and 15

section 15

N. V. K.


HIND CONSTRUCTION CONTRACTORS

THE STATE OF MAHARASHTRA

/{]Jluary 30, 1979

[Y. V. CHANDRACHUD, C. J., V. 0. TuLZAPURKAR AND A. P. SEN,

JJ.]

Contract Act-Contract not completed within stipulated time. No term in contract making tin1e, the essence of contract-Tests for deciding if tin1e was of essence.

The appellant entered into a contract with the respondent for the execution of a work the essential term of which was that the contract should be com- C pleted in 12 months from the commencement of the work. On the ground that the appellant had not completed the work within the stipulated time the respondent rescinded the contract.

In his suit for damages for illegal and wrongful recision of the contract the appellant claimed that the date for commencement of the work was merely nominal and that in any case time was not of the essence of the contract. The D appellant also alleged that on account of several difficulties such as exce.ssive rains in the area, lack of proper road and means of approach to the site, rejec~ tion of materials on improper grounds by the Government officers, completion of the work was delayed, extension of time was wrongfully. refused by the officers of the Government, and that none of these factors had been taken into account by the Government while refusing to give extension of time, and in ultimately rescinding the contract.

Holding that time was not of the essence of the contract the trial Court de.creed the suit, but disallowed certain claims of the appellant.

On appeal by both sides the High Court, without deciding the question whether time was of the essence of the contract, held thnt the recision of the contract was not arbitrary and unreasonable or unjustified.

On further appeal to this Court it was contended on behalf of the appellant that (i) the High Court was in error in not deciding the main question whether or not time was essence of the contract; and (ii) it was not the appellant's case that the recision was mala fide and that, therefore, the High Court erred in considering that question.

Allowing the appeal, G

HELD : The question whether or not time was of the essence of the contract would essentially be a question of the intention of the parties to be gathered from the terms of the contract. Even where the parties he.ve expressly provided that time is of the essence of the contract such stipulation would have to be read alongwith other provisions of the contract and such other provisions may, on construction of the contract, exclude the inference H that the completion of the work by a particular date was intended to be fundamental.

For instance if the contract were to include clauses providing

A for extension of time in certain contingencies or for payment of fine or penalty for every day or week the work undertaken remains unfinished on the expiry of the time provided in the contract such clause would be construed as rendering inefftctivc the express provision relating to the time being of the essence of the cont1act. fl155A-B]

Halsbury', Laws of England, Vol. 4 p. 1174 referred to.

(1) In the instant case, having regard to the terms of the car.tract particularly the clauses pertaining to the imposition of penalty and extension of time~ time was never intended by the parties to be of the essence of the contract The letter by which the contract was rescinded clearly waived the stipulation of 12 months' period, the contractor having been allo, ved to do some more work after th< expiry of the period. [1157B]

(ii) The approach adopted by the respondent and upheld by the High Court

WM not correct Long before the expiry of the period of 12 months the appellant bad requested for extension of the period of completion.

Even if the grounds made out by the appellant were not agreeable to the Superintending Engineer some reasonable time making it the essence of the contract ought to have been granted.

Instead of making time of the essence at some stage or the other, the respondent rescinded the contract which was clearly illegal and wrongful.

[ 11 ~SC]

(iii) It was never the case of the appellant that the recision of the contract was mala fide.

The various reasons given by the appellant for delay in executing the work were put forward merely for showing that the refusal to extend time by the Superintending Engineer was unreasonable or unjustified.

The question was not whether the recision of the contract was unreasonable and, E therefore, unjustified but whether the recision was wrongful and illegal.

If time was not of the essence or if the stipulation as to the time fixed for completion had, by reason of the waiver, ceased to be applicable then the only course open to the respondent was to fix some time making it the essence and if within the time 110 fixed the appellant had failed to complete the work, the Jt!rC'nden.t could have rescinded the contr.o:ict. [1 l57D-G]

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 483 and 1769 of 1969.

Appeal from the Judgment and Ord•or dated 9/10-9-1968 of the Bombay High Court in First App,; al Nos. 844 of 1961 and 245 ot 1962.

M. C. Bhandare, J. S. Sinha and K. J. John for the Appellants.

R. H. Dhebar, B. V. Desai and M. N. Shroff for the Respondent.

The Judgment of the Court was delivered by

TULZAPURKAR, J.

These appeals by certificate of fitness granted by the High Court of Judicature at Bombay are directed against that Court's common judgment and decree dated September 9/10, 1968, passed in two cross appeals being First Appeal Nos. 245 of 1962 and 844 of 1961.

• ,

I j ol

~ ,' ,.

I!IND CONSTRUCTION CONTRACTORS V. MAHARASHTRA 114 9 (Tulzapurkar, J.)

A contract for the construction of an aqueduct across the Alandi River at Mile No. 2 of the Nasik Left Bank Canal of the total value of Rs. 1,07 ,000 /- was granted to the appellant-plaintiff (originally a partnership but later a proprietary firm of contractors) by the respondent-defendant (the State of Maharashtra) after the farmer's tender was accepted on June 17, 1955.

On July 2, 1955 the Executive Engineer issned the work order to the appellant-plaintiff directing him to commence the work by July 5, 1955 intimatihg in clear terms that the stipulated date for starting the work would be reckoned from July 5, 1955. The formal vegular Contract in prescribed Form B-2/1 of 1955-56 (Ex. 34) containing the terms and conditions as well as the Schedules, specifications etc. was executed by the parties on July 12,

1955. A security deposit of Rs. 4,936/- was kept by the appelJ, antplaintif! with the respondent-defendaht.

The period for completion of work was fiioed as 12 months from the date stipulated for commencement of the work, that is to say, it was expected to be completed on or before Ju; y 4, 1956.

It appears that on the ground that the appdlarrt-plaintif! had not completed the work as expected within the stipulated time the Executive Engineer by his letter dated August 27, 1956 (Ex. 78) rescinded the said contract with effect from August 16,

1956. After serving a 'notice under s. 80 of the Civil Procedure Code the appellant-plaintiff filed a suit (being Special Civil Suit No. 23 of

1959) on August 28, 1959 in the Court of the Joint Civil Judge, Senior Division, Nasik making a claim for Rs. 65,000/- in the aggregate against the respondent-defendant alleging wrongful and illegal r~

cisio'n of the contract on the part of the respondent-defendant. The appellant-plaintiff's case was that the initial fixation of July 5, 1955 as the date for commencement of the work was nominal, that the area where the work was to be done had usually heavy rainfall rendering it impossible to carry out any work from July to November and that, therefore, it was the practice of the Public Works Department to deduct the period of monsoon in case of such type of works and that the appella'nt-plaintif! had been orally informed that this period would be deducted or not taken into account for calculating the period of 12 months under the contract and that on this assurance he had commenced the work towards the end of December 1955. His case further was that in any event time was not of the essence of the contract, that oh account of several difficulties, snch as excessive rains, lack of proper road and means of approach to the site, rejection of materials on improper grounds by Govermnent Officers, etc., over which he had no control, the completion of the work was delayed and that the extension of the time which was permissible under the contract had been wrongfully refused by the officers of the respondent-defe'ndant.

Ac-

1150 SUPREME COURT REPOR:fS [1979.1 2 s.c.R.

cording to him none of these factors had been taken into account b} the Government while refusing the extension and the contract was wrongfu1ly rescinded a'nd, therefore, the respondent-defendant was liable in damages.

The total claim of Rs. 65,000/- comprised six items-(1) Rs. 4,936/- being the amount of security deposit wrongfully forfeited by the respondent-defendant, (2) Rs. 10,254/- being the amount due to him for the actual work done by him under Bill No. 1253 dated September 20, 1956 and which had not been paid for,

(3) Rs. 7,3751being the value of the material collected by him on the site for work but which had ree'n rendered useless on account of wrongful recision, the 4th and 5th items sounded in damages, while the last item was interest from date of recision to the date of the suit.

The State of Maharashtra resisted the claim contending that time was of the essence of the contract, that the date fixed for commencement was real and not nominal and the 12 months period was fixed after all aspects of the matter had been taken into account, it was further contended that the appellant-plaintiff knew the situation of the site and the so-called difficulties, that there was no excuse for him for not doing the work during the months of July to November, that the appellant-plaintiff failed to carry out the proportionate work during the periods fixed in the contract and that since the appellant-plaintifl had rendered himself incompetent to complete the work in proper time it had to rescind the contract and the recision was proper a'nd fo1 adequate reasons; it was further contended that the State was entitled to forfeit the security deposit which it did on the date when the contract was rescinded.

The several items claimed by the appellantplaintiff were denied by the State. It was denied that the material of the value of Rs. 7,3751remained on the site or that it was responsible for its 'non-removal from the site. Regarding items 4 and 5 the State denied its liability to pay the same as it was the appellant-plaintiff who had committed the breach of the contract. As regards the amount due under Bill No. 1253 dated September 20, 1956 for the actual work done, it was contended that the State had to deduct the amount of penalty leviable under the contract and for th~ actual cement supplied to the appellant-plaintiff and after making deductions in that behalf only a sum of Rs. 700/- would be due to the appellant-plaintiff.

On a consideration of the documentary evidenee including the terms and conditions of the contract (Ex. 34) and the oral evidence ied by the parties, the learned trial Judge held that the date July 5, 1955 fixed as the date for commencement of the work was not nominal but that time was not of the essence of the contract between the

c '"'', -

J .

• I ,

__Jr.• -- .. l

• _, if ' l .,

If(

~ '

HIND CONSTRUCTIO"I CONTRACTORS V. MAHARASHTRA

11 SI ( Tulzapurkar, J.) parties, that the respondent-defendant (State Government) had wrongfully rescinded the contract, that the appellant-plaintiff was entitled to damages but that he had not established the two items claimed as damages and he was entitled to a nominal sum of Rs. 120/- as damages. He further hld that since the recisioil of the contract was wrongful the State was not entitled to forfeit the security deposit nor levy any penalty.

He accordingly decreed the appellant-plaintiff's claim m respect of refund of security deposits and as regards the amount of Bill No. 1253 dated September 20, 1956 for actual work done he held that a sum of Rs. 5,845/- only would be due to him after giving credit

for Rs. 4,409/- due from the appellant-plaintiff to the State.

He accordingly decreed the appellant-plaintiff's suit to the extent of C Rs. 10,901/- with interest thereon at 6% per annum from the date oL

recision till date of suit and allowed proportionate costs to him.

Two appeals wre preferred against the aforesaid decree of the trial court, one by the appellant-plaintiff in respect of the claims that had been disallowed (First Appeal No. 245 of 1962) and the other by the State in respect of the claims allowed against it (First App, al No. 844 of 1961). Cnriously enough the High Court did not decide the main issue that arose between the parties, namely, whether time was of the essence of the contract, as it took the view that a decision on that question was really unnecessary for disposal of the appeals.

Il proceeded to decide the appeals on the assumption that time was not of the essence of the contract by considering the question whether the recision of the contract by the State could be regarded as ma!a fide or so unreasonable that it must in the place of the judgment of the officers concerned substitute its own judgment and hold that tho recision was wrongful. The High Court observed that even the appeLantplaintiff had not alleged any mala fide on the part of any of the officers of the State but had pressed into service five or six factors the non-consideration whereof by the rcspondent-defundant rendered !he recision of the contract arbitrary, unreasonable and, therefore, unjusti- fied.

After discussing each one of those five or six factors the High Court held that some of them had not been proved by the appellantplaintiff while others did not head to the inference that the recision of the contraci was arbitrary, uilreasonable or unju&tified.

It found that by about July 21, 1956 (vide Ex. Engineer's letter Ex. 74) the appellant-plaintiff had done only 1/3rd of the contract work and that in the circumstances the appellant-plaintiff could not hav>~ completed the work even within the next three months and, therefore, the respondent's officers had rightly rescinded the contract and, therefore, it was the appellant-plaintiff and not the respondent-defendant who had committed a breach of the contract.

However, the High Court took the

17-119 SCI/79

SUPREME COURT REPORTS

[1979] 2 S.C.R .. ; icw that for such breach on the part of the appellant-plaintiff, the respondent-defendant, on a reading of the els. 2 and 3 of the Condi- , tions of Contract, was not entitled both to levy compensation and also to forfeit the security deposit.

Accordingly, the High Court upheld the forfeiture of the S<Ccurity deposit made by the respondent-defendant and while modifying the trial court's decree it confirmed it only to the extent of Rs. 5,845/-, being the amount due to the appellant-plaintiff for the work actually done by him under BilI No. 1253 and which had not been paid.

In the result, the appellant-plaintiff's appeal was dismissed and that of the State was partly al1owd with appropriate order of proportionate costs.

In support of the present appeal counsd for the appellant-plaintifl raised two or three contentions. In the first place he contended that the High Court was in error in not deciding the main issue whether the time was of the essence of the contract or not ? He urged that the said issue could 'no' be avoided in the manner done by the High Court, for, if time was not of the essence of the contract then just before the expiry of the 12 months' period or immediately after its expiry it was up to the respondent-defendant to gtant some reasonable time to the appellant-plaintiff for completing the work undertaken and make U1e same the essence of the contract a'nd only if the work was not completed by the appellant-plaintiff within that time the contract could have beoen rescinded on the gtmrnd that the appel!ant-plaintifi had committed a breach of a contract. According to him such course of action on the part of the respondent-dcfe"ndant was obligatory, when the initial period of 12 months was not of the essence, especially When the request of the appellant-plaintiff for extension of time was pending

before the concerned officers of the Government since before the

- fJ.___ expiry of the initial period.

He contended that instead of adopting

the aforesaid course ilie respondent-defendant had without making ,.- time of the essence of the contract rescinded the same with effect from August 16, 1956 by a letter dated Augnst 27, 1956 (Ex. 78), wluch ; ecision must be regarded as wrongful a'nd illegal.

Secondly counsel contended that the High Court further erred in considering the question whether the recision of the contract by the State was either mala fide or wholly unreasonable and, therefore, unjustified.

He pointed out it was not the appellant-plaintiff's case that the recision was mala fide and, according to him, the question was not whether the recision of the contract on the part of the respondent-defendant was unreasonable, and, therefore, unjustified but whether the respondent-defendant was entitled in law to rescind the contract in the manner done when time was not of the essence of the contract. He further urge<d that the High Court had clearly erred in assuming that the appeUant-plaiBtHl

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l!IND CONSTRUCTION CONTRACTORS V. MAHARASHTRA 1153 (Tulz.apurkar, !.) could no.t have completed the work even within the next three months and, therefore, the contract was rightly rescinded by the respondentdefendant. He, however, fairly stated that even if this Court held in his favour that the recision was wrongful and, therefore, the respondent-defendant had connnitted a breach he would merely press for th~

restoration of the decree passed by the trial Court and not press any other item forming the subject-matter of the original claim in the suit.

On the other hand, counsel for the respondent-defendant sought to support the judgment P.nd decree of the High Court on both the grounds first that time was of the essence of the contract having regard to the express provision contained in cl. (2) of the "Conditions of Contract" and, therefoP", on appellant-plaintiff's failure to complete the san1e \Vithin the stipulacJ thne the recision of the contract \Vas legal and justified and secondly, that even if time was not of the essence of the contract, having regard to the circumstances the Hish Court rightly came to the conclusion that the recision of the contrnct by the respondent-defendant could not be regarded as unreasonable or unjustified and that, thernfore, the appellant-plaintiff being in breach the security deposit had been rightly forfeited.

The first question that arises for our consideration, therefore, is whether time was of the essence of the contract that was executed between the parties on July 12, 1955 (Ex. 34). It cannot be di•puted that question whether or not time was of the essence of the contract would essentially be a question of the intention of the parties to be gathered from the terms of the contract. The contract in the instant case is for the construction of an aqueduct across the Alandi River at Mile No. 2 of the Nasik Left Bank Canal and unquestionably 12 months' period commencing from the date of the commencemrrt of the work had been specified within which the construction had to b~ completed by the appellant-plaintiff.

Indisputably, in the work order dated July 2, 1955 the Executive Engineer had directed the appellantplaintiff to commence the work by July 5, 1955 intimating in clear terms that the stipulated date for starting the work would be reckoned !i:om July 5, 1955. Both the trial court as well as the High Court have found that mentioning of July 5, 1955 as the date for starting the work was not nominal but was real date intended to be acted upon by the parties.

It is, therefore, clear that 12 months' period mentioned for the completion of the work was to expire on July 4, 1956.

The question is whether this period of 12 months so specified in the contract was of the essence of !he contract or not ? On the one hand, counsel for the a~JX'.llantplaintiff con~nded that the contract being analogous to a buildmg contract the period of 12 months would not

" . '

ordinarily be of the essence of the contract as the subject-matter there

of was not such as to make completion to time essential, that an agreement to complete it within reasonable time would be implied and that reasonable time for completion would be allowed. On the other hand counsel for the respondent-defendant contended that time had been expressly made of the essence of the contract and in that behalf reliance was placed upon cl. (2) of the "Conditions of Contract" where not only time was stated to be of the essence of the contract on the part of the contractor but even for completion of proportionate works specific periods had been specified and, therefore, the appellantplaintiff's failure to complete the work within the stipulated period entitled the respondent-defendant to rescind it. In the latest 4th edn. of Halsbury's Laws of England in regard to building and engineering contracts the statement of law is to be found in Vol. 4, Para 1179, which runs thus :-

" 1179. Where time is of the essence of the contract.

The expression time is of the essence means that a breach of the condition as to the time for performance will entitle the innocent party to consider the breach as a repudiation of the contract. Exceptionally, the completion of the work by a specified date may be a condition precedent to the contractor's right to claim payment. The parties may expressly provide that time is of the essence of the contract and where there is power to determine the contract on a failure to complete by the specified date, the stipu1atio'n as to time will be fundamental.

Other provisions of the contract may, on the construction of the contract, exclude an inference that the completion of the works by a particular date is fundamenta~

time is not of the essence where a sum is payable for each week that the work remains incomplete after the date fixed, nor where the parties contemplate a postponement of completion.

Where time has not been made of the essence of the contract or, by reason of waiver, the time fixed has ceased to be applicable, the employer may by notice fix a reasonable time for the completion of the work and dismiss the contractor on a failure to complete by the date so fixed."

(Emphasis supplied)

H It will be clear from the aforesaid statement of law that even where the parties have expressly provided that time is of the essence of the contract such a stipulation will have to be read along with other

HIND CONSTRUCTION CONTRACTORS v. MAHARASHTRA 1155 (Tulzapurkar, J.) provisions of the contract and such other provisions ma.y, on construction of the contract, exclude the inference that the completion -0f the work by a particular date was intended to be fundamentJl, for instance, if the contract were to include causes providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week the work undertaken rel!'ains unfinished on the expiry of the time provided in the contract suLh clauses would be construed as rendering inctiective the express pro~'sion relating to the time being of the essence of contract. The emphas1' 'd portion of the aforesaid statement of law is based on Lamprell v. Billericay

Union('), Webb v. Hughes(') and Charles Rickards Ltd. v. Oppenheim (3 ). It is in light of the aforesaid position in law that we will have to consider the several clauses of the contract Ex. 34 in the case.

The material clauses in this behalf are els. 2 and 6 of the "Conditions of Contract" which run as follows :

"Clause 2 :-The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be reckoned from the date on which the order to commence work is given to the contractor.

The work shall throughout the stipulated period of the contract be proceeded with, with all due diligence (time being deemed to be of the essence of the contract on the part of the contractor) and the contractor shall pay as compensation an amount equal to one per cent or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide, of the amount of the estimated cost of the whole work as shown by the tender for every day that the work remains uncommenced, or unfinished, after the proper dates.

And further to ensure good progress during the execution of the work, the. contractor shall be bound, in all cases in which the time allowed for any work exceeds one month, to complete.

t of the work in t of the, time t of the work in t of the time

t of the work in t of the time" .

"Cfause 6 :-If the contractor shall desire an extension of the time for completion of the work on the ground of his having been unavoidably hindered in its execution or

(1) [184913 Exch 283 at 308.

(2) [1870] L.R. 10 Eq 281.

(3) [ 1950] l KB 616,

' '

on any other ground, he shall apply in writing to the Executive Engineer before the expiry of period stipulated in the tender or before expiry of 30 days from the date on which he was hindered as aforesaid or on which the cause for asking for extension occurred, whichever is earlier and the Executive Engineer, may if in his opinion there arc reasonable grounds for granting an extension, grant such extension as he thinks necessary or proper. The decision of the Executive Engineer in this matter shall be final."

Two aspects emerge very clearly from the aforesaid two clauses, In the first place under cl. 6 power was conferred upon the Executive Engineer to grant extension of time for completion of

e work on reasonable grounds on an application being made by the contractor (appellant•plaintifI) in that behalf; in other words, in certain contingencies parties had contemplated that extension of D time would be available to the contractor.

Such a provision would clearly be inconsistent with parties intending to treat the stipulated period of 12 months in cl. 2 as fundamental.

Similarly, in

cl. 2 itself provision was made for levying and recovering penalty I compensation from the appellant-plaintiff at specified rates during the period the work shall remain unfinished after the expiry of the fixed E date.

Such provision also excludes the inference that time ( 12 months period) was intended to be of the essence of the contract.

Further with regard to the provision that is to be found in c!. 2 whereunder a time schedule for proportionate work had been set out (namely, t of the work in t of the time, t of the work in t of the time and ! of the work in i of the time ) , the evidence of the F Superintending Engineer Pandit (D.W. 1) is very eloquent. In para 13 of his deposition this is what he has stated :

"In the agreement (Ex. 3 ~) the rate of work is based on the valuation tth time mentioned means tth in 12 months.

The suit contract is for Rs. 1,07,000/-.

Hh work means the work of about Rs. 27,000/-.

IL is not possible to do the work of Rs. 27,000/- in tth time as the days were rainy.

This was not reasonable."

The witness in para 12 of his deposition has also given the following , admission :- B "It is not specifically mentioned in the agreement (Ex. 34), that the suit work was urgent and that it was to be completed within 12 months.

In this agreement (Ex. 34)

HIND CONSTRUCTION CONTRACTORS V. MAHARASHTRA

1 I 5 7 (Tulzapurkar, l.) there are the clauses of imposing a penalty and extension A of time."

Having regard to the aforesaid material on recor;;, particularly the <:lauses in the agreement pertaining to imposition of penalty and extension of time it seems to us clear that time (12 months period) was never intended by the parties to be of the essence of the contract.

Further from the correspondence on the record, particularly, the letter (Ex. 78) by , which the contract was rescinded it does appear that the stipulation of 12 months' period was waived, the contractor having been allowed to do some more work after the expiry of the period, albeit at his risk, by making the recision effective from August 16, 1956.

Once either of the aforesaid conclusions is reached it would be difficult to accept the High Court's finding that the recision of the contract on the part of the respondent-defendant was proper and justified on the basis that the same was neither shown to be mala fide nor unreasonable.

It must be observed that it was never the case of the appellant-plaintiff that the recision of the contract on the part of the respondent-defendant was ma/a fide. Counsel for the appellantplaintiff further pointed out and, in our view, rightly that the five or six factors, namely, ( 1) the contract having been given at the threshold of monsoon, the period of monsoon ( 4 months) ought not to have been reckoned, (2) absence of proper road and approach to the work site during the rainy season and a couple of months there after, (3) unreasonable rejection by the Government Officers of material brought on the site, which material was later on allowed to be used, ( 4) difficulty in procuring labour due to malarious climate at the site, (5) delay in issuing quarry permit and (6) extra time taken for doing extra work that was entrusted ought to have been taken into account_:_were put forward by the appellant-plaintiff merely for the purpose of showing that the refusal to extend the time by the Superintending Engineer although recommended by the S.D.O. and Executive Engineer was unreasonable and not for showing that the recision of the contract was unreasonable or unjustified. In our view, the question would not be whether the recision of the contract was unreasonable and, therefore, unjustified but whether the recision of the contract in the circumstances of the case was wrongful and illegal.

If time was not of the essence of the contract or if the stipulation as to the time fixed for completion had, by reason of waiver, ceased to be applicable then the only course open to the, respondent'

defendant was to fix some time making it the essence and if within the' time so fixed the appellant-plaintiff had failed tr ~.omplete the

SUPREME COURT RHPORT5

[1979 I 2 S.C.R.

work the respondent-defendant could have rescinded the contract.

The High Court has taken the view that the contract was rightly rescinded by the. respondent-defendant because by about July 21, 1956 (vide letter Ex. 74). the appellant-plaintiff had done work of the value of Rs. 35,000/- as against the tender value of Rs. 1,07,000/-, that is to say, only I/3rd of the total work had been completed and, therefore, even though time was not of the essence of the contract, the appellant-plaintiff, in the circumstances, could not have completed the work even within the next three months.

In our view, this approach adopted by the respondent-defendant and upheld by the High Court is not correct.

Long' before the expiry of the period of 12 months the appellant-plaintiff had by his letter dated June 6, 1956 (Ex. 68) requested for extension of period of completion up to the end of December, 1956; this request was repeated by another letter dated June 23, 1956 (Ex. 69). May be the reasons or grounds on which the request was made may not have appealed to the Superintending Engineer but some reasonable time making it the essence ought to have been granted. In this behalf it may be stated that the S.D.O. by his letter (Ex. 69) had recommended extension upto December 1956 as sought while by his letter dated June 23, 1956 (Ex. 70) addressed to the Superintending Engineer, the Executive Engineer had recommended that extension of time up to October 30, 1956 may be granted to the appellant-plaintiff with clear intimation that if he failed to complete the work by then, the maximum penalty allowable under

cl. 2, namely, 10% of the cost of the work will be inflicted on him, but the recommendation did not receive approval of the Superintending Engineer. It appean; that the appellant-plaintiff had an interview with the Superintending Engineer on August 24, 1956 when a written representation (Ex. 99) was handed over and the whole position was sought to be explained to the Superintending Engineer but within three days of the interview by the letter dated August 27, 1956 (Ex.

78) the contract was rescinded and the full security deposit was fof'- feited to Government.

It will thus appear clear that though time was not of the essence of the contract, the respondent-defendant did not fix any further period making time the essence directing the appellant-plaintiff to complete the work within such period; instead it nscinded the contract straightaway by letter dated August 27, 1956.

Such recision on the part of the respondent-defendant was clearly illegal and wrongful and thereby the respondent-defendant committed a breach of contract, with the result that there could be no forfeiture of the security deposit. In our view, therefore, the trial court was right in coming to the conclusion that the appellant-plaintiff was entitled to a rdund of their full security deposit of Rs. 4,936/- as also

' '

.. _ .,_, HIND CONSTRUCTION CONTRACTORS V. MAHARASHTRA • 1159 (Tulzapurkar, J.) to Rs. 5845/- being the balance of their Bill No. 1253 dated September 20, 1956 for work actually done by them and not paid for and nominal damages of Rs. 120/-. The appellant-plaintiff was also entitled to interest on the aforesaid sums and costs of suit as directed by the trial court.

In the result we allow the appeal, set aside the common judgment B and decree in F.A. No. 844 of 1961 passed by the High Court and rnstore that of the trial court. The appellant-plaintiff will get costs of this appeal as also costs of F.A. No. 844 of 1961. The High Court's decree dismissing F.A. No. 245 of 1962 is confirmed.

P.B.R.

Appeal allowed.

HIND CONSTRUCTION CONTRACTORS

THE STATE OF MAHARASHTRA

Y. V. CHANDRACHUD

V. 0. TuLZAPURKAR

A. P. SEN,

JJ.

CIVIL APPELLATE JURISDICTION

M. C. Bhandare

J. S. Sinha

K. J. John

R. H. Dhebar

B. V. Desai

M. N. Shroff

TULZAPURKAR

High Court of Judicature at Bombay

Tulzapurkar

State of Maharashtra

June 17, 1955

July 2, 1955

July 5, 1955

July 12,

1955

August 16,

1956

s. 80

August 28, 1959

State of Maharashtra

September 20, 1956

July 21, 1956

July 12, 1955

July 4, 1956

England

Clause 2

cl. 6

cl. 2

cl. 2

Pandit

Tulzapurkar

August 16, 1956

June 23, 1956

cl. 2

August 24, 1956

August 27, 1956