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PROFULLA CHORONE REQUI'ITE & ORS.

SATYA CHORONE REQUITTE

March 2, 1979

[R. S. SARKARIA AND V. D. TULZAPURKAR, JJ.]

Interpretation of Wills-Common ancestor of plaintiffs and defendant! created absolute debutter of his house in favour of family deity-By two wills devised and bequeathed the house to the trustees for service and lvorship of the deity-Shebaiti rights-Whether vested in trustees or descendants of the testator.

The common ancestor of the plaintiffs and the defendant owned a big residential house (the suit property) In which he had his fumily deity. By hvo wills-one dated June 4, 1898 in respect of his properties in British lndia and another, dated June 6, 1898 in respect of the house property in Chandrangore-he appointed his wife, two sons and nephews as hustees of the estate.

By these wills he provided that in the event of vacancy occurring in the office of trustees the continuing trustees might appoint any other person or persons to be a trustee or trustees. By his will of June 6, 1898 th'e tes-ta.tor created an absolute debutter in favour of the family deity.

This will also stated that he "devised and bequeathed" the Chandranagore house to the tn1stees named

therein as a dwelling house "upon trust to stand possessed of" and "to hold, retain and use the premises ns an endowed or debutter property for the service and worship of" the family deity.

In 1934 rival claims of the sons and grandsons of the testator to their E residence in the debutter property were referred to an arbitrator. The arbitrator allotted rooms nos. 72 and 82 which had been in his use and occupation from before to the defendant (respondent) and allotted certain other rooms to the other sons and grandsons of the testator.

The then trustees (plaintiffs) filed a suit in 1959 claiming that the dwelling house at Cbandranagore being absolute debutter property belonging to the deity none other than the trustees had any legal right in it, and since the award of the arbitrator was not binding on the deity the defendant should be ejected from the rooms forcibly occupied by him .

The defendant on the other hand claimed that he was in occupation of the rooms in dispute in his own right as a shebait and that the plaintiffs had no right to represent the deity and so had no locus standi to maintain the suit as trustees.

Dismissing the suit the trial court held that on the death of the testator it was not the trustees but the descendants of the testator who became shebO.its and who had the shebaiti rights in the endowed property and that the defendant being the descendant (grandson) of the testator, had a right, as a co-.hebait, to occupy the rooms in the suit property.

IJ'he District Judge, on appeal, affirmed the decision of the trial court. 8-253 scr /79

A On second appeal the High court decreed possession of certain rooms to the plaintiffs but not in respect of the rooms under the occupation of the defendant.

0n further appeal to this Court it was contended on behalf of the plaintiffs that from the language used in the 'vill dated June 6, 1898 the intention of the testator was clearly to constitute the tn1stees as shebaits of the property with B exclusive right to manage the dehutter.

On the other hand on behalf of the defendant it was contended that the two wills should be read as complementary to each other, and so read, they made it clear that the testator did not wish W part with his shebaiti ri; ghts,

which were heritable property, in favour of the trustees to the exclusion of his natural heirs under the Hindu Law.

C .Allowing the defendant's appeal and dismissing the plaintiffs' appeal.

HELD : 1. A conspectus of the various provisions of the two wills makes it clear tha.t the testator left th'e shebaitsliip undisposed of with the presumed intention that it devolved on bis natural heirs who would have the ri, g, ht to use the suit house as their family dwelling house. The rights conferred o:o the trustees may amount to curtailment of the right to manage the endowed property which a shebait would otherwise have; but such curtailment by itself would not make the ordinary rules of Hindu Law of succession inapplicable in regard eo the devolution of shebaitship. Therefor'e, the defendant and other descenda11ts of the testator became ctrshebaits of the deity by the operation of the ordinary rules of Hindu Law. [445 A-Bl

2(a) It is well established that property dedicated to an idol vests in it in an ideal sense only. The shebait is the human ministrant and custodian of the idol, its authorised representative entitled to deal with all its teinporaJ affairs and to manage its property. Under Hindu Law, property absolutely dedicated to an idol, vests in the idol and not in the shebait. Yet almost in every case a shebait has a right to a part of the usufruct, the mode of its enjoyment and the amount of the usufruct, depending on usage nnd custom, if not devised by the founder. [ 439 F-G]

(b) In the conception of shebaitship both office and property are blended.

A shebait has, to some extent, the rights of a limited owner. Shebaitship being property, it devolves like any other species of heritable property. Where the founder does not dispose of shebaiti rights in the endowment created by him, the shebaitship devolves on the heirs of the founder according to Hindu Law, if no usage or custom of a different nature is shown to exist.

[ 440 D-E]

Gossamee Shree Greedhareejee v.

Rumanlalje~, 19 I.A. 137; Doorganath Roy v. Ra1n Chander Sen L.R. 4 I.A. 52; Pramatha Nath Mullick v. Pradyumna

Kumar Mullick, 52 I.A. 245; referred to.

3(a) The words "to hold, retain and use the premises endowed or debutter property for the service and worship of my family thakur or idol" usei in the wilJ, merely create a trust or endowment and indicate the nature and purpose fl of the endowment. They do not touch or deal with shebaiti rights. [442 GJ

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(b) The two wills are complementary to each other. The will of' June 4, ..o, • refers "~" the family house as having been endowed to the family deity and

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P. c. REQUITTE v. s. c. REQU!TTE (Sarkaria, !.) 433

v..ould be used by the testator's heirs for their residence. By using the words A "''wife and sons and sons' \Vives and other relatives of mine" who shall reside

in my residential house in Chandranagore the testator n1eant that all the des~ cendants and heirs of his should reside in the house.

In other words although 'the entire family house ¥.'as formally endowed to the family idol, his intcutit>n

was that his heirs and descendants "'ould also be entitled to use this house

as their family dwelling house, apart from the room where the idol was en~ shrined. [443 A; ll 444 Al B

(c) The will also provided that although the trustees were provided with funds for the Sewa-puja of the family deity and for other festivals out of tho -estate of the testator, they were not expressly constituted as shebaits of the deity. The intention af the testator apparently was that these funds would te expended for the purpose indicated by him through the sheb<llts. [444 El

(d) Even assuming that originally the trustees "'ere regarded as having been -constituted as shebaits, then, too, those among them who were not fan1ily members or descendants of the founder had renounced and relinquished their •hebaiti right, if any, in favour of the descendants of the founder. Such a relinquishment in favour of the co-shebaits will be valid. (446 E]

(e) The shebaitship of the family deity remained solely with the descenc

dants of the founder and the defendant being the grandson of the founder, D had been regarded as one of the sl1ebnits and therefore was entitled to reside in the disputed rooms. [446 F-G]

(f) Moreover in this case the trustees accepted the a\vard of the arbitrator .allotting the disputed rooms to the defendant and the plaintiffs described the defendant as a shebait of the deity. (446 D]

(g) The trustees by themselves have no right to maintain the suit in respect Of the debutter property.

The legal title to the debutter property vests in the jdol a.nd not in the trustees. The right to sue on behalf of the deity vests in the shebaits. All the shebaits having not been made parties, the suit was not properly constituted and was liable to be dismissed. (446 G]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1873-1874 of 1970. a.

From the Judgment and Decree dated 21-7-1969 of the Calcutta High Court in Appeal from Appellate Decree No. 30/67.

Lal Narain Sinha and Sukumar Ghosh for the Appellant in C.A. 1873/70 and Respondent in C.A. 1874/70.

A. K. Sen (In C.A. 1874/70) and D. N. Mukherjee for the Res- G ponderit in C.A. 1873/70 and Appellant in C.A. 1874/70.

The Judgment of the Court was delivered by

SARKARIA, J. These two appeals on certificate arise out of the appellate judgment and decree, dated July 21, 1969, of the High Colll1 at Calcutta.

The facts of the case are as follows :-

 H Late Babu Durga Charan Requitte was the grandfather of Satya Charan Requitte, defendant, and plaintiffs l and 2.

He owned consi-

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derable immoveable property. He was an inhabitant of Chandernagore (then a French territory). The suit property is situated in Chandernagore.

Among others, it included a big residential house containing about 84 or 85 rooms with extensive grounds, gardens and tanks. In this house, which he was occupying for his residence, he had his family Deity Sree Sree Iswar Sridhar Jiew.

Durga Charan made and published two Wills, one dated June 4, 1898 with regard to his properties in the then British India, and the other dated June 6, 1898 with regard to his properties situated in the French territory of Chandernagore. By these two Wills, Durga Charan appointed his wife, Saraswati Dassi, his two sons, Shyama Chorone Requitte and Tarini Chorone Requitte and his nephews, Ashutosh Das and Bhola Nath Das, executrix and executors and trustees of the (:State left by him.

The Wills provided that the trustees would hold the bequeathed properties left by the testator according to the terms of the Wills for the legatees and the beneficiaries mentioned therein. The Wills also provided that in case of death or retirement or refusal or incapacity to act of any of the trustees, the continuing trustees of trustee for the time being, or the executors or administrators of the last acting trustee might appoint any other person or persons to be a trustee or trustees in place of the trustee or trustees so dying or desiring to retire from or refuse etc.

But, in no case, the number of the trustees should be less than two.

By his Will, dated June 6, 1898, Durga Chorone created un absolute Debutter in favour of the said family Deity and devised and bequeathed to his executors and trustees named therein, his dwelling house with gardens and tanks appertaining thereto sitµated in Chi, ndernagore, "upon T111st to smnd possessed of and to hold, retain and use the premises and endowed or Debutter property for the service and worship of" his said family Deity.

By that Will, he further directed that this family idol "shall be located in my said house in Chandernagore which said house and premises shall be appropriated and devoted solely and exclusively to the Thakur or Idol."

Th~ testator died on Angust 27, 1898. Thereafter, the Will, dated June 6, 1898, was duly probated and the trustees came into possession of the Debutter properties and carried on the administration of the estate and the Sewa and Puja, as directed in the Will.

H Smt. Saraswati, widow Gf Babu Durga Chorone, who was one of the trustees nan1ed in the Will, died on October 30, 1913, while her son, Shyama Chorone, another trustee, died on December 21, 1925.

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Thereupon, Tulsi Chorone son of Shyama Chorone was appointed a new trustee in place of his father, Bhola, the other co-trustee, refused to act as such. Therefore, his son, Devindra wa's appointed as trustee by the continuing trustees.

Turani Chorone died on or about May 29, 1939 and the continuing trustees appointed his son, Profulla Chorone as a trustee. Tulsi Chorone died on August 17, 1952 and the continuing trustees similarly appointed Bhagwati, son of late Shyama Chorone as a new trustee.

Debendranath Das died on or about March 7, 1956, and the continuing trustees appointed Salish Chandra Das, a son-in-law of late Shyama Chorone as a new trustee in his place.

In or about the year 1934, the descendants of the settlor, Durga

Chorne, some of whom were the then trustees, referred certain disputes with regard to the endowed property to the arbitration of one Bhringeswar Sreemany.

The disputes referred to the arbitrator included rival claims by the sons and grandsons of Durga Chorone, to their residence in the Debuttor property belonging to the family Deity. The Arbitrator made an Award on September 6, 1934, whereby he allotted rooms Nos. 72 and 82 to Satya Chorone, respondent, who had been in use and occupation from before. The Arbitrator made similar allotments of other rooms in the said house in favour of the other sons and grandsons of the settlor.

On April 20, 1959, Profulla Chorone Requitte, Bhagwati Chorone Requitte and Salish Chorone Das, the then trustees instituted Title Suit No. 28 of 1959 in the Court of the Subordinate Judge, 1st Court, Hooghly. The plaintiffs prayed for two reliefs in the plaint : (i) Possession by ejectment of the defendant, Satya Chorone Requitte, primarily from all the six rooms, alleging that the defendant had been occupying the same as licensee under the plaintiffs and the said licence had been revoked : (ii) in the alternative, for possession of the four rooms mentioned in Item No. 1 of Schedule 'B' of the Plaint, which had not been allotted to !Jim under the award.

The plaintiffs' ca'se, as laid in the plaint, was that since the dwelling house belonging to the Deity, had a large number of roonis the trustees allowed temporarily the sons and grandsons of Durga Chorone to occupy and use for their families some of the rooms in the said dwelling house as licensees. It was further alleged that in the year 1966, the defendant illegally and forcibly occupied Room Nos. 63, 35, 46 and 57 in the aforesaid house without the knowledge and consent of the trustees causing serious inconvenience in the due perfor• mance of the religious ceremonies of the Deity according to the terms

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of the Will. It was further contended somewhat inconsistently that the dwelling house at Chandemagore being absolute Debutter belonging to the Deity, no person, except the trnstees, has any legal right in the said house which can only be used for the Sewa Puja of the family Deity located in the house; that the arbitration award of 1934 is not binding on the Deity and/or the trnstees who were not parties to the arbitration; that the award was beyond the scope of the reference and was adverse to the Trust, itself.

In his written statement, the defendant traversed the material allegatious in the plaint and asserted that he was in use and occupation of the rooms in dispute in his own right as a Shebait. He further pleaded that the plaintiffs had no right to represent the Deity and had no locus standi to maintain the suit as trnstees; that since all the Shebaits had not been joined as parties the suit was incompetent.

The subordinate Judge dismissed the suit holding, inter alia, that :

(i) By his Will, Babu Durga Chorone had absolutely dedicated the property in dispute to the family Deity, Sree Sree Iswar Sridhar Jiew, but he had not under that Will made any testamentary disposition of his Shebaiti rights in respect of this Debutter property which, on the death of the testator, devolved under Hindu Law upon his descendants, who in consequence, were entitled to reside in the house as Shebaits.

(ii) The Trustees were not Shebaits.

Only the descer, dants of Babu Durga Chorone had become Shebaits and had Shebaiti right in the endowed property.

(iii) The award made by the arbitrator, Bhringeswar Sreemany, was valid and binding upon the plaintiffs.

(iv) The plaintiffs could not recover possession from the defendant as trustees.

(v) The plaintiffs were not entitled to represent the Deity and had no locus standi as trustees to maintain the suit on behalf of the Deity.

(vi) The defendant had a right to occupy the rooms in suit as c<>-shebaits .

(vii) The plaintiffs having not claimed any relief in terms of the arbitration award, were not entitled to any relief in respect of Room Nos. 35, 46, 57 and 63.

Aggrieved, the plaintiffs preferred an appeal to the District Judge, who dismissed the same and 'affirmed the decision of the Trial Court.

H Against the appellate decree of the District Judge, the plaintiffs --< carried a Second Appeal to the High Conrt at Calcutta. The DivisiQn Bench of the High Court, by its judgment dated July 21, 1969~

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allowed the appeal, in part, and granted the plaintiffs' a decree for A Khas possession of Room Nos. 35, 46, 57 and 63 in the said dwelling house; but not in respect of Room Nos. 72 and 82 mentioned as Item No. 1 of Schedule 'B' to the Plaint.

After obtaining the certificate under Article 133(1) (b) of the Constitution, as it then stood, the plaintiffs have filed Civil Appeal 1873 of 1970 against the partial dismissal of their claim in respect of Room Nos. 72 and 82; while the defendant has filed Civil Appeal 1874 of 1970, praying that the plaintiffs' suit ought to have ben dismissed in respect of Room Nos. 35, 46, 57 and 63 also. Both the appeals will be disposed of by this common judgment.

Jne following pedigree table which has been compiled from the material on record by the learned counsel for the appellant, will be helpful in understanding the relationship of the parties and other connected facts :-

Durga Chorone

kraswati (Widow).

Executrix died on 30-10-1913.

I ' Hart

, 111re<

sons & their families.

Tulsi Wife Two sons & their families & one unmarried daughter.

died on 27-8-1898

Shyama qorone

(Son) Executor, died on 21-12-25

I I Satya Chorone (Defdt.)

I !

Wife, six sons and families and five daughters (one unmarried).

hi .

B agwatt Chorone (Plff. 2)

-~--- Tarani Corone

(Son).

Executor died on 29-5-39_

j 1' wife, five sons & two \ daughters (one un- 1 married). \

Profulla Chorone (Plff. l). lmulya (not a party)

life 4 daughters .

life,2sons

& 6daughters (3 unmarried.)

The principal question that falls to be determined in these appeals

_ is, whether the settlor had constituted the same set of persons as H Shebait as well us Trustees. This question turns on a construction of the- V,'ill.

Mr. Lal Narain Sinha, learned Counsel for the appellant in Civil Appeal No. 1873 of 1970 submits that the answer to this question must be in the affirmative because the Settlor, Durga Chorone Requitte had by express words in the Will, (Ex. 6/6A), dated June 6, 1898, imposed an obligation on the trustees to hold, manage and use the suit property which he bad thereby absolutely dedicated to the family idol, for the service and worship of the idol. It is maintained that although the word 'Shebait' is not used in the Will, yet the said obligation cast on the Trustees by inevitable implication clothed them with the character of Shebaits, also.

As against this, Mr. Ashok Sen contends that the answer to the question posed must be in the negative. It is urged that the words "to hold, retain and use the pTemises . . . for the service and worship of my family deity", on which Mr. Sinha's argument rests, do not necessarily mean that the Testator had disposed of his Shebaitship rights, also, and vested them in the Trustees.

Tt is stressed that there are no words in the Will which, expressly or necessary implication, constituted the Trustees as Shehaits; that the testator has not used the word 'Shebait' anywhere in the Will; nor did he employ the word 'manage' or 'manager' anywhere in the Will while charging the Trustees to hold and use the premises as Debutter property of the idol.

According to the learned counsel, if the Will is construed as a whole in the light of the surrounding circumstances, it would be clear that the trust created was not a continuing trust but one which would terminate as soon as the Executor-Trustees handed over the bequeathed properties to the beneficiaries.

It is pointed out that the two Wills, one dated June 4, 1898, and the other dated June 6, 1898, should be read as complementary to each other. The necessity of executing two separate Wills arose, because the properties bequeathed by the Will (Ex. 6) were situated in the then French territoriei., while those covered by the Will dated June 4, 1898, were situated in the British India.

There were several beneficiaries under these Wills, and the family idol was one of them.

The recitals in these Willsaccording to the counsel-particularly in the Will dated June 4, 1898, show that the testator had kept, in tact, the right of residence of his widow and daughters-in-law and other heirs in the property dedicated to the idol. This, says Mr. Ashok Sen, is a sure indication of the fact that the founder did not want to part with his Shebaiti rights, which were heritable property, in favour of the Trustees, to the exclusion of his natural heirs under Hindu Law.

Mr. D. B. Mukherjee, appearing for the appellants in Civil Appeal No. 1874 of 1970, further submitted that the words "to hold!, retain

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llnd use the premises as endowed or debutter property for the service and worship of my family deity", if properly construed in the context of the Will as a whole and surrounding circumstances, mean that the Executors and Trustees would hold the property in trust for the benefit of the deity and the shebaits. In the alternative, counsel submitted that even if it is assumed arguendo that they were so appointed, the line of succession set out in the Will would be hit by the principles laid down in Tagore v.

Tagore('), Ganesh Chandra v. Lalit Behary('); Jagadindra v. Rani Hemanta Kumari(•) and by the Rule against perpetuities (Manohar v. Bhupendra)('). It is further contended that since the founder did not dispose of the Shebaitship but only founded the worship of the Thakur, Shebaitship would vest in the heirs of the founder.

For this proposition, reliance has been placed on Gossamee Shree Greedhareejee v. Rumanlaljee(•).

In reply to this, Mr. Sinha submits that trusteeship with power to nominate successor is an estate recognised by law, and in such a case the founder does not create an estate of inheritance contrary to Hindu Law of Succession, nor does the question nf the rule of perpetuity arise

because the founder does not determine the choice of the succeeding Trustees. Reference has been made in this behalf to

LL.R. 24 Madras 219, and Underhill's treatise on "Trusts", 12th Ed. pp. 534- 35 at 23-31. It is maintained that the Trust in question is a continuing trust; it did not come to, an end when the Trustees had fully performed their duties and obligations as executors of the Will, that the general principle underlying Section 77 of the Trust Act is applicable to the case in hand. lt is further submitted that of the two Wills, the later must prevail and rderence to the earlier Will, for the purpose of

dete.rmining whether the heirs of the Settlor had been given a right of residence in the suit property, is irrelevant.

Before dealing with these contentions, it will be appropriate to have a clear idea of the concept, the legal cha, racter and incidents of Shebaitship.

Property dedicated to an idol ve.sts in it in an ideal sense only; ex-necessitas.. the possession and management has to be entrusted to some human agent.

Such an agent of the idol is known as Shebait in Northern India. The legal character of a Shebait cannot be defined with precision and exactitude. Broadly described, he is the human ministrant and custodian of the idol, its earthly spokesman, its authorised representative entitled to deal with all its temporal

------~-- (!) I.A. Supp. l, Vol. 47.

(2) 63 I.A. 448.

(3) 31 I.A. 203.

(4) 60 Cal. 452.

(5) 19 I.A. l37.

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affairs and to manage its property.

As regards the administration of the debutter, his position is analogous to that of a Trustee, yet, he i:>

not precisely in the position of a Trustee in the English sense, becaus•~ under Hindu L'aw, property absolutely dedicated to an idol, vests in the idol, and not in the Shebait.

Although the debutter never vest> in the Shebait, yet, peculiarly enough, almost in every case, the Shebait has a right to a part of the usufruct, the mode of enjoyment, amf the amount of the usufruct depending again on usage and custom, if not devised by the founder.

As regards the service of the temple and the duties th•at appertain to it, h.e is rather in the position of the holder of an office; but even so, it will not be quite correct to describe Shebaitship as a mere office,. "Office and property are both blended in the conception of Shebait ship". Apart from the obligations and duties resting on him in connection with the endowment, the Shebait has a personal interest in the endowed property.

He has, to some extent, the rights of a limited' D owner.

ShelYaitship being property, it devolves like any other species of hec '.able property. It follows that, where the founder does not dispose of the shebaiti rights in the endowment created by him, the Shebaitship devolves on the heirs of the founder according to Hindu E Law, if no usage or custom of a different nature is shown to exist [Gossamee Shree Greedharejee v. Rumanlaljee, (ibid.) ]

Then, there is a distinction between a public and private debutter.

In a public debutter or endowment, the dedication is for the use or benefit of the public. But in a private endowment, when property is set apart for the worship of a family idol, the public are not interested.

The present ca'se is one of a private debutter. The distinction is important, because the results logically following therefrom have been given effect to _l:iy Courts, differently.

Aooording to English Law, the beneficiaries in a private Trust,. if sui juris 11nd of one. mind, have the power or authority to put arr end to the trust or use the trust fund for any purpose and divest it from its original object.

Whether this principle applies to a private endowment or debutter created under Hindu Law, is a question on which authorities are not agreed.

In Doorganath Roy v. Ram Chunder Sen('), it was observed that while the dedication is to it public temple, the family of the founder could not put an end to it, but "in the case of a familv idol, the consensus of the. whole family

(I) L.R. 4 I.A. 52.

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might give the (Debutter) estate another direction" and tum it into a secular estate.

Subsequently, in Pramatha Nath Mullick v.

Pradyunma KumQI' Mullick('), the Judicial Committee clarified that the property cannot be taken away from the idol and diverted to other purposes without the consent of the idol through its earthly agents who, as guardians of the deity, cannot in law consent to anything which may amount to an extinction of the deity itself.

Although, Shebaitship is heritable property, yet, it C'annot be freely tnu1sferred by the Shebait.

But there are exceptions to this general rule.

Some of such exceptions recognised in several decisions, are : alienation in favour of next shebait, or one in favour of the heir of the transferor, or in his line of succession, or in favour of a coshebait, particularly when it is not against the presumed intention of the founder. (See Nirod Mohini v. Shibdas(') and Mancharan v.

Pranslwnkar(').

The Bombay High Court has also pointed out in Radhu Nath v.

Purnanand ('), that if any one of the Shebaits intends to get rid of his duties. the proper thing for him to do would be to surrender his office in favour of the remaining Shebaits. In the case of such a transfer in favour of co-shebait, no policy of Hindu L'aw is likely to be affected, much less the presumed intentions of the founder.

Now, let us deal with the problem in hand in the light of the principles cited above.

The first question that falls for detennination is : Whether the founder's intention as to confer rights of Shebaitship on the persons designated by him as 'trustees' in his Will? In other words, did he by the Will, dated June 6, 1898 (Ex. 6/6A), dispose of the Shebaitship of the deity, also? 'If the answer to this question is fonnd in the negative, shebaiti rights in this endowed property will devolve, according to Hindu Law, on all the heirs of the founder, including the defendant. In that situation, the defendant with his family, like the other co-Shebaits, will be taken as residing in the debutter property, in his own right.

If, however, the answer to the said question is fonnd in the affirmative, the further question to be considered would be with regard to the effect of the Award dated June 29, 1934 (Ex. C) on the respective claims of the parties.

(l) 52 I.A. 245.

(2) I.L.R. 36 Cal. 975.

(3) I.L.R. 6 Born. 298.

(4) I.L.R. 47 Born. 529.

We will now take up the first question.

Mr. Sinha, learned counsel for the appellants, submits that since by his Will, dated June 6, 1898, the founder had "devised and bequeathed" the Chandernagore house to the pl'aintiffs-trustees "upon Trust to stand possessed of' and "to hold, retain and use the premises as endowed or debutter property for the worship of the family Thakur'', his intention was to constitute the trustees as Shebaits of the property having the exclusive right to manage the debutter, to serve the idol and to preserve its property. It is submitted that the founder had by these express words, invested the trustees both with the legal title and Shebaitship, although the beneficial title (in an ideal sense) was vested in the idol.

The passage in the Will on which Mr. Sinha relies for the construction propounded by him, runs as under :

"I desire, devise and bequeath to my Executors and Executrix and Trustees hereinafter named . . . my dwelling house with garden and tanks appertaining thereto situate in Lal Bagan in Chandernagore. Upon trust to stand possessed of and to hold, retain and use the premises an endowed or Debutter property for the service and worship of my family Thakur or idol Sreedhar Jew, which I hereby direct shall be located in my said house in Chandernagore which said house and premises shall be appropriated and devoted solely and exclusively to the Thakur or Idol."

(Emphasis supplied)

The crucial words are those that have been underlined.

It may be observed that this Will, in English, appeoars to have been drafted in pursuance of legal advice by an expert draftsman.

The omission of the words "management", "1nanager' 1 , "custodian of the idol" or "ministrant of the idol" from the Will, therefore, cannot but be intentional.

It seems clear to us tlrat the underlined words in the above extract, by themselves, merely create a trust/ or endowment and indicate the nature and purpose of the endowment.

These words do not touch or deal with Shebaiti rights. This inference receives support from the surrounding circumstances.

Further, in arriving at the true import of the words "to hold, retain and use the premises an endowed or Debutter property for the service and worship of my family Thakur', it will not be improper to look to the conduct of the Trustees and the members of the family of the founder.

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There is no antagonism between the two Wills, one dated June 4, 1898 and the other dated June 6, 1898, of the founder.

Indeed, in a sense they are complementary to each other.

There is a reference in the Will, dated June 4, 1898, to the Testator's dwelling house at Chandernagore, which under the Will (Ex. 6) was endowed to the family deity.

From the following provisions in the Will, dated June, 4, 1898, .it is clear thoat the testator intended that the dwelling house at Chandernagore would be used by his heirs for their residence :

"(a). I further direct my said Executors and Trustees out of the said rents and profits of the said premises number 39, Chowringhee Road to pay monthly a sum of Rupees Fifty for the maintenance to each of my daughterin law Smt. Gopeswari Dassee wife of my eldest son Shyama Chorone Requitte and Nagendra Mani Dassee wife of youngest son Tarine Choron-e Requitte during their lives respectively and provided they reside with their respective husbands at my dwelling house in Chandernagore.

(b). The Trustees shall pay monthly a sum not exceedin Rupees Two hundred in addition to the interest of Government securities of the nominal wlue of Rupees Twenty thousand hereinafter mentioned and directed to be applied for the purpose of household and other monthly expenses of my family, namely wife and sqns and sons' wives and other relatives of mine who shall reside in my dwelling house at Chandernagore.

( c). To pay and apply the net interest of Government securities on the nominal wlue of Rupees Twenty thousand for the house-hold and other monthly expenses of my family, namely, wife and sons and also sons' wives and other and other relatives of mine who shall reside in my dwelling house at Chandernagore and also to pay and apply the net interest of Government securities of the nominal value of Rupees six thousand for the costs and expenses of keeping and maintaining my said family dwelling house at Chandernagore in proper repair and in payment of all taxes and assessments in respect thereof."

(Emphasis supplied)

Looking to the general tenor of the document, it will not be inappropriate to interpret the words "wife, and sons, and sons' wives, H

4 r and other relatives of mine" in the above-quoted portions of the Will, as including all the descendants and heirs of the testator.

A Thus construed conjointly, tl)e two Wills make it clear that although the entire family )muse, comprising 84 or 85 rooms, at Chandernagore was formally endowed to the faniily idol, yet the testator's intention was that his heirs and descendants would also be entitled to use this house s their family dwelling house, apart from the room wherein the idol was enshrined.

It may be further noted that in the Will, dated June 4, 1898, the testator made the following provisions for the Sewa puja of the idol at Chandernagore and for other religious festivals :

(i) The trustees shall set ap•art interests of Government secur.ities C for the daily expenses of worship of the idol.

(ii) The Trustees shall pay and apply the net interest of Government securities of the nominal value of Rs. 25,000/- for the yearly expenses of the Durga Puja festival at Chandernagore.

(iii) The Trustees shall pay and 11pply the net interest of Government securities of the nominal value of Rs. 15,0001for the yearly expenses of the Dolejatra of the faniily idol, Thakur Sreedhar Jew at Chandernagore.

The aforesaid provisions further show that although the trustees were provided with the funds for the Sewa-puja of the family deity and for other festivals out of the estate left by the testator, but they were not expressly constituted as Shebaits of the deity. It will, therefore, be not unreasonable to infer that the intention of the testator W\lS that these funds would be expended for the purposes indicated by him, through the Shebaits.

Another telling circumstance appearing in evidence is that after the death of the widow and the two sons of the testator, their heirs, also, continued to live in this family dwelling house at Chandernagore.

It may be further noted that by the Will, dated June 6, 1898, no legal title in the endowed property was vested in the trustees.

The title was expressly vested in the family idol to whom the property was absolutely dedicated.

The testator did not create a trust estate in the sense in which it is understood in English Law.

The above-quoted provisions from the Wills further show that no rights to act as ministrant of the idol were conferred upon the Trus- H tees.

On the other hand, a mere obligation to hold 11nd use the property for the endowment indicated was imposed upon the per>ons designated as 'trustees'.

~ '

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~"ii~ • ~

• )' I •

Reading the two Wills together, with particular focus on the pro- <visions extracted iu this judgment, it is clear that the testator, Durga Chand Requitte, did leave Shebaitship uhdisposed of; his presumed intention being that Shetaitship should devolve on his natural heirs who would have a right to use the suit house as their family dwelling house.

The rights conferred on the Trustees under the Will may, at the most, amount to a curtailment of the right to manage the endowed property which a Shcbait would otherwise have.

But, such curtailment by itself would not make the ordinary rules of succession in Hindu Law inapplicable in regard to the devolution of Shebaitship, which is heritable property.

The upshot of the above discussion is that in spite of the interposition of the Trust for management of the endowed property, the Shebaitship remained undisposed of and, as such, the defendant and other descendants of Durga Chand Requitte became co-shebaits of the deity by the operation of the ordinary rules of Hindu Law.

In arriving at the conclusion that in spite of the interposition of the Trust, the founder by his Will left the Shebaitship undisposed of, and as such, the defendant also, under Hindu Law, became one of the Shebaits, we are fortified by the inference arising out of the facts admitted by no less a witness than Plaintiff No. 3, Satish Chandra Dass, himself, who alone deposed for the plaintiffs.

Though he claimed that there were no Shebaits of the deities and the trustees

were managing the Shebaiis, he categoricallY admitted the following facts :

(a) "The disputed house is a big house", having 84-85 rooms. "It is the only family dwelling house" of the sons and grandsons ol Durga Chorone Requittc, who live in it, while "the deity is installed in room No. 66 in the first floor".

(b) "The inmates of the disputed house, as far as practicable, look after the bath of the deity as also the preparation of Naibedya (tray containing the offerings) and Bhog (food) of the deity".

Thus even according to the plaintiffs-appellants, only the descen dants and heirs of the founder, who live in the endowed house, have throughout been acting as ministrants of the fumily idol, which, as already noticed, is one _of the vital characteristics of a Shebait.

In other words, the sons and the descendants of Durga Chorone Requitte, alone, have throughout been acting as co-shebaits of the family deity, to the exclusion of the 'trust'ees' who were not his descendants.

The first two courts were, therefore, right in holding that the

Shebai~I rights remained with the heirs of the founder.

Assuming for the sake of argument, that the 'trustees' were also vested with the rights and obligations of a Shebait, then also, the evidence on the record shows that !hose trustees who were not descendants of the founder, Durga Charon Requitte, never acted as such.

They went out ot the picture long ago and must be presumed to have renounced their Shebaiti rights in favour of their co-shebaits who were descendants of the founder. It is in evidence that in 1934, a dispute arose among the descendants of the founder with regard to the accommodation in their residential occupation.

Thereupon, the trustees agreed with the descendants of the founder by means of the Agreement (Ex. E) to refer the dispute to the sole arbitration of Shri Shringerwar Shrimani.

The arbitrator, inter alia, held that the heirs of late Durga Charon Requitte and his descendants alone had the rights to act as Shebaits. There is documentary evidence on the record to show that this award (Ex. G) given by the arbitrator was accepted by the 'trustees'.

The present plaintiffs-appellants, by their letter dated June 18, 1950 (Ex. A/7), asserted their rights on the basis of this award and described the defendant-respondent as a shebait of the deity.

The letters (Ex. A-8 and A-10) also point to the same conclusion.

Thus, even if it is assumed that originally, the trustees were regarded as having been constituted as Shebaits, then also, those among them who were not family members or descendants of the founder, renounced and relinquished their shebaiti rights, if any, in favO"Jr of the descendants of the founder.

Such a relinquishment made in favour or the co-shebaits, will be valid.

From whatever angle the matter may be looked at, the conclusion is inescapable that Shebaitship of the family deity remained solely with the descendants of the founder; and the defendant-respondent, who is admittedly a grandson of the founder, had been regarded as one of the Shebaits, and as such, entitled to reside in the disputed rooms. All the Shebaits were therefore, necessary parties; but all of them have not been impleaded.

The Trustees by themselves, have no right to maintain the suit in respect of the debutter property, the legal title to which vests in the idol, and not in the Trustees.

The right to sue on behalf of the deity wsts in the Shebaits.

All the Shebaits of the deity not having been made parties, the suit was not properly constituted, and was liable to be dismissed on this :score alone.

In the view we take, it is not necessary to decide, whether the 'trust' created by the Will of Durga Chorone Requitte was a continuing trus~ or not, or whether the mode of devolution of the office of

< •

' )

•I I

Trustees indicated by the founder in his Will was or was not hit by A the rule in Tagore v. Tagore (supra).

For the foregoing reasons, we allow the defendant's appeal (Civil Appeal No. 1874 of 1970), set aside the judgment of the High Court, and dismiss the plaintiffs' suit. In the result, Civil Appeal No. 1873 of 1970 filed by the Plaintiffs, ipso facto fails, and is dismissed. In B the circumstances of the case, there will be no order as to costs.

C.A. 1873/70 dismissed.

P.B.R .

C.A. 1874/70 allowed.

9-253SCI/79

PROFULLA CHORONE REQUI'ITE & ORS

SATYA CHORONE REQUITTE

March 2, 1979

R. S. SARKARIA

V. D. TULZAPURKAR, JJ.

June 6, 1898

Chandrangore

Cbandranagore

L.R. 4 I.A. 52

Chandranagore

CIVIL APPELLATE JURISDICTION

Calcutta High Court

Lal Narain Sinha

Sukumar Ghosh

A. K. Sen

D. N. Mukherjee

SARKARIA

Satya Charan Requitte

Chandernagore

Sree Sree Iswar Sridhar Jiew

Durga Charan

June 4, 1898

Saraswati Dassi

Shyama Chorone Requitte

Tarini Chorone Requitte

Ashutosh Das

Bhola Nath Das

Durga Chorone

Angust 27, 1898

Saraswati

Babu Durga Chorone

October 30, 1913

Shyama Chorone

December 21, 1925

Tulsi Chorone

... '
<, '

Thereupon, Tulsi Chorone son of Shyama Chorone was appointed a new trustee in place of his father, Bhola, the other co-trustee, refused to act as such.

Bhola

Devindra wa

Turani Chorone

Profulla Chorone

Bhagwati

Debendranath Das

Salish Chandra Das

Durga

Chorne

Bhringeswar Sreemany

September 6, 1934

Satya Chorone

April 20, 1959

Profulla Chorone Requitte

Bhagwati Chorone Requitte

Salish Chorone Das

Subordinate Judge, 1st Court, Hooghly

Satya Chorone Requitte

Jim

Chandemagore

Bhringeswar Sreemany

High Conrt at Calcutta

July 21, 1969~

Article 133(1)

Durga Chorone

kraswati (Widow)

Shyama qorone

Lal Narain Sinha

Durga Chorone Requitte

Ashok Sen

Sinha

India

D. B. Mukherjee

Underhill

Section 77

Northern India

L.R. 4 I.A. 52

Bombay High Court

June 29, 1934

June, 4, 1898

Gopeswari Dassee

Nagendra Mani Dassee

Tarine Choron-e Requitte

Durga Chand Requitte

Satish Chandra Dass

Durga Chorone Requittc

Durga Charon Requitte

Shringerwar Shrimani

June 18, 1950


RAM LAL

STATE OF U.P.

March 5, 1979 • B (S. l\1URTAZA FAZAL ALI AND 0. CHINNAPPA REDDY, JJ.]

S. 499(1) Cr.P.C.-No personal bond taken front accused-Nor was the signature of the accupsed taken on the reserve of surety bond-Accused jumptd bail-Sureties if liable-Bond executed by surety if independent of the bond ex~ cuted by accused.

Dismissing the appeal,

HELD: Section 499(1) of the Cr. P.C., \Vhich contemplated the e.xecution of a bond by the accused and by the sureties, did not imply that a single bond was to be executed by both the accused and the sureties, signed by the accused and counter-signed by the sureties. An undertaking of the surety in Form 42, Schedule V to secure the attendance of the accused \Vas quite independent of the undertaking given by the accused to appear before the court whenever called upon, even if both the undertakings of the surety and the accused happened ·o be executed in the same document for the sake of convenience. Each undertaking being distinct can be separately enforced. [ 450 C, 451 BDJ

The fact that an accused 'vould not be released on bail without his executing a personal bond does not mean that if a person is released by n1h .. takc without his executing a personal bond, the sureties are absolved from securing the attendance of the accused and his appearance before the court. The sureties' responsibility arises from the execution of the surety bond and is not contingent upon execution of a personal bond by the accused. Nor is the liability to forfeiture of the bond executed by the surety contingent upon the execution and the Iio1bility to forfeiture of the personal bond executed by the accused. The forfeiture of the personal bond of the accused is not a condition precedet:it to the forfeiture of the bonds executed by the sureties.

[451 E-F]

Abdul Aziz & Anr. v. Emperor, AIR 1946 All. 116; Mewa Ram & Anr. v.

State, AIR 1953 All. 481; approved.

Bakaru Singh v. State of U.P., AIR 1963 SC 430; distinguished.

Brahma Nand Misra v. Emperor, AIR 1939 All. 682; Sailesh Clumdra 'f Chakraborty v. The State, AIR 1963 Cal. 309; over-ruled. •

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 154 -G of 1972. • From the Judgment and Order dated 12-11-1971 of the Allahabad High Court in Criminal Revision No. 865 of 1970.

Shiv Pujan Singh for the Appellant.

D .P. Uniyal and M. V. Goswami for the Respondent. lff The Judgment of the Court was delivered by CmNNAPPA REDDY J.-Jorma who was convicted by the learned -< Sessions Judge, Dehradun under Section ~02 Indian Penal Code and

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RAM LAL v. u. P. STATE (Chinnappa Reddy, !.) 449

entenced to suffer• imprisonment for life, was directed by the High Court of Allahabad to be released on bail on furnishing bail to the 'Satisfaction of the District Magistrate, Dehradun. The District Magistrate (Judicial) Dehradun ordered Jorma to execute a personal bond in a sum of Rs. 5,000/- and to furnish two sureties in a sum of Rs .

10,000/- each.

Ram Lal the present appellant was one of the persons who executed a surety bond. Another, Abdul Jabbar, also executed a surety bond. By some oversight no personal bond was taken from Jorma nor was his signature taken on the reverse of the bonds executed by the two sureties as appeared to have been usually done.

Jorma jumped bail and the sureties were unable to produce him when required to do so.

The Distrjct Magistrate, Dehradun, therefore, forfeited the surety bonds and issued' a warrant of attachment against the sureties under Section 514 of the Olde of Criminal Procedure, 1898.

The "llppellant preferred an appeal to the High Court of Allahabad against the order of forfeiture. Before the High Court it was submitted that the surety bond executed by the appellant could not be forfeited when no personal bond had been taken from the accused who had been released on bail.

The High Court over-ruled the submission of the appellant and confirmed the order af forfeiture.

The appellant has ' 'filed this appeal on a certificate granted by the High Court under Artide 134(1) (c) of the Constitution.

Shri Shiv Pujan Singh, learned Counsel for the appellant submitted that the question of forfeiting the surety bond for the failure of the accused to appear would arise only if the accused himself had executed a personal boud for his appearance. He submitted that someone must be primarily bound before the surety could be bound and his bond forfeited.

He invited our attention to Section 499 of the Code of 'Criminal Procedure, 1898, and form No. 42 of the forms in Schedule V. He relied on the decisions in Brahma Nand Misra v. Emperor,('), and Sailash Chandra Chakraborty v. The State('). A reference was also to BIJJ.'llru Singh v. State of U.P. (3) On the other hand the learned Counsel for the State urged that the bond to be executed by the surety was independent of the bond to be executed by the accused and there was no impediment in the way of the forfeiture of the surety bond even in the absence of a personal bond executed by the accused.

He relied upon the decisions iu Abdul Aziz & Anr. v. Emperor('), oand Mewa Ram &: Anr. v. State(•),

(1) AIR 1939 All. 682 (2) AIR 1963 Cal. 309

(3) AIR 1963 SC 430 '(4) AIR 1946 All. 116 '(5) AIR 1953 All. 481

SUPREME COURT REPORTS [1979) 3 s.r R.

A Section 499(1) of the Code of Criminal'Procedure Code 1898 wa;-. in the following terms :

"Before any person is released on bail or released on his own bond, a bond for such sum of money as the police officer or Court, as the case may be, thinks sufficient shall be execu- B ted by such person, and, when he is relea'sed on bail, by one or more sufficient sureties conditioned that such persons shall attend at the time and place mentioned in the bond, and shall continue so to attend nntil otherwise directed by the policeoflicer or Court, as the case may b.e".

C Now, this provision contemplated the execution of a bond by t)le accused, and by the sureties. The provision did not imply that a singfo bond was to be executed by the accused and the sureties, as it were, to be signed by the accused and counter signed by the sureties. Form No. 42 of Schedule V, Code of Criminal Procedure, 1898, was asfollows : D

"XLII-bond and bail-bond on a preliminary Inquiry before a Magistrate.

(See Sections 496 and 499)

I, (name), of (place), being brought before the Magistrate of (as the case may be charged with the offence of and required to give security for my attendance, in his Court and at the Court of Session, if required, do bind myself to attend at the Court of the said Magistrate on every day of the preliminary inquiry into the said charge, and, should the case be sent for trial by the Court of Session, to be, and appear, before the said Court when called upon to answer the charge against me; and, in case of my making default, herein, I bind myself to forfeit to Government the sum of rupees

Dated this day of 19 c (Signature}

I hereby declare myself (or we jointly and severally declare ourselves and each of us) surety (or sureties) for the said (name) that he shall attend at the Court of on every day of the preliminary inquiry into the offence charged against him, and, should the case be sent for trial by the Court of Session, that he shall be, and appear, before the said Court to answer the char~ against him, and,. in case of his

. }

RAM LAL v. u. P. STATE (Chin1111ppa Reddy, !.) 451

making default therein, I bind myself (or we bind ourselves) to forfeit to Government the sum of rnpees Dated this day of 19 (Signature)"

The undertaking to be given by the accused as may be seen from form No. 42 of Schedule V was to attend the Court on every day of hearing and to appear before the Court whenever called upon. The undertaking to be given by the surety was to secure the attendance of the accused on every day of hearing and his appearance before the Court whenever called upon. The undertaking to be given by the surety was not that he would secure the attendance and appearance of the accused in accordance with the terms of the bond executed by the accused. The undertaking of the surety to secure the attendance and presence of the accused was quite independent of the undertaking given by the accused to appear before the Court whenever called upon, even if both the undertakings happened to be executed in the same document for the sake of convenience.

Each undertaking being distinct could be separately enforced. It is true that before a person is released on bail he must execute a personal bond and, where necessary; sureties must also execute bonds. There can be no question of an accused being released on bail without his executing a personal bond. But it does not follow therefrom that if a person is released by mistake without his executing a personal bond the sureties are absolved from securing his attendance and appearance before the Court. The responsibility of the surety arises from the execution of the surety bond by him and is not contin• gent upon execution of a personal bond by the accused. Nor is the liability to forfeiture of the bond executed by th!) surety contingent upon the execution and the liability to forfeiture of the personal bond executed by the accused. The forfeiture of the personal bond of the accused is not a condition precedent to the forfeiture of (he bonds executed by the sureties. The Calcutta High Court in Sailash Chandra Chakraborty

v. The State (supra) and single Judge of the Allahabad High Court in Brahma Nand Misra v. Emperor, (supra) proceeded on the assumption that the bond executed by the accused and the sureties was single and indivisible and if the accused did not join in the execution of the bond, the bonds executed by the sureties alone were invalid. We do not find any warrant for this assumption in Section 499 of the Criminal Procedure Code of 1898. We are afraid that there has been some <:onfusion of thought by the importation of the ideas of 'debt' and 'surety' from the civil law. As pointed out in Abdul Aziz & Anr. v. Emperor

(supra) under Section 499 Criminal Procedure Code, the surety did not guarantee the payment of any sum of money by the person accusedl

SUPREME COURT REPORTS (1979] 3 s.c.tt.

who was released on bail but guaranteed the attendance of that person and so the fact that the person released on bail himself did not sign the bond for his attendance did not make the bond executed by the surety an invalid one. In Mewa Ram & Anr. v. State (supra) the differene<' between a surety under the Code of Criminal Procedure and a surety under the Civil Law. was pointed out and the view taken in Abdul Azi:: &. Anr. v. Emperor (supra) was reiterated.

We agree with the view expressed in Abdul Aziz & Anr. v. Emperor, and Mewa Ram & Anr.

v. State (supra).

In Bakaru Singh v. State of U.P., (supra) the question presently under consideration did not arise. The question which was considered in that case was whether it was necessary that the .Personal bond of the accused should be executed on the other side of the bond executed by the surety on the same paper. It was held that it was not necessary. And, it was pointed out that the mere fact that form No. 42, Schedule V Criminal Pr_ocedure Code, printed the contents of the tw<>

bonds, one to be executed by the accused and the other by the surety together, did not mean that both the bonds should be ou the same sheet of paper. To the extent that it goes the decision helps the State and not the appellant. For the reasons stated above, the appeal is dismissed.

N.V.K.

Appeal dismissed.

LAL

STATE OF U.P

1979 • B (S. l\1URTAZA FAZAL ALI

0. CHINNAPPA REDDY, JJ.

S. 499(1)

Cr.P.C

Section 499(1)

Schedule V

AIR 1963 SC 430

Brahma Nand

Shiv Pujan Singh

D .P. Uniyal

M. V. Goswami

CmNNAPPA REDDY J.-Jorma

Indian Penal Code

District Magistrate (Judicial) Dehradun

Jorma

Ram Lal

Abdul Jabbar

Distrjct Magistrate, Dehradun

Section 514

High Court of Allahabad

Shiv Pujan Singh

Section 499

Schedule V

AIR 1963 SC 430

Section 499(1)

Procedure Code 1898

Schedule V

Code of Criminal Procedure, 1898

Sections 496 and 499

Schedule V

Calcutta High Court

Allahabad High Court

Section 499

Section 499

Criminal Procedure Code

SUPREME COURT REPORTS (1979] 3 s.c.tt.

Code of Criminal Procedure

Schedule V

N.V.K.


--4 •

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UNION OF INDIA & ANR. v.

K. G. KHOSLA & CO. (P) LTD. & OTHERS

March 6, 1979 ..

[Y. V. CHANDRACHUD, C.J., D. A. DESAI AND R. S. PATHAK, JJ.]

Central Sales Tax Act, 1956 S. 3(a)-Scope of-Goods manufacturf!d in the State of Haryana in accordance with production progrannne advised by head office-Goods despatched from-Delhi-Whether inter-state or intra-state sale.

The respondent company who was a manufacturer of afr compressors and garage equipment had itsfactory at Farid21bad (in the State of Haryana) and C its head office in Delhi (Union Territory of Delhi). The head office drew the production programme and advised the factory to manufacture the goods in accordance therewith. After the goods were so manufactured in the factory they \Vere collected by the head office and brought to Delhi and despatched to various customers Whether outside Delhi or in Delhi. The price of goods was received at the head office. In other words excepting the manufacture of goods at the factory all other activities, were catTied out from the head office in Delhi.

In respect of sale of goods manufactured at Faridabad the respondent company filed sales tax returns with the sales tax authorities at Delhi on the ground that the sales were effected from Delhi by the head office -and that they were intra-state sales within the territory of Delhi and accordingly paid sales tax at Delhi.

In November, 1965, however, the sales tax authorities of Haryana demanded payment of sales tax under the East Punjab General Sales Tax, Act, 1948 for the period commencing from April 1, 1961 and ending \Vith the year 1964-65 pointing out that the sales effected were inter-state sales liable to be assessed by them under the Central Sa\'es Tax Act, 1956.

In its writ petition the respondent-company alleged that since all its activities were being carried on by or through the head office in Delhi and no sales were effected by. or from the factory at Farida.bad sales tax was paid by it in Delhi and since the sales tax authorities in Haiyana were demanding payment of Central Sales Tax in respect of the same transaction the High Court might resolve the controversy .

The High Court held that the sales fell under s. 3(a) of the Central Sales Tax Ac~ 19 56 and were liable to be assessed to inter-state sales tax by the Sales Tax Authorities at Faridabad and accordingly ordered that the sales tax paid by the respondent in Delhi be transferred to the Sales Tax Authorities at Faridabad.

On appeal the Union of India contended that since the situs of sale was Delhi Sales Tax was payable in De1hi.

Dismissing tht appeal, ,.

HELD l(a) The High Court was right in holding that the sales were inter state sales and that the turnover on sales was assessable to sales tax under the Central Sales Tax Act, 1956 and that the amounts of sales tax wrongly paid in Delhi be transferred to the Sales Tax Authorities at Faridabad. [462 A-BJ

(b) In order that a sale may be regarded as an inter-state sale it is immaterial whether the pro.Jfrty in the goods passes in one State or another. The question as regards the nature of the sale, that is, whether it is an inter State sale or an intra-State saJe does ot depend upon the circum11tance as to n which State the property in the goods passes. It may pass in either and yet the sale can he ao inter-State sale. [461 G-H, 462 A]

In the instant case the contract! of sales were made at Delhi and in pursu ance of those contracts, goods were manufactured at Faridabad according to specifications mentioned in the contract:-i. This, therefore, is not that type of case in which goods are manufactured in the general course of business for being sold as and when offers are received by the manufacturer for their pur~ chase. Contracts of sales were finalised in the instant case at Delhi and specific goods were manufactured at Fa.ridabad in pursuance of those contracts. These were "future goods" within the meaning of s. 2(6) of the Sale of Goods Act,

1930. After the goods were manufactured to agreed specifications, they were despatched to the head office at Delhi for being forwarded to the respective customers at who9e instance and pursuant to the contracts with whom the goods were manufactured. The despatch of goods of Delhi was but a convenient made of securing the pe1formance of contracts made at Delhi. Thus the move~ ment of goods was occasioned from Faridabad to Delhi as a result or incident of the contracts of sale made in Delhi. [45& H, 459 A-D

(c) For the purpose of s. 3(a) it is not necessary that the contract of sale must itself provide for and cause the movement of goods or that the movement of goods must be occasioned specifica.lly in accordance with the terms of contract of sale. [459 E]

Tata Iron and Steel Co. Ltd., Bombay v. S. S. Sark'ar & Ors., [1961] I SCR 379; Centrnl Marketing Co. of lndiu v. State of Mysore, [1963] 3 SCR '177; State Trading Corporatiolj of India v. State of Mysore, [1963] 3 SCR 792; Singareni Collieries Co. v. Commissioner of Commercial Taxes, llyderabad, [1966] 2 SCR 190; K. G. Khasla & Co. v. Dy. Commr. of Comm., cial Taxes, [1966] 3 SCR 352; Oil India Ltd. v. The Superintendent of Taxes & Ors., [1975] 3 SCR 797; followed.

Tata Eng. & Locomotive Co. Ltd. v. The Asstt. Com1nr. of Commercial Taxes & Anr., [1970] 3 SCR &62; distinguished.

State af Bihar & Anr. v. Tata Eng. &: Locomotive Co. Ltd., [1971] 2 SCR 849; referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2077 of 1972.

From the Judgment and Order dated 2-8-1971 of the Delhi High Conrt in Civil Writ No. 162-D of 1966.

E. C. Agarwala and R. N. Sachthey for the Appellants.

Lal Narain Sinha, K. K. Jain, S. K. Gupta, Pramod Dayal and Bishamber Lal for the Respondent No. 1

(• ..

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UNION OF INDIA v. KHOSLA & co. (Chandrarhud, C.J.) 455

Rameshwar Dial, Adarsh Fial, and A. D. Mathur for Respondents A 2-3.

The Judgment of the Court was delivered by

CHANDRACHUD, C. J.-This appeal by certificate raises an interesting controversy between the Sales Tax Authorities in the Union Territory of Delhi and those in Haryana, the question being as to which of the two authorities can assess respondent 1 io sales tax. One

of the reliefs sought by respondent 1 is that until the Sales Tax authorities of the two territories settle their differences, no sales tax should be levied or recovered from it since, it does not know to whom to pay the tax. This controversy arises on the following facts.

Respondent 1 is a private limited company called K. G. Khosla & Co. (P) Ltd., having its head office in the Union Territory of Delhi at 1, Deshbandhu Gupta Road, New Delhi. The company carries on business in Air Compressors and garage equipment which it manufactures in its factory at Faridabad, which was formerly in the State D

-Of Punjab and is now a part of the State of Haryana.

For the purposes of sales tax, respondent 1 is registered as a dealer both in the Union Territory of Delhi and in the State of Haryana. It filed returns of sales tax with the sales Tax authorities in Delhi since, according to it, the sale of goods manufactured in the factory at Faridabad was being effected from Delhi by its head office.

The sales tax was being paid by the company under the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi, on the basis that the sales effected by the company were intra-State sales within the territory of Delhi.

On November 24, 1965," however, the Sales Tax Assessing Authority at Gurgaon, which was then in the State of Punjab but which subsequently became a part of the State of Haryana, sent a notice to the company under sections 11 and 14 of the East Punjab Central Sales Tax Act, 1948 and rule 33 made thereunder that, in respect of the period commencing on April 1, 1961 and ending with the year 1964-65, the sales made by the company were liable to assessment in Haryana.

On March 13, 1968 an assessment was made by the Assessing Authority at Faridabad on the basis that the sales effected by the company were inter-State sales liable to be assessed to sales tax under the Central Sales Tax Act, 74 of 1956.

An appeal against the order of assessment is said to be pending.

In the meanwhile, on February 14, 1966, the company filed a writ petition before the Punjab High Court Circnit Bench at Delhi which,

after the reorganisation of States, was dealt with by the Delhi High

A Court.

The Chief Commissioner of the Union Territory of Delhi and the Assessing Authority of the territory were impleaded as respondents 1 and 2 to the writ petition. Respondent 3 was the State of Pnn)ab and respondent 4 the Assessing Authority at Gurgaon. Rcspon. dent 3 was later substituted by the State of Haryana.

The company contended by its writ petition that except the manufacturing of goods at the Faridabad factory, all of its activities, including those of booking of orders, sales, despatching of goods, billing and receiving of sale price were being done by and through the head office in Delhi and that no sales were effected by or from the factory.

Since, however, both the Sales Tax authorities, namely, at Delhi and Haryana, were demanding payment of sales tax on the same sale transactions, the company prayed by its writ petition that the High Court do resolve the controversy between the Sales Tax authorities of the two States and decide the question of their respective jurisdiction• to assess its turnover.

The State of Haryana contended by its counter affidavit to the writ petition that the goods were manufactured by the company at Faridabad in pursuance of contracts of sale with outside purchasers, that those goods were appropriated to the various contracts of sale in the State of Haryana and that the movement of the goods from Faridabad' to Delhi and onwards was caused as a necessary incident of the contracts of sale made by the company. The sales, according to the State of Haryaoa had taken place at Faridabad during the course of inter-State trade.

The Union of India, on the other hand, contended that the goods F were brought from Faridabad to Delhi and were thereafter sold by the company to the various purchasers outside Delhi.

These sdes according to the Union of India, were governed by the Bengal Finance

(Sales Tax) Act, 1941 as extended to Delhi, their situs being the Union Territory of Delhi.

G The Delhi High Court by its judgment dated August 2, 197f allowed the writ petition and granted a declaration that the salei; effected by respondent 1 which fell under section 3 (a) of the Central Sales Tax Act, 1956 were liable to be assessed to inter.State sales tax by the Sales Tax authorities at Faridabad since, those sales caused the movement of goods from Faridabad to Delhi. The High Court added H that the writ petition was confined to the goods manufactured at Faridabad in pursuance of pre-existing contracts of sales and therefore, its judgment would have no application to the local sales;

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effected by respondent 1 at Delhi.

In the resnlt, the High Court passed an order directing that the amount of tax which respondent 1 had wrongly paid to the sales tax authorities at Delhi on the inter- State sales between 1.4.1961 to 30•9-1965 be transferred by the Sales Tax authorities at Delhi to the Sales Tax authorities at Faridabad. The High Court has granted a certificate of fitness to the Union of India to file an appeal to this Court under Article 13 3 ( 1) (b) of the Constitution.

The question which arises for decision is whether the sales made by respondent 1 were made at Faridabad in the course of inter-State trade as contended by the State of Haryana or whether they are intrastate sales effected within the Union Territory of Delhi as contended by th~ appellant, the Union of India.

The answer to this question would depend upon the course and nature of transactions in relation to which the movement of goods was caused from Faridabad to Delhi and the terms of the contracts of sales which caused that movement.

But before adverting to those aspects of the matter, it wonld be necessary to notice the relevant provisions of the Central Sales Tax Act 7 4 of 1956 ("The Act").

Section 3 of the Act provides as follows :

"3. When is a sale or purchase of goods said to take

place in the course of inter-State trade or commerce :- E

A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase :-

(a) occasions the movement of goods from one State to another; or

(b) is effected by a transfer of documents of title to the goods during their movement from one State to another." ·

There are two Explanations to the section but they have no bearing on

the appeal.

Section 9(1) of the Act provides as follows :-

9. "Levy and collection of tax and penalties (1) the tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether snch sales fall within clause .(a) or clause

(b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government

in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced."

There is a proviso to section 9 (I) to which it is unnecessary to refer since it has no application.

In the light of these provisions, what has to be considered is whether the sales effected by respondent 1 occasioned the movement of goods from one State to another State, which oh the facts of the instant case would mean, from the State of Haryana to the Union Territory of Delhi.

It is only if a sale occasions the movement of goods from one State to another that it can be deemed to have taken place in the course of inter-State trade or commerce within the meaning of 1; ection 3 (a) of the Act.

Clause (b) of section 3 is not relevant for our purpose.

The course and manner of its business have been set out by respondent 1 in paragraphs 3 and 27 of the writ petition in the following terms :

"3. Orders for the supply of goods from various parti, es are received by the petitioner's company at its head office in Delhi. The head office draws out a production programme and advises the factory to manufacture the goods in accordance therewith.

After the goods are so manufactured in the factory, the goods are collected by the head office and brought to its head office in Delhi. From its head office the goods are despatched to various customers whether outside Delhi or in Delhi. The price of goods is also received at the he-dd office. In short, the position is that excepting the manufacture of goods at the factory, all other activities including that of booking of orders, sales, despatching and billing and receiving of sale price are being carried out from the head office in Delhi."

"27. The goods manufactured in the factory are future goods within the meaning of the Sale of Goods Act and 11ie G dispute does not relate to any ready goods."

It is clear from these averments that goods were manufactured by respondent 1 in its factory at Faridabad, Haryana, in pursuance of specific orders received by its head office at Delhi. The contracts of sales were made at Delhi and in pursuance of those contracts, goods JI were. manufactured at Faridabad according to specifications mentioned in the contracts. This, therefore, is not that type of case in which goods are manufactured in the general course of business for being

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sold as and when offers are received by the manufacturer for their purchase. Contracts of sales were finalised in the instant case at Delhi and specific goods were manufactured at Faridabad in pursuance of those contracts.

Those were "future goods" within the meaning of section 2(6) of the Sale of Goods Act, 1930.

After the goods were manufactured to agreed specifications, they were despatched to the head office at Delhi fat being forwarded to the respective customers at whose instance and pursuant to the contracts with whom the goods were manufactured.

The goods could as well have been despatched to the respective customers directly from the factory but they were sent in the first instance to Delhi as a matter of convenience, since there are better godown and rail facilities at Delhi as compared with Faridabad. The despatch of the goods to Delhi was but a convenient mode of securing the performance of contracts made at Delhi.

Goods conforming to agreed specifications having been manufactured at Faridabad, the contracts of sale could be performed by respondent 1 only by the movemel\t of the goods from Faridabad with the i.ntention of delivering them to the purchasers. Thus, the movement of goods was occasioned from Faridabad to Delhi as a result or incident of the contracts of sale made in Delhi. '

It is true that in the instant case the contracts of sales did not require or provide that goods should be moved from Faridabad to Delhi.

But it is not true to say that for the purposes of section 3(a) of the Act it is necessary that the contract of sale must itself provide for and cause the movement of !\oods or that the movement of goods must he occasioned specifically in accordance with the terms of the contract of sale. The true position in law is as stated in Tata Iron and Steel Co. Ltd., Bombay v. S. R. Sarkar and others(•) wherein Shah, J. speaking for the majority observed that clauses,(a) and (b) of section 3 of the Act are mutually exclusive and that section 3(a) covers sales in which the movement of goods from one State to another

"is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State" (page 391). Sarkar, .J . speaking for himself and on behalf of Das Gupta, J. agreed with the majority that clauses (a) and (b) of section 3 are mutually exclusive but differed from it and held that "a sale can occasion the movement of the goods sold only when the terms of the sale provide that the goods wonld. be moved; in other words, a sale occasions a movement of goods when the contract of sale so provides" (page 407). The view of the majority was, approved by this Court in the Central

(1) [1961! I SCR 379 .

Marketing Co. of India v. State of Mysore,(') State Trading Corporation of India v. State of Mysore( 2 ) and Singareni Collieries Co. v.

Commissioner of Commercial Taxes, Hyderabad.(•) In K. G. Khosfa & Co. v. Deputy Commissioner of Commercial Taxes,(4 ) counsel for the Reveque invited the Court to reconsider the question but the Court declined to do so.

In a recent decision of this Court in Oil India Ltd.

v. The Superintendent of Taxes & others(") it was observed by Mathew, J., who spoke for the Court, that : (1) a sale which occasions movement of goods from one State to another is a sale in the course of inter-State trade, no matter in which State the property ia the goods passes; (2) it is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement; and (3) it is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter-State Movement must be specified in the contract itself. It would be enough ;:c the movement was in pursuance of and incidental .to the contract of sale (page 801). The learned Judge added that it was held in a number of cases by the Supreme Court that if the movement of goods from one State to another is the result of a covenant or an incident of the contract of sale, then the sale iB an inter-State sale.

The decision in Tata Engineering & Locomotive Co.

Limited v.

The Assistant Commissioner of Commercial Taxes and Another(") on which the Union of India relies, proceeds on a different consideration and is distinguishable.

The appellant therein carried on the business of manufacturing trucks in Jamshedpur in the State of Bihar.

The sales office of the appellant in Bombay used to instruct the Jamshedpur factory to transfer stocks of vehicles to the stockyards in various States after taking into account the production schedule and requirements ol customers in different States.

The stocks available in the stockyards were distributed from time to time to dealers.

The transfer of the vehicles from the factory to the various stockyards was a continuous process and was not -related to the requirement of any particular custo- G mer.· It was the stockyard incharge who appropriated the required number of vehicles to the contract of sale out of the stocks available with him. Until such appropriation of vehicles was made, it was open

(I) [1963] 3 SCR 777

(2) [1963] 3 SCR 792

(3) [1966] 2 SCR 190

(4) [1966] 3 SCR 352

(5) [1975] 3 SCR 797

(6) [1970] 3 SCR 862

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to the company to allot any vehicle to any purchaser or to transfer A the vehicles from the stockyard in one State to a stockyard in another

State.

At page 870 of the report, a statement occurs in the judgment -0f Grover, J., that it was not possible to comprehend how in the above situatJOn it could be held that "the movement of the vehicles from the works to the stockyards was occasioned by any covenant or incident -0f the contract of sale." This statement is relied upon by the Union of India iµ support of its contention that the contract of sale must itself provide for the movement of goods from one State to another.

We are unable to read any such implication in the observation cited above.

At page 866 of the report, after referring to certain decisions, the Court observed that the principle admits of no doubt, according to the decisions of this Court, that the movement of goods "must be the result of a covenant or incident of the contract of sale."

This decision may be usefully contrasted with another decision between the same parties, which is reported in State of Bihar & Anr.

v. Tata Engineering & Locomotive Co. Ltd.('). In that case the turn- -0ver in dispute related to the sales made by the company to its dealers -0f trucks for being sold in the territories assigned to them under the dealership agreements.

Each dealer was assigned an exclusive territory and under the agreement between the dealers and the company, they had to place their indents, pay the price of the goods to be purchased and obtain delivery orders from the Bombay office of the company.

In pursuance of such delivery orders trucks used to be delivered in the State of Bihar to be taken over to the territories assigned to the dealers. Since under the terms of the contracts of sale the purchasers were required to remove the goods from the State of Bihar to other States, no question arose in the case whether it was or was not ne.:essary

for a, sale to be regarded as an inter-State sale that the contract must itself provide for the movement of goods from one State to another.

If a contract of sale contains a stipulation for such movement, the sale

would, of course, be an inter-State sale.

But it an also be an inter- State sale, even if the contract of sale does not itself provide for the movement oI goods from one State to another but such movement is the result of a covenant in the contract of sale or is an incident of that contract.

The decisions to which we have referred above show that in order that a sale may be regarded as an inter-State sale, it is immaterial whether the property in the goods passes in one State or another.

The question as regards the nature of the sale, that is, whether it is an inter-

(1) [1971] 2 SCR 849.

A State sale or an intra-State sale, does not depend upon the circums-

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tances as to iu which State the property in the goods passes. It may passin either State and yet the sale can be an inter-State sale ..

The High Court was, therefore, right in holding that the sales in question are inter-State sales and that the turnover of sales is assessable • ,,.

B to sales tax under the Central Sales Tax Act, 1956 at the instance of ji the Sales Tax authorities at Faridabad. The amount of tax which .. respondent has wrongly paid to the Sales Tax authorities at Delhi on • such inter-State sales from 1-4-1961 to 30-9-1965 shall have to be

~ II transferr<:d by the Sales Tax authorities at Delhi to the Sales Tax authot

'" ritiei; at Faridabad, as directed by the High Court. c The appeal is accordingly dismissed but there will be no order as to costs.

I Appeal dismissed. ""

N.K.A

JI .. ' •

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UNION OF INDIA & ANR

K. G. KHOSLA & CO. (P) LTD. & OTHERS

Y. V. CHANDRACHUD, C.J.

D. A. DESAI

R. S. PATHAK, JJ.

Central Sales Tax Act, 1956

S. 3(a)

Delhi

Faridabad

Haryana

1, 1961

Tax Act, 1956

Haiyana

s. 3(a)

Union of India

Central Sales Tax Act, 1956

Fa.ridabad

s. 2(6)

Sale of Goods Act

s. 3(a)

[1963] 3 SCR 792

[1966] 2 SCR 190

[1966] 3 SCR 352

[1975] 3 SCR 797

[1971] 2 SCR 849

E. C. Agarwala

R. N. Sachthey

Lal Narain Sinha

K. K. Jain

S. K. Gupta

Pramod Dayal

Bishamber Lal

Rameshwar Dial

Adarsh Fial

A. D. Mathur

CHANDRACHUD

K. G. Khosla & Co. (P) Ltd.

New Delhi

Punjab

The company carries on business in Air Compressors and garage equipment which it manufactures in its factory at Faridabad, which was formerly in the State D
Of Punjab and is now a part of the State of Haryana.

November 24, 1965

Sales Tax Assessing Authority at

Gurgaon

State of

sections 11 and 14

East Punjab Central Sales Tax Act, 1948

April 1, 1961

March 13, 1968

Central Sales Tax Act

February 14, 1966

Delhi High

A Court

State of Pnn)ab

Assessing Authority at Gurgaon. Rcspon

State of Haryana

State of Haryaoa

Delhi High Court

August 2, 197f

section 3

Central Sales Tax Act, 1956

Article 13

Union of India

Central Sales Tax Act

Section 3

Section 9(1)

section 3

Government of India

section 9

section 3

Sale of Goods Act

section 2(6)

Sale of Goods Act, 1930

section 3(a)

Shah

section 3

section 3(a)

Sarkar

Das Gupta

section 3

Mathew

Supreme Court

Jamshedpur

Bihar

Bombay

[1963] 3 SCR 777

[1963] 3 SCR 792

[1966] 2 SCR 190

[1966] 3 SCR 352

[1975] 3 SCR 797

[1970] 3 SCR 862

[1971] 2 SCR 849

Central Sales Tax Act, 1956