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Civil Appeal No. 30 of 1971. Appeal by special leave from the judgment and order dated the 19th February, 1970 of the Andhra Pradesh High Court in case Reference No. 2 of 1967. R. M. Mehta and section P. Nayar for the appellant. P. Ram Reddy and A.V.V. Nair for the respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. Keynote thought. Politics and philanthropy may well fall victims to the contruction of section 5(a) and (j) of the Expenditure. Tax Act, 1957 (the Act for 1018 short) if we fall victim to the submission naively made, at the first stage, by counsel for the State. In fairness to him, we must state that later he retracted from that position, and rightly so, for the Act, in spirit and letter, does not intend this blow on the profession of politics or the disposition for donations. A fair reading of the provisions in question convincingly excludes from 'taxable expenditure ' sums wholly and exclusively incurred for the purpose of a profession or occupation carried on by the assessee and no modern man may dispute that politics is a profession or occupation. Likewise, expenditure by way of gift or donation incurred by the assessee is also excluded and no politically conscious soul will deny that donation to the party in a democracy squarely comes within this exclusionary provision. The factual matrix Expenditure tax under the Act was sought to be levied from the assessee PVG Raju, the respondent before us. Paradoxical, perhaps, it may appear but here is a case of a rich Maharaja practising the politics of socialism, spending lavishly for furthering his party 's popularity and the prospects of his fellow candidates at the elections to the Andhra Pradesh Legislative Assembly. This expenditure, falling under two heads, was taxed by the assessing authority and upheld up to the Tribunal level. The High Court, on reference, reversed the findings on both counts and the Commissioner of Expenditure Tax, the appellant, challenges the legality of this verdict. The best beginning in stating the facts may well be to extract the questions of law referred by the Tribunal in its own words: "(1) Whether on the facts and in the circumstances of the case the expenditure of Rs. 38,832/ claimed to be the amount incurred by the assessee for the benefit of other candidates for election is excludible from the taxable expenditure either under Section 5 (a) or under Section 5 (j) of the Expenditure Tax Act ? (2) Whether on the facts and in the circumstances of the case the sum of Rs. 47,867/ claimed to be party expenses could be excluded from the taxable expenditure of the assessee either under Section 5(a) or under Section 5(i) of the Expenditure Tax Act ? We have to assume the following facts as implied in the very questions referred to the High Court and from the attendant circumstances. They are: (a) that the respondent, during the relevant period was the Chairman of the State Socialist Party which was interesting itself in electoral politics; 1019 (b) the respondent was a wealthy socialist; (c) that he was meeting not only the expenditure of his own elections but spending moneys for the benefit of other candidates belonging to his party; (d) that he was issuing cheques to the Secretary and other office bearers of his party to meet the expenses involved in party work. He expended Rs. 38,832/ for propelling the election prospects of other party candidates during the election. Likewise, he gave Rs. 47,867/ to his party through its office bearers. On these facts the question is whether he is eligible for exclusion of the two sums from expenditure tax either under section 5(a) or under section 5(j) of the Act. Consideration of the legal issue It is appropriate to start with reading the relevant portion of s 5 of the Act: "section 5. No. expenditure tax shall be payable under this Act in respect of any such expenditure as is referred to in the following clauses, and such expenditure shall not be included in the taxable expenditure of an assessee. (a) any expenditure, whether in the nature of revenue expenditure or capital expenditure, incurred by the assessee wholly and exclusively for the purpose of the business, profession, vocation or occupation carried on by him or for the purpose of earning income from any other source; (b) to (i). (j) any expenditure incurred by the assessee by way of, or in respect of any gift, donation or settlement on trust or otherwise for the benefit of any other person. " The assessee was Party Chairman and politics was undoubtedly his profession or occupation, it being admitted that his interest in politics was not causal nor sporadic but abiding and ambitious. The contention of the respondent which met with success before the High Court was that the election expenses of other candidates set up by him as Chairman of the Socialist Party, loosely described as 'party expenditure ', were incurred wholly and exclusively for the purpose of his 'profession ' or 'occupation '. So, the first point which arrests our attention in examining this contention is as to whether politics of the socialist brand or otherwise is a profession or occupation. There can hardly be any doubt that it is either, or both. Harold Laski treated politics as a science and wrote his well known book on the Grammar of Politics, but the art of politics at a practical level has also been the subject of comment and has been praised and denounced on the basis that it is a profession. To Gandhiji it is sacred as religion. In Lincoln it rises to noble heights of statesman 1020 ship. Lenin, Nehru and a galaxy of other great visionaries and makers and moulders of the modern world have dedicated themselves to politics as a profession. Of course in its vulgar and vicious manifestations, this occupation has been regarded by literary giants like Dr. Johnson as the last refuge of a scoundrel '. Robert Louis Stevenson has used barbed words: 'Politics is perhaps the only profession for which no preparation is thought necessary (Familiar studies of Men and Books, 'Yoshida Torajiro '). George Bernard Shaw uses stinging language in Major Barbara: 'He knows nothing; and he thinks he knows everything. That points clearly to a political career '. It is thus clear, without reference to the wealth of case law relied on by the High Court, that politics has been a profession and, indeed, under modern conditions in India, perhaps the most popularand uninhibited occupation with its perils, of course. Law cannot take leave of realities and therefore section 5(a) must bear the construction that politics is a profession or occupation. The next question is whether the expenditure incurred by the assessee for the election of candidates set up by him as Chairman of his party can be legitimately regarded as incurred 'wholly and exclusively ' for the purpose of his profession or occupation. We have grave doubts whether meeting the expenses of other candidates can be fulfilment of his professional expenses, but this question deserves no deeper probe for the simple reason that section 5(j) embraces the expenditure as it does answer the description of a donation. When a person gives money to another without any material return, he donates that sum. An act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another, without any consideration, is a donation. A gift or gratuitous payment is, in simple English, a donation. We do not require lexicographic learning nor precedential erudition to understand the meaning of what many people do every day, viz., giving donations to some fund or other, or to some person or other. Political donations are not only common, but are assuming deleterious dimensions in the public life of our country. It is therefore clear that when this Raja assessee gave money to the candidates of his Party for them to meet their election expenses, he made donations. Even if he met their election expenditure, it was money gratuitously given on their behalf and therefore amounted to donation. Without straining language, we reach the natural conclusion that what the respondent expended for the other candidates during the elections was 'donation ' in the language of the law. There is no suggestion nor evidence that any material return was in contemplation when he spent these sums. Being a politically important man with plenty of money and vitally interested in boosting his Party 's standing in the State, he donated liberally for candidates set up by the party. In this view section 5(j) aplies to these donations which earn exemption from the expenditure tax. The next item relates to sums gives to the Socialist Party. It is reasonable to assume that the amounts paid to the office bearers 1021 of the party were without an eye on any material return other than loyalty or gratitude. They were outright gifts. Indeed, many rich people out of diverse motives make donations to political parties. The hope of spiritual benefit or political goodwill, the spontaneous affection that benefaction brings, the popularisation of a good cause or the prestige that publicised bounty fetches these and other myriad consequences or feelings may not mar a donation to make it a grant for a quid pro quo. Wholly motiveless donation is rare, but material return alone negates a gift or donation. We need not investigate the propriety or political donations 'unlimited ' and often invisible. All that we need consider is whether such sums are gifts and donations or are non gratuitous payments with a tag of return. We have no doubt that on the question as framed, and on the facts and circumstances present, these sums were paid purely as gifts and donations to his Party by the respondent. It is not surprising either, because he was the Chairman of the said party, had a long and liberal purse from which to draw and a large circle of support to build up in the long run. The inevitable conclusion from our discussion is that both the heads of expenditure fall under s.5(j) of the Act and, therefore, flow out of the assessable zone. The High Court 's conclusion is sound and the appeal deserves to be and is hereby dismissed, but without costs. V.P.S. Appeal dismissed.

Under section 5 (a) and (j) of the Expenditure Tax Act, 1957, no expenditure tax shall be payable on any expenditure incurred by the assessee wholly and exclu sively for the purpose of his business profession or vocation, and on any expenditure incurred by the assessee by way of donation. The respondent assessee was the Chairman of the State Socialist Party and politics was his profession or occupation. He is a wealthy socialist and spent Rs. 38,832/ towards election expenses of other candidates of his party, and gave Rs. 47,867/ to the office bearers of his party to meet the expenses involved in party work. ^ HELD: The two amounts are eligible for exclusion from expenditure tax. [1021 B] (1) Under modern conditions, politics is a profession or occupation. [1020 C] (2) But the expenses incurred on behalf of other candidates cannot be the assessee 's professional expenses. [1020 D] (3) The amounts, however, fall under section 5(j) of the Act. When a person gives money to another without any material return, he donates that sum. Therefore, when the assessee gave money to the candidates of his party for their elections expenses, it was money gratuitously given, that is he made donations. [1020 E G] (4) Similarly, the amounts paid to office bearers of the party were not for any material return. They were for loyalty or gratitude. Wholly motiveless donation is rare but material return alone negates a gift or donation. Therefore, they also were outright gifts. [1021 A C]

Appeals Nos. 680 to 682 of 1963. Appeals by special leave from the judgment and decree dated February 8, 1960 of the Board of Revenue, U. P. in petitions Nos. 203 to 205 of 1958 59. J. P. Goyal, for the appellant (in all the appeals). Brijbans Kishore and Ramesh B. Saxena, for respon,dents Nos. I to 3 (in all the appeals). April 17, 1964. The judgment of the Court was delivered ,by HIDAYATULLAH, J. This judgment shall also govern the disposal of C. A. 681 of 1963. These are appeals by special leave of this Court against a common order of the Board of Revenue, U.P. dated February 8, 1960 disposing of three .appeals. Civil Appeal No. 682 of 1963 (since compromised) was also against the same decision. The appellant in each 'of these appeals is one Amba Prasad who was the Zamindar of village Rhonda, Pargana and Tehsil Khurja, District Bulandshahr, before the coming into operation of the U. P. Zamindari Abolition and Land Reforms Act, 1950. The opposite parties (who will be referred to as the answering respondents in this judgment) are persons whose names were recorded in column 23 (miscellaneous) in the Khasra for the year 1356 Fasli, as persons in possession and who claim, by reason of the entry, to be the recorded, occupants of the fields in dispute, and to have 'obtained adhivasi rights in the fields under section 20 of the Abolition Act. Though the point in dispute appears to lie within a very narrow compass the history of litigation in respect of these plots is as tedious as it is long. It must unfortunately be told to get a true measure of the ,arguments in the appeals. Amba Prasad brought two suits under section 180 of the U.P. Tenancy Act, 1939 for ejectment from the fields now in dis pute and for damages, against Mohammad Ali and Mst. Sharifan respectively because their names A ere recorded in the Khasra as tenants 'bila tasfia lagan '. These suits were dismissed by the trial Judge and Aniba Prasad 's appeal to the Commissioner failed on November 30, 1943. Amba Pra.sad then appealed to the Board of Revenue, U.P. and succeeded. The order of the Board of Revenue, U. P. is dated March 19, 1949 (item No. 25). Mohammad Ali had died by L/P(D)ISCI 26 802 then and was represented by one Faivazali and six others. Sarifan had also died and was represened by one Abdul Sattar alias Chunna Khan and two others. As a result of the decision of the Board of Revenue possession of the fields was delivered to Amba Prasad on July 1, 1949 the day of the commencement of the year 1357 Fasli. The dakhalnamas are items Nos. 44 and 45 in this record and they mention fields Nos. 427/2, 428/2, 429, 430 and 380 (item No. 44) and fields Nos. 416, 418/1 and 418/2 (item No. 45) of village Rhonda, Pargana and Tehsil Khurja, District Bulandshahr. Immediately after obtaining possession of the fields Amba Prasad was required to commence proceedings under section 145, Criminal Procedure Code before the Sub Divisional Magis trate, Anupshahr against Faiyazali and Abdul Sattar and others and on January 13, 1951 these proceedings terminated in favour of Amba Prasad (item No. 28). The Sessions Judge Bulandshahr made a reference to the High Court of Allahabad recommending that the order be vacated but the High Court declined to interfere. The order of the High Court is dated October 20, 1951 (item No. 29). Meanwhile Amba Prasad started a prosecution under section 218, Indian Penal Code against the Lekhpal alleging that he had made false entries in the Revenue papers but the Magistrate, 1st Class, Buland shahr discharged him by his order dated July 24, 1950 (item No. 26). An application for revision of the order filed by Amba Prasad was dismissed by the Sessions Judge, Bulandshahr on October 10, 1950 (item No. 27). During the pendency of the proceedings under section 145,. Criminal Procedure Code these fields remained under atta chment from August 23, 1949 (1358 F.) to November 6, 1951 (1359 F.). Two suits were then commenced in the court of the Munsif, Khurja for declaration that crops of the fields under attachment belonged to the plaintiffs. One suit (97 of 1951) was filed by Abdul Noor Khan and others (answering respondents) and the other (67 of 1952) was filed by Sarfraz Ali Beg and 8 others (respondents in C. A. 682 of 1963since compromised). These suits were directed against Amba Prasad and the plaintiffs claimed to be in possession of the fields by virtue of entries to this effect in the remarks column of the Khasras of the relevant years. These suits failed on August 9, 1952 and August 8, 1953 respectively (vide items Nos. 30 and 32). It appears that proceedings under section 107,, Criminal Procedure Code were also started against A. Noor khan and others before Magistrate, 1st Class, Bulandshahrand they were bound over to keep the peace. There is on the file of this case an order of the Sessions Judge, Buland shahr dismissing their application in revision on February 24, 1953 (item No. 31). 803 Meanwhile, the answering respondents and Sarfraz Ali and others commenced on November 6, 1951 three suits under section 61 read with section 183 of the U. P. Tenancy Act, 1939 .for declaration of Sirdar rights and to claim hereditary rights under section 180/2 ibid. These suits were decreed against Amba Prasad by the Judicial Officer, Anupshahr on July 14, 1953. He held that the Dakhaldehi of July 1, 1949 did not affect the plaintiffs and since they were shown to be in possession they were entitled to succeed (item No. 33). Amba Prasad filed an appeal and the Commissioner, Meerut Division re versed the decision by his order dated April 1, 1954 (item No. 35). The Board of Revenue, U. P. also dismissed the appeal of the plaintiffs on September 17, 1955 (item No. 38). On October 10, 1953 two suits were filed by the answering respondents in these two appeals and a third by the res pondents in C. A. No. 682 of 1963 which has been compro mised. These suits were under section 232/2O of the U. P. Zamin dari Abolition and Land Reforms Act. It is with these suits that we are concerned in the appeals. Two suits also under section 232/20 of the Abolition Act were filed by Ayub Ali Khan and Abdul Sattar Khan and others against Amba Prasad. The answering respondents and Sarfraz Ali and others were joined as defendants in those suits. The plaints in these two suits are dated December 28, 1954 and December 20, 1954 (items Nos. 36 and 38). They were dismissed by the Sub Divisional Magistrate, Khurja on % lay 16, 1955. The Addi tional Commissioner, Meerut, dismissed the appeals on Janu ary 30, 1950 in default of appearance (item No. 39). On September 4, 1958 the Sub Divisional Officer, Khurja dismissed the three suits filed by the answering respondents ,and the respondents in the companion appeal. In these suits the answering respondents relied on extracts from the Khasras of 1355F, 1356F, 1357F, 1358F and 1359F as showing their possession. These lands, however, were under attachment from August 23, 1949 (1358F) to November 6, 1959 (1359F) and could not be in the possession of the answering respondents in the years 1358F and 1359F. This fact was noticed by the Commissioner, Meerut Division, in his order dated April 1, 1954 and he cast doubts on the entries in 1355F ,and 1356F. The Sub Divisional Officer took up the same line of reasoning and pointed 'out that in years subsequent to 1355F the entry would have found place in column 6 of the Khasra and not the remarks column. He accordingly held that the entries of 1355 F and 1356 F were unreliable and .the answering respondents had not acquired adhivasi rights. On Appeal, the Additional Commissioner, Meerut, reversed ,the decision on April 19, 1959 and decreed the suits. Before the Commissioner the answering respondents claimed that as L /P(D)ISCI 26(a) 804 they were recorded occupants in 1356F they were not required to prove actual possession. This proposition, it appears, was conceded by the counsel for Amba Prasad. He only argued that the entries were not in accordance with paragraph 87 of the Land Records Manual and they were considered spurious in earlier litigation. He also claimed that the answering respondents were barred by the principle of res judicata because though they were parties to the suits of Ayub Ali Khan and Abdul Sattar they did not claim adhivasi rights in those suits. The learned Commissioner pointed out that the entries were no doubt suspected to be spurious by the Commissioner on April 1, 1954, but this was after July 1. 1952 which was the date of vesting and the case therefore was outside Expla nations 11 and III of section 20(b) of the Abolition Act. The learned Commissioner, therefore, was of the opinion that them entries could not be discarded as they must have been completed under the rules before April 30, 1949, that is to say, even before the Dakhaldehi. He held that the answering respondents (appellants before him) had acquired adhivasi rights. Amba Prasad appealed to the Board of Revenue. The Board dismissed his appeal on February 8, 1960 by the order now impugned. This time the learned counsel for Amba Prasad conceded that the entry was made but contended that it was fraudulently made after July 1, 1949 and referred to the prosecution of the Lekhpal. The Board 'of Revenue pointed out that there was no order for the correction of the entry before the date of vesting and the Lekhpal was acquitted of ' the charge under section 218, Indian Penal Code. Since the entries were not corrected as required by Explanation 11 to section 20 the conditions of section 20(b) of the Abolition Act were held to be satisfied and the appeal was dismissed. Mr. Goyal on behalf of Amba Prasad contends that these suits were barred by res judicata. He submits that in the previous suits filed by Ayub Ali Khan and Abdul Sattar and others, the answering respondents were made defendants and could have raised the plea that they had acquired adhivasi rights and as they did not raise such a plea they cannot now raise it. We do not accept this Contention. The answering respondents had filed these suits even before Ayub Ali Khan and Abdul Sattar had filed their suits. Further, the suits filed by Ayub Ali Khan and Abdul Sattar did not decide anything because they were dismissed owing to a technical flaw in the plaint. Even the appeal was dismissed in default of appearance. Lastly, the answering respondents and Amba Prasad were co defendants and no issue between them was tried or decided even if one was necessary to be tried. 805 Mr. Goyal next contends that the answer in respondents must show that they were in possession and that under Explanation I to section 20 they were evicted after June 30, 1948. He submits that these conditions are not fulfilled by them. Mr. Goyal also wishes to withdraw the concession made on behalf of Amba Prasad before the Tribunals below that the answering respondents need not prove their possession. He says that the concession was made because there were rulings of the Allahabad High Court which bound the Revenue Tri bunals. He submits that these rulings should be considered and urge that possession in 1356 Fasli must be proved. He further submits that even entries in the Khasra and Khatauni to be of value must be made in accordance with sections 28 and 33 of the U. P. Land Revenue Act and he relies on paragraph 87 of the Land Record Manual to contend that the entries in favour of the answering respondents were irregular. These contentions though they appear to be many are really two. The first questions the entry and the other the right of the answering respondents even if the record be correct to claim adhivasi rights under section 20 of the Abolition Act. We shall consider them separately. The first question is whether these entries were regularly made. It is pointed out that they were doubted by the Revenue Tribunals in some other proceedings and that the Lekhpal was also prosecuted under section 218, Indian Penal Code. That, however, does not prove in these proceedings that the entries are spurious. The Lekhpal was discharged and the Additional Commissioner has held here: "By making the entry in the remarks column it is also not possible to attribute any dishonest or collusive entry. It appears that Shri Amba Prasad had filed a criminal case against the patwari but this was after the entries in the remarks column in favour of appellants had been made. The entry in 1356 fasli cannot be discarded on the remarks in the judgments referred by the learned counsel for the respondent. It appears that Sri Mohammad Ali and Srimati Sharifan were the proprietors and they mortgaged their share with present respondents and Sri Amba Prasad purchased the equity of redemption and got the share partitioned. There was litigation between Sri Amba Prasad and Sri Mohammad Ali and Srimati Sharifan upto High Court. Sri Amba Prasad and others filed suits against Srimati Sharifan and Sri Mohammad Ali under section 180 and it was decreed in the 2nd appeal on 19 3 49. The possession was delivered on 1 7 1949, in execution of the decree. The Khasra for 1356 fasli under 806 the rules may have been deposited some time before 31st July 1950 but the entries in the Khasras had to be completed upto 30th April 1949" Mr. Goyal relies upon paragraph 87 of the Land Records Manual and argues that the names of persons occupying land without the consent of persons whose names are recorded in column 5 of the khasra should have been entered in column 6 but column 6 is crossed out. It is, however, to be seen that when a tenant leaves the neighbourhood without leaving in charge of his holding, a person responsible for the pay ment of his rent as it falls due and without giving a written notice to the land holder of such arrangement, the Lekhpal is required to show the name of the actual cultivator in the column of remarks preceded by the word 'qabiz ' (see Para. 85(c)). That is how the entry stands and there is nothing on the record of this case on the strength of which it can be said that the entry in 1356F was not regularly made. If it was wrong Amba Prasad ought to have got it corrected but the doubts cast on the entry cannot be said to have corrected it .as required by Explanation III to section 20 of the Abolition Act. There is thus no doubt that the answering respondents were recorded as 'qabiz ' in 1356F. There is also no doubt that if they were 'qabiz ' they were dispossessed after June 30, 1948. The possession of Amba Prasad did not begin ,earlier than July 1, 1949. There is nothing to show that the possession of the answering respondents was disturbed bet ween these two dates, because the attachment came much later. Mr. Goyal, however, contends that the burden is on ,the answering respondents to prove their possession and eviction after June 30, 1948 before they can regain possession as adhivasis under section 20. Mr. Brij Bans Kishore, however, joins issue and claims that the answering respondents have done enough when they show that they are recorded as 'occupants ' in the year 1356F. He contends that it is not necessary to show possession though he does not admit that the Ian were not in his clients ' possession. We have pointed out above that the eviction could not have taken place before July 1, 1949. The Dakhalnamas show that possession was given to Amba Prasad on July 1, 1949. In so far as the appellant is concerned he was not in possession before that date and the khasra for 1356F shows that the answering respondents were 'qabiz ' (in possession). It is ,contended that the suit is for possession and the date of dispossession has not been given as required by rule 183. No such objection appears to have been made at any time. In any event, that date is useful only to calculate limitation and it is not Amba Prasad 's cases that there is any such bar. 807 The real dispute thus is whether a person who is recorded as 'qabiz ' but not as a tenant or a sub tenant can get the advantage of section 20 of the Abolition Act and claim rights as an adhivasi. It is convenient at this stage to set out the material portions of section 20: "20. Every person who (a) * (b) was recored as occupant (i)of any land (other than grove land or land to which section 16 applies) in the khasra or khatauni of 1356F prepared under sections 28 and 33 respectively of the U.P. Land Revenue Act, 1901, or who was on the date immediately preceding the date of vesting entitled to regain possession thereof under clause (c) of subsection (1) of section 27 of the United Provinces Tenancy (Amendment) Act, 1947, or (ii) * * * * be called adhivasi of the land and shall, subject to the provisions of this Act, be entitled to take or retain possession thereof. Explanation I Where a person referred to in clause (b) was evicted, from the land after June 30, 1948, he shall notwithstanding anything in any order or decree, be deemed to be a person entitled to regain possession of the land. Explanation II Where any entry in the records referred to in clause (b) has been corrected before the date of vesting under or in accordance with the provisions of the U. P. Land Revenue Act, 1901, the entry so corrected shall for the purposes of the said clause, prevail. Explanation III For the purposes of explanation 11 an entry shall be deemed to have been corrected before the date of vesting if an order or decree of a competent court requiring any correction in records has been made before the said date and had become final even though the correction may not have been incorporated in the records. Explanation IV For the purposes of this section " occupant" as respects any land does not include a person who was entitled as an intermediary to the land or any share therein in the year l356 Fasli. " The scheme of the section may now be noticed. The section, speaking generally says that certain persons "recorded" a,, "occupants" of lands (other than grove lands or lands to which section 16 applies) shall be known as adhivasis and. 808 shall be entitled to retain or to regain possession of them, after the date of vesting which was July 1, 1952. Such persons do not include an intermediary (Explanation IV). Such persons must be recorded as occupants in the khasra or khatauni for 1356F (1 7 48 to 30 6 49). If such a person is in possession be continues in possession. If he is evicted after June 30, 1948 he is to be put back in possession notwithstanding anything in any order or decree. By fiction such persons are deemed to be entitled to regain possession (Explanation 1). The emphasis has been laid on the record of khasra or khatauni of 1356F and June 30, 1948 is the datuni line. The importance of an entry in these two documents is further apparent from explanations 11 and 111. Under the former, if the entry is corrected before the date of vesting (1 7 52), the corrected entry is to prevail and under the latter the entry is deemed to be corrected (even though not actually corrected) if an order or decree of a competent court ordering the correction had been made before the date of vesting and the order or decree had become final. There are thus two date lines. They are June 30, 1948 and July 1, 1952, and the title to possession as adhivasi depends on the entries in the khasra or khatauni for the year 1356F. Before we proceed to decide whether the answering respondents satisfy the above tests we must consider what is meant by the terms 'occupant ' and 'recorded '. The word 'occupant ' is not defined in the Act. Since khasra records possession and enjoyment the word 'occupant ' must mean a person holding the land in possession or actual enjoyment. The khasra, however, may mention the proprietor, the tenant, the sub tenant and other person in actual possession, as the case may be. If by occupant is meant the person in actual possession it is clear that between a proprietor and a tenant the tenant, and between a tenant and the sub tenant the latter and between him and a person recorded in the remarks column as "Dawedar qabiz" the dawedar qabiz are the occupants. This is the only logical way to interpret the section which does away with all intermediaries. If rights are not to be determined except in the manner laid down by the section, the entries must be construed as explained by the four explanations. Once we find out the right person in the light of the explanations, that person continues as an adhivasi after July 1, 1952, provided he is in possession or was evicted after June 30, 1948. If he was evicted after June 30, 1948 he is entitled to regain possession in spite of any order or decree to the contrary. The word 'occupant ' thus signifies occupancy and enjoyment. Mediate possession, (except where the immediate possessor holds on behalf of the mediate possessor) is ,of no consequence. In this way even persons who got into Occupation when lands were abandoned get recognition. The 809 section eliminates inquiries into disputed possession by ac cepting the records in the khasra or khatauni of 1356F, or its correction before July 1, 1952. It was perhaps thought that all such disputes would have solved themselves in the four years between June 30, 1948 and June 30, 1952. There was, however, for some time a difference of opinion, on the point whether possession in 1356F should be proved, between the High Court of Allahabad and the Board of Revenue. Section 20 came before this Court in The Upper Ganges Sugar Mills Ltd. vs Khalil ul Rehman and others(1) where the correctness of Lala Nanak Chand vs The Board of Revenue, U.P.(2) was challenged oil the ground that it had held that a mere entry in 1356F without possession in that year was sufficient. This Court did not decide the question and left it open. Subsequently, the Allahabad High Court in several decisions including the Full Bench decision in Ram Dular Singh and another vs Babu Sukh Ram and others(3) has endorsed the earlier view in Nanakchand vs Board of Revenue, U.P.(2) In L. Bhal Singh vs Bhop and another(4) the following passage from Nanak Chand 's case was expressly approved: "It seems to us that clauses (b)(i) and (b)(ii) of Sec. 20 do not require the proof of actual possession in the year 1356F. What they require merely is the entry of a person 's name as an occupant in the Khasra or Khatauni of 1356F. The words of the section are clear. (Every person who was recorded as occupant in the Khasra or Khatauni in 1356F. etc.). The words are not "every person who was an occupant in 1356F": nor are the words "every person who was recorded as an occupant in the year 1356F and who was also in possession in that year". There is no warrant for introducing words in the section which are not there. This conclusion is reinforced by what is stated in Explanation 11". The Board of Revenue in Sugriva vs Mukhi etc.(5) has also adopted the same view. In view of the long established line 'of cases we see no justification for reopening of this question. The decision of the Board of Revenue was therefore right. The appeal fails and is dismissed with costs. One set of hearing fees. Appeal dismissed. (1) ; (2) (3) (4) at p. 291.

On October 10, 1953, the respondents filed suits under section 232 read with section 20 of the U. P. Zamindari Abolition, and Land Reforms Act, 1950 against the appellant before the Sub Divisional Officer. Before the coming into operation of the Abolition Act the appellant (Amba Prasad) was Zamindar of the disputed land. The names of the respondents were recorded in column 23 (miscellaneous) in the Khasra for the year 1356 Fasli as persons in possession of the disputed land. The respondents claimed adhivasi rights under section 20 of the Abolition Act because they were recorded as occupants of the fields in dispute in the Khasra for 1356 Fasli. The common case of the respondents was: (i) that they were in possession of the suit land (ii) that they were dispossessed after June 30, 1948 by the appellant, (iii) that as they were recorded occupants in 1356F they were not required to prove actual possession. The case of the appellant was that the entry was fraudulently made after July 1, 1949. These suits were dismissed by the Sub Divisional officer. On appeal, the Additional Commissioner held that the respondents had acquired the adhivasi fights. Against this order Amba Prasad (the appellant) appealed to the Board of Revenue. The Board of Revenue dismissed the appeals. The appellant then filed appeals in this Court. Held:(i) Under section 20 of the Abolition Act (U. P. Zamindari Abolition and Land Reforms Act) a person continues as an adhivasi after July 1, 1952. provided he is in possession or was evicted after June 30, 1948. If he was evicted after June 30, 1948 he is entitled to regain possession in spite of any order or decree to the contrary. (ii)The words "recorded as occupants" in section 20 of the Abo lition Act mean persons recorded as occupants in the Khasra or Khatauni for 1356 Fasli (1 7 48 to 30 6 49). Such persons do not include an intermediary. The word "occupant" must mean a person holding the land in possession or actual enjoyment. Mediate possession (except where he immediate possessor holds on behalf of the mediate possessor) is of no consequence. (iii)The appellant was not entitled to raise the plea of the correctness of the entry in Khasra because the entry was not corrected before the date of vesting (1 7 52) as required by Explanation (ii) to section 20 of the Abolition Act. (iv)The title to possession as adhiwasi depends on the entries in the Khasra or Khatauni for the year 1356 Fasli. Section 20 of the Abolition Act does not require the proof of actual possession. Therefore, section 20 eliminates inquiries into disputed possession by accepting the record in the Khasra or Khatauni of 1356F. or its correction before July 1, 1952. 801 The Upper Ganges Sugar Mills Ltd. vs Khalil ul Rehman, ; , referred to. Lala Nanak Chand vs Board of Revenue, U. P., 1955 A.L.J. 408, Ram Dular Singh vs Babu Sukh Ram, , Bhal Singh vs Bhop and Anr., and Sugriva vs Mukhi etc., , approved.

Appeals Nos. 47 and 48 of 1961. Appeals by special leave from the judgment and decree dated August 5, 1957, of the Bombay High Court in Appeal No. 1085 of 1954 with second Appeal No. 1086 of 1954. G.S. Pathak and Naunit Lal, for the appellant. I. N. Shroff, for respondent No. 1 M.S.K. Sastri and R.H. Dhebar, for respondent No. 2. December 10, 1963. The Judgment of the Court was delivered by MUDHOLKAR J. This judgment will also govern C.A. No. 48 of 1961. Both the appeals are by special leave from the judgment of the Bombay High Court in second appeal disposing of two appeals which arise out of two separate suits instituted by the appelant, the Borough Municipality of Bhusawal, against 907 the Bhusawal Electricity Co. Ltd., respondent No. 1 before us, to which suits the State of Bombay was later added as a defendant. In each of the two suits the appellant had claimed refund of two sums of money paid by them to the respondent No. 1 under protest as electricity charges to which the respondent No. 1 claimed to be entitled by virtue of an order made by the Government of Bombay under the Bombay Electricity Supply (Licensed Undertakings War Costs) Order, 1944 (herein referred as Surcharge Order ). The appellant succeeded in both the suits in the trial court as well as the District Court. In second appeal, however, the High Court set aside the decrees passed by the trial court and dismissed the two suits. While doing so, the High Court admitted on record certain documents by way of additional evidence and the only contentions raised before us by Mr. G.S. Pathak for the appellant are firstly that the High Court is incompetent in second appeal to admit additional evidence on record in asmuch as O. XLI, r. 27, Code of Civil Procedure is inapplicable to a second appeal. Secondly, the provisions of O. XLI, r. 27 cannot be used to fill up the lacuna in the evidence left by a party. We may incidentally mention that when the High Court, by its order dated April 30, 1958, decided to admit additional evidence on record, no objection was raised on behalf of the appellant before us. It seems to us to be wholly unnecessary to decide in this case whether the High Court has the power to admit additional evidence in second appeal and also whether even if it has that power it was right in admitting the evidence in the circumstances of this case. Basing itself on a particular interpretation of the agreements regarding payment of electric charges with respondent No. 1, the appellant claimed refund on the ground that it was not liable to pay the surcharge payable under the Surcharge Order, 1944 in respect of electrical energy consumed by it. The substantial defence of the respondent No. 1 was that the dispute between it and the municipality was 908 decided by the Government of Bombay and that under the second proviso to cl. 5 of the Surcharge Order, 1944 the decision of the Government was final and binding both on the appellant and the respondent No. 1.The relevant provisions read thus: Clause 5: "Upon the rate of the War Costs Surcharge being fixed by the Provincial Government from time to time in accordance with this order, it shall not be lawful for the licensee or sanction holder concerned to supply energy at other than charges surcharged at the rate for the time being so fixed:" * * * * Second proviso: "Provided further that no War Costs Surcharge shall be effective upon the charges for the supply of energy under any contract entrered into after the 1st May, 1942, unless such contract provides for the same charges for energy as have been contained in similar previous contracts for similar supply by the licensee or sanction holder concerned (as to which in the event of dispute by any party interested, the decision of the Provincial Government shall be final) or unless and to such extent as such application may be expressly ordered by the Provincial Government. " It is not disputed before us by Mr. Pathak that the decision of the Government upon the dispute is final and binding on the parties. But, according to him, it was not established by the evidence led in the trial Court that the dispute between the parties had at all been referred to the Government and that a certain communication sent by the Government to the parties, exhibit 68 dated May 22, 1946 relied upon by the respondent No. 1, contains nothing but the opinion of the Government. Mr. Pathak further urged that the proviso referred to by us purports to constitute the Govern 909 ment into an arbitrator and, therefore, there had to be a reference to the arbitrator by both the parties to the dispute under the provisions of the . This latter point, however, had not been taken in the courts below nor is it found in the statement of the case. We have, therefore, not permitted Mr. Pathak to rely upon it before us. The communication of May 22, 1946 relied upon by the first respondent runs thus: "No. 6404/36 E1(1). Public Works Department, Bombay Castel, 22nd May, 1946. From The Secretary to the Government of Bombay Public Works Department (Irrigation). TO The President, The Borough Municipality, Bhusawal. Subject: War Costs Surcharge. Dear sir, With reference to the correspondence ending with Government letter No. 6404/36, dated the 10th May, 1946 on the subject mentioned above, I am to inform you that Government has fully considered your case under the second proviso to clause 5 of the Bombay Electricity Supply (Licensed Undertakings War Costs) Order, 1944, and has decided that you should pay the surcharge to the Bhusawal Electricity Co. Ltd., at the rate of 15 % fixed in Government Order No. 6331/36 (IV) dated the 15th August, 1944, unless the Company raised its rate of supply of energy for street lighting to more than 4 annas per unit. Yours faithfully, Sd/ D.N. Daruwala. for Secretary to the Govt. of Bombay. Copy forwarded for information to: Public works Department, the Electrical Engineer to the 910 Government with reference to his No. LRM.57/ 5260, dated the 8th March, 1946. The Account ant General, Bombay with reference to his No. O.A. 2888, dated the 2nd February 1946. Messrs The Bhusawat Electricity Co. Ltd., Bombay with reference to correspondence ending with Government letter No. 6404/36 El. (i) dated the 17th May 1946. CC to E.E. Bhusawal for information sent on 25th May 1946. " It is obvious from this communication that both the parties, that is, the appellant as well as the respondent No. 1 had stated their respective cases before the Government. There was no occasion for them to do so unless they were both purporting to act under the second proviso to cl. 5 of the Order of 1944. After consideration of the cases of both the parties the Government has stated in the aforesaid communi cation that it had decided that the municipality should pay to the Electricity Company surcharge at the rate of 15% fixed in a certain Government Order unless the Company raised its rate for the supply of energy for street lighting to more than four annas per unit. There is no reason to think that what is on the face of it a decision is nothing but an opinion because if there were anything in the correspondence to which a reference is made in that letter as well as in the endorsement at the bottom which went to show that the appellant did not purport to refer any dispute to the Government, it was for the appellant to produce that correspondence. Its omission to do so must be construed against it. Then Mr. Pathak said that under the Surcharge Order itself the dispute had to be referred by both the parties and not by only one of them. This contention is, however, untenable in view of the clear language of the proviso which says: "In the event of dispute by any party interested" the decision of the Provincial Government shall be final. There is, therefore, no substance in the contention. In our opinion the trial court and the District Court had wholly misconstrued this document which is not merely of evident 911 iary value but is one upon which the claim of the respondent No. 1 for the surcharge is based. Misconstruction of such a document would thus be an error of law and the High Court in second appeal would be entitled to correct it. This is what in fact has been done. There is no substance in the appeals which are dismissed with costs. Appeals dismissed.

The Municipality filed two suits to claim refund of two sum of money paid by them to the respondent No. 1 under protest a, electricity charges. The defence of the respondent No. 1 was that the dispute between it and the municipality was decided by the Government of Bombay and that under the second proviso to cl. 5 of the Surcharge Order, 1944 the decision of the Government was final and binding both on the appellant and the respondent No. 1. The decision of the Government was communicates to the parties by the letter dated May 22, 1946. The appellant succeeded in both the suits in the trial court as well as the District 906 Court. In second appeal, the High Court dismissed the two units. Hence this appeal. Held: (i) The Municipality was not entitled to claim fund because the dispute between the parties had been decided by the Government under the second proviso to cl. 5 of the Surcharge order, 1944. The decision of the Government was final and binding on the parties. (ii) The communication dated May 22,1946 sent by the Govern ment to both the parties was a final decision under the second proviso to cl. 5 of the Surcharge Order, 1944. There is no reason to think that the communication contains nothing but the opinion of the Government. (iii) The second proviso to cl. 5 of the Surcharge Order does not require that the dispute has to be referred by both the parties. Such a dispute can be referred by one of the parties as clear from the language of the proviso which says "in the event of dispute by any party interested" the decision of the provincial Government shall be final. (iv) The Trial Court and the District Court had wholly mis construed the document dated May 22, 1946 which is not merely of evidentiary value but is one upon which the claim of the respondent No. 1 for the surcharge is based. Misconstruction of such document would thus be an error of law and the High Court in second appeal would be entitled to correct it.

vil Appeal No. 2931 (N) of 1981. From the Judgment and Order dated 7.10.1980 of the Madhya Pradesh High Court in Miscellaneous First Appeal No. 78 of 1974. L.M. Singhvi, D. Bhandari and A.K. Sanghi for the Appellant. T.S. Krishnamurthy Iyer and S.K. Gambhir for the Respondent. The Judgment of the Court was delivered by K.N. SAIKIA, J. This Civil Appeal by special leave is from the order dated 7.10.1980 of the High Court of Madhya Pradesh, Jabalpur in Misc (F) Appeal No. 78 of 1974, allow ing the appeal and enhancing compensation for land acquired by the Improvement Trust, Bhopal. The Improvement Trust, Bhopal, hereinafter referred to as 'the Trust ', acquired 152 acres of land of Village Jamal pura by Notification dated 30th April, 1965 issued under Section 68 of the Madhya Pradesh Town Improvement Trust Act, 1960, hereinafter referred to as 'the Act ', and took posses sion of the land sometimes in June, 1967. Out of these acquired land the instant appellant owned 12.62 acres where upon stood a house, a well and some trees. The whole of the acquired land including that of the appellant was within the limits of Bhopal Municipal Corporation. On 25.3.1966 Notifi cation under Section 71 of 911 the Act was issued vesting the land in the Trust. The Trust offered compensation at the rate of Rs.950 per acre (@ 14 paise per sq. ft.) amounting to Rs.11,997.00; for the well Rs.3,108; and for the trees Rs.815 and for compulsory acqui sition 15% amounting to Rs.2,400. The appellant made refer ence, No. 8 of 1970 to the Compensation Tribunal under Section 72(3) of the Act. The Tribunal awarded compensation at the rate of Rs.6,000 per acre (Rs.0.28 Paise per sqr. ft.) for the land, Rs.5,000 for the building, Rs.3,000 for the well and Rs.815 for the trees. Thus the Tribunal by its award dated 25th November, 1972 awarded a total sum of Rs.1,20,060 inclusive of interest as compensation to the appellant, as against his claim at the rate of Rs.20,000 per acre for the land, Rs.20,000 for the building, Rs.5,000 for the well, Rs.2,500 for the trees and Rs. 10,000 for loss of business and earnings, his total claim amounting to Rs. 13,39,560. On appeal, being Misc. (F) Appeal No. 78 of 1974, the High Court maintained the award in respect of the Build ing, well and the trees, but enhanced the compensation in respect of the land determining the market value at Rs. 12,000 per acre and the total area being 12.62 acres the total compensation inclusive of that allowed for the house etc. and 15% solatium worked out to Rs. 1,84,293. Dissatis fied, the appellant obtained leave and filed this appeal. Dr. L.M. Singhvi learned counsel for the appellant submits, inter alia, that the house and the well were gross ly undervalued; that both the Tribunal as well as the High Court misdirected themselves in treating the land as agri cultural land but not as urbanised developed land on the erroneous ground that there was no building activity of substantial nature at the time of acquisition in spite of the fact that a part of the land was already converted to Abadi, that both the Tribunal as well as the High Court failed to take into consideration the potential value of the land; and that evidence of sales of similar plots was not accepted on the ground that those pertained to small plots; and that the High Court committed an error when it deducted the development charge from the agreed price instead of adding it to the agreed price while calculating the market value. Mr. Krishnamurthi learned counsel for the respondent Trust submits that the house and the well were properly valued; that it was not correct that the Tribunal did not correctly consider the question of the nature of the land which it held to be agricultural because it did not find therein any building activity of substantial nature. At any rate, counsel submits, the High Court took into considera tion the potential value of the land and as such there was no omission to consider any 912 relevant material or misdirection in this regard. Counsel, however, fails to explain the reason of deducting the devel opment charge from the agreed price, instead of adding it, while calculating market value of the lands on the basis of evidence produced by the claimant. This, however, according to counsel, is not a sufficient ground for our interference in this appeal under Article 136 of the Constitution of India. In an appeal under Article 136 of the Constitution of India involving the question of valuation of acquired land, this Court will not interfere with the award unless some erroneous principle has been invoked or some important piece of evidence has been overlooked or misapplied, as was held in Atmaram Bhagwant vs Collector of Nagpur, A.I.R. 1929 P.C. 92. In Dollar Company, Madras vs Collector of Madras, the Land Acquisition Officer awarded Rs. 800 per ground as compensation and the City Civil Court on reference awarded at the rate of Rs. 1,000 pet ground, and the High Court on appeal awarded Rs.1800 per ground. The appellant himself purchased the suit land about 10 months before the Notification under Section 4 was made at a price of Rs.410 per ground whereafter the appellant has spent a little money on filling up a pond. Dismissing the appeal it was observed that this Court interferes with the judgment of the High Court only if the High Court applies a principle wrongly or because some important point affecting valuation has been overlooked or misapplied. A Court of appeal inter feres not when the judgment under attack is not right, but only when it is shown to be wrong. As there was no error in principle in the High Court judgment nor had any of the limited grounds on which that Court 's jurisdiction could be legitimately exercised was made out, the appeal was dis missed. Therefore, it is for the the appellant to show that there is ground for interference in this case. As regards the value of the house, the Land Compensation Tribunal clearly observed that it visited the spot and found that the house 'was in extremely dilapidated condition having big cracks in foundation, walls and pillars. The foundation was getting loose. The roof of asbestos sheets was sagging, indicating that the wood rafters had been badly damaged. Doors and windows were in bad condition. The two verandahs of the house were temporary, with roof of asbestos sheets. ' The house, according to the Tribunal might be 20 to 25 years old and depreciation would be 5% per year. Considering the above factors 913 we are of the view that the compensation awarded, namely, Rs.5,000 is reasonable. Also from evidence we find that Rs.3,000 for the well was reasonable. There was no error of principle and hence there can be no grievance on these counts. Regarding nature of the land the Tribunal noted that the claimants in most of the references asserted that the ac quired land should be valued as urban house site because of alleged potential value and had claimed compensation between the Rs.3 to Rs. 1 per sqr. The Trust disputed the claim and urged that the lands at the time of acquisition, were either agricultural or merely fallow land and they had absolutely no urban site value. The claimants also urged that the lands were situated within Corporation limits and lands of some of the claimants were already diverted (con verted). We agree with Mr. Krishnamurthi that though the Tribunal treated it as agricultural, the High Court proceed ed on the principle of developed land. It is true that the market value of the land acquired has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. Dr. Singhvi argues that failing to consider potential value is an error of principle. It is an accepted principle as was laid down in Gajapatiraju vs Rev. Divisional Officer, A.I.R. 1939 P.C. 98 that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to obtain from willing purchaser. The disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy it must alike be disregarded. Neither must be considered as acting under compulsion. The value of the land is not to be estimated at its value to the purchaser but this does not mean that the fact that some particular purchaser might desire the land more than others is to be disregarded. The wish of a particular purchaser, though not his compulsion, may always be taken into consideration for what it is worth. Any sentimental value for the vendor need not be taken into account. The vendor is to be treated as a vendor willing to sell at the market price. Section 23 of the Land Acquisition Act, 1894, enumerates the matters to be considered in determining compensation The first to be taken into consideration is the market value of the land on the date of the publication of the Notification under Sec tion 4(1). Market value is that of a willing vendor and a willing purchaser. A willing vendor would naturally take into consideration such factors as would contribute to the value of his land including its unearned increment. A will ing purchaser would also consider more or less the same factors. There may be many ponder 914 able and imponderable factors in such estimation or guess work. Section 24 of the Act enumerates the matters which the Court shall not take into consideration in determining compensation. Section 25 provides that the amount of compen sation awarded by the Court shall not be less than the amount awarded by the Collector under Section 11. As was observed in Gajapatiraju (supra) sometimes, it happens that the land to be valued possesses some unusual, and it may be, unique features, as regards its position or its potentiali ty. In such a case the court has to ascertain as best as possible from the materials before it what a willing vendor might reasonably expect to obtain from a willing purchaser, for the land in that particular position and with that particular potentiality. In the instant case also the ac quired land possesses Some important features being located within the Corporation area and its potentiality for being developed as a residential area. In such a situation in determining its market value, where there was no sufficient direct evidence of market price, the Court was required to ascertain as best as possible from the materials before it, what a willing vendor would reasonably have expected to obtain from a willing purchaser from the land in this par ticular position and with this particular potentiality. It is an accepted principle that the land is not to be valued, merely by reference to the use to which it has been put at the time at which its value has to be determined, that is, the date of the notification under Section 4, but also by reference to the use to which it is reasonably capable of being put in the future. A land which is certainly or likely to be used in the immediate or reasonably near future for building purposes but which at the valuation date is waste land or has been used for agricultural purposes, the owner, however willing a vendor he is. is not likely to be content to sell the land for its value as waste or agricultural land as the case may be. The possibility of its being used for building purposes would have to be taken into account. However, it must not be valued as though it had already been built upon. It is the possibilities of the land and not its realised possibilities that must be taken into considera tion, In other words, the value of the land should be deter mined not necessarily according to its present disposition but laid out in its lucrative and advantageous way in which the owner can dispose it of. It is well established that the special, though natural, adaptability of the land for the purpose for which it is taken, is an important element to be taken into consideration in determining the market value of the land. In such a situation the land might have already been valued at more than its value as agricultural land, if it had any other capabilities. However, only rea sonable and fair capabilities but not far fetched and hypo thetical capabilities are to be taken into consideration. In sum, in estimating 915 the market value of the land all of the capabilities of the land, and all its legitimate purposes to which it may be applied or for which it may be adapted are to be considered and not merely the condition it is in and the use to which it is at the time applied by the owner. The proper principle is to ascertain the market value of the land taking into consideration the special value which ought to be attached to the special advantage possessed by the land; namely, its proximity to developed urbanised areas. The value of the potentiality has to be determined on such materials as are available and without indulgence in fits of the imagination. In Mahabir Prasad Santuka vs Col lector, Cuttack, [1987] 1 S.C.C. 587 the evidence on record was that the land was being used for agricultural purposes but it was fit for non agricultural purposes and it had potentiality for future use as factory or building site and that on industrialisation of the neighbouring areas the prices increased tremendously, and that aspect, it was held, could not be ignored in determining compensation. On the question as to whether the land was urbanised developed land or not we find that the Tribunal consolidated all the 15 references arising out of the acquisition for the purpose of recording evidence and, that is, how it came to consider the Exts. P 1, P 2, P 3, and P 8 being agreements of sale executed by Phool Chand Gupta who was father of the claimant in reference No. 1 of 1970 while the petitioners reference was No. 8 of 1970. Similarly the Ext. D 1 to D 6 also pertained to small plots of land out of land in refer ence No. 1 of 1970. The High Court rightly held that the Exts. P 1, P 2, P 3 and P 8 and the sale deeds Exts. D 1 to D 6 furnished a more reliable data for working out the market value. If those lands were the urban developed house site lands, their prices would have reflected the same. It cannot, therefore be said that High Court was in error in taking the above Exts. into consideration. However, poten tial value was not separately considered. P 1, P 2, P 3 and P 8 were agreements of sale executed on 29th July, 1961 in respect of small parcels of land wherein the vendor agreed to sell the land at that time at the rate of 14 annas per sqr. to Rs. 1 per sqr. It was further agreed that the vendees would pay development charges at the rate of 4 annas per sqr. The vendor and the respective vend ees were examined It should be noted that the Exts. were agreements to sell and not sales. The High Court observed. that the idea behind those transactions was that the vendor would apply to the revenue authority for diversion and the town planning authority for sanction of lay out plan and the sale deeds would be executed after the land was developed. The High Court also noted that 916 there was nothing to show that the agreements were prepared only to be used later as evidence of market value. In Decem ber 1960 Phool Chand Gupta applied for diversion of his land to the Sub Divisional Officer. In January 1961 application was also made to the Town Planning Authority for sanction of the lay out plan but in the meantime the land was notified for acquisition under the Land Acquisition Act sometimes in 1962 and Phool Chand Gupta tried to extricate his land from acquisition which, however, did not materialise and, as already noted, on 30.4.65 the instant notification to ac quire under Section 68 of the Act was issued. Rejecting the contention that the agreements were spurious, the High Court observed that the very fact that applications were made for diversion and for sanction of lay out plan went to show that the owner was interested in the development in the land and in selling it after dividing it into plots. Thus, the High Court, rightly took into consideration the above Exts, which pertained to a part of the acquired land of 152 acres. The High Court also considered the sale deeds Exts. D 1 to D 6 which pertained to small plots of lands out of land in reference No. 1 of 1970. Those sale deeds were registered in 1966 67, but the agreements to sale were entered into in 1959 62. The respective purchasers and the vendors were examined. The market value on the basis of Ext. D 2 made in the sale deed of 1962 selling only to 12.50 sqr. for Rs.260 which worked out to Rs.8712 per acre. The High Court did not say that these Exts. were rejected. By Ext. P 5, P 6 and P 32 small parcels of land, at Kumharpura were sold. Kumharpura was noted to be two to three furlongs away from the acquired land. The market rate according to these Exts. ranged from Rs. 1.88 to 2.34 per sqr. The High Court observed that these sales could not be a useful guide for determining the market value of land acquired. We are of the view that compared to Exts. P 1, P 2, P 3 and P 8 Exts. P 5 and P 6 and P 32 were less indicative of the market value of the acquired land. We feel that the appellant should have no grievance for rejection of these sales of Kumharpura. We find force in the contention of Dr. Singhvi that potential value was not taken into account in this case to the extent it should have been done. From the award dated 25.11.1972 it appears that the acquired land was situated at Village Nissatpura, within Corporation limits of Bhopal Town and consisting of Khasra No. 190/ 73, 136/74, 178/74, 135/75 76, the total area being 12.62 acres. The High Court found that the land was bounded on three sides by three roads: towards the eastern side by Berasia road; towards the western side by Sultania road; and towards the northern side by P.G.B.T. College Road. Southern boundary of the land was a Nala. The High 917 Court also noticed that the land abutted to roads, namely, Berasia road and P.G.B.T. College road and the claimant had a house on the land and that the claimant had stated that he had obtained water and electricity connection from the Corporation and the electricity Board. : 7.60 acres of land out of 12.62 acres had been diverted and the land was even. At paragraph 14 of the special leave petition it is stated that the land is approachable from two different and important localities of Bhopal Town. From Bajaria Chowk Shahjanabad, a road, called Sultania Infantry road, proceeds Military Lines called Sultania Infantry lines. On both sides of this road, there is the thickly habited locality of Shahjahanabad, till about two furlongs. Slightly ahead is the enterance porch gate of the Military lines. Just before the gate, a tarred road bifurcates on the right hand side and it enters the acquired land of Swatantra Kumar Ref. No. 1/70. This tarred road was constructed by the Trust after acquisition of the lands. It goes on all sides of village Jamalpura, which is surrounded on all sides by the lands of Ref. No. 1/70. A part of land of Ref. No. 1/70 was developed after acquisition, and the tarred road reaches the developed plots. We have to note that such detail evidence was not there before the Tribunal and no benefit of development pursuant to and after the acquisition can be taken into consideration. Even so, from the map and juxtaposition we have no doubt that the acquired land had potentialities which deserved to be counted. In U.P. Government vs H.S. Gupta, A.I.R. 1957 S.C. 202 where in computing compensation for acquisition of an estate outside the Municipal area the High Court had given valid and weighty reasons for adopting the principle that the valuation should be on plot wise though there was certain advantages in computing the value at the block rate where vast area of land was acquired, this Court held that in the circumstances of that case the proper mode of valuation was plot rate basis. In the instant case the application of the principle that if the land has to be sold in one block consisting of a large area, the rate likely to be fixed per sq. ft. would be lower than if an equal extent of land is parcelled out into smaller bits and sold to different pur chasers could not be found fault with. The price fetched for smaller extent of land similarly situated with the same kind of advantages and drawbacks can also be applied to a large area valued plot wise instead of block wise. In the instant case relying on Exts. P 1, P 2, P 3 and P~8 and considering the fact that applications were made for diversion and for sanction of a lay out plan the High Court found that it went to show that the owner was interested in developing the land and in selling it by 918 dividing it into plots. The lowest rate of price in these agreements was 14 annas per sqr. and the agreements mentioned that 4 annas per sqr. ft. Would be needed for developing the land. This charge was to be paid by the purchaser. So the price of developed land would be Rs. 1/2 per sqr. The evidence of M.P. Jain (D.W. 9), Senior Draftsman of the Improvement Trust went to show that ex penses for improvement of land ranged from Rs. 1.50 to 2 per sqr. The statement of Shri Jain was recorded in 1972. Making some allowance for the increase in the rate the High Court considered it proper to hold that in 1965 when this land was acquired the charges for improvement would have worked at 75 paise (12 annas) per sqr. It had also come in the evidence of Shri Jain that 50 to 60 per cent of the land had to be left for roads, drainage, gardens, school etc. and it was only then that the lay out plan was sanc tioned. High Court, accordingly, deducted improvement charges at the rate of 12 annas per sqr. ft., and the market rate for unimproved land in the light of these agreements worked out to 6 annas per sqr. As 50% of the land at least had to be left out for roads etc; so the market rate of 3 annas per sqr. ft. was applied for the entire unde veloped land. Market rate thus worked out to Rs.8,000 per acre approximately. However, the High Court awarded Rs. 12,000 per acre. There was an additional factors in the calculation. Mr. Krishnamurthi therefore submitted that the High Court took into consideration the potential value of the land as a developed area but while making calculation it may have committed mistake. To our mind the error was in wholly overlooking the basic price agreed to be paid by the purchaser and the standard of development they visualised. The whole of the basic price could not be expected to be eaten up by the development of the land to the standard contemplated by the vendor and purchaser. When the willing vendor has agreed to sell land at 14 annas per sqr. after development and the development charge was to be paid by the willing purchaser, it could be reasonable to deduct only 50% on account of the land to be set apart for roads, drains etc. and not beyond that. Considering this aspect of the matter and the potential value of the land as urban developed area we are of the view that the compensation may justly be enhanced by 1/6th to Rs. 14,000 per acre and we do so. We maintain 15% solatium but raise the rate of interest to 9% on the enhanced compensation from today till payment. We leave it open for the appellant to move for higher inter est and solatium if entitled by virtue of subsequent judg ment of this Court, if any. In the result, this appeal is allowed as above. We make no order as to costs. Y.L. Appeal allowed.

Respondent Town Improvement Trust Bhopal acquired 152 acres of land in village Jamalpura under section 68 of the Madhya Pradesh Town Improvement Trust Act within the munici pal limits of Bhopal. That land included 12.62 acres of land belonging to the appellant on which stood a house, a well and some trees. The appellant being not satisfied with the amount of compensation offered to him by the Trust, made a Reference to the Compensation Tribunal. The Tribunal awarded compensation at the rate of Rs.6,000 per acre for the land, Rs.5,000 for the building, Rs.3,000 for the well and Rs.815 for the trees. Thus the Tribunal awarded a total sum of Rs.1,20,000 as compensation as against a claim of Rs.13,39,560 made by the appellant. On appeal, the High Court, maintained the award in respect of the building, well and the trees but enhanced the same so far as the land is concerned by determining the market value of Rs.12,000 per acre. Working or this basis, including 15% solatium, the total amount of compensation awarded worked out to he Rs. 1,84,923. Being dissatisfied with the Order of the High Court, he has come up to this Court after obtaining special leave. The main contentions urged by the appellant are (i) that the house and well are undervalued; (ii) that the land ought to have been treated as urbanised developed land; (iii) that potential value of the land has not 909 been taken into consideration while determining compensa tion; (iv) that the value of the sales of similar plots has wrongly been rejected. Partly allowing the appeal, this Court, HELD: In determining market value, where there was no sufficient direct evidence of market price, the Court is required to ascertain as best as possible from the materials before it, what a willing vendor would reasonably have expected to obtain from a willing purchaser from the land in its particular position and with its particular potentiali ty. [914C D] A land which is certainly or likely to be used in the immediate or reasonably near future for building purposes but which at the valuation date is waste land or has been used for agricultural purposes, the owner, however, willing a vendor he is, is not likely to be content to sell the land for its value as waste or agricultural land as the case may be. The possibility of its being used for building purposes would have to be taken into account. However, it must not be valued as though it had already been built upon. It is the possibilities of the land and not its realised possibilities that must be taken into consideration. [914E F] In estimating the market value of the land, all the capabilities of the land and all its legitimate purposes to which it may be applied, or for which it may be adapted are to be considered and not merely the condition it is in and the use to which it is put at the time applied by the owner. The proper principle is to ascertain the market value of the land taking into consideration the special value which ought to be attached to the special advantage possessed by the land; namely, its proximity to developed urbanised areas. [915A B] The value of the potentiality has to be determined on such materials as are available and without indulgence in fits of imagination. [915B C] A court of appeal interferes not when the judgment under attack is not right, but only when it is shown to be wrong. [912E] In an appeal under article 136 of the Constitution of India involving the question of valuation of acquired land, the Supreme Court will not interfere with the award unless some erroneous principle has been invoked or some important piece of evidence has been overlooked or misapplied [912B C] 910 When the willing vendor had agreed to sell land at 14 annas per sq. feet after development and the development charge was to be paid by the willing purchaser it could be reasonable to deduct only 50% on account of the land to be set apart for roads, drains etc. and not beyond that. Con sidering this aspect of the matter and the potential value of the land as urban developed area the Court took the view that the compensation may justly be enhanced by 1/6th i.e. to Rs.14,000 per acre. Solatium 15% was maintained but the rate of interest was raised to 9% on the enhanced compensa tion till payment. [918F G ] Atmaram Bhagwant vs Collector ofNagpur, A.I.R. 1929 P.C. 92, followed; Dollar Company Madras vs Collector of Madras, ; Gajapatiraju vs Rev. Divisional Officer, ; Mahabir Prasad Santuka vs Collector, Cuttack, [1987] 1 S.C.C. 587 and U.P. Government vs H.S. Gupta, A.I.R. 1957 S.C. 202.

N/ORIGINAL JURISDICTION: Criminal Appeal No. 745 of 1980. Appeal by Special leave from the Judgment and Order dated the 21st December, 1979 of the Punjab & Haryana High Court in Criminal Appeal No. 1107 of 1979 & Murder Reference No. 15 of 1979. WITH Writ Petition (CRL) No. 529 of 1980 (Under Article 32 of the Constitution of India) AND Writ Petition (CRL) No. 368 of 1981 (Under Article 32 of the Constitution of India) AND Special Leave Petition (CRL.) No. 2744 of 1980 From the Judgment and order dated the 28th August, 1980 of the Punjab & Haryana High Court in Criminal Appeal No. 317 of 1980 and Murder Reference No. 4 of 1980. AND Writ Petition No. 1365 of 1982 (Under Article 32 of the Constitution of India) AND Criminal Appeal No. 303 of 1982 Appeal by Special leave from the Judgment and Order dated the 29th & 30th April, 1982 of the Bombay High Court in Criminal Appeal No. 180 of 1982 & Confirmation Case No. 2/82. AND Criminal Appeal No. 502 of 1982 Appeal by Special leave from the Judgment and Order dated the 4th March, 1982 of the Punjab & Haryana High Court in Criminal Appeal No. 711 DB of 1981. 695 The following Judgments were delivered CHANDRACHUD, CJ : The question which arises for consideration in these proceedings is whether section 303 of the Indian Penal Code infringes the guarantee contained in Article. 21 of the Constitution which provides that "No person shall be deprived of his life or personal liberty except according to procedure established by law. " Section 300 of the Penal Code defines 'Murder ', while section 302 reads thus: "302. Punishment for murder whoever commits murder shall be punished with death, or imprisonment for life, and shall also be liable to fine." Section 302 is not the only section in the Penal Code which prescribes the sentence of life imprisonment. Literally, it is one of the fifty one sections of that Code which prescribes that sentence. The difference between those sections on one hand and section 302 on the other is that whereas, under those sections life imprisonment is the maximum penalty that can be imposed, under section 302 life imprisonment is the minimum penalty which has to be imposed. The only option open to a court which convicts a person of murder is to impose either the sentence of life imprisonment or the sentence of death. The normal sentence for murder is life imprisonment. Section 354(3) of the Code of Criminal Procedure, 1973 provides: "354(3) When the conviction is for an offence punishable with death or, in the alternative, with imprisonment for a term of years, the judgment shall state the reasons for the sentence awarded, and, in the case of sentence of death, the special reasons for such sentence. " While upholding the validity of the death sentence as a punishment for murder, a Constitution Bench of this Court ruled in Bachan Singh(1) that death sentence can be imposed in a very exceptional class of cases "the rarest of rare cases". The Indian Penal Code was passed in 1860. The framers of that Code achieved a measure of success in classifying offences 696 according to their subject matter, defining them with precision and in prescribing what, in the context of those times, was considered to be commensurate punishment for those offences. One of the problems which they had to deal with, was as to the punishment which should be prescribed for the offence of murder committed by a person who is under a sentence of life imprisonment. They solved that problem by enacting section 303, which reads thus: "303. Punishment for murder by life convict Whoever, being under sentence of imprisonment for life, commits murder, shall be punished with death. " The reason, or at least one of the reasons, why the discretion of the Court to impose a lesser sentence was taken away and the sentence of death was made mandatory in cases which are covered by section 303 seems to have been that if, even the sentence of life imprisonment was not sufficient to act as a deterrent and the convict was hardened enough to commit a murder while serving that sentence, the only punishment which he deserved was death. The severity of this legislative judgment accorded with the deterrent and retributive theories of punishment which then held sway. The reformative theory of punishment attracted the attention of criminologists later in the day. How sternly the legislature looked at the offence of murder committed by a life convict can be gauged by the fact that in the early history of the Code of Criminal Procedure, unlike as at present, if a person undergoing the sentence of transportation for life was sentenced to transportation for another offence, the latter sentence was to commence at the expiration of the sentence of transportation to which he was previously sentenced, unless the court directed that the subsequent sentence of transportation was to run concurrently with the previous sentence of transportation. It was in 1955 that section 397 of the Criminal Procedure Code of 1898 was replaced by a new section 397 by Amendment Act 26 of 1955. Under the new sub section (2) of section 397 which came into force on January 1, 1956, if a person already undergoing a sentence of imprisonment for life was sentenced on a subsequent conviction to imprisonment for life, the subsequent sentence had to run concurrently with the previous sentence. Section 427(2) of the Criminal Procedure Code of 1973 is to the same effect. The object of referring to this aspect of the matter is to emphasise that when section 303 of the Penal Code was originally enacted, the legislature did not 697 consider that even successive sentences of transportation for life were an adequate punishment for the offence of murder committed by a person who was under the sentence of life imprisonment. While enacting section 303 in terms which create an absolute liability, the framers of the Penal Code ignored several important aspects of cases which attract the application of that section and of questions which are bound to arise under it. They seem to have had only one kind of case in their mind and that is, the commission of murder of a jail official by a life convict. It may be remembered that in those days, jail officials were foreigners, mostly Englishmen, and, alongside other provisions which were specially designed for the members of the ruling class as, for example, the choice of jurors, section 303 was enacted in order to prevent assaults by the indigenous breed upon the white officers. In its 42nd Report (1971), the Law Commission of India has observed in paragraph 16.17 (page 239), that "the primary object of making the death sentence mandatory for an offence under this section seems to be to give protection to the prison staff". We have no doubt that if a strictly penological view was taken of the situation dealt with by section 303, the framers of the Code would have had a second thought on their decision to make the death sentence mandatory, even without the aid of the constitutional constraints which operate now. But before we proceed to point out the infirmities from which section 303 suffers, we must indicate the nature of the argument which has been advanced on behalf of the petitioners in order to assail the validity of that section. The sum and substance of the argument is that the provision contained in section 303 is wholly unreasonable and arbitrary and thereby, it violates Article 21 of the Constitution which affords the guarantee that no person shall be deprived of his life or personal liberty except in accordance with the procedure established by Law. Since the procedure by which section 303 authorises the deprivation of life is unfair and unjust, the section is unconstitutional. Having examined this argument with care and concern, we are of the opinion that it must be accepted and section 303 of the Penal Code struck down. In Maneka Gandhi vs Union of India,(1) it was held by a seven Judge Bench that a statute which merely prescribes some kind of procedure for depriving a person of his life or personal liberty cannot 698 ever meet the requirements of Article 21: The procedure prescribed by law has to be fair, just and reasonable, not fanciful, oppressive or arbitrary. Bhagwati J. observed in that case that "Principally, the concept of reasonableness must be projected in the procedure contemplated by Article 21, having regard to the impact of Article 14 on that article". In Sunil Batra vs Delhi Administration,(1) while dealing with the question as to whether a person awaiting death sentence can be kept in solitary confinement, Krishna Iyer J. said that though our Constitution did not have a "due process" clause as in the American Constitution, the same consequence ensued after the decisions in the Bank Nationalisation case(2) and Maneka Gandhi: "For what is punitively outrageous, scandalizingly unusual or cruel and rehabilitatively counter productive, is unarguably unreasonable and arbitrary and is shot down by Articles 14 and 19 and if inflicted with procedural unfairness, falls foul of Article 21." Desai J. observed in the same case that: "The word 'Law ' in the expression 'procedure established by law ' in Article 21 has been interpreted to mean in Maneka Gandhi 's case that the law must be right, just and fair, and not arbitrary, fanciful or oppressive. Otherwise it would be no procedure at all and the requirement of Article 21 would not be satisfied. If it is arbitrary, it would be violative of Article 14. " In Bachan Singh which upheld the constitutional validity of the death penalty, Sarkaria J., speaking for the majority, said that if Article 21 is understood in accordance with the interpretation put upon it in Maneka Gandhi, it will read to say that: "No person shall be deprived of his life or personal liberty except according to fair, just and reasonable procedure established by valid law." (page 730) These decisions have expanded the scope of Article 21 in a significant way and it is now too late in the day to contend that it is for the Legislature to prescribe the procedure and for the Court to follow it, that it is for the legislature to provide the punishment 699 and for the courts to impose it. Two instances, undoubtedly extreme, may be taken by way of illustration for the purpose of showing how the courts are not bound, and are indeed not free, to apply a fanciful procedure by a blind adherence to the letter of the law or to impose a savage sentence. A law providing that an accused shall not be allowed to lead evidence in self defence will be hit by Articles 14 and 21. Similarly, if a law were to provide that the offence of theft will be punishable with the penalty of the cutting of hands, the law will be bad as violating Article 21. A savage sentence is anathema to the civilized jurisprudence of Article 21. These are, of course, extreme illustrations and we need have no fear that our legislatures will ever pass such laws. But these examples serve to illustrate that the last word on the question of justice and fairness does not rest with the legislature. Just as reasonableness of restrictions under clauses (2) to (6) of Article 19 is for the courts to determine, so is it for the courts to decide whether the procedure prescribed by a law for depriving a person of his life or liberty is fair, just and reasonable. The question which then arises before us is whether the sentence of death, prescribed by section 303 of the Penal Code for the offence of murder committed by a person who is under a sentence of life imprisonment, is arbitrary and oppressive so as to be violative of the fundamental right conferred by Article 21. Counsel for the respondents rely upon the decision in Bachan Singh in support of their submission that the provision contained in section 303 does not suffer from any constitutional infirmity. They contend that the validity of death sentence was upheld in that case and since, section 303 does no more than prescribe death sentence for the offence of murder, the ratio of Bachan Singh would apply and the question as regards the validity of that section must be treated as concluded by that decision. These questions, it is said, should not be allowed to raise their head over and over again. This argument suffers from a two fold defect. In the first place, it betrays a certain amount of misunderstanding of what was decided in Bachan Singh and secondly, it overlooks the essential distinction between the provisions of section 302 and section 303. Academicians and text book writers have the freedom to discuss legal problems in the abstract because, they do not have to decide any particular case. On the other hand, the decisions rendered by the court have to be understood in the light of the legal provisions which came up for consideration therein and in the light of the facts, if facts were involved. The majority did not lay down any abstract proposition in Bachan Singh 700 that "Death sentence is constitutional", that is to say, that "It is permissible under the Constitution to provide for the sentence of death". To be exact, the question which arose for the consideration of the Court was not whether, under the Constitution, it is permissible to provide for the sentence of death. The precise question which arose in that case was whether section 302 of the Penal Code which provides for the sentence of death as one of the two alternative sentences is valid. It may be recalled that section 302 provides for the sentence of death as an alternative sentence which may be imposed. The normal sentence for murder is life imprisonment; and if the death sentence has to be imposed, the Court is under a legal obligation under section 354(3) of the Criminal Procedure Code to state the special reasons for imposing that sentence. That explains why, in Bachan Singh, Sarkaria J., who spoke for the majority, underscored the words "alternative" and "may" in paragraph 19 of the judgment, whilst observing that the Penal Code prescribes death as an alternative punishment to which the offender may be sentenced in cases relating to seven kinds of offences. The majority concluded that section 302 of the Penal Code is valid for three main reasons: Firstly, that the death sentence provided for by section 302 is an alternative to the sentence of life imprisonment, secondly, that special reasons have to be stated if the normal rule is departed from and the death sentence has to be imposed; and, thirdly, because the accused is entitled, under section 235(2) of the Code of Criminal Procedure, to be heard on the question of sentence. The last of these three reasons becomes relevant, only because of the first of these reasons. In other words, it is because the Court has an option to impose either of the two alternative sentences, subject to the rule that the normal punishment for murder is life imprisonment, that it is important to hear the accused on the question of sentence. If the law provides a mandatory sentence of death as section 303 of the Penal Code does, neither section 235(2) nor section 354(3) of the Code of Criminal Procedure can possibly come into play. If the Court has no option save to impose the sentence of death, it is meaningless to hear the accused on the question of sentence and it becomes superfluous to state the reasons for imposing the sentence of death. The blatant reason for imposing the sentence of death in such a case is that the law compels the court to impose that sentence. The ratio of Bachan Singh, therefore, is that, death sentence is constitutional if it is prescribed as an alternative sentence for the offence of murder and if the normal sentence prescribed by law for murder is imprisonment for life, 701 It will be clear from this discussion that since there is a fundamental distinction between the provisions of section 302 and section 303 of the Penal Code, the ratio of Bachan Singh will not govern the question as regards the validity of section 303. This latter question is res integra. Stated briefly, the distinction between the two sections is that whereas, section 302 provides for the sentence of death as alternative sentence, the only sentence which section 303 prescribes is the sentence of death. The Court has no option under section 303 to impose any other sentence, no matter what is the motivation of the crime and the circumstances in which it was committed. Secondly, section 354(3) of the Code of Criminal Procedure applies in terms to those cases only wherein "the conviction is for an offence punishable with death or, in the alternative, with imprisonment for life or imprisonment for a term of years". Since section 303 does not provide for an alternative sentence, section 354(3) has no application to cases arising under that section. Thirdly, section 235(2) of the Code of Criminal Procedure which confers a right upon the accused to be heard on the question of sentence, becomes, a meaningless ritual in cases arising under section 303. If the Court itself has no option to pass any sentence except the sentence of death, it is an idle formality to ask the accused as to what he has to say on the question of sentence. The question which we had posed for our consideration at the beginning of this judgment was somewhat broad. In the light of the aforesaid discussion, that question narrows itself to a consideration of certain specific issues. The first and foremost issue which arises specifically for our consideration is whether there is any intelligible basis for giving differential treatment to an accused who commits the offence of murder whilst under a sentence of life imprisonment. Can he be put in a special class or category as compared with others who are found guilty of murder and be subjected to hostile treatment by making it obligatory upon the court to sentence him to death ? In other words, is there a valid basis for classifying persons who commit murders whilst they are under the sentence of life imprisonment, separately from those who commit murders whilst they are not under the sentence of life imprisonment, for the purpose of making the sentence of death obligatoy in the case of the former and optional in the case of the latter ? Is there any nexus between such discrimination and the object of the impugned statute ? These questions stem principally from the position that section 303 makes the sentence of death mandatory. That position raises certain side 702 issues which are equally important. Is a law which provides for the sentence of death for the offence of murder, without affording to the accused an opportunity to show cause why that sentence should not be imposed, just and fair ? Secondly, is such a law just and fair if, in the very nature of things, it does not require the Court to state the reasons why the supreme penalty of law is called for ? Is it not arbitrary to provide that whatever may be the circumstances in which the offence of murder was committed, the sentence of death shall be imposed upon the accused ? The first question which we would like to examine is whether there is any valid basis for classifying persons who commit murders whilst they are under the sentence of life imprisonment as distinguished from those who commit murders whilst they are not under the sentence of life imprisonment, for the purpose of making the sentence of death mandatory in the case of the former class and optional in the case of the latter class. We are unable to see any rational justification for making a distinction, in the matter of punishment, between these two classes of offenders. Murders can be motiveless in the sense that, in a given case, the motive which operates on the mind of the offender is not known or is difficult to discover. But, by and large, murders are committed for any one or more of a variety of motives which operate on the mind of the offender, whether he is under a sentence of life imprisonment or not. Such motives are too numerous and varied to enumerate but hate, lust, sex, jealousy, gain, revenge and a host of weaknesses to which human flesh is subject are common motives for the generality of murders. Those reasons can operate as a motive force of the crime whatever may be the situation in which the criminal is placed and whatever may be the environment in which he finds himself. But, as we have stated earlier, the framers of the Penal Code had only one case in mind, namely, the murder of jail officials by life convicts. Even if we confine ourselves to that class of cases, the test or reasonableness of classification will break down inevitably. From that point of view, it will be better to consider under different heads cases in which murders are committed by life convicts within the jail precincts and murders which are committed by life convicts outside the jail, while they are on parole or bail. We will first deal with cases of murders committed by life convicts within the precincts of the jail. The circumstance that a 703 person is undergoing a sentence of life imprisonment does not minimise the importance of mitigating factors which are relevant on the question of sentence which should be imposed for the offence committed by him while he is under the sentence of life imprisonment. Indeed, a crime committed by a convict within the jail while he is under the sentence of life imprisonment may, in certain circumstances, demand and deserve greater consideration, understanding and sympathy than the original offence for which he was sentenced to life imprisonment. This can be illustrated with the help of many instances but one or two of those may suffice. A life convict may be driven to retaliate against his systematic harassment by a warder, who habitually tortures, starves and humiliates him. If the act results in the death of the warder, the crime may amount to murder because none of the exceptions mentioned in section 300 may apply. The question is whether it is reasonable to provide that a life convict who has committed the offence of murder in these circumstances must necessarily be sentenced to death and an opportunity denied to him to explain why the death sentence should not be imposed upon him. And, how is it relevant on the question of the prescription of a mandatory sentence of death that the murder was committed by a life convict ? Then again, to take another instance, there are hundreds of inmates in central jails. A life convict may be provoked gravely but not suddenly, or suddenly but not gravely enough, by an insinuation made against his wife 's chastity by another inmate of the jail. If he commits the murder of the insinuator, the only sentence which can be imposed upon him under section 303 is the sentence of death. The question is, whether it is reasonable to deprive such a person, because he was under a sentence of life imprisonment when he committed the offence of murder, from an opportunity to satisfy the court that he acted under the pressure of a grave insult to his wife and should not therefore be sentenced to death. We are of the opinion that, even limiting oneself to murders committed by life convicts within the four walls of jail, it is difficult to hold that the prescription of the mandatory sentence of death answers the test of reasonableness. The other class of cases in which, the offence of murder is committed by a life convict while he is on parole or on bail may now be taken up for consideration. A life convict who is released on parole or on bail may discover that taking undue advantage of his absence, a neighbour has established illicit intimacy with his wife. If he finds them in an amorous position and shoots the seducer on 704 the spot, he may stand a fair chance of escaping from the charge of murder, since the provocation is both grave and sudden. But if, on seeing his wife in the act of adultery, he leaves the house, goes to a shop, procures a weapon and returns to kill her paramour, there would be evidence of what is called mens rea, the intention to kill. And since, he was not acting on the spur of the moment and went away to fetch a weapon with murder in his mind, he would be guilty of murder. It is a travesty of justice not only to sentence such a person to death but to tell him that he shall not be heard why he should not be sentenced to death. And, in these circumstances, how does the fact that the accused was under a sentence of life imprisonment when he committed the murder, justify the law that he must be sentenced to death ? In ordinary life we will not say it about law, it is not reasonable to add insult to injury. But, apart from that, a provision of law which deprives the court of the use of its wise and beneficent discretion in a matter of life and death, without regard to the circumstances in which the offence was committed and, therefore, without regard to the gravity of the offence, cannot but be regarded as harsh, unjust and unfair. It has to be remembered that the measure of punishment for an offence is not afforded by the label which that offence bears, as for example 'Theft ', 'Breach of Trust ' or "Murder '. The gravity of the offence furnishes the guideline for punishment and one cannot determine how grave the offence is without having regard to the circumstances in which it was committed, its motivation and its repercussions. The legislature cannot make relevant circumstances irrelevant, deprive the courts of their legitimate jurisdiction to exercise their discretion not to impose the death sentence in appropriate cases, compel them to shut their eyes to mitigating circumstances and inflict upon them the dubious and unconscionable duty of imposing a preordained sentence of death. Equity and good conscience are the hall marks of justice. The mandatory sentence of death prescribed by section 303, with no discretion left to the court to have regard to the circumstances which led to the commission of the crime, is a relic of ancient history. In the times in which we live, that is the lawless law of military regimes. We, the people of India, are pledged to a different set of values. For us, law ceases to have respect and relevance when it compels the dispensers of justice to deliver blind verdicts by decreeing that no matter what the circumstances of the crime, the criminal shall be hanged by the neck until he is dead. We are also unable to appreciate how, in the matter of sentencing, any rational distinction can be made between a person who 705 commits a murder after serving out the sentence of life imprisonment and a person who commits a murder while he is still under that sentence. A person who has been in jail, say for 14 years, and commits the offence of murder after coming out of the jail upon serving out that sentence is not entitled to any greater consideration than a person who is still serving the sentence of life imprisonment for the mere reason that the former has served out his sentence and the latter is still under the sentence imposed upon him. The classification based upon such a distinction proceeds upon irrelevant considerations and bears no nexus with the object of the statute, namely, the imposition of a mandatory sentence of death. A person who stands unreformed after a long term of incarceration is not, by any logic entitled to preferential treatment as compared with a person who is still under the sentence of life imprisonment. We do not suggest that the latter is entitled to preferential treatment over the former. Both have to be treated alike in the matter of prescription of punishment and whatever safeguards and benefits are available to the former must be made available to the latter. We have already adverted to the stresses and strains which operate on convicts who are sentenced to long terms of imprisonment like the sentence of life imprisonment. Many scholars have conducted research into this matter. It will serve our purpose to draw attention to the following passage from a book called "The Penalty of Death" by Thorsten Sellin (1) "Anyone who has studied prisons and especially the maximum security institutions, which are the most likely abodes of murderers serving sentences of life imprisonment or long terms of years, realizes that the society of captives within their walls is subject to extraordinary strains and pressures, which most of those in the outside world experience in attenuated forms, if at all. The prison is an unnatural institution. In an area of limited size, surrounded by secure walls, it houses from a few score to several thousand inmates and their custodians. In this unisexual agglomeration of people, separated from family and friends, prisoners are constantly thrown into association with one another and subject to a host of regulations that limit their freedom of action and are 706 imposed partly by the prison authorities and partly by the inmate code. It is not astonishing that in this artificial environment altercations occur, bred by the clash of personalities and the conflict of interests that lead to fights in free society, especially when one considers that most of the maximum security prison inmates are fairly young and have been raised in the poorer quarters of our cities, where resort to physical violence in the settlement of disputes is common. Indeed, what surprises the student of prison violence is the relative rarity of assaultive events, everything considered." (p. 105) This is some good reason why convicts who are under the sentence of life imprisonment should not be discriminated against as compared with others, including those who have served out their long terms of imprisonment. There is another passage in the same book which shows with the help of statistics that the frequency of murders committed by life convicts while they are on parole is not so high as to justify a harsher treatment being accorded to them when they are found guilty of having committed a murder while on parole, as compared with other persons who are guilty of murder. The author says : "In the United States, convicts whose death sentences have been commuted or who have been sentenced to life imprisonment for murder may regain their freedom by being paroled after spending a decade or two in prison. Some are deprived of this opportunity, because they die a natural or violent death while in the institution. Some may be serving time in states that have laws baring the release of first degree murderers or lifers, but even there the exercise of executive clemency may remove the barrier in individual cases. There is no need to discuss here the various aspects of the parole process when murderers are involved because we are concerned only with how such parolees behave once they have been set free. Do they, indeed, abuse their freedom and are they especially likely to prove a menace to the lives of their fellow citizens ? It is fear of that menace that makes some people favor capital punishment as a sure means of preventing a murderer from killing again after his return to freedom in the community. As we shall see, paroled murderers do sometimes repeat their crime, but a look at some facts 707 will show that among parolees who commit homicides, they rank very low." (P. 113) According to the statistics tabulated at page 115 of the book, out of 6835 life convicts who were released on parole, 310 were returned to prison for new crimes committed by them while on parole. Out of these 310 twenty one parolees were returned to the prison on the charge of wilful homicide, that is, murder. There is no comparable statistical data in our country in regard to the behaviour of life convicts who are released on parole or bail but there is no reason to assume that the incidence of murders committed by such persons is unduly high. Indeed, if there is no scientific investigation on this point in our country, there is no basis for treating such persons differently from others who commit murders. Thus, there is no justification for prescribing a mandatory sentence of death for the offence of murder committed inside or outside the prison by a person who is under the sentence of life imprisonment. A standardized mandatory sentence, and that too in the form of a sentence of death, fails to take into account the facts and circumstances of each particular case. It is those facts and circumstances which constitute a safe guideline for determining the question of sentence in each individual case. "The infinite variety of cases and facets to each would make general standards either meaningless 'boiler plate ' or a statement of the obvious. .(1)". As observed by Palekar J., who spoke for a Constitution Bench in Jagmohan Singh vs State of U.P. (2) : "The impossibility of laying down standards is at the very core of the criminal law as administered in India which invests the Judges with a very wide discretion in the matter of fixing the degree of punishment . . The exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused." (Page 559) The self confidence which is manifested in the legislative prescription of a computerised sentence of death is not supported by scientific data. There appears to be no reason why in the case of a 708 person whose case falls under section 303, factors like the age and sex of the offender, the provocation received by the offender and the motive of the crime should be excluded from consideration on the question of sentence. The task performed by the legislature while enacting section 303 is beyond even the present human ability which has greater scientific and sophisticated resources available for compiling data, than those which were available in 1860 when section 303 was enacted as part of the Indian Penal Code. It is because the death sentence has been made mandatory by section 303 in regard to a particular class of persons that, as a necessary consequence, they are deprived of the opportunity under section 235(2) of the Criminal Procedure Code to show cause why they should not be sentenced to death and the Court is relieved from its obligation under section 354(3) of that Code to state the special reasons for imposing the sentence of death. The deprivation of these rights and safeguards which is bound to result in injustice is harsh, arbitrary and unjust. We have stated at the beginning of this judgment that there are as many as 51 sections of the Penal Code which provide for the sentence of life imprisonment. Those sections are : Sections 121, 121 A, 122, 124 A, 125, 128, 130, 131, 132, 194, 222, 225, 232, 238, 255, 302, 304 part I, 305, 307, 311, 313, 314, 326, 328, 363 A, 364, 371, 376, 388, 389, 394, 395, 396, 400, 409, 412, 413, 436, 438, 449, 459, 460, 467, 472, 474, 475, 477, 489 A, 489 B, 489 D and section 511 (attempt to commit offences punishable with imprisonment for life). A person who is sentenced to life imprisonment for any of these offences incurs the mandatory penalty of death under section 303 if he commits a murder while he is under the sentence of life imprisonment. It is impossible to see the rationale of this aspect of section 303. There might have been the semblance of some logic to explain, if not to sustain, such a provision if murder was the only offence for which life imprisonment was prescribed as a punishment. It could then be argued that the intention of the legislature was to provide for enhanced sentence for the second offence of murder. But, under the section as it stands, a person who is sentenced to life imprisonment for breach of trust (though, such a sentence is rarely imposed), or for sedition under section 124 A or for counterfeiting a coin under section 232 or for forgery under section 467 will have to be sentenced to death if he commits a murder while he is under the sentence of life imprisonment. There is nothing in common between such offences previously committed and the subsequent 709 offence of murder. Indeed, it defies all logic to understand why such a provision was made and what social purpose can be served by sentencing a forgerer to a compulsory punishment of death for the mere reason that he was undergoing the sentence of life imprisonment for forgery when he committed the offence of murder. The motivation of the two offences is different, the circumstances in which they are committed would be different and indeed the two offences are basically of a different genre. To prescribe a mandatory sentence of death for the second of such offences for the reason that the offender was under the sentence of life imprisonment for the first of such offences is arbitrary beyond the bounds of all reason. Assuming that section 235(2) of the Criminal Procedure Code were applicable to the case and the Court was under an obligation to hear the accused on the question of sentence, it would have to put some such question to the accused : "You were sentenced to life imprisonment for the offence of forgery. You have committed a murder while you were under that sentence of life imprisonment. Why should you not be sentenced to death ?" The question carries its own refutation. It highlights how arbitrary and irrational it is to provide for a mandatory sentence of death in such circumstances. In its Thirty Fifth Report on 'Capital Punishment ' published in 1967, the Law Commission of India considered in paragraphs 587 to 591 the question of prescribing a lesser sentence for the offences under sections 302 and 303 of the Penal Code. It observed in paragraph 587 that : "For the offence under section 303, Indian Penal Code, the sentence of death is mandatory. The reason for this is that in the case of an offence committed by a person who is already under sentence of imprisonment for life, the lesser sentence of imprisonment for life would be a formality. It has, however, been suggested that even for this offence the sentence of death should not be mandatory. We have considered the arguments that can be advanced in support of the suggested change. It is true that, ordinarily speaking, leaving the court no discretion in the matter of sentence is an approach which is not in conformity with modern trends." 710 After dealing with the question whether the sentence of death ought not to be mandatory and after considering whether section 303 should be amended so as to limit its application to cases in which a person sentenced to life imprisonment for the offence of murder commits again a murder while he is under the sentence of life imprisonment, the Law Commission concluded in paragraph 591 of its Report that "It is not necessary to make any change". It felt that : "Acute cases of hardship, where the extenuating circumstances are overwhelming in their intensity, can be dealt with under section 401, Code of Criminal Procedure, 1898. and that seems to be sufficient". In its Forty second Report on the Indian Penal Code, published in June 1971, the Law Commission considered again the question of amending section 303. It found it anomalous that a person whose sentence of imprisonment for life was remitted unconditionally by the Government could be held not to be under the sentence of life imprisonment, but if a person was released conditionally, he could still be held to be under that sentence. It therefore suggested that section 303 should be amended so as to restrict its application to life convicts who are actually in prison. The Commission did not, however, recommend any change since, section 303 was "very rarely applied". It felt that if there was an exceptionally hard case, it could be easily dealt with by the President or the Governor under the prerogative of mercy. On December 11, 1972 a Bill was introduced in the Rajya Sabha to amend the Penal Code, one of the amendments suggested being that section 303 of the Code should be deleted. On a motion made by the then Minister of State in the Ministry of Home Affairs, the Bill was referred to the Joint Committee of the Rajya Sabha and the Lok Sabha: The Committee held 97 sittings and made various recommendations, one of which was that the punishment for murder which was prescribed separately by sections 302 and 303 of the Penal Code should be brought under one section of the Code. The Committee further recommended that it should not be obligatory to impose the sentence of death on a person who commits a murder while under the sentence of life imprisonment and the question whether, in such a case, the sentence of death or the sentence of life imprisonment should be awarded should be left to the discretion of the Court. The Committee accordingly suggested the addition of a new Clause 125 in the Bill for omitting section 303 of the Penal 711 Code. The Report of the Joint Committee was presented to the Rajya sabha on January 29, 1976 whereupon The Indian Penal Code (Amendment) Bill, XLII B of 1972, was tabled before the Rajya Sabha. But, what was proposed by Parliament was disposed of by the ballot box. A mid term parliamentary poll was held while the Bill was pending and there was a change of Government. The Bill lapsed and that was that. It is to be deeply regretted that the attention of an over worked Parliament has not yet been drawn to urgent reforms suggested in the Penal Code Amendment Bill XLII B of 1972. In all probability, the amendment suggested by Clause 125 (New) for the deletion of section 303 of the Penal Code would have passed muster without any opposition. The only snag in the passing of the Bill has been that it was not revived and put to vote. Section 303 was destined to die at the hands of the court. Our only regret is that during the last six years since 1977, some obscure forger sentenced to life imprisonment, who may have committed murder while under the sentence of life imprisonment, may have been sentenced to the mandatory sentence of death, unwept and unasked why he should not be hanged by the neck until he is dead. On a consideration of the various circumstances which we have mentioned in this judgment, we are of the opinion that section 303 of Penal Code violates the guarantee of equality contained in Article 14 as also the right conferred by Article 21 of the Constitution that no person shall be deprived of his life or personal liberty except according to procedure established by law. The section was originally conceived to discourage assaults by life convicts on the prison staff, but the Legislature chose language which far exceeded its intention. The section also assumes that life convicts are a dangerous breed of humanity as a class. That assumption is not supported by any scientific data. As observed by the Royal Commission in its Report on 'Capital Punishment ' (1) "There is a popular belief that prisoners serving a life sentence after conviction of murder form a specially troublesome and dangerous class. That is not so. Most find themselves in prison because they have yielded to temptation under the pressure of a combination of circumstances unlikely to recur '. In Dilip Kumar Sharma vs Sate of M.P., (2) this Court was not concerned with the question of the vires of section 303, but Sarkaria J., in his concurring judgment, described the vast sweep of that section by saying that "the section is Draconian in severity, relentless and inexorable in 712 operation". We strike down section 303 of Penal Code as unconstitutional and declare it void. It is needless to add that all cases of murder will now fall under section 302 of the Penal Code and there shall be no mandatory sentence of death for the offence of murder. The various cases in this batch of Appeals and writ petitions may now be placed before a Division Bench for disposal on merits in the light of these judgments. CHINNAPPA REDDY, J. Section 303, Indian Penal Code, is an anachronism. It is out of tune with the march of the times. It is out of tune with the rising tide of human consciousness. It is out of tune with the philosophy of an enlightened Constitution like ours. It particularly offends article 21 and the new jurisprudence which has sprung around it ever since the Banks Nationalisation case freed it from the confines of Gopalan. After the Banks Nationalisation case, no article of the Constitution guaranteeing a Fundamental Right was to lead an isolated existence. Added nourishment was to be sought and added vigour was to be achieved by companionship. Beg, CJ,. said it beautifully in Maneka Gandhi: "Articles dealing with different fundamental rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at many points. They are all parts of an integrated scheme in the Constitution. Their waters must mix to constitute that grand flow of unimpeded and impartial Justice (social, economic and political), Freedom (not only of thought, expression, belief, faith and worship, but also of association, movement, vocation or occupation as well as of acquisition and possession of reasonable property), of Equality (of status and of opportunity, which imply absence of unreasonable or unfair discrimination between individuals, groups and classes), and of Fraternity (assuring dignity of the individual, and the unity of the nation), which our Constitution visualises. Isolation of various aspects of human freedom, for purposes of their protection, is neither realistic nor beneficial but would defeat the very objects of such protection." Maneka Gandhi carried article 21 to nobler rights and made it the focal point round which must now revolve to advantage all 713 claims to rights touching life and liberty. If article 21 declared, "No person shall be deprived of his life or liberty except according to procedure established by law," the Court declared, without frill or flourish, in simple and absolute terms: "The procedure prescribed by law has to be fair, just and reasonable, not fanciful, oppressive or arbitrary", (Chandrachud, J, as he then was). The question whether Sec. 302 which provides for a sentence of death as an alternative penalty was constitutionally valid was raised in Bachan Singh. Bachan Singh sustained the validity of Sec. 302 because the sentence of imprisonment for life and not death was the normal punishment for murder, and the sentence of death was an alternative penalty to be resorted to in the most exceptional of cases and the discretion to impose or not to impose the sentence of death was given to the Judge. The ruthless rigour of the sentence of death, even as an alternative penalty, was thought to be tempered by the wide discretion given to the Judge. Judicial discretion was what prevented the outlawing of the sentence of death even as an alternative penalty for murder. Even so the Court took care to declare that it could only be imposed in the 'rarest of rare ' cases. Judged in the light shed by Maneka Gandhi and Bachan Singh, it is impossible to uphold Sec. 303 as valid. 303 excludes judicial discretion. The scales of justice are removed from the hands of the Judge so soon as he pronounces the accused guilty of the offence. So final, so irrevocable and so irrestitutable is the sentence of death that no law which provides for it without involvement of the judicial mind can be said to be fair, just and reasonable. Such a law must necessarily be stigmatised as arbitrary and oppressive. 303 is such a law and it must go the way of all bad laws. I agree with my Lord Chief Justice that Sec. 303, Indian Penal Code, must be struck down as unconstitutional.

Section 303, I.P.C. provides that whoever, being under sentence of imprisonment for life, commits murder, shall be punished with death Counsel for appeallants/petitioners contended that section 303, I.P.C. is unconstitutional not only for the reason that it is unreasonable and arbitrary but also because it authorises deprivation of life by an unjust and unfair procedure. Counsel for respondents on the other hand contended that since the validity of death sentence has been upheld in Bachan Singh and since section 303 does no more than prescribe death sentence for the offence of murder, the ratio of Bachan Singh should apply and the question as regards the validity of section 303, I.P.C. must be treated as having been concluded by that decision. Upholding the contention of the appellants/petitioners, ^ HELD: Per Chandrachud, C.J. (Chinnappa Reddy, J Concurring) Section 303, I.P.C. is unconstitutional and void. It violates the guarantee of equality contained in article 14 as also the right conferred by article 21 that no person shall be deprived of his life or personal liberty except according to procedure established by law. [712 A; 711 E] (i) There is no rational justification for making a distinction in the matter of punishment between persons who commit murders whilst they are under the sentence of life imprisonment and persons who commit murders whilst they are not under the sentence of life imprisonment. Further, no rational distinction can be made in the matter of sentencing between a person who commits murder after serving out the sentence of life imprisonment and a person who commits murder while he is still under that sentence. A person who stands unreformed after a long term of incarceration is not, by any logic, entitled to preferential treatment as compared with a person who is still under the sentence of life imprisonment. The classification based upon such a distinction proceeds upon irrelevant considerations and bears no nexus with the object of the statute, namely, the imposition of a mandatory sentence of death. [70 C D; 704 H; 705 B D] 691 (ii) Murders are, by and large, committed for any one or more of a variety of motives which operate on the mind of the offender, whether he is under a sentence of life imprisonment or not. Such motives are too numerous and varied to enumerate but hate, lust, sex, jealousy, gain, revenge and a host of weaknesses to which human flesh is subject, are common motives for the generality of murders. Those reasons can operate as a motive force of the crime whatever may be the situation in which the criminal is placed and whatever may be the environment in which he finds himself. [702 D F] (iii) Even limiting oneself to murders committed by life convicts within the four walls of the jail or while they are on parole or on tail, it is difficult to hold that the prescription of the mandatory sentence of death answers the test of reasonableness. The circumstance that a person is undergoing a sentence of life imprisonment does not minimise the importance of mitigating factors which are relevant on the question of sentence which should be imposed for the offence committed by him while he is under the sentence of life imprisonment. Indeed, a crime committed by a convict within the jail while he is under the sentence of life imprisonment may, in certain circumstances, demand and deserve greater consideration, understanding and sympathy than the original offence for which he was sentenced to life imprisonment. [703 F G; 702 H; 703 A B] (iv) Convicts who are sentenced to long terms of imprisonment like the sentence of life imprisonment are subject to extraordinary stresses and strains and they should not be discriminated against as compared with others. There is no justification for prescribing a mandatory sentence of death for the offence of murder committed inside or outside the prison by a person who is under the sentence of life imprisonment. Research studies conducted abroad have indicated that the frequency of murders committed by life convicts while they are on parole is not so high as to justify a harsher treatment being accorded to them when they are found guilty of having committed a murder while on parole, as compared with other persons who are guilty of murder. There is no comparable statistical data in our country in regard to the behaviour of life convicts who are released on parole or bail but there is no reason to assume that the incidence of murders committed by such persons is unduly high. Indeed, if there is no scientific investigation on this point in our country, there is no basis for treating such persons differently from others who commit murders.[705 D H; 706 A H; 707 A C] (v) There are as many as 51 sections in the Penal Code which provide for the sentence of life imprisonment. A person who is sentenced to life imprisonment for any of these offences incurs the mandatory penalty of death under section 303, if he commits a murder while he is under the sentence of life imprisonment. It is impossible to see the rationale of this aspect of section 303. There might have been the semblance of some logic to explain, if not to sustain, such a provision if murder was the only offence for which life imprisonment was prescribed as a punishment. It could then be argued that the intention of the legislature was to provide for enhanced sentence for the second offence of murder. But, under the section as it stands, a person who is sentenced to life imprisonment for breach of trust or for sedition under section 124 A or for counterfeiting a coin under section 232 or for forgery under s.467 will have to be sentenced to death if he commits a murder while he is under the sentence of life 692 imprisonment. There is nothing in common between such offences previously committed and the subsequent offence of murder. Indeed, it defies all logic to understand why such a provision was made and what social purpose can be served by sentencing a forgerer to a compulsory punishment of death for the mere reason that he was undergoing the sentence of life imprisonment for forgery when he committed the offence of murder. The motivation of the two offences is different, the circumstances in which they are committed would be different and indeed the two offences are basically of a different genre. To prescribe a mandatory sentence of death for the second of such offences for the reason that the offender was under the sentence of life imprisonment for the first of such offences is arbitrary beyond the bounds of all reason. [708 E H; 709 A C] (vi) A standardised mandatory sentence, and that too in the form of a sentence of death, fails to take into account the facts and circumstances of each particular case. It is those facts and circumstances which constitute a safe guideline for determining the question of sentence in each individual case. The impossibility of laying down standards is at the very core of the criminal law as administered in India which invests the judges with a very wide discretion in the matter of fixing the degree of punishment. The exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused. There is no reason why in the case of a person whose case falls under section 303, factors like the age and sex of the offender, the provocation received by the offender and the motive of the crime should be excluded from consideration on the question of sentence. [707 D H; 708 A] Jagmohan Singh vs State of U.P. ; , referred to. (vii) Equity and good conscience are the hall marks of justice. A provision of law which deprives the court of the use of its wise and beneficent discretion in a matter of life and death, without regard to the circumstances in which the offence was committee and, therefore without regard to the gravity of the offence, cannot but be regarded as harsh, unjust and unfair. The legislature cannot make relevant circumstances irrelevant, deprive the courts of their legitimate jurisdiction to exercise their discretion not to impose the death sentence in appropriate cases, compel them to shut their eyes to mitigating circumstances and inflict upon them the dubious and unconscionable duty of imposing a pre ordained sentence of death [704 D F] (viii) It is because the death sentence has been made mandatory by section 303 I.P.C. in regard to a particular class of persons that, as a necessary consequence, they are deprived of the opportunity under section 235 (2), Cr. P.C. to show cause why they should not be sentenced to death and the Court is relieved from its obligation under section 354 (3), Cr. P.C. to state the special reasons for imposing the sentence of death. The deprivation of these rights and safeguards which is bound to result in injustice is harsh, arbitrary and unjust. [708 C D] (ix) After the decisions in Maneka Gandhi, Sunil Batra and Bachan Singh it cannot be contended that it is for the legislature to prescribe the procedure and for the courts to follow it or that it is for the legislature to 693 provide the punishment and for the courts to impose it. The courts are not bound and are indeed not free, to apply a fanciful procedure by a blind adherence to the letter of the law or to impose a savage sentence. The last word on the question of justice and fairness does not rest with the legislature. Just as reasonableness of restrictions under cls. (2) to (6) of article 19 is for the courts to determine, so is it for the courts to decide whether the procedure prescribed by a law for depriving a person of his life or liberty is fair, just and reasonable. [698 G H; 699 C D] Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621; Sunil Batra vs Delhi Administration, ; ; and Bachan Singh vs State of Punjab, , referred to. (x) In Bachan Singh the majority concluded that s.302, I.P.C. is valid for three main reasons: Firstly, that the death sentence provided for by section 302 is an alternative to the sentence of life imprisonment; secondly, that special reasons have to be stated under section 354 (3), Cr. P.C. if the normal rule is departed from and the death sentence has to be imposed; and, thirdly, because the accused is entitled under section 235 (2), Cr. P.C. to be heard on the question of sentence. The ratio of Bachan Singh, therefore, is that, death sentence is constitutional if it is prescribed as an alternative sentence for the offence of murder and if the normal sentence prescribed by law for murder is imprisonment for life. Since there is a fundamental distinction between the provisions of section 302 and section 303, I.P.C., the ratio of Bachan Singh will not govern the question as regards the validity of s.303: whereas section 302, I.P.C. provides for the sentence of death as an alternative sentence, the only sentence which section 303 I.P.C. prescribes is the sentence of death; and since section 303 I.P.C. does not provide for an alternative sentence, ss.354 (3) and 235(2), Cr. P.C. have no application to cases arising under that section.[700 D H; 701 A D] Bachan Singh vs State of Punjab explained. per Chinnappa Reddy, J. (concurring): Section 303, I.P.C. is out of tune with the philosophy of our Constitution. It particularly offends article 21 and the new jurisprudence which has sprung around since the Bank Nationalisation case. Maneka Gandhi carried article 21 to nobler rights and made it the focal point round which must now revolve to advantage all claims to rights touching life and liberty. The procedure prescribed by law has to be fair, just and reasonable, not fanciful, oppressive or arbitrary. Bachan Singh sustained the validity of s.302 because the sentence of imprisonment for life and not death was the normal punishment for murder, and the sentence of death was an alternative penalty to be resorted to in the most exceptional of cases and the discretion to impose or not to impose the sentence of death was given to the Judge. Judicial discretion was what prevented the outlawing of the sentence of death even as an alternative penalty for murder. Judged in the light of Maneka Gandhi and Bachan Singh, it is impossible to uphold section 303 as valid. Section 303 excludes judicial discretion. So final, so irrevocable and so irrestitutable is the sentence of death that no law which provides for it without involvement of the judicial mind can be said to be fair, just and reasonable. [712 C H; 713 A G] 694 Bank Nationalisation Case; , ; Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621; and Bachan Singh vs State of Punjab, [1980] 2 S.C.C.684, referred to.

minal Appeal No. 150 of 1954. On appeal by leave from the judgment and order dated the 23rd March 1954 of the Allahabad High Court (Lucknow Bench) in Criminal Appeal No. 112 of 1953 connected with Criminal Reference Register No. 15 of 1953 arising out of the judgment and order dated the 24th February 1953 in Sessions Trial No. 5 of 1952 of the Sessions Court at Lucknow. 1037 B, B. Tawakley, (K. P. Gupta and A. D. Mathur with him) for the appellant. S.P. Sinha (K. B. Asthana and C. P. Lal with him) for the respondent. December 7. The Judgment of the Court was delivered by VENKATARAMA AYYAR J. This is an appeal by special leave against the judgment of the High Court of Allahabad affirming the conviction of the appellant by the Sessions Judge, Lucknow under sections 409 and 477 A of the Indian Penal Code. On 12 2 1949 a Society known as the Model Town Co operative Housing Society, Ltd., was registered under the provisions of the Co operative Societies Act (II of 1912), its object being to acquire vacant sites in the town of Lucknow and to allot them to its members so as to enable them to build houses of their own. The appellant was the chief promoter thereof, and collected monies from prospective shareholders by way of share money. The first general body meeting of the Society was held on 1 3 1949. At that meeting, the appellant was elected Honorary Secretary and one Sri Munna Lal Tewari as Treasurer. The latter having resigned, one section C. Varma was appointed Treasurer in his stead. On 22 4 1949, there was a meeting of the Managing Committee, at which the appellant was directed to band over the accounts of the Society and its funds to its Treasurer. The ap pellant gave a list of 38 persons as members of the Society, delivered cheques issued by 13 of them as their share money, and paid a sum of Rs. 3,500 being the amount stated to have been received by him from the other 25 members as share money. The Society did not function thereafter. On 16 7 1949 some of the members wrote a letter to the Registrar of Co operative Societies pointing out that the Society had not functioned ever since its incorporation, and asking that steps might be taken for examination of its accounts and, if necessary, for its being wound up. On this, there was an investigation of the affairs of the Society by two Assistant 1038 Registrars, and on the basis of their reports dated 22 2 1950 and 18 5 1950 the present prosecution was started against the appellant charging him under sections 409 and 477 A of the Indian Penal Code. The charge under section 409 was that he had received a sum of Rs. 500 from one Sri Chaturvedi, a sum of Rs. 100 from Dr. 0. P. Bhanti and another sum of Rs. 100 from Dr. R. section Seth, all as share money in December 1948, and that he had misappropriated the same. The charge under section 477 A was that on 22 4 1949 the appellant acting as the Secretary of the Society falsified the minute book, Exhibit P 18, by omitting to show therein the share money received from the three persons above mentioned. The defence of the appellant was that the three amounts aforesaid were paid to him not as prospective Secretary for the purpose of allotment of shares, but were deposited with him in his individual capacity for purchasing shares, in case the Society worked well. The trial of the offence under section 409 was held with the aid of assessors and that under section 477 A with the aid of a jury, the same persons acting both as assessors and jurors, and they returned a verdict of not guilty with reference to the charges under both the sections. The Sessions Judge, disagreeing with the verdict of the jury under section 477 A, referred the matter to the High Court under section 307 of the Code of Criminal Procedure. He also disagreed with the opinion of the assessors with reference to the charge under section 409, and held that the appellant was guilty and sentenced him to four years ' rigorous imprisonment and a fine of Rs. 1,000,. Against this conviction, the appellant preferred an appeal to the High Court. Both the reference under section 3O7 and the appeal were heard together by the High Court, which agreed with the Sessions Judge that the appellant had received the three amounts as share money and in his capacity as Secretary, and accordingly confirmed his conviction under section 409 and the sentence passed by the Sessions Judge. Disagreeing with the verdict of the jury, it also held him guilty under section 477 A and sentenced him to 1039 two years ' rigorous imprisonment. The present appeal by special leave is directed against this judgment. Mr. Tawakley firstly contended that the finding of the courts below that the amounts paid by Sri Chaturvedi, Dr. Bhanti and Dr. Seth were paid as share money was erroneous, and in support of this contention relied on a letter written by one of them, Dr. Seth, to the appellant on 3rd May 1951 (exhibit D 5) in which it was stated that the amount was paid on the express understanding that if the Society ran, a share would be allotted to him and otherwise the money would be returned. This letter was written long after proceedings had been taken by the Registrar, and the courts below did not attach much importance to it. On the other hand, Dr. Seth himself gave evidence in these proceedings which deprives Exhibit D 5 of very much of its value. Exhibit P 10 is the receipt granted to Sri Chaturvedi. It expressly recites that Rs. 500 was received as share money for five shares in the Society. Notices were also issued to both Sri Chaturvedi and Dr. Bhanti to attend the general body meeting of the Society to be held on 1st March 1949 for electing the President and members of the Managing Committee of the Society, and Dr. Seth and Dr Bhanti actually attended it. Sri Chaturvedi and Dr. Bhanti have also given evidence that they paid the amounts only as share capital. The courts below accepted the above evidence, and held that the moneys were not paid to the appellant in his individual capacity. There are no grounds for disturbing that finding in special appeal. It is now necessary to deal with the several contentions of law urged by Mr. Tawakley in support of this appeal. His first contention was that when the Sessions Judge disagreed with the verdict of the jury and with the opinion of the assessors, he should have referred the whole case under section 307 for the decision of the High Court and not merely that part of it which related to the charge under section 477 A, and that his failure to do so vitiated the conviction. He argued that when the same facts constitute two 1040 distinct offences, one of which is triable with the aid of jurors and the other with assessors, and the accused is charged with both, the reference under section 307 must relate to both the charges, if inconsistent findings by different courts with reference to the same matter is to be avoided. What would happen, he asked, if, in the present case, the appellant did not file an appeal against his conviction under section 409, but the High Court came to the conclusion in the reference under section 307 that Sri Chaturvedi, Dr. Bhanti and Dr. Seth did not pay the amounts to the appellant as share money, and that no offence had been committed by him under section 477 A? The conviction of the appellant under section 409 based on the finding of the Sessions Judge that those amounts were paid as share money would stand, notwithstanding that it would be against the decision of the High Court. This anomaly could be avoided, it is argued, by holding that the reference under section 307 must be of the whole case. Reliance is placed in support of this contention on the observations in Emperor vs Haria Dhobi(1). We are unable to agree with this contention. If the procedure adopted by the Sessions Judge is to be held to be illegal, it can only be on the ground that he contravened some provision of law which requires him to refer the whole case to the High Court. It is conceded that the only provision of law dealing with this matter is section 307. But that section applies in terms only to trials with the aid of a jury. There is therefore no power in the Sessions Court to refer cases tried with the aid of assessors for decision of the High Court under that section. That was the view taken in Pachaimuthu In re(2), where it was held that the Assistant Sessions Judge had no jurisdiction to refer under section 307 the whole case to the High Court, that he should himself dispose of the charges which were triable with the aid of assessors, and that the reference in respect of those charges was bad. This decision was followed in Emperor vs Lachman (1) A.I.R. 1937 Patna 66 (2) Mad 715. 1041 Gangota(1). The same view has also been taken by the High Court of Bombay in a number of cases: Vide Emperor vs Kalidas(2), Emperor vs Vyankat Sing(3) and Emperor vs Chanbasappa(4). We are accordingly of opinion that the Sessions Judge had contravened no provision of law, and had committed no illegality in deciding the case, in so far as it related to the charge under section 409, himself In this case there is the further fact that the appellant preferred an appeal against his conviction under section 409 by the Sessions Judge, and that appeal was heard along with the reference under section 307 in respect of the charge under section 477 A, and that they were both of them disposed of by the same judgment. It was next contended that the true status of the appellant was that of a servant and not of an agent, and that he should have been charged not under section 409 but under section 408. The substance of the charge against the appellant is that as the promoter of a Society he lawfully received the amounts paid by Sri Chaturvedi, Dr. Bhanti and Dr. Seth, but that after its incorporation, when he failed on 22 4 1949 to hand over those amounts to the Treasurer and to include their names as shareholders in the minutes book, he committed offences under sections 409 and 477 A. Now, what is the status of the appellant as Secretary of the Society in which capacity he committed the offences, servant or agent? The distinction between the two is thus stated in Halsbury 's Laws of England, Volume 22, page 113, para 192 "A, servant acts under the direct control and supervision of the master, and is bound to conform to all reasonable orders given him in the course of his work. . An agent though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in its exercise to the direct control or supervision of the principal". Having regard to the nature of the duties of the appellant as the Secretary of the Society, we are clearly (1) A.I.R. 1934 Patna 424. (3) (2) (4) A.I.R. 1932 Bom. 61. 1042 of opinion that his status was that of an agent and not a servant. Moreover, whether the appellant should be charged under section 408 or section 409 is of no importance in the present case, as the sentence imposed on him under section 409, viz., four years ' rigorous imprisonment could be maintained even under section 408. It was argued by the appellant that an offence under section 408 was triable with the aid of a jury, whereas that under section 409 was triable with the aid of assessors, and that he had been prejudiced in that be bad lost the benefit of a trial by jury. But this objection was not taken in the trial court, and is not now open. Vide section 536 of the Code of Criminal Procedure. It is next contended that there has been a violation of section 234 of the Code of Criminal Procedure in that the appellant had been charged with three offences under section 409 and one under section 477 A. But the case is governed by section 235, as the several offences under sections 409 and 477 A arise out of the same acts and form part of the same transaction. Moreover, the appellant. has failed to show any prejudice as required by section 537. This objection must accordingly be overruled. It was finally contended that there had been no proper examination of the appellant under section 342, and that therefore the conviction was illegal. This objection was not raised in the Courts below, and is sought to be raised in this Court by a supplemental proceeding. We find no substance in this objection. In the result, this appeal fails and is dismissed.

The appellant was tried by the Sessions Judge with the aid of assessors for an offence under section 409, I.P.C. for misappropriating certain sums of money received as promoter of a Company from three ,different persons for the purpose of allotment of shares and omitted to be brought into the Company after it was formed, and also for an offence under section 477 A, I.P.C. by the same Sessions Judge with the aid of a jury for the offence of falsifying a minute book, the same persons acting both as assessors and jurors. They returned a verdict of not guilty in respect of both the charges. The Sessions Judge, disagreeing with the verdict of the jury under section 477 A, referred the matter to the High Court under section 307 of the Code of Criminal Procedure. Disagreeing also with the opinion of the assessors in respect of the charge under section 409, I.P.C. he held the appellant guilty and sentenced him to 4 years ' rigorous imprisonment. Against this conviction the appellant appealed to the High Court. Both the reference under section 307 of the Code of Criminal Procedure and the appeal were heard together by the High Court which confirmed the appellant 's conviction under section 409 and the sentence passed by the Sessions Judge and disagreeing with the verdict of the jury it held him guilty under section 477 A and sentenced him to two years ' rigorous imprisonment. On appeal by special leave to the Supreme Court: Held (i) that the contention that when the Sessions Judge disagreed with the verdict of the jury and the opinion of the assessors, 1036 he should have referred the whole case under section 307 of the Code of Criminal Procedure to the High Court and not merely that part of it which related to the charge under section 477 A, I.P.C. was without force because the Sessions Judge had contravened no provision of law and committed no illegality in deciding the case which related to the charge under section 409, I.P.C. That section 307, Code of Criminal Procedure applies in terms only to trials by a jury and the Sessions Judge had no power under that section to refer cases tried with the aid of assessors for the decision of the High Court. In the present case there was the further fact that both the appeal against the conviction under section 409, I.P.C. and the reference under section 307 of the Code of Criminal Procedure in respect of the charge under section 477 A were disposed of by the same judgment; (ii)that the contention that the appellant 's true status was that of a servant and not that of an agent and that he should have been tried not under section 409, I.P.C. but under section 408, I.P.C. was also without force inasmuch as his status was that of an agent and not that of a servant in view of his duties as Secretary of the Society. The distinction between the two is this a servant acts under the direct control and supervision of the master, and is bound to con form to all reasonable orders given to him in the course of his work. An agent though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in its exercise to the direct control or supervision of the principal; (iii)that the contention that there had been violation of section 234 of the Code of Criminal Procedure in that the appellant had been charged with three offences under section 409, I.P.C. and one under section 477 A was also without force as the case was governed by section 235 of the Code of Criminal Procedure as the several offences under section 409, I.P.C. and section 477 A, I.P.C. arose out of the same acts and formed part of the same transaction. Emperor vs Haria Dhobi, (A.I.R. 1937 Patna 662), Pachaimuthu In re, ([1932] I.L.R. , Emperor vs Lachman Gangota, (A.I.R. 1934 Patna 424), Emperor vs Kalidas, ([1898] , Emperor vs Vyankat Sing ([1907] and Emperor vs Chanbasappa (A.I.R. , referred to.

Appeals Nos. 645 and 646 of 1957. Appeal from the judgment and decree dated August 1956, of the Patna High Court, in Second Appeals Nos. 2155 and 2156 of 1948. A. V. Viswanatha Sastri and R. C. Prasad, for the appellant. B. K. Garg, M. K. Ramamurthi, section C. Agarwal, and D. P. Singh, for respondents Nos. 1 to 4. 1961. April 28. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. These are appeal against the judgment of the High Court of Patna in Second Appeals Nos.2155 and 2156 of 1948 on certificates granted by the High Court under article 133(1)(c) of the Constitution. The facts leading to this litigation lie in a narrow compass. One Prithi Dubey died on July 14, 1932, leaving him surviving, his widow Laung Kuer, who succeeded as heir to his estate. For the purpose of discharging debts due by the deceased Laung Kuer executed on June 21, 1935, a Zerpeshgi deed in favour of two persons, Rajdewan Dubey and Kailash Dabey, who were also the next reversioners, for a sum of Rs. 1,100. It is not in dispute that this deed is binding on the reversioners. On June 17, 1943, Laung Kuer sold to the appellant a portion of the properties which were the subject matter of the Zerpeshgi deed dated June 21, 1935, for a consideration of Rs. 1,600 Out of this amount, a sum of Rs. 1,100 was reserved with the purchaser for redemption of the Zerpeshgi, and the balance of Rs. 500 was paid in cash. It is recited in the deed of sale that a sum of Rs. 100 was required to effect repairs to the family dwelling house, a sum of Rs. 200 for purchasing two bulls for agricultural purposes, and a sum of Rs. 200 for repairing a well, which had been constructed by the deceased for user by the public and which was then in a ruined condition. It is to meet these expenses that Laung Kuer raised Rs. 500. After obtaining the sale deed, the appellant sought 561 to redeem the Zerpeshgi, but the Zerpeshgidars refused to receive the amount and surrender possession of the properties. The appellant deposited the mortgage amount in court under section 83 of the Transfer of Property Act and then instituted Title Suit No. 69 of 1944 for redemption. Meantime the reversioners, the respondents herein, had filed Title Suit No. 126 of 1943 for a declaration that the sale deed in favour the appellant was not binding on the reversioners. And both the suits were tried together. The parties were at issue on several questions of fact of which the only one material at this stage is whether the sale in favour of the appellant was supported by necessity and binding on the reversioners. The District Munsif of Palamau who tried the suits held on a review of the evidence that necessity was established in respect of all the four items of consideration and that the sale was binding on the reversioners. He accordingly dismissed Title Suit No. 126 of 1943 filed by the respondents and granted a decree for redemption in Title Suit No. 69 of 1944 filed by the appellant. The respondents herein, the reversioners, preferred appeals against both the decrees passed by the District Munsif of Palamau and they were heard by the Subordinate Judge of Palamau, who, agreeing with the findings given by the District Munsif, affirmed the decrees and dismissed the appeals. Against these decrees, the respondents preferred Second Appeals Nos. 2155 and 2156 of 1948 in the High Court of Patna. While these appeals were pending, Laung Kuer died on March 14, 1952, and on the application of the respondents, the plaint in Title Suit No. 126 of 1943 was amended by adding reliefs for possession and mesne profits. The appeals were then heard by a Bench consisting of Rai and Misra, JJ., who in separate but concurring judgments, held that the sale deed in favour of the appellant was not binding on the reversioners. Misra, J., who delivered the leading judgment did not disagree with the finding of the courts below that all the four items of consideration were supported by necessity. Indeed, being a finding of fact, it would be binding on the court in Second 562 Appeal. He, however, held, following the decision in Dasrath Singh vs Damri Singh (1) that a widow cannot by selling properties subject to usufructuary mortgage jeopardise the right of the reversioners to redeem, and that, therefore, the sale would not be binding on them. A different view was taken in Lala Ram Asre Singh vs Ambica Lal (1), where it was held that a widow was not debarred from selling properties subject to mortgage where there was necessity for it merely by reason of the fact that they were subject to usufructuary mortgage which contained no personal covenant to pay. But the learned Judge declined to follow this decision and stated the reason thus: "Following, therefore, the settled practice of this Court as laid down in a number of decisions, the only course left open to us in the circumstances would be either to follow the previous Division Bench Ruling in preference to the later or to refer the case to a larger Bench for settling the position. In my opinion, however, the present case is not one in which it is desirable to refer this case to a larger Bench. Following, therefore, the authority of this Court in Dasrath Singh 's case which completely covers the present case, it must be held that the courts below were in error in relying upon the decision in Lala Ram Asre Singh 's case." In the result the learned Judge held that the sale deed in favour of the appellant dated June 17, 1943, was not binding on the reversioners. Rai, J., expressed the view that as the bona fides of the sale in favour of the appellant was questioned by the reversioners and as there had been no finding on that point by the Subordinate Judge, the matter might have to be remanded for a finding on that question, but that, as the sale deed was not supported by necessity, he agreed with the conclusion of Misra, J. The Second Appeals were accordingly allowed and consequential reliefs granted. Thereafter, the appellant applied in the High Court under article 133 for leave to appeal to this court, and in granting certificates, Ramaswami, C. J., and Raj Kishore Prasad, J., observed in their (1) 8 Pat.L.T. 314; A.I.R. 1927 Pat.(2) 1i Pat.L.T. 6; A.I.R. 1929 Pat.563 Order dated November 27, 1956, that there being a conflict between the decisions in Dasrath Singh 's case (1) and Lala Ram Asre Singh 's case (2), the point was one of sufficient importance for grant of leave to appeal to this Court. They also stated that the question as to the practice to be followed when there was a conflict of decisions, was likewise one of public importance, which ought to be settled by this Court. They accordingly granted certificates under article 133 (1)(c) and that is how these appeals come before us. Before considering the two questions referred to in the order of the High Court granting certificates, we shall deal with a contention raised on behalf of the respondents, which if well founded would necessitate a remand of these appeals. It was argued that the sale deed in favour of the appellant was not bona fide, that it had been so held by the District Munsif, but that the Subordinate Judge had failed to record a finding on this question, and that therefore there should be a remand for a decision on that point. As already stated, Rai, J., appears to have been impressed by this contention. But when the contention is further examined it will be found to be wholly without substance. What the District Munsif said was that "after the death of Prithi Dubey the relatives of Lawan Kuer had fallen on her property like vultures", and that it was quite possible "that the transaction in question was also brought at their instance and they were also benefited by it." This only means that the relatives of Laung Kuer were guilty of spoliation of the estate. But that would not affect the rights of the appellant unless he was a party to it, which, however, is not the case, and that is what the District Munsif himself observes with reference to this aspect: "But in the present suit I have got to consider the interest of Jaisri Sahu who has in good faith already paid Rs. 500 to the Mostt.and has deposited the balance of Rs. 1,100 in court for the redemption of the Zarpeshgi." This finding that the appellant himself acted bona fide was not challenged before the Subordinate Judge (1) 8 Pat.L.T. 314.A.I.R. 1927 Pat. 219.(2) 11 Pat.L.T. 6; A.I.R. 1929 Pat.564 on appeal and the point is accordingly not open to the respondents. Dealing next with the points mentioned in the Order of the High Court dated November 27, 1956, the first question that arises for decision is whether a sale by a widow of properties which are the subject matter of a usufructuary mortgage is beyond her powers when the mortgagee cannot sue to recover the amount due on the mortgage. This has been answered in the affirmative by the learned Judges of the High Court on the strength of the decision in Dasrath Singh vs Damri Singh (1). There the last male holder, one Sitaram Singh, had created a usufructuary mortgage, and after his death the widow sold the property for the discharge of this debt and of certain other debts, and for meeting the marriage expenses of her daughter and grand daughter. It was held by Das and Adami, JJ., that all these items of consideration were supported by necessity, but nevertheless the sale was not binding on the reversioners. Das, J., who delivered the judgment observed as follows "It is contended that under the terms of the usufructuary mortgage it would be open now to the plaintiffs to redeem that mortgage and it is pointed out that their right to redeem should not have been jeopardised by the widow by the transfer of the property to the mortgagee. In my opinion this argument is right and should prevail." If the learned Judge intended to lay down as an inflexible proposition of law that, whenever there is a usufructuary mortgage, the widow cannot sell the property, as that would deprive the reversioners of the right to redeem the same, we must dissent from it. Such a proposition could be supported only if the widow is in the position of a trustee, holding the estate for the benefit of the reversioners, with a duty cast on her to preserve the properties and pass them on intact to them. That, however, is not the law. When a widow succeeds as heir to her husband, the ownership in the properties, both legal and beneficial, vests in her. She fully represents the estate, the interest of (1) 8 Pat.L.T. 314; A.I.R. 1927 Pat.565 the reversioners therein being only spes successionis. The widow is entitled to the full beneficial enjoyment of the estate and is not accountable to any one. It is true that she cannot alienate the properties unless it be for necessity or for benefit to the estate, but this restriction on her powers is not one imposed for the benefit of reversioners but is an incident of the estate as known to Hindu law. It is for this reason that it has been held that when Crown takes the property by escheat it takes, it free from any alienation made by the widow of the last male holder which is not valid under the Hindu law, vide: Collector of Masulipatam vs Cavaly Venkata (1). Where, however, there is necessity for a transfer, the restriction imposed by Hindu law on her power to alienate ceases to operate, and the widow as owner has got the fullest discretion to decide what form the alienation should assume. Her powers in this regard are, as held in a series of decisions beginning with Hanooman Persaud vs Mussamat Ba booee (2), those of the manager of an infant 's estate or the manager of a joint Hindu family. In Venkaji vs Vishnu (3) it Was observed that "A widow like a manager of the family, must be allowed a reasonable latitude in the exercise of her powers, provided. . she acts fairly to her expectant heirs '." And more recently, discussing this question, it was observed in Viraraju vs Venkataratnam ( '): "How exactly this obligation is to be carried out, whether by a mortgage, sale or other means, is not to be determined by strict rules or legal formulae, but must be left to the reasonable discretion of the party bound. In the absence of mala fides or extravagance, and so long as it is neither unfair in character nor unreasonable in extent, the Court will not scan too nicely the manner or the quantum of the alienation." Judged by these principles, when there is a mortgage subsisting on the property, the question whether (1) (1861) 8 M.I.A. 529.(3) , 536.(2) (4) I.L.R. 231.72 566 the widow could sell it in discharge of it is a question which must be determined on the facts of each case, there being no absolute prohibition against her effecting a sale in a proper case. What has to be determined is whether the act is one which can be justified as that of a prudent owner managing his or her own properties. If the income from the property has increased in value, it would be a reasonable step to take to dispose of some of the properties in discharge of the debt and redeem the rest so that the estate can have the benefit of the income. In this view, the decision in Dasrath Singh 's case,( ') in so far as it held that a Bale by a widow of a property which is subject to a usufructuary mortgage is not binding on the reversioners must be held to be wrong. In Lala Ram Asre Singh 's case (2), which was a decision of Das and Fazl Ali, JJ., the facts were similar to those in Dasrath Singh 's case (1). Dealing with the contention that a sale by the widow of properties which were the subject matter of a Zerpesbgi deed was not binding on the reversioners because the Zerpeshgidar was in possession of the properties and he could not sue to recover the amount due thereunder, Das, J., delivering the judgment of the court observed: "This in my view is an impossible argument. The debt was there; it was a subsisting debt, only the creditor was in possession of a part of the estate and was unable to recover it by instituting a suit in the civil courts. But the result was that a considerable portion of the income was withdrawn from Basmati Kuer who had succeeded her husband. It is well established that where a case of necessity exists, an heiress is not bound to borrow money, with the hope of paying it off before her death. Nor is she bound to mortgage the estate, and thereby reduce her income for life. She is at liberty, if she thinks fit, absolutely to sell off a part of the estate." In our judgment these observations correctly state the position in law. It will be noticed that Das, J., deli (1) 8 Pat.L. T. 314; A.I.R. 1927 Pat.219, (2) ii Pat.L. T. 6; A.I.R. 1929 Pat.567 vered the judgment in both Dasrath Singh 's case (1) and Lala Ram Asre Singh 's case (2 ) and that the decision in Dasrath Singh 's case (1) is not referred to in the judgment in Lala Ram Asre Singh 's case (2). It has been found in this case that Laung Kuer had to raise a sum of Rs. 500 for necessary purposes. She could have done that by mortgaging other properties, but that would have reduced the income available for enjoyment by her. On the other hand, by a sale of a portion of the properties covered by the Zerpeshgi deed dated June 21, 1935, she was able to redeem the other properties and the estate had the benefit of the income from those properties. The District Munsif and the Subordinate Judge on appeal have both of them held on a review of all the facts that the sale in favour of the appellant is a proper one binding on the reversioners. We are of opinion that this finding is not open to attack in Second Appeal. Then there is the question of the practice to be followed when there is a conflict among decisions of Benches of the same High Court. When a Bench of the High Court gives a decision on a question of law, it should in general be followed by other Benches unless they have reasons to differ from it, in which case the proper course to adopt would be to refer the question for the decision of a Full Bench. In Buddha Singh vs Laltu Singh (3), the Privy Council had occasion to discuss the procedure which should be adopted when a Bench of a High Court differs from the opinion given by a previous Bench. After referring to Suraya Bhukta vs Lakhshminarasamma (4) and Chinnasami Pillai vs Kunju Pillai (5), where decisions had been given based on the opinions expressed by Devananda Bliatta in the Smriti Chandrika, the Privy Council observed: "Curiously enough there is no reference in either of the Madras judgments referred to above to a previous decision, Parasara Bhattar vs Rangaraja Bhattar (6) of the same court to which Turner, (1) 8 Pat.L.T. 314; A.I.R. 1927 Pat.(2) 11 Pat.L.T. 6; A.I.R. 1929 Pat.(3) All. (4) Mad.(5) Mad.152 (6) Mad.2. 568 C. J., was also a party. In that case the rule of the Smriti Chandrika was not accepted nor was the literal construction of the Mitakshara followed. It is usual in such cases where a difference of opinion arises in the same court to refer the point to a Full Bench, and the law provides for such contingencies. Had that course been followed their Lordships would probably have had more 'detailed reasoning as to the change of opinion on the part at least of one Judge." (pp. 622, 623). Considering this question, a Full Bench of the Madras High Court observed in Seshamma vs Venkata Narasimharao (1): "The Division Bench is the final Court of appeal in an Indian High Court, unless the case is referred to a Full Bench, and one Division Bench should regard itself bound by the decision of another Division Bench on a question of law. In England, where there is the Court of Appeal, Divisional Courts follow the decisions of other Divisional Courts on the grounds of judicial comity; see The Vera Cruz (No. 2) (2), Harrison vs Ridgway Ratkinsky vs Jacobs (4) and Phillips vs Copping If a Division Bench does not accept as correct the decision on a question of law of another Division Bench the only right and proper course to adopt is to refer the matter to a Full Bench, for which the rules of this court provide. If this course is not adopted, the courts subordinate to the High Court are left without guidance. Apart from the impro priety of an appellate Bench refusing to regard itself bound by a previous decision on. a question of law of an appellate Bench of equal strength and the difficulty placed in the way of subordinate Courts administering justice, there are the additional factors of the loss of money and, the waste of judicial time." Law will be bereft of all its utility if it should be thrown into a state of uncertainty by reason of conflicting decisions, and it is therefore desirable that in (1) I.L.R. , 474.(2) (3) (4) (5) [1935] 1 K.B. 15.569 case of difference of opinion, the question should be authoritatively settled. It sometimes happens that an earlier decision given by a Bench is not brought to the notice of a Bench hearing the same question, and a contrary decision is given without reference to the earlier decision. The question has also been discussed as to the correct procedure ' to be followed when two such conflicting decisions are placed before a later Bench. The practice in the Patna High Court appears to be that in those cases, the earlier decision is followed and not the later. In England the practice is, as noticed in the judgment in Seshamma vs Venkata Narasimharao (1), that the decision of a Court of Appeal is considered as a general rule to be binding on it. There are exceptions to it, and one of them is thus stated in Halsbury 's Laws of England, third edition, Vol. 22, para. 1687, pp. 799, 800: "The court is not bound to follow a decision of its own if given per incuriam. A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of a co ordinate jurisdiction which covered the case before it, or when it has acted in ignorance of a decision of the House of Lords. In the former case it must decide which decision to follow, and in the latter it is bound by the decision of the House of Lords." In Virayya vs Venkata Subbayya (2) it has been held by the Andhra High Court that under the circumstances aforesaid the Bench is free to adopt that view which is in accordance with justice and legal principles after taking into consideration the views expressed in the two conflicting Benches, vide also the decision of the Nagpur High Court in Bilimoria vs Central Bank of India (3 ). The better course would be for the Bench hearing the case to refer the matter to a Full Bench in view of the conflicting authorities without taking upon itself to decide whether it should follow the one Bench decision or the other. We have no doubt that when such situations arise, the Bench (1) I.L.R. , 474.(2) A.I.R 1955 Andhra 215, 217.(3) A.I. R. 570 hearing cases would refer the matter for the decision of a Full Court. In the result these appeals are allowed and the decrees passed by the trial court restored with costs throughout. One set of hearing costs. Appeals allowed.

P died on July 14, 1932, leaving behind his widow, L as his heir. On June 21, 1935, L executed a Zerpeshgi in favour of the respondents for an admittedly binding purpose, and on June 17, 1943, she sold to the appellant a portion of the properties which were the subject matter of the Zerpeshgi deed for the purpose of redeeming the Zerpeshgi and for certain other necessary purposes. The respondents who were the reversioners 559 instituted a suit challenging the validity of the sale. The trial court and the lower appellate court held that the sale was a proper one binding on the reversioners. On second appeal, a Division Bench of the Patna High Court took a contrary view and allowed the appeal. One of the judges while he did not disagree with the findings of fact of the courts below as to the necessity for the sale followed a decision of the same High Court to the effect that a widow cannot by selling properties subject to usufructuary mortgage jeopardise the right of reversioners to redeem them. A different view of the law had been taken in a later decision of that court, but the learned judge declined to follow that decision observing that the practice of that Court was either to follow the previous Division Bench ruling in preference to the later or to refer the case to a larger Bench for settling the position, but that in the present case it was not desirable to adopt the latter course. The other learned judge was of the opinion that the sale deed was not supported by necessity. Held, that the High Court was in error in holding that the sale deed in favour of the appellant was not binding on the reversioners. When there is a mortgage subsisting on the property, the question whether the widow could sell it in discharge of it is a question which must be determined on the facts of each case, there being no absolute prohibition against her effecting a sale in a proper case. What has to be determined is whether the act is one which can be justified as that of a prudent owner managing his or her own properties. Hanooman Persaud vs Mussamat Babooee, , Vankaji vs Vishnu, Bom. 534 and Viraraju vs Vankataratnam, I.L.R. , relied on. Dasrath Singh vs Damri Singh, A.I.R. 1927 Pat. 219, dis approved. Lal Ram Asre Singh vs Ambica Lal, 1929 Pat. 216, approved. Held, further, that when a Bench of the High Court gives a decision on a question of law, it should in general be followed by other Benches unless they have reasons to differ from it, in which case the proper course to adopt would be to refer the question for the decision of a Full Bench. Where two conflicting decisions are placed before a later Bench, the better course for the latter is to refer the matter to a Full Bench without taking upon itself to decide whether it should follow the one Bench decision or the other. Buddha Singh vs Laltu Singh, All. 604, Seshamma vs Venkata Narasimharao, I.I.R. , Bilimoria vs Central Bank of India, A.I.R. 1943 Nag. 340 and Virayya vs Venkata Subbayya, A.I.R. 1955 Andhra 215, con sidered.

ivil Appeal Nos. 337 38 of 1982. From the Judgments and order date 5.7.80 and 3.2.1981 of the Karnataka High Court in W.P. No. 543/1976 and 1217 of 1981 respectively . R.N. Narasimamurthy. Attorney General and P.R. Ramasesh for the Appellants. G.L. Sanghi, A.K. Sen H.B. Datar. K.R. Nagaraja. N. Ganpathy, K.R. NambiaI, R.P. Ranga Swamy, R.B. Datar and Ms. c. K. Sucharita for the Respondents . R.S. Hegde for the impleded party. DUTT, J. These appeals by special leave preferred at the instance of the Secretary, Regional Transport Authority, Bangalore, and the State of Karnataka, are directed against the judgment of the Division Bench of the Karnataka High PG NO 1041 Court dismissing the appeal preferred by the appellants and affirming that of the learned Single Judge of the High Court whereby the Rule issued on the writ petition filed by the respondent No. 1 D.P. Sharma was made absolute. The respondent No. 1, who is the owner of a public service vehicle, made an application on October 10, 1976 to the Regional Transport Authority for the grant of a special permit under sub section (6) of section 63 of the for the period from November 15, 1976 to November 22, 1976. The Regional Transport Authority rejected the said application on the ground that the provisions of the Karnataka Contract Carriages (Acquisition) Act, 1976, hereinafter referred to as `the Act ', prohibit the grant of such permits. The respondent No. 1 being aggrieved by the refusal by the Regional Transport Authority to grant a special permit filed a writ petition in the High Court. A learned Single Judge of the High Court allowed the writ petition and directed the Regional Transport Authority to consider the application of the respondent No. I for the grant of special permit. Against the judgment of the learned Single Judge, the appellants preferred a writ appeal to the Division Bench of the High Court. The Bench took the view that the intention of the Legislature was that only a public service vehicle in relation to which a special permit had been issued when the Act came into force and which was not operating as a stage carriage should be acquired. Accordingly, it was held that a public service vehicle in relation to which a special permit had not been issued when the Act came into force would not come within the definition of `contract carriage ' under section 3(g) of the Act and the prohibition contained in section 28 of the Act against the grant of contract carriage permit would not extend to the grant of special permit under sub section (6) of section 63 of the . In that view of the matter, the Division Bench dismissed the appeal preferred by the appellants. The only point that is involved in these appeals is whether after the coming into force of the Act, a special permit under section 63(6) of the can be granted under the Act. The Act is to provide for the acquisition of contract carriages and for matters incidental, ancillary or subservient thereto. The preamble provides, inter alia as follows: PG NO 1042 'Whereas contract carriages and certain other categories of public service vehicles are being operated in the State in a manner highly detrimental and prejudicial to public interest; And Whereas with a view lo prevent such misuse and also to provide better facilities for the transport of passengers by road and to give effect to the policy of the State towards securing that the ownership and control of the resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment; And Whereas for the aforesaid purposes it is considered necessary to provide for the acquisition of contract carriages and certain other categories of public service vehicles in the State and for matters incidential. ancillary or subservient thereto; It is apparent from the preamble of the Act that the primary object of the Act is acquisition of contract carriages with a view to preventing misuse and also to provide better facilities for the transport of bassengers by road Besides the prearmble. we may refer to the Statement of Objects and Reasons for the Act which will show the back ground for the enactment of the Act. The Statement of objects and Reasons for the Act is as follows: "A large number of contract carriages were being operated in the StaLe to the detriment of public interest and were also functioning stealthily as stage carriages. This had to be prevented. Article 39(b) and (c) enjoins upon the . State to see that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the concentration of wealth to the common detriment. In view of the aforesaid it was considered necessary to acquire the contract carriages run by private operators Accordingly the Karnataka Contract Carriages PG NO 1043 (Acquisition) Ordinance, 1976 was promulgated. The Bill "seeks to replace the Ordinance. " The constitutional validity of the Act was challenged before this Court and a Constitution Bench of Seven Judges in State of karnataka vs Shri Ranganatha Reddy, [1978] I SCR 641 upheld the validity of the Act. In considering the question of validity of the Act, this Court referred to the Statement of Objects and Reasons for the Act and on the basis of various affidavits filed on behalf of the State, observed that the operators were misusing their permits granted to them as contract carriage permits, and that in many cases the vehicles here used as stage carriages picking up and dropping passengers in the way. Accordingly. the Legislature thought that to prevent such misuse and to provide for better facilities to transport passengers and to the general public, it was necessary to acquire the vehicles permits and all right title and interest of the contract carriage operators etc. Keeping in view the objects and reasons for the enactment of the Act, we have to consider whether after the coming into force of the Act, it is permissible to grant a special permit under section 68(6) of the . But before we do that we may refer to the Scheme of the Act. We have already referred to the preamble to the Act providing for the acquisition of contract carriages. The Act shall be deemed to have come into force on January 30, 1976 as provided in sub section (3) of section 1 of the Act. Section 2 contains a declaration that the Act is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Constitution of India and the acquisition therefor of the contract carriages and other property referred to in section 4 of the Act. Section 3 is the definition section. Clause (g) of section 3 is an extended definition of contract carriage ' as given in section 3(2) of the . and we shall presently refer to and deal with the definition in detail. Clause (h. of section 3 of the Act defines 'contract carriage operator '. Under clause (m) of section 3 of the Act, 'permit ' means the permit granted under the , authorising the use of a vehicle as a contract carriage. Section 4 is the vesting provision of contract carriages etc. Section 6 provides for the determination of the amount for the vesting of the acquired property under section 4 of the Act. Section 14 bars the issuance of a fresh permit or renewal of the existing permit for the running of any contract carriage. Sub section (l) of section 20 provides inter alia that all contract carriage permits granted or renewed in respect of PG NO 1044 any vehicle, other than a vehicle acquired under the Act or belonging to the Karnataka State Road Transport Corporation or referred to in section 24 of the Act, shall stand cancelled. Sub section (3) of Section 20 provides that "no officer or authority shall invite any application or entertain any such application of persons other than the Corporation for the grant of permit for the running of any contract carriage". It has been already noticed that the Act provides for acquisition of contract carriages. The words 'contract carriage ' have been defined in section 3(R) of the Act as follows: 3(g). 'contract carriage ' shall have the same meaning as in clause(3) of section 2 of the and includes (i) a public service vehicle in relation to which a special permit has been issued under sub section (6) of section 63 of the : (ii) a public service vehicle in relation to which a temporary permit has been issued under sub section (l) of section 62 or sub section (lC) of section 68F of the ; (iii) a public service vehicle without a contract carriage permit but which is specified as contract carriage in the concerned certificate of registration; (iv) any right in or over such vehicles or moveable property, but does not include, (i) a tourist vehicle in relation to which a permit has been issued under sub section (7) of section 63 of the ; (ii) a vehicle operating as a stage carriage in relation to which on the 30th day of January, 1976 a temporary contract carriage permit or a special permit issued under sub section ( l) of section 62 or sub section (6) of section 63 respectively of the , is in force; (iii) a motor cab;" PG NO 1045 Under section 3(g), the 'contract carriage ' shall, in the first place, have the same meaning as in section 2(3) of the , which provides as follows: "2(3). 'contract carriage ' means a motor vehicle which carries a passenger or passengers for hire or reward under a contract expressed or implied for the use of the vehicle as a whole at or for a fixed or agreed rate or sum (i) on a time basis whether or not with reference to any route or distance. or (ii) from one point to another, and in either case without stopping to pick up, or set down along the line of route passengers not included in the contract, and includes a motor cab notwithstanding that the passengers may pay separate fares;" In the second place, section 3(g) gives an extended meaning to 'contract carriage '. Under the extended meaning, 'contract carriage ' will include a public service vehicle in relation to which a special permit has been issued under section (6) of section 63 of the or in relation to which a temporary permit has been issued under sub section (l) of section 62 or sub section (IC) of section 68F of the . It also includes a public service vehicle without a contract carriage permit but which is specified as contract carriage in the concerned certificate of registration. We are not referring to clauses (iv) and (v) of the extended definition, as the same are not relevant for our purpose. A 'public service vehicle ' has been defined in section 2(25) of the as meaning any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage, and stage carriage. Thus, it is apparent from the definition of 'public service vehicle ' that it includes a contract carriage and a stage carriage as well. Under clauses (i) and (ii) of section 3(g) of the Act if a special permit under section 63(6) or a temporary permit under section 62(1) or sub section (lC) of section 68F of the has been issued, it will come within the purview of the definition of contract carriage '. In other words, if a 'contract carriage ' or a 'stage carriage ' within the meaning of the has been issued a special permit or a temporary permit, as referred to in PG NO 1046 clauses (i) and (ii) of section 3(g). such 'contract carriage ' or 'stage carriage ' will be a contract carriage within the meaning of section 3(g) of the Act. Now we may refer to the latter part of the definition of 'contract carriage ' under section 3(g) of the Act which excludes certain vehicles from the definition of contract carriage '. The exclusion that has been provided in clause (ii) is important for our purpose. It excludes a stage carriage in respect of which a temporary contract carriage permit under section 62(1) or a special permit under section 63(6) of the is in force on January 3(), 1976, that is, the date on which the Act is deemed to have come into force. Under clauses (i) and (ii) of section 3(g) of the Act, which form a part of the extended definition of 'contract carriage ', a public service vehicle, that is to say, a contract carriage or a stage carriage in respect of which a special permit under section 63(6) or a temporary permit under section 62(1) or section 68F(lC) of the has been issued, will come within the meaning of 'contract carriage ' under the Act. On the other hand, if a special permit under section 62(1) or under section 63(6) of the was in force on January 30, 1976 in respect of a stage carriage, such a stage carriage will not be a 'contract carriage ' within the meaning of section 3(g) of the Act. The High Court seems to think that if any special permit had not been granted to a public service vehicle when the Act came into force, such a vehicle will not come within the meaning of the definition of 'contract carriage ' under section 3(g). This view of the High Court is not correct. In clauses (i) and (ii) of section 3(g), the expression 'has been issued ' occurs. It is submitted by the learned Advocate General of Karnataka that in view of the expression 'has been issued ', clauses (i) and (ii) contemplate the issuance of a special permit or a temporary permit after the coming into force of the Act. It does not include the issuance of a special permit or a temporary permit earlier than the date of the commencement of the Act. The learned Advocate General has placed reliance on an English decision in re Athlumne, Ex parte Wilson, In that case, the words 'where a date has been proved under the principal Act ' came to be construed and it was observed "But this form of words is often used to refer, not to a past time which preceded the enactment, but to a time which is made past by anticipation a time which will have become a past time only when the event occurs on which the statute is to operate. " In our opinion, whether the expression 'has been ' occurring in a provision of a statute denotes transaction prior to the enactment of the statute in question or a transaction PG NO 1047 after the coming into force of the statute will depend upon the intention of the Legislature to be gathered from the provision in which the said expression occurs or from the other provisions of the statute. In the instant case, the words 'has been ' contemplate the issuance of a special permit or a temporary permit as referred to in clauses (i) and (ii) of section 3(g) of the Act after the enactment of the Act which is clear from the exclusion clause (ii) of section 3(g) which excludes a stage carriage from the definition of 'contract carriage ', if special permits issued under section 62(1) or section h.(6) of the were in force on January 30, 1976. It is difficult to interpret clauses (i) and (ii) of section 3(g) as contemplating the issuance of a temporary permit or a special permit. as referred to therein before the coming into force of the Act. Merely because of the use of the words has been in clauses (i) and (ii) of section 3(g), such an interpretation is not possible to be made, particularly in view of the legislative intent apparent from the exclusion clause (ii), namely. that the Legislature only. excluded a stage carriage in respect of which a temporary contract carriage or a special permit issued under section 62(1) or 63(6) of the was in force on January 30, 1976. It has, however, been urged by Mr. A K. Sen learned counsel appearing on behalf of the respondent No. 1. that a stage carriage vehicle in respect of which a special permit has been granted, is excluded form the operation of the Act. counsel submits that the Act only contemplates the acquisition of a contract carriage within the meaning of the Motor vehicles Act and not a stage carriage in respect of which a special permit was or has been granted. In support of his contention, the learned counsel has placed strong reliance on the definition of the word permit under section 3(m) of the Act, as meaning the permit granted under the , authorising the use of a vehicle as a contract carriage. It is submitted by him that the contract carriage under the . It is urged by the learned Counsel that the word permit used in the different provisions of the act will have the same meaning of the word as defined in section 3(m), that is to say, the permit granted under the for the use of a vehicle as a contract carriage. In section 3(h) 'contract carriage operator ' has been defined as follows: PG NO 1048 "3(h). 'contract carriage operator ' means an operator holding one or more contract carriage permit and includes any person in whose name a public service vehicle is registered and is specified as a contract carriage in the certificate or registration of such vehicle ;" According to the learned Counsel, the word 'permit ' in section 3(h) refers only to permit granted in respect of a contract carriage under the . Section 4 is the vesting provision of contract carriages. Clause (a) of sub section ( 1) of section 4 provides as follows: "4 Vesting of contract carriages, etc. (1) On and from such date as may be specified by the State Government in this behalf by notification in respect of any contract carriage operator, (a) every contract carriage owned or operated by such contract carriage operator along with the permit or the certificate of registration or both as the case may be shall vest in the State Government absolutely free from all encumbrances;" Counsel submits that the word Permit ' in clause (a) refers to a permit granted to a vehicle for the use of a contract carriage under the . In other words, the sum and substance of the argument of Mr. Sen is that the word 'permit ' in section .(m) relates to the permit granted to a vehicle for the use as a contract carriage under the and the definition with this interpretation should be applied to the word Permit ' occurring in the different provisions of the Act including section 3(h) and should also be applied to the word occuring in section 14 of the Act. Section 14 provides as follows: "14 Fresh permit or renewal of the existing permit barred. Except otherwise provided in this Act (1) no person shall on or after the commencement of this Act apply for any permit or fresh permit or for renewal of an existing permit for the running of any contract carriage in the State; and (2) every application for the grant of a permit or fresh permit Or for the renewal of the existing permit and all PG NO 1049 appeals or revisions arising therefrom relating thereto made or preferred before the commencement of this Act and pending in any court or with any officer, authority or Tribunal constituted under the shall abate. " It is submitted that only the grant or renewal of a permit in respect of a 'contract carriage ' within the meaning of the is prohibited under section 14 of the Act, and such prohibition does not relate to a stage carriage for the running of the same as; contract carriage. We are unable to accept the contention. If the interpretation as given by Mr. Sen of the definition of the word 'permit ', under section 3(m) of the Act is accepted, it will make the definition of the words 'contract carriage ' under section 3(g) of the Act meaningless and nugatory and also set at naught the object of the Act and the clear intention of the Legislature to acquire a stage carriage as well in respect of which a special permit or a temporary permit, as referred to in clauses (i) or (ii) of section 3(g), has been granted. The words 'contract carriage ' occurring in section 3(m) must, in our opinion, be read in the light of the definition as contained in section 3(g) of the Act. So read, it is manifest that section 14 read with section 20(3) of the Act clearly bars the making of any application for a permit or fresh permit or for renewal of an existing permit for the running of a vehicle, whether a contract carriage Or a stage carriage. as a contract carriage. It is not disputed before use that the Act does not contemplate the vesting of stage carriage simpliciter But section 14 read with section 20(3) of the Act clearly, prohibits the grant or renewal of any permit for the running of any contract carriage. A stage carriage in respect of which d temporary contract carriage permit or a special permit under section 62(1) or section 63(6) respectively of the was in force on January 3t) 1 ')76, has been excluded from the definition obtaining a permit under the . But whether a special permit was granted in respect of a stage carriage or not, no such PG NO 1050 permit can be granted in respect of a stage carriage for the running of it as a contract carriage. In other words, section 14 read with section 20(3) of the Act confers a monopoly on the Karnataka State Road Transport Corporation to run vehicles as contract carriages. The High Court is not, therefore, right in its view that a public service vehicle in relation to which a special permit had not been issued when the Act came into force, would not come within the definition of 'contract carriage ' in section 3(g) and the prohibition contained in section 20 of the Act against the grant of contract carriage permit cannot extend to grant of special permit under section 63(6) of the . But before we conclude, we may observe that but for the object of the Act as stated above, it would have been very difficult for us to interpret the provisions of the Act in view of bad drafting of the same. Be that as it may, for the reasons aforesaid, these appeals are allowed and the judgment of the High Court is set aside. The writ petition filed by the respondent No. 1 in the High Court is dismissed. There will, however, be no order as to costs. N.V.K. Appeals allowed.

Respondent No. 1, the owner of a public service vehicle, made an application to the Regional Transport Authority for the grant of a `special permit ' under section 63(6) of the Motor vehicles Act, 1939. The Regional Transport Authority rejected the said application on the ground that the provisions of the Karnataka Contract Carriages (Acquisition) Act, 1976 prohibited the grant of such permit. Aggrieved by the aforesaid order of refusal, respondent No. 1 filed a writ petition in the High Court and a Single Judge of the High Court allowed writ petition and directed the Regional Transport Authority to consider the application of responded No.1 for the grant of a special permit. The Regional Transport Authority preferred a writ appeal. The Division Bench of the High Court taking the view that the intention of the legislature was that only a public service vehicle in relation to which a special permit held been issued when the 1976 Act came into force and which was not operating as a stage carriage should be acquired, held that a public service vehicle in relation to which a special permit had not been issued when the Act came into force would not come within the definition of `contract carriage under section 3(g) of the Act and the prohibition contained in section 20 of the Act against the grant of contract carriage permit would not extend to the grant of special PG NO 1038 PG NO 1039 permit under sub section 6 of section 63 of the . The Division Bench dismissed the appeal. The Regional Transport Authority appealed by special leave to this Court. On the question whether after the coming into force of the Karnataka Contract Carriages (Acquisition) Act, 1976, a special permit under section 63(6) of the can be granted under the Act. Allowing the appeals, HELD: 1. Section 14 read with Section 20(3) of the Karnataka Contract Carriages (Acquisition) Act, 1976 confers a monopoly on the Karnataka State Road Transport Corporation to run vehicles as contract carriages. [1050A] 2. Section 14 read with section 20(3) of the Act clearly prohibits the grant of renewal of any permit for the running of any contract carriage. [1049C] 3. The High Court was not therefore right in its view that a public service vehicle in relation to which a special permit had not been issued when the Act came into force, would not come within the definition of `contract carriage ' in section (g) and the prohibition contained in Section 20 of the Act against the grant of contract carriage permit cannot extend to grant of special permit under Section 63(6) of the . [1050B C] 4. Under clauses (i) and (ii) of Section 3(g) of the Act if a special permit under Section 63(6) or a temporary permit under Section 62(1) or sub section ( I C) of Section 68 F of the has been issued, it will came within the purview of the definition of `contract carriage '. [1046C D] 5. If a special permit under Section 62(1) or under Section 63(6) of the was in force on January 30, 1976 in respect of a stage carriage, such a stage carriage will not be a `contract carriage ' within the meaning of Section 3(g) of the Act. [1046 D] 6. Whether the expression `has been ' occurring in a provision of a statute denotes transaction prior to the enactment of the statute in question or a transaction after the coming into force of the statute will depend upon the intention of the Legislature to be gathered from the provision in which the said expression occurs or from the other provisions of the statute. [1046H; 1047A] PG NO 1040 In the instant case, the words `has been ' contemplate the issuance of a special permit or a temporary permit as preferred to in clauses (i) and (ii) of Section 3(g) of the Act after the enactment of the Act which is clear from exclusion clause (ii) of Section 3(g) which excludes a stage carriage from the definition of `contract carriage ', if special permits issued under section 62(1) or Section 63(6) of the were in force on January 30, 1976. [1049F] 7. The words `contract carriage ' occurring in Section 3(m) must be read in the light of the definition as contained in section 3(g) of the Act. So read, it is manifest that section 14 read with section 20(3) of the Act clearly bars the making of any application for a permit or for renewal of an existing permit for the running of a vehicle, whether a contract carriage or a stage carriage, as a contract carriage. [1049D E] State of Karnataka vs Shri Ranganatha Reddy. and Athlumney Ex pate Wilson, referred to.

ivil Appeal Nos. 1335 36 of 1976. 853 From the Judgment and Order dated 9.12.75 of the Punjab & Haryana High Court in L.P.A. Nos. 231 and 267 of 1974. Markandey Singh, Appellant in person, in CA. No. 1335 of 1976 and Respondent in person in CA. No. 1336 of 1976. Girish Chandra, C.V. Subba Rao and K.S. Guruswamy for the appellants in CA. No. 1336 of 1976. V.C. Mahajan, for the Respondent In 1335 of 1976. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These two appeals are connected. These deal with the rectification of year of allotment of absorption of the appellant in the first appeal and respondent in the second one Shri Markandey Singh (hereinafter called the appellant in the first appeal and respondent in the second appeal) in the Indian Police Service. Shri M.L. Bhanot is the respondent in the first appeal. He is appellant in the second appeal being Civil Appeal No. 1336 of 1976. By the order dated 21st July, 1973, Shri Markandey Singh was assigned 1956 as the year of allotment in I.P.S. cadre. Shri Bhanot challenged the said order. The same was quashed by the learned single judge of Punjab & Haryana High Court on 4th April, 1974. Letters Patent Appeal against the said order was dismissed by the Division Bench of the said High Court on 9th December, 1975. The first appeal aforesaid arises from the said decision. In order to appreciate the position, it may be relevant to note that Shri Markandey Singh the appellant in the first appeal joined the U.P. State Service as Deputy Superintendent of Police on 17th November, 1950 by passing a competitive examination. Two years later he was confirmed as such. In November, 1953, he joined on deputation the Union Territory of Delhi which had at that time no police service of its own. While on deputation in 1958 and again in 1959 60, the appellant had officiated as Superintendent of Police but for administrative reasons was reverted back. In July, 1960, Himachal Pradesh Indian Police Service was created and thereafter the Delhi Himachal Pradesh Police Service in March, 1961. On 6th December, 1961, Shri Singh was again promoted to officiate as Superintendent of Police. During the period of his officiation, his request for being absorbed in the Himachal Pradesh State Police Service was accepted and by an order dated 7th February, 1963, he was absorbed in the State Service with effect from 27th November, 1962. While he was continuing to officiate in the senior post as aforesaid, on 854 30th April, 1965, he was confirmed in the Union Territory Cadre of I.P.S. with effect from 14th May, 1964. He was assigned 1958 as the year of allotment. He, however, made representation against the order of allotment in August, 1969 to the Central Government claiming the benefit of officiation from 6th December, 1961 to 13th May, 1963 in the matter of fixation of his year of allotment. On 14th May, 1963, the appellant 's name had been brought on the select list of the officers to be promoted to the Indian Police Service and he was recruited with effect from the same date. It may be noted that during the preceding period of officiation as mentioned hereinbefore he was not on the select list. On 23rd April, 1970, his representation was rejected by the Central Government. He made a second representation on 23rd June, 1970. Shri Bhanot had appeared in the I.P.S. Examination. He was successful and recruited in the Police Service in October, 1957. The year of allotment assigned to him was 1957. Shri Bhanot, was allotted the year 1957 on his joining the service by examination and the appellant allotted the year 1958 as mentioned hereinbefore. In November, 1962, the respondent, Shri Bhanot was promoted as Superintendent of Police in the Union Territory of Delhi with effect from 13th May, 1961. In November, 1966, reorganisation of State of Punjab took place and at that time Shri Bhanot was allotted to the joint I.P.S. Cadre of Delhi and Himachal Pradesh. On coming to know in December, 1972 about the second representation made by Shri Singh, Shri Bhanot wrote to the Central Government that he having been allotted the year 1957 was senior to Shri Singh and if any change was brought about in the year of allotment of Shri Singh which was 1958, he, the respondent, should be intimated of the reasons so as to enable him to make an effective representation. According to the respondent, which has been accepted by the Division Bench of the High Court of Punjab & Haryana in the impugned judgment, he did not hear anything from the Central Government in spite of the several reminders. On 21st June, 1973, the Central Government by its order of the same date gave the benefit of officiation for a period from 6th December, 1961 to 13th May, 1963 to Shri Singh and accepted his representation and assigned to him 1956 as the year of allotment. In consequence, Shri Singh was placed below one Shri B.P. Marwaha and above Shri Bhanot in the gradation list of Union Territory of I.P.S. Feeling aggrieved, Shri Bhanot filed the writ petition being Writ Petition No. 12 of 1974 before the High Court. The learned single judge allowed the same. He held that Shri Singh being on deputation was not entitled to the benefit of officiation on senior post prior to 27th November, 1962 with effect from which he was absorbed in Delhi Himachal Pradesh State Police Service. The representation made by Shri Singh was barred by time. 855 It was further held by the learned single judge that acceptance of the second representation of Shri Singh without giving an opportunity to Shri Bhanot was in violation of the principles of natural justice. In the premises the order dated 21st June, 1973 was quashed by the learned single judge. There were two appeals before the Division Bench one was filed by Shri Singh against the judgment of the learned single judge and the other was filed by the Union of India. Both these appeals were disposed of by the Division Bench by judgment in Letters Patent Appeal No. 231 of 1974 and for the reasons given in Letters Patent Appeal No. 231 of 1974, the appeal by the Union of India was also dismissed and being aggrieved by the said decision, the Union of India has preferred the second appeal herein namely Civil Appeal No. 1336 of 1976. The question involved in these appeals is whether the year of allotment given to Shri Singh as 1958 was correct or not and whether the order passed by the High Court both of the learned single judge which was later upheld by the Division Bench to quash the year of allotment in favour of Shri Singh for the year 1956 was bad or not. this depends upon the interpretation of various rules and provisions. The main question which falls for consideration in these two appeals is whether the service rendered by one in a senior post in the I.P.S. Cadre of a particular State while the incumbent was on deputation to the State Police Service of that State from another State was entitled to the benefit for the purpose of working out the year of allotment in accordance with second proviso to rule 3(3)(b) of the Seniority Rules. We are concerned with the unamended rule 3(3) of the said Rules. The relevant part of the said rule reads as follows: "3(3) The year of allotment of an officer appointed to the Service after the commencement of these rules, shall be (a) Where the officer is appointed to the Service on the result of a competitive examination, the year following the year in which such examination was held; (b) Where the officer is appointed to the Service by promotion in accordance with rule 9 of the Recruitment Rules, the year of allotment of the junior most among the officers recruited to the 856 Service in accordance with rule 7 of those rules who officiated continuously in a senior post from a date earlier than the date of commencement of such officiation by the former; Provided that the year of allotment of an officer appointed to the Service in accordance with rule 9 of the Recruitment Rules who started officiating continuously in a senior post from a date earlier than the date on which any of the officers recruited to the Service, in accordance with rule 7 of those Rules, so started officiating shall be determined adhoc by the Central Government in consultation with the State Government concerned. Provided further that an officer appointed to the Service after the commencement of these Rules shall be deemed to have officiated continuously in senior post prior to the date of the inclusion of his name in the Select List prepared in accordance with the requirements of the Indian Police Service (Appointment by Promotion) Regulation framed under rule 9 of the Recruitment Rules, if the period of such officiation prior to that date if approved by the Central Government in consultation with the Commission. Explanation 1. An officer shall be deemed to have officiated continuously in a senior post from a certain date if during the period from that date to the date of his confirmation in the senior grade he continues to hold without any break or reversion a senior post otherwise than as a purely temporary to local arrangement. Explanation 2. An officer shall be treated as having officiating in a senior post during any period in respect of which the State Government concerned certifies that he would have so officiated but for his absence on leave or appointment to any special post or any other exceptional circumstances. " On behalf of the appellant before us, reliance was placed on the decision of this Court in Arun Ranjan Mukherjee vs Union of India & Ors., [1971] Suppl. S.C.R. 574 A.I.R. It may be mentioned that in 1954 the Central Government, in 857 exercise of the powers vested in it by section 3 of the All India Services Act, 1951 (hereinafter called the 'said Act ') framed certain rules. The Indian Service (Recruitment) Rules (hereinafter called the 'Recruitment Rules '), the Indian Police Service (Cadre) Rules (hereinafter referred to as the 'Cadre ') and the Indian Police Service (Regulation of Seniority) Rules (hereinafter referred to as the 'Seniority Rules '). The Indian Police Service (Fixation of Cadre Strength) Regulations ', 1955 (hereinafter referred to as the 'Cadre Regulations ') were also framed for determining the strength and composition. It is not necessary to refer to the various rules to which the Division Bench in the impugned judgment has made exhaustive reference. It is indisputable that Shri Singh, the appellant herein, was holding a substantive position in the U.P. State Police Service until he was taken over in the joint Police Service of Delhi and Himachal Pradesh in February, 1963, with effect from 27th November, 1962. He was brought on the select list of officers to be promoted to I.P.S. cadre of the Union Territories of Himachal Pradesh and Delhi on 14th May, 1963. Prior to that, he had been continuously officiating in a senior post since 6th December, 1961. He claimed that he should be given the benefit of that period. This was rejected by the learned single judge and this rejection was upheld by the Division Bench of the High Court. He was on deputation in Delhi Himachal Pradesh State Police Service. The question is what is the correct position. The first representation that the appellant made for fixing the year of allotment to be given the benefit of continuous officiation on a senior post from 6th December, 1961, to 13th May, 1963 was rejected by an order dated 23rd April, 1970. The said order of rejection is Annexure R. 4. It stated that in accordance with the orders contained in Letter No. 1/2/62 Delhi IDH(S) dated 23.8.1963, of the Home Ministry, all cadre posts held by non cadre officers not on the Select List were deemed to have been kept in abeyance with effect from 27th September, 1961 onwards; and according to the Seniority Rules, the service rendered by an officer prior to his inclusion in the Select List could not be counted for seniority unless approved by the Central Government in consultation with the Union Public Service Commission under the Second proviso to rule 3(3)(b) of the Seniority Rules. The requisite approval, it was stated, was not there. In the second representation made by the appellant, the Division Bench noted the fact that Shri Singh had noted in Madan Gopal Singh vs Union of India, the Division Bench of Delhi High Court had quashed the aforesaid letter of the Home Ministry. A 858 perusal of the order dated 21st June, 1973 made by the Central Government showed that the representation was accepted but not on the ground urged by him. The reason why the second representation was accepted by the Central Government was that in November, 1972, the Union Public Service Commission had approved of the officiation of Shri Singh in the I.P.S. cadre post during the period 6th December, 1961 to 13th May, 1963 under the second proviso to rule 3(3)(b) of the Seniority Rules, "as they stood in May, 1963". Accordingly, Shri Singh was allowed the year of 1956 and placed above Shri Bhanot. Old rule 3(3)(b) of the Seniority Rules applicable in this case has been set out hereinbefore. It was urged before the Division Bench that nowhere rule 3(3)(b) and the second proviso thereto in particular excludes the officiating period of deputation. In this connection reliance was placed on the decision of the Division Bench in the case of Arun Ranjan Mukherjee vs Union of India and others (supra). In as much as good deal of reliance was placed by the Division Bench as well as by the appellant before us on the said decision. It may be mentioned that the appellant in that case joined the Indian Army as a Commandant Officer in 1942. He became a Major in 1945. His services were lent to the state of West Bengal and accordingly on 10th January, 1949, he was posted as a Commandant of the Special Armed Police Battalion, a post corresponding to a senior post in the I.P.S. The said appellant with his consent was appointed to the West Bengal State Police Service on 1st July, 1953. On 8th September, 1954, the Indian Police Service (Recruitment) Rules, 1954, Indian Police Service (Cadre) Rules, 1954 and the Indian Police (Regulation of Seniority) Rules, 1954 were framed by the Government of India under section 3 of the All India Services Act 61 of 1951. On 6th June, 1955, the Indian Police Service (Appointment by Promotion) Regulations, 1955 were also issued under which 25% of the senior posts were allotted to the Indian Police Service cadre in each State. The appointment of the appellant was outside the quota. On 31st July, 1958, the appellant was appointed on probation in the State cadre of West Bengal. In December, 1959 he was substantively appointed to a senior post in the Indian Police Service and confirmed thereon with effect from 21st July, 1958. In December, 1958, the Ministry of Home Affairs conveyed to the Government of West Bengal its decision to fix the pay of the appellant in the senior scale of the Indian Police Service notionally from 10th January, 1949, the date from which he held an Indian Police Service Cadre post continuously. On 19th January, 1960, the Indian Police Service (Seniority of Special Recruits) Regulations 1960 were framed pursuant to rule 5 A of the Seniority Rules on 11th October, 859 1960, the Government of India in consultation with the Union Public Service Commission decided to allot to the appellant the year 1948. The year of allotment was subsequently changed to 1947 on the basis that the officiation of the appellant as well as that of the junior most direct recruit, in a senior scale did not start before 19th May, 1951. The appellant filed a writ petition under Article 226 of the Constitution. The learned single judge, allowing the petition, held that the date from which the appellant continuously officiated was 10th January, 1949 and that accordingly the year 1943 allotted to D the Junior most direct recruit, should also be allotted to the appellant. The learned Single Judge also held that the first and second proviso to rule 3(3)(b) of the Seniority Rules were not applicable to the appellant. The Division Bench in appeal agreed with the learned single judge, that the date of continuous officiation of the appellant was 10th January, 1949. But the High Court thought that the year 1947 allotted to the appellant on the basis of his officiation from 19th May, 1951 could not be sustained because the latter date had been held by this Court to be irrelevant in the case of D.R. Nim, I.P.S. vs Union of India, ; Non the less the year of allotment 1948 assigned to the appellant in the order of 11th October, 1960 was sustained because it was on an ad hoc basis. Against the High Court 's order the appellant appealed to this Court. He urged under the main clause of rule 3(3)(b) of the Seniority Rules the year 1943 should be allotted to him as the said year had been allotted to D the junior most direct recruit and that the first proviso to rule 3(3)(b) did not apply to him as it applied only to those in the joint cadre; and that this Court should deduct the 'P ' factor from the date of officiation which as held by the High Court was 10th January, 1949 and allot to him the year 1943 as the year of allotment. This Court dismissed the appeal and held that D was an Indian Police Officer recruited in 1945. He became a member of the Indian Police Service under sub rule(1) of rule 3 of the Indian Police Service (Recruitment) Rules, 1954 on the date when the said Rules came into force in 1954, and was not an officer recruited to the service in accordance with rule 7 of those Rules. The year of allotment assigned to D was not therefore available to the appellant under the main part of rule 3(3)(b). This Court further held that the first proviso to rule 3 nowhere referred or even remotely indicated that it was only applicable to the persons in the joint cadre. In fact rule 2(1) of the Seniority Rules and the words "State cadre" and "joint cadre" had been defined as having the meaning respectively assigned to them in the Indian Police Service (Cadre) Rules, 1954. By reference to rule 7 of the Cadre Rule it is 860 apparent that what is to be determined is the authority which is to appoint, to the respective cadres i.e. in the case of State Cadre it is the State Government and in the case of Joint Cadre it is the State Government concerned. The first proviso did not refer to any appointment to any cadre it only dealt with Regulation of Seniority and the reference to State Government concerned is for the purpose of fixing the date of officiation ad hoc in consultation with the Central Government. When there are several State Governments the consultation by the Central Government must necessarily be with the State Government concerned in relation to the officer who was appointed to the cadre of that State. Whether the first proviso applied or the second proviso applied, it was the Central Government that had to determine ad hoc, the year of allotment after approving the period of officiation in consultation with the Public Service Commission. This Court further held that in view of the judgment in Nim 's case (supra) the order assigning 1947 as the year of allotment to the appellant on the basis of an arbitrary date of officiation namely 19th May, 1951 was bad and had been quite properly struck down by the High Court. The High Court however had no power to direct the year 1948 to be fixed as the year of allotment for the determination of the seniority of the appellant on the basis that that was fixed on an ad hoc basis in an earlier occasion by the Government of India. Once the Government of India had on a memorial presented by the Appellant decided finally in supersession of its previous decision that his year of allotment was 1947, the previous decision fixed on ad hoc basis could not be revived. It was for the Government of India in consultation with the Commissioner to determine ad hoc the year of allotment to be assigned to the appellant in relation to the date of his continuous officiation. This Court would not trespass upon the jurisdiction of the Government of India to determine ad hoc in consultation with the Commission on a consideration of the relevant materials, the date of the appellant 's continuous officiation and assign him a year of allotment. This Court reiterated that it was for the Central Government to examine year of allotment after approving the period of officiation in consultation with the Union Public Service Commission. It may be relevant to mention that this Court noted the observations of the Division Bench judgment of the Calcutta High Court which was under appeal in that case and noted that there was nothing in clause (b) of the said Rules which showed that while officiating in a "senior post", the officer concerned must be an officer belonging substantially to the State Police Service in question and could not be an officer on deputation from some other service. It was urged before the Divi 861 sion Bench that this Court had approved the view of the Calcutta High Court that benefit of the period of deputation should be given to Shri Mukherjee. The Division Bench was unable to accept the position. The Division Bench was of the view that this Court had reiterated that it was relevant material which had to be taken into consideration by the Government of India but it was for Government to determine in consultation with the Union Public Service Commission the date of a person 's continuous officiation and assign to him a year of allotment and the High Court as such had no such power. The Division Bench was of the view that the learned single judge of the High Court was right that this Court had not given any decision whether the period of deputation of Shri Mukherjee in that case before his absorption could be taken into account in assigning the year of allotment to him. The learned single judge in Chambers as noted by the Division Bench further found support to this view with reference to relevant noting in the file of Shri Mukherjee which was produced before the learned single judge. Rule 3(3)(b) of the Seniority Rules and the provisos thereto should not be read in isolation. This rule is in the setting of other rules. The Cadre rules read with Indian Police Service (Fixation of Cadre Strength) Regulations of 1955 fixed the strength of the Indian Police cadre of the Union Territories a particular figure. Out of them, not more than 25% officers eligible for recruitment to the I.P.S. cadre had to be the substantive members of the State (U.T.) Police Service at that time. The scheme as it stood, fixed the strength of the I.P.S. cadre State wise. Recruitment by promotion thereto could only be from the substantive members of the Police Service of that particular State. So long as Shri Singh remained as a substantive member of the U.P. State Police Service, he could not possibly be promoted to the joint I.P.S. cadre of the Union Territories of Delhi and Himachal Pradesh. He became eligible to his promotion to the Union Territory I.P.S. Cadre only after he had been absorbed in the Delhi Himachal Pradesh State Police Service. Proviso (1) to Rule 3(3)(b) of the Recruitment Rules gave a clear indication that for determining the year of allotment ad hoc the Central Government consulted the State Government concerned. In Explanation (2) again, there was reference to a certificate by the State Government concerned that an officer would have officiated in a senior post but for his absence on leave or appointment to any special post. It is apparent therefore that the State Government is the one, of the Police Service of which the Officer concerned is a substantive member. In this case as found by the Division Bench, Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he 862 had gone back to his parent State of U.P. In case Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he had gone back to his parent State of U.P., then according to Explanation (2) the U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. cadre of the U.P. State. The Promotion Regulation of 1955 laid down the determination of the eligibility of a substantive member of the State Police Service. Thereafter, the names of the eligible officers were brought on the Select List, which were to be approved by the commission. Appointments by promotion to the I.P.S. cadre are made from the Select List. In the event of promotion, but for second proviso the benefit of continuous officiation on a senior post for fixing his year of allotment is given to an officer from the date after his being nominated on the Select List. In Explanation (1) of rule 3(3), there is no mention that deputationist before his absorption in the State Police Service can get the benefit of such officiation. That is the position. Therefore before his absorption, it is not possible to accept the position that Shri Singh was entitled to the benefit of his officiation. The Division Bench so held. We are of the opinion that the Division Bench was right on this aspect of the matter. It may be mentioned that Seniority Rules 1954 including rule 3(3)(b) quoted above were amended with effect from 22nd April, 1967. Before the amendment, the appellant Shri Singh, had been confirmed in the Union Territory cadre of Indian Police Service with effect from 14th May, 1964 and had been allotted 1958 as the year. The first representation was made by him in August, 1969 and the second in June, 1970. The second proviso to old seniority rule 3(3)(b) referred to hereinbefore had laid down that where a promotee had officiated continuously in a senior post prior to the date of inclusion of his name in the Select List prepared in accordance with the Promotion Regulations, he could get the benefit of such officiation if approved by the Central Government in consultation with the Commission. The Seniority Rules as amended in 1967, however, did not provide for such approval. Hence, after the amendment of the Seniority Rules, the Central Government was not empowered to grant the approval as aforesaid in favour of Shri Singh in November, 1972. This was the submission on behalf of the respondent, Shri Bhanot. The argument was not accepted by the Division Bench because the question of allotment of Shri Singh in accordance with the Seniority Rules ripened before the amendment of 1967. There is no rule vitiating the operation of the old seniority rules. As a matter of fact, the party had proceeded all along in this case on the basis that the old seniority rules applied. 863 In Government of India and Anr. vs C.A. Balakrishnan and Ors., this question was considered. In that case the promotion in question was made in November, 1957. The change in the relevant rules of promotion came in September, 1960. This Court affirmed the decision of the High Court and held that in November, 1957 the post in question was a selection post and that the basis of seniority cum fitness introduced by the amendment rules in September, 1960 was not applicable. The question, therefore, was held to be governed by the old rules. The Division Bench held that the second representation made by Shri Singh was barred. As mentioned hereinbefore, in support of the appeal, the appellant submitted that the Division Bench was in error in not following the ratio of the decision in the case of Arun Ranjan Mukherjee (supra). We are unable to accept this submission. Arun Ranjan Mukherjee 's case proceeded on the basis of the decision of this Court in the case of D.R. Nim, I.P.S.v. Union of India (supra). There under rule 3 of the Indian Police Service (Regulation of Seniority) Rules, 1954 issued under section 3(1) of the All India Services Act, 1951, the mode of determining the seniority of officers of the Indian Police Service was laid down. It was provided that the officers were divided into categories: namely, (1) those in the Service at the commencement of the Rules, and (2) those appointed to the Service after the commencement of the Rules. The second category was divided into two sub categories: namely, (a) officers appointed as a result of a competitive examination, and (b) officers appointed by promotion in accordance with rule 9 of the Recruitment Rules. The year of allotment of an officer which determined his seniority, was determined according to rule 3(3)(a) or (b) of the present rules. But if an officer started officiating continuously in a senior post from a date earlier than the date on which any of the officers was recruited to the Service by competition, the year of allotment had to be determined ad hoc by the Central Government under proviso (1) to rule 3(3)(b) and under proviso (2) to rule 3(3)(b), the period of officiation before the date of inclusion of the name of an officer in the Select List prepared in accordance with the requirements of the Indian Police Service (Appointment by Promotion) Regulations would be counted only if such period was approved by the Central Government in consultation with the Public Service Commission. In that case the appellant was officiating as Superintendent of Police from June, 1957 that is from a date earlier than the date of any officer recruited by competition, and was appointed to the Indian Police Service by promotion in 1955 after the commencement of the Seniority Rules. His name was included in the Select List in 1956. The 864 government passed an order on 25th August, 1955, that officers promoted to the Indian Police Service should be allowed the benefit of their continuous officiation with effect only from 19th May, 1951. The appellant challenged the order by a petition under Article 226 before the High Court because the period of his officiation from June, 1947 to May, 1951 was excluded for the purpose of fixation of his seniority. The High Court dismissed the petition. This Court under appeal held that the impugned order dated 25th August, 1955 should be quashed and the Central Government directed to fix the year of allotment and seniority of the appellant according to the law. The date 19th May, 1951 in that case was an artificial and arbitrary date having nothing to do with the application of the first and second proviso to rule 3(3). It has some relevance for the Indian Administrative Service, but why it should be applied to the Indian Police Service was not adequately explained. Under the two provisos, this Court held, the Central Government had to determine ad hoc the year of allotment after approving or not approving the period of officiation in consultation with the Public Service Commission taking into consideration all the relevant facts. The Central Government cannot pick out a date and say that a period prior to that date would not be deemed to be approved by the Central Government within the second proviso. In view of the fact that he was officiating for eight years, that he was never reverted and that he was appointed to the post when vacancies fell, it could not be held that the appellant 's continuous officiation a mere temporary or local or stop gap arrangement, within the meaning of Explanation (1) to rule 3(3)(b). In the instant case, the Central Government had not fixed the date of appellant 's absorption in the Select List as 1958 out of the hat so to say. It had relevance as it appears from the basis of the order of the Central Government. In this case, the appellant who was a deputationist before the absorption in the State Public Service could not be entitled to get such officiation. In case Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he had gone back to his parent State of U.P., then according to explanation (2), U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. cadre of the U.P. State. But so long as Shri Singh remained a substantive member of the U.P. State Police Service, he could not possibly be permitted to join I.P.S. cadre of the Union Territories of Delhi and Himachal Pradesh. In accordance with the rules, he became eligible to his promotion to the Union Territory I.P.S. cadre only after he had been absorbed in Delhi Himachal Pradesh Police Service. 865 Reading the rules with which we are concerned which state that certain year should be assigned by the Government in consultation with Public Service Commission must be interpreted in the light of the well established rule of construction that if the words of a statute are in themselves precise and unambiguous no more is necessary than to expound these words in their natural and ordinary sense, the words themselves in such a case best declaring the intention of the legislature. See in this connection the observations of this Court in The Collector of Customs, Baroda vs Digvijaysinhji Spinning & Weaving Mills Ltd.,[1962] 1 SCR 896 at 899. This Court in Ram Prakash Khanna and others etc. vs S.A.F. Abbas and others etc. ; , dealing with the aforesaid rule proviso 2, observed that under the second proviso to Rule 3(3)(b) a promotee could obtain the advantage of officiation continuously in a senior post prior to the inclusion of the name in the Select List if the period of such officiation is approved by the Central Government in consultation with the Union Public Service Commission. This Court reiterated that approval as contemplated in Rule 3(3)(b) is a specific approval and is directed to the particular matter mentioned therein as to whether there was approval of the period of officiation prior to the inclusion in the names in the select list. The officiation in a senior post is one of the indispensable ingredients in the application of rule 3(3)(b). But it must be borne in mind that this was not a sine qua non. This Court found on the materials in the appeal before this Court in that case that it could not be held that the Central Government gave any approval in consultation with the Union Public Service Commission to have the benefit of the period claimed by the appellant. In the instant case, before the absorption of the appellant in the Himachal Pradesh Delhi, I.P.S. Cadre, his officiation had not been taken by the Central Government into consideration. We are unable to say that the Central Government had not acted properly. This appeal is not concerned with the assignment of year 1958 to Shri Singh but rule 16 clause (1)(iii) of the Service Rules provides for certain penalties and one of the penalties, inter alia, is the effect of superseding him in promotion to a Selection Post and as such is appealable. We are of the opinion that the High Court was right that appeal does not necessarily lie only against the order imposing penalty and is also open to entertain appeal when the service rule was interpreted to the disadvantage of member of the service but rule 17 bars the filing of appeal after the expiry of 45 days. Proviso to the said rule, however, gives discretion to the appellate authority to condone the delay if 866 sufficient cause is shown. Rule 24 of All India Services (Discipline and Appeal) Rules, 1969 provides for review within different periods. Under that rule since Shri Singh could have filed an application for review within one year, in this case remedy of review by Shri Singh had also become barred when the second order was passed. Rule 25 regulates memorials. It reads as follows: "A member of the Service shall be entitled to submit a memorial to the President against any order of the Central Government or the State Government by which he is aggrieved within a period of three years from the date of the passing of such order. It appears that there is provision for appeal in the order of this nature. Failure to prefer an appeal or apply for review was no bar to the submission of memorials to the President. In December, 1963 in this case the year of allotment was assigned to Shri Singh. Shri Singh made the first representation in August, 1969, after the period of limitation had expired. It was contended, however, on behalf of the appellant relying on the Full Bench decision of the Punjab and Haryana High Court in Sunder Lal and others vs The State of Punjab, that in a case of bona fide mistake, there was always the power to rectify. It was emphasised that every administrative authority has an inherent right to rectify its own mistakes. So far as fixing the year 1957 was concerned, we are unable to accept the submission. It is doubtful that inherent power can be invoked, if there is no reason for refixing the appellant 's year of 1957. If belated claims are allowed arbitrarily, an atmosphere of uncertainty would prevail. There should be no sense of uncertainty among public service. Furthermore it is clear that if the fixation of year 1958 allotment is a mistake, the first representation was rejected with the order dated 23rd April, 1970 which has been set out in extenso in the judgment under appeal. There the Government 's order reiterates that in accordance with the order contained in the Home Ministry 's letter to which reference is made, all cadre posts held by non cadre officers not on the Select List were deemed to have been kept in abeyance with effect from 27th September, 1961 onwards. As such Shri Singh could not have claimed that he was officiating in the cadre post prior to coming on the Select List. In those circumstances, Shri Singh could not be deemed to have officiated in cadre post during the period 6th December, 1961 to 14th May, 1963. The order further reiterated that according to the seniority rules, the service rendered by an officer prior to inclusion in the Select List could not be counted for seniority unless approved by the Central Government in consultation 867 with the Union Public Service Commission. It is clear that the Central Government was of the view that decision taken by it in 1963, fixing the said year of allotment was correct. Good and cogent reasons were given for it. It is true that the Home Ministry 's letter referred to in annexure R 4 has been quashed by the Delhi High Court but the same has no bearing on the correctness of the decision taken by the Central Government in 1963, because at the relevant time the letter was there and the Central Government was bound to act in accordance thereto. The contention of the appellant that there was no period of limitation for the grant of the approval is not relevant. It is therefore clear that there was no scope of the acceptance of second representation. In the said order there is no mention of any mistake. When the first order was made, it may be that it was not necessary to give any notice to Shri Bhanot but when the second order was made it affected adversely Shri Bhanot because he in the meantime having been absorbed in the I.P.S. in 1957. In our opinion it is not that the constitutionality of any provision was challenged as was the case in A. Janardhana vs Union of India and Others, ; at 967 and in General Manager, South Central Railway Secundrabad and Anr. vs A.V.R. Siddhanti and Ors. ; , , it was held that those would be affected by the grant of the year of seniority need not join as party. But the position here is different. Here Shri Bhanot would be adversely affected and his seniority would be affected and here the change was sought from the Government reversing the previous decision and in the meantime Shri Bhanot has acquired a year of allotment. Therefore, in our opinion it should have been done upon notice to Shri Bhanot. In any case, Shri Bhanot has been heard. Our attention was drawn to certain observations of Administrative Law Cases & Materials, second edition by Peter Brett and Peter W. Hogg on the nature of appeal and in the light of the view we have taken, it is not necessary to refer to the said observations. In the aforesaid view of the matter we are of the opinion that the High Court was right in dismissing the writ petition of the appellant herein. We, however, having regard to the facts set out hereinbefore, direct the Central Government that the salary scale of the appellant should be refixed taking into consideration the appellant 's service in U.P. and Himachal Pradesh cadre in the senior position as a deputationist. The appeals are, therefore, dismissed with the aforesaid directions without any order as to costs. S.L. Appeals dismissed.

Shri Markandey Singh, the appellant in the first appeal had joined the U.P. State Service as Deputy Superintendent of Police by passing a competitive examination. In November, 1953, he joined on deputation the Union Territory of Delhi which at that time had no police service of its own. While on deputation and again in 1959 60, he officiated as Superintendent of Police but was reverted back for administrative reasons. In July, 1960, Himachal Pradesh Indian Police Service was created and thereafter, the Delhi Himachal Pradesh Police Service, in March 1961. On 6th December, 1961, Shri Singh was again promoted to officiate as Superintendent of Police. During the period of his officiation, his request for being absorbed in the Himachal Pradesh State Police Service was accepted and he was absorbed in the State Service with effect from 27th November, 1962. He was confirmed in the Union Territory Cadre of I.P.S. with effect from 14th May, 1964. He was assigned 1958 as the year of allotment. He made a representation against the order of allotment to the Central Government, claiming the benefit of officiation from 6th December, 1961 to 13th May, 1963 in the matter of fixation of his year of allotment. The Central Government rejected the representation by order dt. 23rd April, 1970, which stated that in accordance with the orders contained in letter NO. 1/2/62 Delhi IDH(S) dated 23.8.1963 of the Home Ministry, all cadre posts held by non cadre officers not on the Select List were deemed to have been kept in abeyance with effect from 27th September, 1961 onwards, and according to the seniority rules, the service rendered by an officer prior to his inclusion in the Select List could not be counted for seniority 848 unless approved by the Central Government in consultation with the Union Public Service Commission under the Second Proviso to rule 3(3)(b) of the Seniority Rules. The requisite approval was not there. Shri Singh made a second representation on 23rd June, 1970. The Central Government by order dt. 21st June, 1973, accepted the second representation, gave the benefit of officiation in question and assigned to him 1956 as the year of allotment. The reason why the second representation was accepted was that in November, 1972, the Union Public Service Commission had approved of the officiation of Shri Singh in the I.P.S. cadre for the relevant period under the second proviso to rule 3(3)(b) of the Seniority Rules "as they stood in May, 1963. " In consequence, he was placed above Shri M.L. Bhanot, respondent, in the gradation list of Union Territory of I.P.S. Feeling aggrieved by the order of the Central Government, Shri Bhanot filed a writ petition before the High Court. A Single Judge allowed the same, and quashed the order dt. 21st June, 1973. Against the judgment of the Single Judge, two appeals were filed before the Division Bench of the High Court one by Shri Singh, and the second, by the Union of India. Both the appeals were dismissed by the Division Bench. Aggrieved by the decision of the High Court, Shri Singh and the Union of India filed these two appeals for relief in this Court. Dismissing the appeals with directions, the Court, ^ HELD: The question involved in the appeals was whether the year of allotment given to Shri Singh as 1958 was correct or not and whether the order of the High Court, quashing the year of allotment given to Shri Singh as 1956 was bad or not. This depended upon the interpretation of the various rules and provisions and the determination of the question whether an officer was entitled to the benefit of the service rendered by him in a senior post in the I.P.S. cadre of a particulare State while he was on deputation to the State Police Service of that State from another State, for the purpose of working out the year of allotment in accordance with the second proviso to unamended rule 3(3)(b) of the Indian Police Service (Regulation of Seniority) Rules (The 'Seniority Rules '). [855D F] Rule 3(3)(b) of the Seniority Rules and the provisos thereto should not be read in isolation. This rule is in the setting of other rules. The Indian Police Service (Cadre) Rules (The 'Cadre Rules ') read with the Indian Police Service (Fixation of Cadre Strength) Regulations of 1955 849 fixed the strength of the Indian Police cadre of the Union Territories at a particular figure. Out of them not more than 25% officers eligible for recruitment to the I.P.S. cadre had to be substantive members of the State (U.P.) Police Service at that time. The scheme, as it stood, fixed the strength of the I.P.S. cadre State wise. Recruitment by promotion thereto could only be from the substantive members of the Police Service of that particular State. So long as Shri Singh remained as a substantive member of the U.P. State Police Service, he could not possibly be promoted to the joint I.P.S. Cadre of the Union Territories of Delhi and Himachal Pradesh. He became eligible to his promotion to the Union Territory, I.P.S. cadre only after he had been absorbed in the Delhi Himachal Pradesh State Police Service. Proviso (1) to Rule 3(3)(b) of the Recruitment Rules gives a clear indication that for determining the year of allotment ad hoc the Central Government consulted the State Government concerned. In Explanation (2) again there is a reference to a certificate by the State Government concerned that an officer would have officiated in a senior post but for his absence on leave or appointment to any special post. It is apparent, therefore, that the State Government is the Government of the Police Service of which the officer concerned is a substantive member. In this case, as found by the Division Bench of the High Court, Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he had gone back to his parent State of U.P. In case Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Service and had gone back to his parent State of U.P., then according the Explanation (2), the U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. Cadre of the U.P. State. The Promotion Regulations of 1955 laid down the determination of the eligibility of a substantive member of the State Police Service. Thereafter, the names of the eligible officers were brought on the Select List, who were to be approved by the Public Service Commission. Appointments by promotion to the I.P.S. cadre are made from the Select List. In the event of promotion, but for the second proviso, the benefit of continuous officiation on a senior post for fixing his year of allotment is given to an officer from the date after his being nominated on the State List. In Explanation (1) of rule 3(3), there is no mention that deputationist before his absorption in the State Police Service can get the benefit of such officiation. Therefore, it was not possible to accept the position that before his absorption Shri Singh was entitled to the benefit of his officiation. The Division Bench of the High Court so held. The Division Bench was right on this aspect of the matter. [861D H;862A D] The Seniority Rules 1954 including rule 3(3)(b) were amended with 850 effect from 22nd April, 1967. Before the amendment, the appellant Shri Singh had been confirmed in the Union Territory cadre of the Indian Police Service with effect from 14th May, 1964, and had been allotted 1958 as the year. The question of allotment of Shri Singh in accordance with the Seniority Rules had ripened before the amendment of 1967. There is no rule vitiating the operation of the old seniority rules. Reliance was placed by the appellant Shri Singh on the decision of this Court in Arun Ranjan Mukharjee vs Union of India & Ors., , and the appellant submitted that Division Bench was in error in not following the ratio of the decision in that case. The Court could not accept this submission. [862D E;863C] In this case, the Central Government had not fixed the date of appellant 's absorption in the Select List as 1958 out of the hat, so to say. It had relevance as it appeared from the basis of the order of the Central Government. The appellant, who was a deputationist before the absorption in the State Police Service could not be entitled to get such officiation. In case, Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and had gone back to his parent State of U.P., then, according to explanation (2) the U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. cadre of the U.P. State. But so long as Shri Singh remained a substantive member of the U.P. State Police Service, he could not possibly be permitted to join I.P.S. cadre of the Union Territories of Delhi and Himachal Pradesh. In accordance with the rules, he became eligible to his promotion to the Union Territory I.P.S. cadre only after he had been absorbed in the Delhi Himachal Pradesh Police Service. [864F H] The rules with which the Court was concerned, which state that certain year should be assigned by the Government in consultation with the Public Service Commission, must be interpreted in the light of the well established rule of construction that if the words of a statute are in themselves precise and unambiguous no more is necessary than to expound these words in their natural and ordinary sense, the words themselves in such a case best declaring the intention of the legislature. See in this connection the observations of this Court in The Collector of Customs, Baroda vs Digvijaysinhji Spinning & Weaving Mills Ltd., ; , 899. [865A B] The officiation in a senior post is one of the indispensable ingredients in the application of rule 3(3)(b). But it must be borne in mind that this was not a sine qua non. In this case, before the absorption of 851 the appellant in the Himachal Pradesh Delhi I.P.S. cadre, his officiation had not been taken by the Central Government into consideration. The Court could not say that the Central Government had not acted properly. [865E F] This appeal was not concerned with the assignment of year 1958 to Shri Singh but rule 16, clause (1)(iii) of the Service Rules provides for certain penalties and one of the penalties, inter alia, is the effect of superseding him in promotion to a selection post and such is appealable. The High Court was right that appeal does not necessarily lie only against the order imposing penalty and it is also open to entertain appeal when the service rule was interpreted to the disadvantage of member of the service but rule 17 bars the filing of appeal after the expiry of 45 days. Proviso to the said rule, however, gives discretion to the appellate authority to condone the delay if sufficient cause is shown. Rule 24 of All India Services (Discipline and Appeal) Rules 1969 provides for review within different periods. Under that rule since Shri Singh could have filed an application for review within one year, in this case remedy of review by Shri Singh had also become barred when the second order was passed. [865G H;866A B] It appeared that there is provision for appeal in the order of this nature. Failure to prefer an appeal or apply for review was no bar to the submission of memorials to the President. In December, 1963, in this case, the year of allotment was assigned to Shri Singh. Shri Singh made the first representation in August, 1969, after the period of limitation had expired. It was contended by the appellant relying on the full Bench decision of the Punjab & Haryana High Court in Sunder Lal & Ors. vs The State of Punjab, that in a case of bona fide mistake, there was always the power to rectify. It was emphasized that every Administrative authority has an inherent right to rectify its own mistakes. It was doubtful that inherent power could be invoked if there was no reason for re fixing the appellant 's year. If belated claims are allowed arbitrarily, an atmosphere of uncertainty would prevail. There should be no sense of uncertainty among public service. Furthermore, it was clear that if the fixation of year 1958 was a mistake, the first representation was rejected with the order dated 23rd April, 1970. There, the Government 's order reiterated that in accordance with the order contained in the Home Ministry 's letter to which reference was made, all cadre posts held by the non cadre officers not on Select List were deemed to have been kept in abeyance with effect from 27th September, 1961, onwards. As such Shri Singh could not have claimed that he had been officiating in the cadre post prior to coming on the Select List. In 852 those circumstances, Shri Singh could not be deemed to have officiated in cadre post during the period 6th December, 1961 to 14th May, 1963. The Central Government was of the view that the decision taken by it in 1963, fixing the year of allotment was correct. It is true that Home Ministry 's letter referred to in Annexure R 4, had been quashed by the High Court but the same had no bearing on the correctness of the decision taken by the Central Government in 1963, because at the relevant time, the letter was there and the Central Government was bound to act in accordance therewith. The contention of the appellant that there was no period of limitation for the grant of the approval was not relevant. It was, therefore, clear that there was no scope of acceptance of the second representation. In the said order, there was no mention of any mistake. [866C H;867A C] When the second order was made, it affected Shri Bhanot adversely because he in the meantime had been absorbed in the I.P.S. in 1957. It was not that the constitutionality of any provision was challenged as was the case in A. Janardhana vs Union of India & Ors., ; , 967. In this case, seniority of Shri Bhanot would be adversely affected as he had acquired a year of allotment. In the opinion of the Court, it should have been done upon notice to Shri Bhanot. [867C E] The High Court was right in dismissing the writ petition of the appellant. Having regard to the facts of the case, the Central Government was directed to refix the salary scale of the appellant, taking into consideration the appellant 's service in U.P. and Himachal Pradesh cadre in the senior position as a deputationist. [867G] Arun Ranjan Mukherjee vs Union of India & Ors., ;Madan Gopal Singh vs Union of India, ;D.R. Nim, I.P.S. vs Union of India, ; ;Government of India and Anr. vs C.A. Balakrishnana & Ors., ;The Collector of Customs, Baroda vs Digvijaysinhji Spinning & Weaving Mills Ltd., ; , 899;Ram Prakash Khanna & Ors., etc. vs S.A.F. Abbas & Ors., etc.; , ;Sunder Lal & Ors. vs The State of Punjab, ;A. Janardhana vs Union of India & Ors., ; ,967 and General Manager, South Central Railway Secundrabad & Anr., etc. vs A.V.R. Siddhanti & Ors., etc.; , , referred to.

Criminal Appeal No. 464 of 1986. From the Judgment and Order dated 7.6.1986 of the Alla habad High Court in Crl. Case No. 1320 of 1986. Anil Kumar Gupta for the Appellant. U.R. Lalit, K.B. Rohtagi and S.K. Dhingra for the Respond ents. The following Order of the Court was delivered. Special leave granted. This appeal is directed against the order of the High Court of Allahabad, Lucknow Bench, dated 7th June 1986, granting bail to respondent No. 1, Ishtiaq Hasan Khan. We allowed the appeal and set aside the order of the High Court and issued directions that respondent No. 1, Ishtiaq Hasan Khan be taken into custody forthwith. In that order we had directed that the reasons will follow. Hence this order articulating our reasons. Ishtiaq Hasan Khan, respondent No. 1 and three others, namely, Naseem, Shiva Kant Sharma and Asghar are facing trial for the murder of Zaheer Hasan Khan at about 9.00 a.m. on March 3, 1985, in a public place in Mahmood Nagar leather market. After the occurrence respondent No. 1 absconded and he surrendered in court on April 22, 1985. He applied for bail before the Sessions Judge, Lucknow, which was rejected. He approached the Lucknow Bench of the 37 High Court of Allahabad with an application for grant of bail. The application was opposed by the complainant and as well as by the Public Prosecutor. Justice Kamleshwar Nath by his order dated September 18, 1985 refused to enlarge the respondent on bail and rejected the bail application. After a lapse of two months ' time respondent No. 1, Ishtiaq Hasan Khan filed another bail application before the High Court. That application was placed before Justice Kamleshwar Nath who rejected the same by his order dated January 21, 1986. Within a few days thereafter respondent No. 1 made another application before Justice P. Dayal. The learned Judge having regard to the judicial discipline and prevailing practice in the High Court, directed that the bail applica tion be placed before Justice Kamleshwar Nath who had passed orders rejecting earlier applications for bail. In pursuance of that order the bail application was placed before Justice Kamleshwar Nath. Meanwhile, respondent No. 1 made two futile attempts before the trial court for the grant of bail even though his application for bail was pending before the High Court. On March 18, 1986 Justice Kamleshwar Nath was sitting in a Division Bench and the respondent 's counsel appeared before him seeking his permission for listing the bail application before him. The learned Judge passed an order releasing the bail application, but it appears that inspite of that order the bail application was not listed before any other Judge, instead it again came up for orders before Justice Kamleshwar Nath on March 24, 1986. On that date counsel for the respondent No. 1 for some unknown reasons did not press the bail application, on his request the application was dismissed as withdrawn. Meanwhile, one of the accused Shiva Kant Sharma filed an application for transfer of the trial from the court of the First Additional Sessions Judge to any other court. The complainant had also filed an application in the High Court for the cancellation of bail granted to Shiva Kant Sharma. Respondent No. 1 also made an application from jail for the transfer of the case. All the three miscellaneous cases were heard by D .N. Jha, J. By a composite order dated 10.12. 1985, Justice D.N. Jha refused to transfer the case and he further refused to cancel the bail granted to Shiva Kant Sharma. The learned Judge, however, made observations that the trial should be concluded expeditiously and if necessary the court should hold day to day trial to conclude the same at an early date. In pursuance to the order of Justice D.N. Jha, the First Additional Sessions Judge fixed several dates for the trial of the case but the accused persons obtained adjournments on one pretext or the other with the result the trial could not be commenced or completed within three months as desired by Justice D.N. Jha. Mean 38 while, the respondent No. 1 made another application on June 3, 1986 before Justice D.S. Bajpai Vacation Judge for grant of bail. The learned Judge directed that the application be placed before Justice Kamleshwar Nath who was sitting as a Vacation Judge with effect from 23rd June, 1986. Two days later, another application was made on behalf of respondent No. 1 before Justice D.S. Bajpai for recalling his order dated June 3, 1986, the application was directed to be placed before the Court on June 6, 1986. On June 6, 1986 when the application was taken up the Assistant Government Advocate appearing for the prosecution and the complainant 's advocate both appeared and filed their appearance. Justice D.S. Bajpai directed the application to be listed on June 7, 1986. On that date the complainant 's counsel filed applica tion raising objections against the heating of the bail application on a number of grounds and he further sought three days time to file detailed counter affidavit in reply to the allegations made in bail application. Justice D.S. Bajpai, did not grant time. Instead he heard the arguments, he recalled his order dated June 3, 1986 for placing the matter before Kamleshwar Nath and enlarged the respondent No. 1 on bail. Aggrieved, Shahzad Hasan Khan the complain ant, who is the son of the deceased Zaheer Hasan Khan, has approached this court by means of this appeal. Normally this court does not interfere with bail matters and the orders of the High Court are generally accepted to be final relating to grant or rejection of bail. In this case, however, there are some disturbing features which have persuaded us to interfere with the order of the High Court. The matrix of facts detailed above would show that three successive bail applications made on behalf of respondent No. 1 had been rejected and disposed of finally by Justice Kamleshwar Nath. In that view it would have been appropriate and desirable and also in keeping with the prevailing prac tice in the High Court that the bail application which was filed in June 1986 should have been placed before Justice Kamleshwar Nath for disposal. In fact on June 3, 1986. Justice D.S. Bajpai being conscious of this practice and judicial discipline himself passed order directing the bail application to be placed before Justice Kamleshwar Nath but subsequently on 7th June 1986 he recalled his order. We are of the opinion that Justice D.S. Bajpai should not have recalled his order dated June 3, 1986 keeping in view the judicial discipline and the prevailing practice in the High Court. Justice D.S. Bajpai was persuaded to the view that Justice Kamleshwar Nath had passed orders on March 18, 1986, releasing the bail application, the matter was therefore not tied up to him. However, the learned Judge failed to notice that when the bail application was listed 39 before Justice Kamleshwar Nath on March 24, 1986 the re spondent No. 1, for reasons known to him only, withdrew his application, as a result of which Justice Kamleshwar Nath dismissed the same as withdrawn. This fact was eloquent enough to indicate that respondent No. 1 was keen that the bail application should not be placed before Justice Kam leshwar Nath. Long standing convention and judicial disci pline required that respondent 's bail application should have been placed before Justice Kamleshwar Nath who had passed earlier orders, who was available as Vacation Judge. The convention that subsequent bail application should be placed before the same Judge who may have passed earlier orders has its roots in principle. It prevents abuse of process of court in as much as an impression is not created that a litigant is shunning or selecting a court depending on whether the court is to his liking or not, and is encour aged to file successive applications without any new factor having cropped up If successive bail applications on the same subject are permitted to be disposed of by different judges there would be conflicting orders and a litigant would be pestering every judge till he gets an order to his liking resulting in the creditability of the court and the confidence of the other side being put in issue and there would be wastage of courts ' time. Judicial discipline re quires that such matter must be placed before the same judge, if he is available for orders. Since Justice Kamlesh war Nath was sitting in Court on June 23, 1986 the respond ent 's bail application should have been placed before him for orders. Justice D.S. Bajpai should have respected his own order dated June 3, 1986 and that order ought not to have been recalled, without the confidence of the parties in the judicial process being rudely shaken. As regards merits, for granting the bail, the learned Judge appears to be influenced by two factors, firstly, he observed that the trial could not be commenced or completed as directed by Justice D .N. Jha by his order dated 10th December, 1985. In this respect the complainant has filed a detailed affidavit giving the details of the proceedings before the trial court. On a perusal of the same it is evident that the accused persons obtained adjournment after adjournment on one pretext or the other and they did not allow the court to proceed with the trial. On June 7, 1986 complainant 's counsel had filed a written application seek ing three days, time to file counter affidavit giving the details of the proceedings pending before the trial court. We are constrained to observe that Justice D.S. Bajpai refused to grant the prayer and proceeded to grant bail simply on the ground that the liberty of a citizen was involved which is the case in every criminal case more particularly in a murder case where a citizen who let alone losing 40 liberty has lost his very life. Another ground for granting bail was that trial was delayed therefore the accused was entitled to bail. This also cannot be helped if a litigant is encouraged to make half a dozen applications on the same point without any new factor having arisen after the first was rejected. Had the learned Judge granted time to the complainant for filing counter affidavit, correct facts would have been placed before the Court and it could have been pointed out that apart from the inherent danger of tampering with or intimidating witnesses and aborting case, there was also the danger to the life of the main witnesses or to the life of the accused being endangered as experience of life has shown to the members of the profession and the judiciary, and in that event, the learned Judge would have been in a better position to ascertain facts to act judi ciously. No doubt liberty of a citizen meat be zealously safeguarded by court, nonetheless when a person is accused of a serious offence like murder and his successive bail applications are rejected on merit there being prima facie material, the prosecution is entitled to place correct facts before the court. Liberty is to be secured through process of law, which is administered keeping in mind the interest of the accused, the near and dear of the victim who lost his life and who feel helpless and believe that there is no justice in the world as also the collective interest of the community so that parties do not lose faith in the institu tion and indulge in private retribution. Learned Judge was unduly influenced by the concept of liberty, disregarding the facts of the case. The learned judge also failed to consider the question that there were serious allegations of tampering of evidence on behalf of the accused persons. Vishram and Jagdish, two eye witnesses had filed written applications before the trial court making serious allegations against Masod and Masroof, brothers of respondent No. 1. They alleged that they had been kidnapped and their signatures and thumb impressions had been obtained on some blank papers and they were being threatened with dire consequences and they re quested the court for being granted police protection. One of the salutory principles in granting bail is that the court should be satisfied that the accused being enlarged on bail will not be in a position to tamper with the evidence. When allegations of tampering of evidence are made, it is the duty of the court to satisfy itself whether those alle gations have basis (they can seldom be proved by concrete evidence) and if the allegations are not found to be con cocted it would not be a proper exercise of jurisdiction in enlarging the accused on bail. In the instant case there were serious allegations but the learned Judge did not either consider or test the same. 41 Having regard to the facts and circumstances of this case we are of the opinion that the learned judge committed serious error in recalling his order dated June 3, 1986 and enlarging the respondent on bail. The occurrence took place, in the broad day light, in a busy market place and there are a number of eye witnesses to support the case against the respondent who was named as an assailant in the First Infor mation Report. Immediately after the occurrence be could not be traced (it was alleged that he had absconded for more than a month, attempts were made on his behalf to tamper with evidence. In view of these facts and circumstances the respondent No. 1 was not entitled to bail if the seriousness of the matter was realised and a judicious, approach was made. We had accordingly set aside the order of the High Court and directed that respondent No. 1, Ishtiaq Hasan Khan shall be taken into custody forthwith and the trial shall proceed in accordance with law expeditiously. N.P.V. Appeal allowed.

The first respondent and three others were alleged to have murdered the deceased. The first respondent absconded after the occurrence and surrendered in court later. The trial court rejected his bail application, and three succes sive bail applications were rejected by a Single Judge of the High Court. The first respondent made another attempt in the High Court to get bail. Having regard to the judicial discipline and prevailing practice in the High Court, anoth er Single Judge of the High Court, sitting as a Vacation Judge, ordered that the bail application be placed before the same learned Judge who had dealt with the case on earli er occasions. However, a few days later, the Judge, after recalling his earlier order, granted bail on the ground that the trial could not be commenced or completed as directed by another Single Judge and because of the delay the accused was entitled to bail, and that the liberty of a citizen was involved. The complainant has filed an appeal to this Court against the aforesaid order. Allowing the appeal and setting aside the order of the High Court granting bail, this Court, HELD: 1. Normally this Court does not interfere with bail matters and the orders of the High Court relating to grant or rejection of bail are generally accepted to be final but some disturbing features have persuaded this Court to interfere in the instant case, with the order of the High Court. [38E] 2. No doubt liberty of a citizen must be zealously safe guarded by 35 court. Nonetheless, when a person is accused of a serious offence like murder and his successive bail applications are rejected on merit, there being prima facie material, the prosecution is entitled to place correct facts before the Court. Liberty is to be secured through process of law, which is administered keeping in mind the interests of the accused, the near and dear of the victim who lost his life and who reel helpless and believe that there is no justice in the world as also the collective interest of the communi ty so that parties do not lose faith in the institution and indulge in private retribution. [40C E] 3. The convention that subsequent bail application should be placed before the same Judge who may have passed earlier orders has its roots in principle. It prevents abuse of process of court inasmuch as an impression is not created that a litigant is shunning or selecting a court depending on whether the court is to his liking or not, and is encour aged to file successive applications without any new factor having cropped up. If successive bail applications on the same subject are permitted to be disposed of by different Judges there would be conflicting orders and a litigant would be pestering every Judge till he gets an order to his liking resulting in the credibility of the court and the confidence of the other side being put in issue and there would be wastage of court 's time. Judicial discipline re quires that such a matter must be placed before the same Judge, if he is available for orders. [39B D] 4. One of the salutory principles in granting bail is that the Court should be satisfied that the accused being enlarged on bail will not be in a position to tamper with the evidence. When allegations of tampering of evidence are made, it is the duty of the court to satisfy itself whether those allegations have basis and if the allegations are not found to be concocted it would not be a proper exercise of jurisdiction in enlarging the accused on bail. [40FH] 5. In the instant case, as three successive bail appli cations made on behalf of the first respondent had been rejected and finally disposed of by the same Judge, it would have been appropriate and desirable and also in keeping with the prevailing practice in the High Court that the subse quent bail application also should have been placed before the same Judge for disposal. In tact, being conscious of the long standing convention and judicial discipline, the Judge himself passed an order directing the bail application to be placed before the other Judge. The Judge should have re spected his own earlier order and ought not to 36 have recalled it without the confidence of the parties in the judicial process being rudely shaken. [38E G; 39E] 6. The Judge was unduly influenced by the concept of liberty, disregarding the facts of the case. There were serious allegations, but the Judge did not either consider or test the same. Objections were raised against hearing of the bail application on a number of grounds and time was sought for filing a detailed counter affidavit which was refused. He granted bail simply on the ground that liberty was involved, which is the case in every criminal case, more particularly in a murder case where a citizen who, let alone losing liberty, has lost his very life, and that because of the delay in the trial the accused was entitled to bail. The Judge committed serious error in recallint his earlier order and enlarging the first respondent on bail. [40E; H; 39G H; 41A]

vil Appeal Nos. 16 16 17 of 1990. From the Judgment and Order dated 22.5.1989 of the Allahabad High Court in Writ Petition No. 2777/78 & dated 5.7.89 Review Petition No. 68(W)/89 in W.P. No. 2777/78. K. Parasaran, Amitabh Misra, section Murlidhar and M.S. Ganesh for the Appellant. P.P. Rao, Raja Ram Aggarwal, E.C. Aggarwala, Atul Shar ma, Ms. Purnima Bhatt, Mrs. Shobha Dikshit, Lokesh Kumar, R.D. Kewalramani and M.K. Garg for the Respondents. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. Special Leave granted. The Chancellor of the Lucknow University while exercis ing power under Section 31(8)(a) of the Uttar Pradesh State Universities Act, 1973 ("The Act") has directed that Km. Neeliam Misra, the appellant herein should be appointed as Reader in Psychology in the University. That order has been quashed by the High Court of Allahabad, Lucknow Bench in Writ Petition No. 2777 of 1978 ,at the instance of Dr. Harinder Kaur Paintal, respondent (1). This appeal is from that judgment of the High Court. 90 The background of the case in the barest outline may be stated as under. The Lucknow University invited applications for appoint ment of Reader in Psychology from candidates who possessed the prescribed qualifications. In response to the advertise ment, several candidates filed their applications. The appellant and respondents I to 5 were some of them who offered themselves as candidates. The Committee which was constituted for selection of candidates called them for interview along with some others. After considering their qualifications, experience and relative performance in the interview, the Selection Committee graded them as follows: "All the candidates who appeared for the interview possess a Ph. D. degree. Neelima Misra does not possess a Ph. D. degree. Her thesis is nearing 'completion. Her thesis work alongwith her publication were scrutinised and it was found that she satisfies the condition of published work of a high standard in the subject, provided as an alternative to Ph. D. degree. All the candidates have a consistently good academic record and more than 54% marks in the M.A. Examina tions, except Dr. C.B. Dwivedi, who has a 3rd Division in the High School, Dr. Ratan Singh who has 3rd Division in High School and B.A. 2. All the candidates possess the requisite teaching experi ence of post graduate classes. And the basis of the research work, publications, experi ence and performance at the interview, the Committee graded the candidates as follows: 1. Ms. Neelima Misra 2. Dr. (Km.) Mukta Rani Rastogi 3. Dr. (Smt.) Harinder Kaur Paintal 4. Dr. S.N. Rai The rest of the candidates were found unsuitable. The view of the above Committee recommended that Km Neelima Misra be appointed to the post of Reader in Psychology." 91 Km. Neelinia Misra was found to have to her credit a published work of high standard in the subject of Psychology though she had no Ph. D. degree. Besides she was considered to be more suitable on the basis of research work, publica tion, experience and performance at the interview. The Selection Committee, therefore, recommended her for appoint ment to the post of Reader in Psychology. That recommendation came before the Executive Council. The Executive Council, by a split majority disagreed with the recommendation and preferred the appointment of respond ent (5) Dr. (Km) M.R. Rastogi. It has expressed the view that the appellant did not possess the essential qualifica tions prescribed for the post of Reader and therefore, not suitable for appointment. The opinion expressed by the Executive Council is as under: perusal of the bio data of Km. Neelima Misra shows that she does not possess Ph.D. degree nor has she submitted her thesis so far. Yet it is strange to say that her pub lished work is of a high standard. Thus she does not fulfil requirement of essential qualifications and not suitable for the post. The bio data of Dr. (Km) M.R. Rastogi shows that she possesses 11 years teaching experience of post graduate classes. She has a consistently good academic record and should be appointed Reader in Psychology as she has been graded No. 2 by the Selection Committee. Dr. (Smt.) Harmder Kaur Paintal is a Lecturer since November 1972 and has also a consistently good academic record and is suitable for the post. As a consequence there is no question of relaxa tion of essential qualification as candidate of requisite merit are available. " When there is thus disagreement with the recommendation of the Selection Committee, the matter must be referred to the Chancellor for his decision. That is the mandatory requirement of Section 31(8)(a) of the Act. Accordingly, the Executive Council referred the matter to the Chancellor. The Chancellor, however, by order dated August 16, 1978 did not approve of the Executive Council 's opinion to appoint Dr. (Km) M.R. Rastogi. The Chancellor rejected the opinion of the Executive Council and accepted the recommendation of the 92 Selection Committee and directed that the appellant should be appointed as Reader. The Chancellor observed: "The Selection Committee has unanimously recommended that Km. Neelima Misra be appointed to the post of Reader in Psychology. Instead of accepting this recommendation, the Executive Council held by a majority of 6:5 votes that Kumari Neelima Misra does not fulfil the requirement of essential qualifications and is not suitable for the post. It was of opinion that Dr. (Km) M.R. Rastogi who has been graded No. 2 by the Selection Committee should be appointed and that Dr. (Smt) H.K. Paintal is also suitable for the post. Neelima Misra does not possess a Doctorate in the subject of study, but the Selection Committee has re corded that her thesis alongwith her publications were scrutinised and it was found that she satisfies the condi tion of published work of a high standard on the subject, which is an alternative to the Doctorate degree, as provided in Statute 11.01 read with Statute 11.02 of the First Stat utes of Lucknow University. Thus Km. Neelima Misra possess the essential prescribed minimum qualification. She has also been adjudged to be the most suitable candidate on the basis of research work, publications and experience and perform ance at interview, among all the candidates, by the Selec tion Committee which was in a better position to Judge the merits of the suitability of the appointment. After considering all the facts and circumstances of the case, I approve the report of the Selection Committee and direct that the appointment order be issued accordingly. Sd/ G.D. Tapase, Chancellor" As per the decision of the Chancellor, the appellant was appointed as Reader in Psychology. Dr. (Smt) Harmder Kaur Paintal, respondent 1, moved the High Court under Article 226 of the Constitution challenging the Chancellor 's order. The Writ Petition was filed on 17 August 1978 before the Lucknow Bench of the Allahabad High Court and it was admitted on 93 30 March 1979. Ten years later i.e. on 3 May 1989 the writ petition was listed for hearing before the Division Bench of the High Court. On 22 May 1989, the judgment was delivered by allowing the writ petition and quashing the Chancellor 's order with d direction to reconsider the matter. It seems that learned Judges had little discretion in the matter in view of an earlier decision of the High Court on the nature and scope of the Chancellor 's power under Section 31(8)(a) of the Act. In L.N. Mathur vs The chancellor, Lucknow Uni versity, Lucknow & Ors. , , the Full Bench of the High Court by majority, inter alia, has held that the Chancellor must state explicitly the reasons for his deci sion. The Chancellor in order to arrive at a decision has to make a judicial approach to the question and he is enjoined by the Act to act quasi judicially. To reach that conclu sion, the Full Bench has relied upon the observations in the Division Bench judgment in Dr. U.N. Roy vs His Excellency Sr. G.D. Tapase, (The Ex Governor, State of Uttar Pradesh), Chancellor Allahabad University (1981 UPLBEC 309.) Following those authorities, the learned Judges in the present case have set aside the Chancellor 's order making some more observations: "When difference of opinion between the Selection Committee and Executive Council is referred to the Chancellor, his position is that of an Arbitrator and there is a sort of 'lis ' before him and in case the Chancellor has to agree with the Selection Committee with which the Executive Coun cil has differed assigning particular reason, the Chancellor has to assign reasons as to why he has agreed with the recommendation made by the Selection Committee. The dispute having been raised, was to be decided atleast like a dis pute" At this point, we may interrupt the narration and ana lyse Section 1 of the Act which provides procedure for selection of University eachers. Omitting unnecessary clauses, the Section reads: "31(1) Subject to the provisions of the Act, the teachers of the University and the teachers of an affiliated or associ ated college (other than a college maintained exclusively by the State Government) shall be appointed by the Executive Council or the Management of the affiliated or associated college, as the case may be, on the recommendation of a Selection Committee in the manner hereinafter provided. XXXX XXXXX XXXXX 94 (4)(a)The Selection Committee for the appointment of a teacher of the University (other than the Director of an Institute and the Principal of a constituent college) shall consist of (i) the Vice Chancellor who shall be the Chairman thereof,; (ii)the head of the Department concerned: XXX XXX XXX (iii) in the case of a Professor or Reader, three experts, and in any other case, two experts be nominated by the Chancellor; XXX XXX XXX (6) No recommendation made by a Selection Committee referred to in sub section (4) shall be considered to be valid unless one of the experts had agreed to such selection. XXX XXX XXX (7 A) It shall be open to the Selection Committee to recom mend one or more but not more than three names for each post. (8)(a) In the case of appointment of a teacher of the Uni versity, if the Executive Council does not agree with the recommendation made by the Selection Committee, the Execu tive Council shall refer the matter to the Chancellor along with the reasons of such disagreement, and his decision shall be final. Provided that if the Executive Council does not take a decision on the recommendations of the Selection Committee within a period of four months from the date of meeting of such Committee, then also the matter shall stand referred to the Chancellor, and his decision shall be final. " Three authorities are involved in the selection of University teachers; (i) Selection Committee, (ii) Executive Council and (iii) Chancellor. 95 The Selection Committee for appointment of University teachers is a recommendatory body the composition of which has been prescribed under section 31(4)(a). It is a high power Committee of which the Vice Chancellor shall be the Chairman. The Head of the department concerned shall be a member. There shall also be expert members in the particular subject. The experts shall be drawn from outside the Univer sity and the Chancellor must nominate them. In the case of appointment of Professor or Reader, there shall be three experts and in any other case two experts in the Selection Committee. In the case of selection of teachers of the University, the recommendation of the Selection Committee shall not be valid unless atleast one of the experts agrees to such selection. The Selection Committee has the liberty to recommend one or more candidates but not more than three names for each post. The Executive Council is the principal executive body of the University whose powers and duties are provided under Section 21 of the Act. Subject to the provisions of the Act, the Executive Council has power to appoint officers, teach ers and other employees of the University. The appointment shall be made on the basis of recommendation made by the Selection Committee, which means in the order of merit of candidates arranged by the Selection Committee. The Selec tion Committee has expert members and it has thus the exper tise to judge the relative suitability of competing candi dates. The Executive Council has no such experts on the subject for selection. Therefore, the Executive Council shall make appointments as per the position or ranking obtained in the recommendation, unless any other rule re quires otherwise. Section 31(8)(a) seems to suggest that if the Executive Council wants to agree with the recommendation and appoint candidates in the order of merits, no reasons are to be given. But if it wants to disagree with the recom mendations made by the Selection Committee, it must give reasons for disagreement. It has however, no power to over ride the recommendation and appoint a candidates of its own choice. It may disagree, but should give reasons for disa greement and refer the matter under section 31(8)(a) to the Chancellor. Then the decision of the Chancellor shall be binding on the Executive Council. The nature of the Chancellor 's power located under Section 31(8)(a) is now to be considered. The High Court has held that the Chancellor 's power is quasi judicial. There is a 'lis ' before the Chancellor for determination and he has to decide the dispute as an arbitrator. 96 The suggested analogy with the position of an arbitrator was not even supported by counsel for the respondents. The essence of the attack of Mr. Parasaran, learned counsel for the appellant is that there is no legal or equitable fight of parties or any dispute relating thereto for determination by the Chancellor and therefore, there is no duty to act judicially. The Chancellor has only to consider the recom mendation of the Selection Committee in the light of disa greement if any, expressed by the Executive Council and direct appointment of a candidate in the select list. The order of the Chancellor, and his function, it was argued, are purely administrative in nature. Mr. K.P. Rao for re spondent (3) was indeed very fair in his submission. He did not say that there is a 'lis ' before the Chancellor for determination. He urged that the Chancellor is required to exercise his powers properly and not improperly even though there is no 'lis ' before him for adjudication. The argument of Mr. Agarwal for the respondent No. 5, however, ranged a good deal under than his counter part appears to have done in the High Court. The power of the Chancellor, he contend ed, is quasijudicial and he must determine the issue that is referred to him with reasons in support of his conclusion. The question raised is of considerable importance and it has general application in Universities governed by similar pattern of statutory provisions. Reference may be made to some of such enactments. Section 27(4) of the provides that if the Executive Council is unable to accept any recommendation made by Selection Committee, it may remit the same for reconsidera tion and if the difference is not resolved, it shall record its reasons and submit the case to the Visitor for orders. Similar are the provisions under the Calcutta University Act, 1979. Section 32(2) therein provides that if the Syndi cate does not accept the recommendation of the Selection Committee it shall refer back the matter for reconsideration and if the Syndicate does not accept the reconsidered views, the matter shall be referred to the Chancellor whose deci sion shall be final. Section 57(2)(e) of the Bombay Univer sity Act, 1974 is almost parallel and it states that if the Executive Council does not choose to appoint from amongst the persons recommended by the Selection Committee, it shall for reasons recorded refer to the Chancellor whose decision shall be final. The by Section 27(5) also provides that if the Executive Council is unable to accept the recommendations made by the Selection Committee, it shall record its reasons and submit the case to the Visitor for final orders. Section 49(2) of the M.P. Vishwavidhayalaya Adhiniyam, 1973 likewise requires where the Executive Council pro 97 poses to make the appointment otherwise than in accordance with the order of merit arranged by the Select Committee it shall record its reasons and submit its proposal for sanc tion of the Kuladhipati. The pattern in the Kerala University Act, 1974 is slightly different. The First Statute under that Act empow ers the Syndicate to make appointments contrary to recommen dation of the Committee but With the sanction of the Chan cellor. The First Statute under the Delhi University Act, 1922 by clause 6 provides that the Executive Council shall appoint from time to time Professors and Readers etc. on the recommendations of the Selection Committee constituted for the purpose. Under the Act and Statute with which we are concerned, the Executive Council has no power to ask the Selection Committee to reconsider the recommendation. It must for reasons recorded refer the matter under Section 31(8)(a) to the Chancellor for decision. The Full Bench of the Allahabad High Court in L.N. Mathur, case (supra) had analysed the concept of quasi judicial function with reference to the power of the Chan cellor under Section 31(8)(a) and expressed the view that the reference to the Chancellor showed the existence of a disagreement between two University Authorities with respect to the claims of competing candidates. The Chancellor has to decide the issue by examining the reasons given by the Executive Council and the records of the candidate. The decision of the Chancellor is final and not subject to any appeal/revision and his power is quasi judicial. The fact that the Chancellor is not required to follow any set proce dure or sit in public or take evidence does not make his function administrative. Such are the reasonings for the conclusion of the High Court to hold that the Chancellor must act as a quasi judicial authority. We find it difficult to accept the reasoning underlying the aforesaid view. Before we consider the correctness of the proposition laid down by the High Court we must, at the expense of some space, analyse the distinctions between quasi judicial and administrative functions. An administra tive function is called quasi judicial when there is an obligation to adopt the judicial approach and to comply with the basic requirements of justice. Where there is no such obligation. the decision is called 'purely administrative ' and there is no third category. This is what was meant by Lord Reid in Ridge vs Baldwin, ; , 75 76: 98 "In cases of the kind with which I have been dealing the Board of Works . . was dealing with a single isolated case. It was not deciding, like a judge in a law suit, what were the rights of the persons before it. But it was decid ing how he should be treated something analogous to a judge 's duty in imposing a penalty . " "So it was easy to say that such a body is performing a quasi judicial task in considering and deciding such a matter and to require it to observe the essentials of all proceedings of a judicial character the principles of natu ral justice. Sometimes the functions of a minister or de partment may also be of that character and then the rules of natural justice can apply in much the same way . " Subba Rao, J., as he then was, speaking for this Court in G. Nageshwara Rao vs Andhra Pradesh State Transport Corporation, 19 put it on a different empha sis (at 353): "The concept of a quasi judicial act implies that the act is not wholly judicial, it describes only a duty cast on the executive body or authority to conform to norms of judicial procedure in performing some acts in exercise of its execu tive power . " Prof. Wade says "A judicial decision is made according to law. An administrative decision is made according to administrative policy. A quasi judicial function is an administrative function which the law requires to be exer cised in some respects as if it were judicial. A quasi judicial decision is, therefore, an administrative decision which is subject to some measure of judicial procedure, such as the principles of natural justice." (Administrative Law by H.W.R. Wade 6th Ed. p. 46 47). An administrative order which involves civil conse quences must be made consistently with the rule expressed in the Latin Maxim audi alteram partem. It means that the decision maker should afford to any party to a dispute an opportunity to present his case. A large number of authori ties are on this point and we will not travel over the field of authorities. What is now not in dispute.is that the person concerned must be informed of the case against him and the evidence support thereof and must be given a fair opportunity to meet the case before an adverse decision is taken. Ridge vs Baldwin, (supra) and state of 99 Orissa vs Dr. Binapani Dei & Ors., ; The shift now is to a broader notion of "fairness" of "fair procedure" in the administrative action. As far as the administrative officers are concerned, the duty is not so much to act judicially as to act fairly (See: Keshva Mills Co. Ltd. v: Union of India; , at 30; Mohinder Singh Gill vs Chief Election Commissioner, ; at 434; Swadeshi Cotton Mills vs Union of India, and Management of M/s M.S. Nally Bharat Engineering Co. Ltd. vs The State of Bihar & Ors., Civil Appeal No. 1102 of 1990 decided on February 9, 1990. For this concept of fairness, adjudicative settings are not necessary, not it is necessary to have lis inter partes. There need not be any struggle between two opposing parties giving rise to a 'lis '. There need not be resolution of lis inter partes. The duty to act judicially or to act fairly may arise in widely differing circumstances. It may arise expressly or impliedly depending upon the context and considerations. All these types of non adjudicative administrative decision making are now covered under the general rubric of fairness in the administration. But then even such an administrative deci sion unless it affects one 's personal rights or one 's property rights, or the loss of or prejudicially affects something which would juridically be called atleast a privi lege does not involve the duty to act fairly consistently with the rules of natural justice. We cannot discover any principle contrary to this concept. In the light of these considerations, we revert to the central issue, that is with regard to the nature of the Chancellor 's power under Section 31(8)(a). It may be noted that the Chancellor is one of the three authorities in the Statutory Scheme for selecting and appointing the best among the eligible candidates in the academic field. The Chancel lor is not an appellate authority in matters of appointment. He is asked to take a decision, because the Executive Coun cil who is the appointing authority has no power to reject the recommendation of the Selection Committee and take a decision deviating therefrom. The Chancellor 's decision is called for when the Executive Council disagree with the recommendation of the Selection Committee. What is referred to the Chancellor under Section 31(8)(a) of the Act, is therefore, not a dispute between the Selection Committee and the Executive Council on any issue. Nor it is a dispute between two rival candidates on any controversy. What is referred to the Chancellor is the recommendation of the Selection Committee with the opinion, if any, recorded thereon by the Executive Council. In fact, even without any opinion of the Executive Council, the matter stands automat ically 100 remitted to the Chancellor if the Executive Council delays its decision on the recommendation of the Selection Commit tee. The proviso to Section 31(8)(a) provides for this contingency. It reads: "Section 31(8)(a) xxxxx xxxxx Proviso: Provided that if the Executive Council does not take a decision on the recommendation of the Selection Committee within a period of four months from the date of the meeting of such Committee, then also the matter shall stand referred to the Chancellor, and his decision shall be final. " The matter thus goes to the Chancellor for decision since the Executive Council could not take a decision on the recommendation of the Selection Committee. The Chancellor in the circumstances has to examine whether the recommendation of the Selection Committee should be accepted or not. If any opinion by way of disagreement has been recorded by the Executive Council on that recommendation, the Chancellor has also to consider it. He must take a decision as to who should be appointed. It is indeed a decision with regard to appointment of a particular person or persons in the light of the recommendation and opinion if any, of the two statu tory authorities. Such a decision appears to be of an admin istrative character much the same way as the decision of the Executive Council with regard to appointment. In matters relating to public employment whether by promotion or direct recruitment, only requirement to be complied with is the mandate of Articles 14 and 16 of the Constitution. There shall be equality of opportunity and no discrimination only on ground of religion, race, caste, sex, dissent, place of birth or residence or any of them. The eligible candidate has a right to have his case considered in accordance with law. In the instant case, that require ment has been complied with by the Selection Committee. There is no further right with the candidates to make repre sentation to the Executive Council and much less to the Chancellor. Reference however, was made to the observation of this Court in Dr. G. Sarana vs University of Lucknow and Ors., ; at 592. While dismissing the writ petition challenging the recommendation made by the Selec tion Committee of the Lucknow University for appointment of a candidate as Professor, it was observed that "the ag grieved candidate has remedy by way of representation to the Executive Council and an application for re 101 ference under Section 68 of the Act to the Chancellor". We have carefully perused the decision and that observation. We find that it is of little assistance to the present case. We are concerned with the scope of Section 31(8)(a) of the Act which was not considered in that case. Apart from that, Section 31 confers no such right to make representation to the Executive Council or to the Chancellor against the recommendation of the Selection Committee. There is no provision in the Section for hearing any candidate or the Executive Council. There is also no provision for receiving evidence. The material in respect of every candidate has already been collected and collated by the Selection Commit tee. Every material is on the record and the Chancellor has no power to take further evidence. The Chancellor is autho rised to take a decision and he must take it on the avail able records since the Executive Council has not taken a decision on the recommendation of the Selection Committee. The decision of the Chancellor in the exercise of this Statutory function does not, in our opinion, expressly or impliedly require the application of the principles of natural justice. See also the observations of K.N. Singh, J., in R.S. Dass vs Union of India, at 633. It has been argued that the order of the Chancellor becomes final and binding which is one of the features of judicial power. It is true that the conclusiveness of the decision without the need for confirmation or adoption by any other authority is generally regarded as one of the features of judicial power. But it must be added that the order made by a statutory authority even it is given finali ty does not thereby acquire judicial quality if no other characteristic of judicial power is present. Power to make orders that are binding and conclusive is not, by itself a decisive factor to hold that the power is judicial. Prof. De Smith makes a similar point in his book 'Judicial Review of Administrative Action ' (4th Edition p. 82). Taking all these factors into consideration, we would sum up our opinion m this way. The power of the Chancellor under Section 31(8)(a) is purely of administrative character and is not in the nature of judicial or quasi judicial power. No judicial or quasi judicial duty is imposed on the Chancellor and any reference to judicial duty, seems to be irrelevant in the exercise of his function. The function of the Chancellor is to consider and direct appointment of a candidate on the basis of the relative performance assessed by the Expert Selection Committee and in the light of the opinion, if any, expressed by the Executive Council. His decision nonetheless is a decision on the recommendation of the Selection Committee. Such a power cannot be considered as a quasi judicial power. And we see nothing in that to justify our thinking 102 that it must conform to the principles of natural justice. The contention urged to the contrary is, therefore, unac ceptable to us. We also do not agree with the contrary view taken by the High Court in the Full Bench decision in L.N. Mathur, case (supra). The Chancellor, however, has to not properly for the purpose for which the power is conferred. He must take a decision in accordance with the provisions of the Act and the Statutes. He must not be guided by extraneous or irrele vant consideration. He must not act illegally, irrationally or arbitrarily. Any such illegal, irrational or arbitrary action or decision, whether in the nature of a legislative, administrative or quasi judicial exercise of power is liable to be quashed being violative of Article 14 of the Constitu tion. As stated in E.P. Royappa vs State of Tamil Nadu & Anr., ; "equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other to the whim and caprice of an absolute monarch". The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative executive, or quasijudicial. See Mrs. Maneka Gandhi vs Union of India & Anr., [1978] 1 SCC 248 at 283 84; Ajay Hasia & Ors. vs Khalid Mujib Sehravardi & Ors., ; at 740 41 and Som Raj & Ors. vs State of Haryana, JT 1990 1SC 286 at 290. The order of the Chancellor impugned in this case indi cates very clearly that he has considered the recommendation of the Selection Committee and the opinion expressed by the Executive Council. He has stated and in our opinion, very rightly that the appellant possesses the prescribed qualifi cation for appointment as Reader. The decision of the Chan cellor gets support from the Statute 11.01 of the First Statute. The Statute 11.01 is in these terms: "11.01. (1) In the case of the Faculties of Arts, Commerce and Science, the following shall be the minimum qualifica tions for the post of Lecturer in the University, namely (a) a Doctorate in the subject of study concerned or a published work of a high standard in that subject; and (b) Consistently good academic record (that is to say, the overall record of all assessment throughout the academic career of a candidate), with first class of high second class (that is to say, with an aggregate of more than 54% marks Master 's Degree in the subject concerned or equivalent Degree of a foreign University in such subject .) 103 (2) Where the selection committee is of the opinion that the research work of a candidate, as evidenced either by his thesis or by his published work, is of a very high standard, it may relax any of the qualifications specified in sub:clause of clause (1). " The minimum qualification prescribed for the post is a Doctorate in the subject of study concerned or a published work of high standard in the subject. The appellant then was found to have an alternate qualification though not a Doc torate in the subject. The Selection Committee has accepted the alternate qualification as sufficient and did not relax the essential qualification prescribed for the post. The Executive Council appears to have committed an error in stating that the appellant has lacked the essential qualifi cation and the Selection Committee has relaxed the essential qualification. The Chancellor was, therefore, justified in rejecting the opinion of the Executive Council. It is not unimportant to point out that in matters of appointment in the academic field the Court generally does not interfere. In the University of Mysore & Ant. C.D. Govind Rao, , this Court observed that the Courts should be slow to interfere with the opinion ex pressed by the experts in the absence of mala fide alleged 2against the experts. When appointments based on recommenda tions of experts nominated by the Universities, the High Court has got only to see whether the appointment had con travened any statutory or binding rule or ordinance. The High Court should show due regard to the opinion expressed by the experts constituting the Selection Committee and its recommendation on which the Chancellor has acted. See also the decisions in Dr. J.P. Kulshreshtha & Ors. vs Chancellor, Allahabad University, Raj Bhavan & Ors., ; at 912 and Dalpat Abasahed Solunke vs B.S. Mahajan, at 309 310. In the result, tile appeals are allowed, the judgment of the High Court is set aside. We also set aside the conse quential order dated June 16, 1989 made by the Registrar of the University reverting the appellant to her substantive post of Lecturer in Psychology. Needless to state that her original appointment as Reader pursuant to the decision of the Chancellor shall remain undisturbed with all the conse quential benefits. In the circumstances of the case, however, we make no order as to costs. T.N.A. Appeals allowed.

The appellant and the respondents applied for the post of Reader in Psychology in Lucknow University. Under the University Statute, the minimum qualification for the post was a Doctorate degree or a published work of high standard in the subject. The respondents possessed Ph.D. degree, while the appellant 's thesis was nearing completion. On the basis of her experience, performance at the interview and published work, which was found to be of high standard on the subject, the Selection Committee recommended the appellant 's appointment by grading her No. 1. 85 By a split of the majority, the Executive Council disa greed with the recommendation of the Selection Committee on the ground that the appellant did not possess the essential qualification for the post of Reader and it preferred the appointment of respondent No. 2. In view of the Council 's disagreement, the matter was referred to the Chancellor for his decision under Section 31(8)(a) of the U.P. State Universities Act, 1973. The Chancellor rejected the opinion of Executive Council and accepted the recommendations of the Selection Committee and directed that the appellant should be appointed as a Reader. Respondent No. 1 challenged the Chancellor 's order by filing a writ petition in the High Court, which following its earlier Full Bench decision wherein it was held that the Chancellor must explicitly state the reasons for his deci sion and was enjoined by the Act to act quasijudicially quashed the Chancellor 's order with a direction to reconsid er the matter. In the appeal to this Court on the question of the nature of the Chancellor 's power under Section 31(8)(a) of the U.P. State Universities Act, 1973: Allowing the appeal and setting aside the order of the High Court, this Court, HELD: 1. Three authorities are involved in the Selection of University teachers ' (i) Selection Committee, (ii) Execu tive Council and (iii) The Chancellor. The Selection Commit tee for appointment of University teachers is a recommenda tory body the composition of which has been prescribed under section 31(4)(a). The Executive Council is the principle executive body of the University. Subject to the provisions of the Act, it has power to appoint officers, teachers and other employees of the University. Section 31(8)(a) seems to suggest that if the Executive Council wants to agree with the recommendation and appoint candidates in the order of merits, no reasons are to be given. But if it wants to disagree with the recommendations made by the Selection Committee, it must give reasons for disagreement. It has however, no power to override the recommendation and appoint a candidate of its own choice. It may disagree, but should give reasons for disagreement and refer the matter under section 31(8)(a) to the Chancellor. Then the decision of the Chancellor shall be binding on the Executive Council. The Chancellor is not an appellate authority in matters of appointment. His decision is called for when the Executive Council disagree with the recommendation of the Selection Committee. What is referred to him 86 under section 31(8)(a) of the Act, is therefore, not a dispute between the Selection Committee and the Executive Council on any issue. Nor it is a dispute between two rival candidates on any controversy. It is indeed a decision with regard to appointment of a particular person or persons in the light of the recommendation and opinion if any, of the two statutory authorities. [94H; 95A, IL F G; 99F H] 1.1 The power of the Chancellor under Section 31(8)(a) is purely of administrative character and is not in the nature of judicial or quasijudicial power. No judicial or quasi judicial duty is imposed on the Chancellor and any reference to judicial duty, seems to be irrelevant in the exercise of his function. Such a power cannot be considered as quasi judicial power. [101 F H] L.N. Malhur vs The Chancellor, Lucknow University, Lucknow & Ors., ; Dr. U.N. Roy vs G.D Tapase, [1981] UPLBEC, 309, disapproved. Section 31 confers no right to make representation to the Executive Council or to the Chancellor against the recommendation of the Selection Committee. There is no provision in the Section for hearing any candidate or the Executive Council. There is also no provision for receiving evidence. The decision of the Chancellor in the exercise of this statutory function does not expressly or impliedly require the application of the principle of natural justice. [ I 01 B 1)] Dr. G. Sarana vs University of Lucknow and Ors., ; ; held inapplicable. R.S. Dass vs Union of India. [1966] (Supp.) SCC 617; re ferred to. 2.1 The Chancellor, however, has to act properly for the purpose for which the power is conferred. He must take a decision in accordance with the provisions of the Act and the Statutes. He must not be guided by extraneous or irrele vant consideration. He must not act illegally, irrationally or arbitrarily. Any such illegal. irrational or arbitrary action or decision, whether in the nature of a legislative, administrative or quasi judicial exercise of power is liable to be quashed being violative of Article 14 of the Constitu tion. [102B C] 2.2 The order of the Chancellor impugned in this case indicates very clearly that he has considered the recommen dation of the question Committee and the opinion expressed by the Executive Council. The 87 minimum qualification prescribed for the post is a Doctorate in the subject of study concerned or a published work of high standard in the subject. The appellant was found to have an alternate qualification though not a Doctorate in the subject. The Selection Committee has accepted the alter nate qualification as sufficient and did not relax the essential qualification prescribed for the post. The Execu tive Council appears to have committed an error in stating that the appellant has lacked the essential qualification and the Selection Committee has relaxed the essential quali fication. The Chancellor was, therefore, justified in re jecting the opinion of the Executive Council. His decision gets support from the Statute I 1.01 of the First Statute of the Lucknow University. Accordingly the judgment of the High Court and the consequential order made by the Registrar of the University reverting the appellant to her substantive post of Lecturer are set aside. Her original appointment as Reader pursuant to the decision of the Chancellor shall remain undisturbed with all consequential benefits. [102E, 103B C, G] 3. An administrative function is called quasi judicial when there is an obligation to adopt the judicial approach and to comply with the basic requirements of justice. Where there is no such obligation, the decision is called 'purely administrative ' and there is no third category. 197G H] Ridge vs Baldwin, ; ; G. Nageshwara Rao vs Andhra Pradesh State Transport Corporation, ; Administrative Law by H.W.R. Wade 6th Ed. p. 46 47, referred to. 3.1 The conclusiveness of the decision without the need for confirmation or adoption by any other authority is generally regarded as one of the features of judicial power. But the order made by a statutory authority even it is given finality does not thereby acquire judicial quality if no other characteristic of judicial power is present. Power to make orders that are binding and conclusive is not, by itself a decisive factor to hold that the power is judicial. [101 E F] Prof. Desmith, 'Judicial Review of Administrative Ac tion ' 4th Ed., p. 82; referred to. 3.2 An administrative order which involves civil conse quences must be made consistently with the rule expressed in the Latin Maxim audi alteram partem. The person concerned must be informed of the case against him and the evidence in support thereof and must be given a fair opportunity to meet the case before an adverse decision is taken. [98G H] 88 State of Orissa vs Dr. Binapani Dei & Ors., ; ; Ridge vs Baldwin, ; ; referred to. 3.3 So far as the administrative officers are concerned, the duty is not so much to act judicially as to act fairly. For this concept of fairness, adjudicative settings are not necessary, nor it is necessary to have lis inter parties. There need not be any struggle between two opposing parties giving rise to a 'lis '. There need not be resolution of lis inter parties. The duty to act judically or to act fairly may arise in widely different circumstances. It may arise expressly or impliedly depending upon the context and con siderations. All these types of non adjudicative administra tive decision making are now covered under the general rubric of fairness in the administration. But then.even such an administrative decision unless it affects one 's personal rights or one 's property rights, or the loss of or prejudi cially affects something which would juridically be called atleast a privilege does not involve the duty to act fairly consistance with the rules of natural justice. [99A E] Keshva Mills Co. Ltd. vs Union of India, ; ; Mohinder Singh Gill vs Chief Election Commissioner. ; ; Swadeshi Cotton Mills vs Union of India, ; Management of M/s M.S. Nally Bharat Engi neering Co. Ltd. vs The State of Bihar & Ors., Civil Appeal No. 1102 of 1990 decided on 9.2.1990; ' referred to. In matters of appointment in the academic field the Court generally does not interfere. The Courts should be slow to interfere with the opinion expressed by the experts in the absence of mala fide alleged against the experts. When appointments are based on recommendations of experts nominated by the Universities, the High Court has got only to see whether the appointment had contravened any statutory or binding rule or ordinance. The High Court should show due regard to the opinion expressed by the experts constituting the Selection Committee and its recommendation on which the Chancellor has acted. [103D E] University of Mysore & Anr. C.D. Govinda Rao, ; Dr. J.B. Kulshreshtha & Ors. vs Chancellor, Allahabad University, Raj Bhavan & Ors. , ; ; Dalpat Abasaheb Soluke vs B.S. Mahajan, ; followed. The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive or quasi judicial. [102C D] 89 E.P. Royappa vs State of Tamil Nadu & Anr., ; ; Mrs. Maneka Gandhi vs Union of India & Ant., [1978] 1 SCC 248; Ajay Hasia & Ors. vs Khalid Mujib Sehravardi & Ors., [1981] I SCC 722; Som Raj & Ors. vs State Of Haryana, JT ; referred 5.1 In matters relating to public employment whether by promotion or direct recruitment, only requirement to be complied with is the mandate of Articles 14 and 16 of the Constitution. There shall be equality of opportunity and no discrimination only on ground of religion, race, caste, sex, dissent, place of birth or residence or any of them. The eligible candidate has a right to have his case considered in accordance with law. [100F]

l Appeals Nos. 181 and 181 A of 1955. Appeals from the judgment and decree dated September 30, 1952, of the former Nagpur High Court in Second Appeals Nos. 699 and 700 of 1946, arising out of the judgment and decree dated February 21, 1946, of the court of First Additional District Judge, Nagpur, in Civil Appeals Nos. 22 A and 23 A of 1946, against the judgment and decree dated January 2, 1945, of the Court of Second Subordinate Judge, Nagpur, in Civil Suit No. 143 A of 1944. H. J. Umrigar, Ratnaparkhi A. O and Shankar Anand Zinj arde,for the appellants. W. section Barlingay and B. H. Dhebar, for the respondent. February 2. The Judgment of Jafer Imam and section K. Das, JJ., was delivered by section K. Das, J. Kapur, J., delivered a separate judgment. section K. DAS, J. These two appeals arise out of a litigation which has had a chequered career in the courts below. The short facts are these. The suit out of which the appeals arise was instituted on January 13, 1941, but the plaint was amended on May 4, 1942. The amended plaint was to the effect that in or about the year 1905 the defendant, the then Provincial Government of the Central Provinces and Berar, Nagpur, " opened up " an area known as the Craddock Town Area which was originally called the Sitabuldi Extension Area or Dhantoli Area. Due to the scarcity of residential accommodation in the city of Nagpur, the then Provincial Government along with some prominent members of the Nagpur Municipal Committee devised a scheme to extend residential accommodation by acquiring agricultural land and making it available for residential purposes. With that object in view, the area in question was acquired and building sites of the average size of about 10,000 sq. each were carved out. These were leased out on a premium of Rs. 350 and an annual rent of Rs. 3 8 0 each. The indenture of lease in each case contained a clause to the following effect: 183 " III. And the lessor does further covenant that he will at the end of the term of 30 years hereby granted and so on from time to time thereafter at the end of each successive further term of years as shall be granted at the request of the lessee execute to him a renewed lease of the land hereby demised for the term of 30 years; Provided that the rent of the land hereby demised shall be subject to such fair and equitable enhancement as the lessor shall determine on the grant of every renewal: Provided also that every such renewed lease of the land shall contain such of the covenants, provisions and conditions in these presents contained as shall be applicable and shall always contain a covenant for further renewal of the lease. " One of the leases was executed on May 24, 1909, and some other leases near about that year. By the year 1939 the first 30 years ' period of some of the leases came to an end. The original plaintiffs, who were two in number and who sued in their individual right as also representing the members of an association known as the Craddock Town Plot holders Association alleged that on the expiry of the terms of the leases in question, during which period some of the lessees had built houses on the leasehold property, the then Provincial Government proposed an enhancement of Rs. 21 14 0 from Rs. 3 8 0 as annual rent and also the insertion of some new terms in the renewed deeds of lease. The plaintiffs, on the contrary, said that Rs. 7 per plot was the fair and equitable enhancement. Various representations to the relevant authorities having proved unavailing, the plaintiffs instituted the suit in which they prayed (a) that the enhancement of rent from Rs. 3 8 0 to Rs. 21 14 0 per plot was not fair and equitable within the meaning of el. III of the deed of lease; (b) that the offer of Rs. 7 as annual rent made by the association was fair and reasonable; (c) that the defendant do insert in the renewed deeds of lease only such conditions as were to be found in the original deed and not to add to them to the detriment of the lessees ' interest; and (d) that in the event of this Court not agreeing that 184 Rs. 7 was a fair and, reasonable rent, a fair and equitable rent should be fixed by it. The suit was contested by the defendant on several grounds, with most of Which we are not now concerned. The learned Subordinate Judge of Nagpur, who dealt with the suit in the first instance, took up certain preliminary issues for decision and by a judgment dated April 13, 1942, he disposed of those preliminary issues. One such issue material for our purpose was in these terms: ,In case of dispute as to what is fair and equitable rent, has the civil court no right to, determine what is fair rent?" On this preliminary issue, he found " that under the terms of cl. III of the indenture of lease, the defendant was entitled to fix a fair and equitable rent; but the civil court has jurisdiction to enquire whether the rent fixed by the defendant is fair and equitable within the meaning of cl. III ". We need not refer to the other preliminary issues on which the learned Subordinate Judge gave his decision, because those issues no longer survive. On the disposal of the aforesaid preliminary issue, the plaint was amended and some more lessees were added, the 30 years ' period of whose leases had also expired ; therefore the position was that the plaintiffs were those lessees, the 30 years ' period of whose leases had expired and as respects the renewal of whose leases the defendant had proposed an enhancement of Rs. 21 14 0. The defendant claimed that it had been very reasonable in fixing the enhanced rent and it further claimed the right of withdrawing the offer of Rs. 21 14 0 and of making a fresh demand at a much higher rent if the lessees did not agree to the terms originally proposed by the defendant. The defendant further denied that the offer of Rs. 7, that is, twice the original rent, made by the lessees was a reasonable and fair enhancement. After the disposal of the preliminary issues the learned Subordinate Judge proceeded to try the suit on merits and on January 2, 1945, he found on issue No. 4 that Rs. 14 per year would be the fair and equitable enhanced rent for each plot of about 10,000 sq. and he fixed that rent for the next term of 30 years to 185 which the lessees were entitled under cl. III; he further directed the grant of a rebate of 25 per cent. to those lessees who agreed to a renewal for a term ending in 1948. From the decision of the learned Subordinate Judge two appeals, one by the plaintiffs, and the other by the defendant, were taken to the District Judge and they were heard by the Additional District Judge of Nagpur, who by his Judgment dated February 21, 1946, affirmed the decision of the learned Subordinate Judge that under cl. III of the indenture of lease it was open to the Subordinate Judge to determine what was the fair and equitable rent. The learned Additional District Judge, however, reversed the finding of the learned Subordinate Judge as to the quantum of the fair and equitable rent. He came to the conclusion that the enhancement of rent should not exceed Rs. 7, as any increase over that amount would not be a fair and equitable one within the meaning of cl. III of the indenture of lease. From the decision of the learned Additional District Judge, two appeals were taken to the then High Court of Judicature at Nagpur by the defendant Government. The appeals were first placed before a single Judge who directed that they should be heard by a Division Bench. The appeals were then heard by B. P. Sinha, C. J. (as he then was) and Mudholkar, J. The learned Chief Justice came to the conclusion that the suit must fail on the ground that the authority of the court had been invoked in a matter which really lay in contract and the civil court had no jurisdiction to determine the fair and equitable rent. Mudholkar, J., came to a contrary conclusion and held that the suit was maintainable and the courts below could determine the fair and equitable rent. On the question of what should be the fair and equitable rent, the learned Chief Justice gave no finding except saying that " the decision of the lower appellate, court on the question of assessment of fair and equitable rent was not satisfactory, because it had gone more by the rule of the thumb than upon the evidence adduced in the 24 186 case or upon any other sound basis. " Mudholkar, J., however, said that he saw no adequate ground for differing from the view taken by the lower appellate court with regard to the quantum of fair and equitable rent. On this difference of opinion between the learned Chief Justice and Mudholkar, J., the case was referred to a third Judge, namely, Hemeon, J., who agreed with the view of the learned Chief Justice that, on a proper construction of cl. III of the indenture of lease, the civil court had no jurisdiction to determine the fair and equitable rent and the parties had consciously and deliberately stipulated to abide by the lessor 's fixation of a fair and equitable enhancement of rent; and in that view of the matter, he expressed no opinion as to what should be the fair and equitable rent. In accordance with the opinion of the majority of Judges, the appeals in the High Court were allowed and the suit was dismissed with costs. The plaintiffs, who are the appellants here, then asked for a certificate of fitness under article 133(1)(c) of the Constitution of India. The High Court granted the necessary certificate by an order dated October 23, 1953, and the present appeals have been filed in pursuance of that certificate. The area in question being now within the State of Bombay, the State of Bombay has been substituted as the respondent before us. The principal question before us is one of construction of el. III of the indenture of lease. On behalf of the appellants it has been argued that the construction put upon the clause by the majority of Judges in the High Court is not correct inasmuch as it gives no effect to the words " fair and equitable enhancement " occurring therein. On behalf of the respondent, it has been submitted that the expression " subject to such fair and equitable enhancement as the lessor shall determine " is tantamount to saying " subject to such enhancement as the lessor shall determine to be fair and equitable " ; in other words, the argument of learned counsel for the respondent is that the parties had deliberately chosen to abide by whatever was determined to be fair and equitable enhancement by 187 the lessor. Mudholkar, J., had proceeded on the footing that the primary intention of the parties was that the enhancement must be fair and equitable and the adjectival clause ,as the lessor shall determine " following the word I enhancement ' being subordinate to the primary intention of the parties could be ignored. Learned counsel for the respondent has very strongly submitted that this view is not correct. We think that the clause should be read as a whole and every effort should be made to give effect to all the words used therein. The relevant portion of the clause states " such fair and equitable enhancement as the lessor shall determine ". If the construction is that whatever the lessor determines as fair and equitable enhancement must be treated as binding on the lessee, then the words 'fair and equitable ' are not given the meaning and sense which they have according to the ordinary acceptation of those words. I Fair ' and I equitable ' mean fair and equitable in fact, and not what the lessor subjectively considered to be fair and equitable. The words I fair ' and 'equitable ' both mean I just or unbiased ' (see the Concise Oxford Dictionary, 4th Edn., p. 426 and p. 402). If the intention was to leave the enhancement to the subjective determination of the lessor, the clause would have more aptly said 'such enhancement as the lessor shall determine '. We consider that the words I fair and equitable ' must be given their due meaning and proper effect. The question then asked is what meaning is to be given to the words 'such. as the lessor shall determine '. It is indeed true that these words constitute an adjectival clause to the expression ' fair and equitable enhancement ', but we consider that the meaning of the adjectival clause is merely this: the lessor must first determine what it considers to be fair and equitable enhancement; but if in fact it is not so, it is open to the lessee to ask the Court to determine what is fair and equitable enhancement. We do not think that on a proper construction of the clause, the intention was to oust the jurisdiction of the Court and make the determination of the enhancement by the lessor final and binding on the lessee. We think that 188 the conclusion at which Mudholkar, J., arrived on this point was correct, though not exactly for the reasons given by him. If the construction stated above is the correct con struction, then no further difficulty is presented by cl. 111. The learned Judges of the High Court unanimously expressed the view that the lease 'Was not void for uncertainty, and in that view we concur. There is authority in support of the view that a covenant to settle land I at a proper rate ' or I upon such terms and conditions as should be judged reasonable ' is not void for uncertainty (see The New Beerbhoom Coal Company Limited vs Boloram Mahata and others (1) and Secretary of State, for India in Council vs Volkart Brothers (2)). In the former case, Sir Barnes Peacock who delivered the judgment of their Lordships said : " The High Court affirmed the decision, but not for reasons which their Lordships consider to be correct. They affirmed it upon the ground that it was impossible to determine what was a reasonable rate. Their Lordships cannot think that in the present case the Court, upon a proper inquiry, would have been unable to determine it. There might have been considerable difficulty in fixing the rate; but difficulties often occur in determining what is a reasonable price or a reasonable rate, or in fixing the amount of damages which a man has sustained under particular circumstances. These are difficulties which the Court is bound to overcome. " Our attention has been drawn to some English decisions in which the point arose if a contract which appoints a way of determining the price can be specifically enforced. There are two lines of decisions. In Milnes V. Grey (3) the contract provided that the price shall be valued by two different persons to be nominated and if they happened to disagree then those two persons shall choose a third person whose determination shall be final. The question was whether such a contract could be specifically performed and the (1) (1880) L.R. 7 I.A. 107. (2) Mad. (3) (18O7) ; ; 189 answer given by the Master of the Rolls can be best put in his own words: " The more I have considered this case, the more I am satisfied, that, independently of all other objections, there is no such agreement between the parties, as can be carried into execution. The only agreement, into which the Defendant entered, was to purchase at a price, ' to be ascertained in a specified mode. No price having ever been fixed in that mode, the parties have not agreed upon any price. Where then is the complete and concluded contract, which this Court is called upon to execute ? " In Taylor vs Brewer (1) a claim to compensation was founded on the resolution of a committee which provided that" such remuneration be made as should be deemed right ". It was held that the engagement was merely an engagement of honour and no claim could be made on it. An example of the other line of decisions is furnished by Gourlay vs The Duke of Somerset (2). In that case the agreement provided for " all such usual and proper conditions, reservations, and agreements, as shall be judged reasonable and proper by John Gale, land surveyor, and in case of his death, by some other proper and competent person to be mutually agreed upon by the said parties ". The plaintiff came to court and the question arose whether the reference to settle the lease to be made by the defendant to the plaintiff should be to the Master or to Mr. Gale, the defendant contending that the court decreeing specific performance will take the whole subject to itself and determine by its own officer, not by a particular individual, what are usual and proper covenants. Sir William Grant, Master of the Rolls, said: " When the agreement is, that the price of the estate shall be fixed by arbitrators, and they do not fix it, there is no contract as the price is of the essence of a contract of sale, and the Court cannot make a contract, where there is none; but, where the Court has determined, that the agreement is binding and (1) ; ; (2) ; ; 190 concluded and such as ought to be executed, it does not require foreign aid to carry the details into execution. Gale 's agency is not of the essence of this con tract. . If the parties had gone to Gale, and got him to settle a lease, and one of them had objected to the covenants as improper, and the Bill had been filed by the other, the Court would have inspected the lease; and if it were found unreasonable, would not have decreed an execution of the agreement. " We consider that the present case comes within the rule laid down in Gourlay vs The Duke of Somerset (1). Learned counsel for the respondent placed strong reliance on Collier vs Mason (2 ). That was a case in which the defendant had agreed to purchase a property at a valuation to be made by AB; the Court, though it considered AB 's valuation very high and perhaps exorbitant, 'decreed specific performance, there appearing neither fraud, mistake or miscarriage. The case was decided on the footing that the contract provided that the property shall be purchased at such a price or sum as should be fixed by reference to AB, and it was pointed out that there being no evidence of fraud, mistake or miscarriage the parties were bound by the contract they had made. There was no question in that case of the court stepping in, under the terms of the contract, to determine what was fair and reasonable. Learned counsel for the respondent also relied on Tekchand Kapurchand vs Mt. Birzabai (3). The principle laid down therein was that a contract binds the parties to it and their representatives and the court 's power to interfere with contracts is limited to such cases as fraud, undue influence or mistake and relief against penalty or forfeiture. Indeed, we agree that if the contract in the present case was that whatever the lessor determined as the enhanced rent would be binding on the parties, then the court has no power to interfere with that contract unless it is vitiated by fraud, undue influence, mistake, etc. If, however, the proper construction of el. III of the contract is what (1) ; ; (2) ; ; (3) A.I.R. 1942 Nag. 191 we have held it to be, then the contract itself provides that the enhanced rent though determined by the lessor in the first instance, must be fair and equitable. On such a construction the determination of the enhancement by the lessor would not be final and it would be open to the court to determine what is fair and equitable enhancement. We say this with respect, but the Patna decisions (Secretary of State for India in Council vs Nistarini Annie Mitter (1) and Secretary of State vs Babu Rajendra Prasad (2)), referred to by the learned Chief Justice in his judgment are not in point. Those decisions were not concerned with interpreting a clause in the agreement like the one before us and it was rightly held that in the absence of a contract between the parties, the court had no power to impose upon the parties a bargain not of their own making. For the reasons given above, we hold that the decision of the majority of the learned Judges of the High Court with regard to the interpretation of cl. III of the indenture of lease is not correct and these appeals must go back for a fresh hearing by the High Court in accordance with law for determination of what should be the fair and equitable enhancement. On that point there was no concluded finding by the majority of the learned Judges of the High Court, but learned counsel for the appellants submitted that the finding of the learned Additional District Judge on the quantum of fair and equitable enhancement was a finding of fact and therefore binding in second appeal. At this stage we express no opinion on such a submission, nor do we express any opinion whether the courts below or any of them have gone wrong in principle in determining what should be the fair and equitable enhancement and whether on merits it should be Rs. 7 or Rs. 14 or Rs. 21 14 0, or even a higher sum. All these points must be considered afresh by the High Court. There is a further point which must also be dealt with in the High Court. The learned Subordinate Judge decided on issue No. 7 with regard to the conditions for a renewal of the lease that the Government (8) Pat. 446. (9) A.I.R. 1937 Pat. 192 were not entitled to make any alterations in the clauses relating to re entry and notice of demand as contained in cl. II of the original lease. The learned Addl. District Judge said: " As regards the new form of lease, it is clear that the clause regarding building would be deleted if it is found to be superfluous or redundant. While that in respect of right of lessor to enter on the land without a demand of ground rent (in case of failure to pay it on the appointed date) it is not necessary to interfere as it would amount to making a contract for the parties. It is better to leave the matter to the parties and their legal advisers. " Whether the view of the learned Subordinate Judge or of the District Judge is correct or not was not considered by the High Court and as the appeals are going back on remand this point should also be dealt with by the High Court. Accordingly, we allow the appeals and set aside the judgment and decree of the High Court dated September 30, 1952. The appeals must go back for a fresh hearing by the High Court in accordance with law and in the light of the observations made above. In the peculiar circumstances of this case, there will be no order for costs of the hearing of the appeals in this Court. Costs incurred in the two courts below and costs incurred in the High Court, both before and after remand, will be dealt with by the High Court when finally disposing of the appeals. KAPUR, J. I regret I am unable to agree in the proposed judgment that it is open to the Court in the circumstances of this case to go into the question of the valuation and to determine as to what, in its opinion would be fair and equitable enhancement in rent and to interfere with the enhancement as determined by the lessor under the terms of the indenture of lease executed on May 24, 1909. The original lease was for a term of 30 years with a provision for renewal for another 30 years with the proviso that the rent of the land demised was " subject to such fair and equitable enhancement as the lessor shall determine 193 The facts are set out in the judgment of my learned brother, section K. Das, J., and it is not necessary to repeat them. Plots of land measuring about 10,000 sq. ft. were given on lease by the Government to the appellants and others, for which the premium to be paid was Rs. 350 and the rent Rs. 3 8 0 per annum or Re. 1 per cent. of the premium. Lease deeds were executed in 1909 under clause III of which the lessor determined the enhanced rent at Rs. 21 14 0 and thus raised it from Rs. 3 8 0 per plot to Rs. 21 14 0. The appellants brought a suit for declaration that the enhancement proposed was excessive and the fair and equitable rent should be Rs. 7 per plot and if the Court was of the opinion that Rs. 7 was not a fair and equitable rent then it should fix such sum as it considered fair and equitable. The respondent pleaded that such a suit was incompetent. The question for decision is what is the effect of using the adjectival words " fair and equitable ". For the appellants it was argued that because in the lease deed the enhancement contemplated was qualified by the words " fair and equitable " the determination became clothed with a qualification which made it subject to judicial review and determination because it was for the Court to say whether the determined enhancement conformed to the standard prescribed in the disputed clause or not. The respondent contended on the other hand that the rule applicable to determinations by valuers is that it is conclusive and cannot be overhauled except upon proof of fraud and imposition of gross misconduct. Thus according to the submission of the appellant the clause in dispute means such enhancement as the lessor shall determine and which determination shall, in the opinion of the Court, be fair and equitable and according to the respondent it means that the amount of enhancement shall be fair and equitable but what is fair and equitable shall be determined by the lessor, such determination being conclusive. The appellants do not contend that the lessor is not a valuer and that if the qualifying words " fair and equitable " had not been used then 25 194 the enhancement determined would not be conclusive but the contention is that by using these words the quality and the quantity of enhancement is no longer in the sole determination of the lessor but the final determination must be of the Court because otherwise any fanciful amount would have to be accepted as fair and equitable and that the parties intended that the lessor was not the final determiner of the quality and quantity of enhancement and his determination was not conclusive but the lessee if dissatisfied could get the matter reviewed by the Court. In my view the correct interpretation to be put on this clause of the lease deed is what is contended for by the respondent. The lessor was given the authority to determine the enhancement but such enhancement was to be fair and equitable and what would be fair and equitable in any particular case was also to be determined by the lessor. The lease deed entered into between the parties is dated May 24, 1909. In the first clause are given the usual obligations of the lessee as to payment of rent, the purpose of the building to be constructed, the period in which it was to be completed, the design of the building and keeping it in proper condition. In the second clause of the agreement the lessor covenanted peaceful possession subject to the right of the lessor to recover rent as arrears of land revenue and other remedies for non observance of the obligations contained in the first clause with a provision for re entry upon failure of certain conditions. I In the third clause the lessor covenanted for grant of lease for further periods of 30 years at the request of the lessee with the following proviso : " Provided that the rent of the land hereby demised shall be subject to such fair and equitable enhancement as the lessor shall determine on the grant of every renewal ". This is the disputed clause. Now it appears that this further covenant was for the benefit of the lessee and the reservations made are couched in such language which left the discretion in regard to enhancement of rent to the lessor. What the enhancement was to be and what would be fair and equitable was left to the 195 determination of the lessor. It is not an unusual provision in a lease for a long term of years with provision for renewal to leave the question of rent to be determined by the lessor or an outside valuer and it s would not, in my respectful opinion, be a correct interpretation to say that the enhancement by a valuer would be unchallengeable if the adjectival words " fair and equitable " are not used but would be subject to court 's review if these words are employed. That is going contrary to the very notion of valuations and their legal incidence. The extent of the power of courts over valuations by valuers has been stated in text books and in certain decided cases. In Williston on Contracts, Vol. 3, section 802, at p. 2252 the law is stated thus: " In the absence of fraud or mistake, the price fixed by aGreed valuers is conclusive upon the parties. Though an excessively large or an unreasonably small price involves some element of penalty or forfeiture, the possibility of this is not enough to overcome the express terms of the contract in the absence at least of fraud, gross mistake, or such arbitrary conduct as is outside what the parties could have reasonably contemplated ". And it is not a far step to say that in all cases of valuation the parties do contemplate a fair and equitable amount to be fixed or determined and not any price fanciful or otherwise. In Collier vs mason (1) the defendant agreed to purchase a property at a valuation to be made by a third party. The defendant repudiated the value as exorbitant and refused to complete his contract and the plaintiff vendor instituted a suit for specific performance. The Court held that the valuation was very high and perhaps exorbitant but it decreed specific performance of the contract as there appeared no fraud, mistake or miscarriage. It was said by the Master of the Rolls " It may have been improvident as between these parties to enter into a contract to buy and sell property at a price to be fixed by another person, but that cannot avoid the contract. (1) ; ; 196 Here the referee has fixed the price, which is said to be evidence of miscarriage, but this Court, upon the principle laid down by Lord Eldon, must act on that valuation, unless there be proof of some mistake, or some improper motive, I do not say a fraudulent one; as if the valuer had valued something not included, or had valued it on a wholly erroneous principle, or had desired to injure one of the parties to the contract ; or even, in the absence of any proof of any of these things, if the price were so excessive or so small as only to be explainable by reference to some such cause; in any one of these cases the Court would refuse to act on the valuation ". It does not appear that in that case the words "fair and equitable " were used but that is implied in every reference for valuation to be made by an agreed referee. He cannot act in a fanciful or a corrupt manner or with puerile motives nor can he make a valuation which be (toes not consider to be fair and equitable. In cases of transfer of property the form of contract to buy and sell may make a provision and very often such a provision is made that the price payable shall be that which a certain valuer shall fix. Such a requirement is an express condition or a condition implied in fact qualifying the obligation of the buyer to pay the price and such a contract cannot be performed unless the valuation first takes place. Such a condition is a necessary condition or an inherent condition. Williston on Contracts, Vol. 3, section 800 ; Firth vs Midland Railway Co. (1). In such contracts it must be assumed that the parties laid weight on the parti cular individuality of the valuer. Accordingly if the valuer dies or refuses to act the buyer cannot be compelled to pay the price. A similar condition is common in long term leases and in provisions for renewal of leases and where the parties choose to abide by the determination of a valuer and that valuation is not acceptable to one of the parties, Courts will not interfere, the only exception being fraud, mistake or misconduct. In Vickers vs Vickers (2) which was a suit for specific (1) , 112. (2) 197 performance of a contract enforcing an option of purchase where the stock was to be valued in the usual way by two valuers and one of the valuers was not allowed to proceed, it was held that there was no contract between the parties which the Court could specifically enforce. Sir W. Page Wood, V. C., said at p. 535: " If a nomination of that kind fails, or if the two persons named do not make their award, this Court has said there is no constat of the price; the contract is not a complete contract, and there is nothing on which it can act ". In Weekes vs Gallard (1) where a contract was entered into for the sale of certain property, the price to be fixed by two valuers who afterwards valued the property at inadequate price, it was held that in the abence of fraud or collusion on the part of the valuer, the buyer was entitled to specific performance of the contract. Lord Romilly said : " The court has really no discretion in the matter. The discretion of the court is bound, as Lord Ellenborough says, by fixed rules. In one case of this kind a house and furniture were valued at three times their value, and yet there was a decree for specific performance. The only defence to such a suit would be fraud or collusion ". A valuer may, in one sense, be called an arbitrator but not in the proper legal sense of the term. Per Lindley, L. J., In re Carus Wilson & Greene (2). But there is this difference between arbitration and valuation that the object of the former is to settle a dispute which has arisen and of the latter to avoid a dispute arising. The arbitrator is called in to settle judicially any matter in controversy between the parties and the valuer by the exercise of his knowledge and skill has to make a valuation the object being to prevent disputes from arising. A valuer like an arbitrator is required to act fairly and diligently. He cannot act in a fanciful or a perverse manner and his determination must be fair and equitable whether the authority given to him uses these words or not. But once a (1) (2) 198 valuation is properly made the valuation is conclusive as between the parties and the Court in the absence of fraud, mistake or collusion can no more go into whether it is fair and equitable than a Court can sit in appeal against the award of an arbitrator as to what would be fair amount of damages in a particular case of breach of contract. See also Emery vs Wase (1). The decision in Gourlay vs Somerset (Duke of) (2) was relied upon by the appellants in support of their case. That does not, in my opinion, deal with the matter now before us. There the suit was for specific performance of an agreement to grant a lease. One of the conditions of the contract was that the farm was to be let on conditions, reservations and agreements " as shall be judged reasonable and proper by John Gale . " The Court was of the opinion that Gale 's agency was not of the essence of the contract and that it could not be contended that the contract was to end if Gale refused to settle a lease. The Court said : " Suppose the reference is made to Gale ; is his decision liable to exception ? If it is, the decision with regard to the propriety of the lease will ultimately be that of the Court. If not, the Court may be carrying into execution a lease, which it may think extremely unreasonable and improper. If the parties had gone to Gale, and got him to settle a lease, and one of them had objected to the covenants as improper and the Bill had been filed by the other, the Court would have inspected the lease; and if it were found unreasonable, would not have decreed an execution of the agreement ". That was a case relating to covenants other than fixation of price. With regard to the valuation or fixation of price it was said that if an agreement was that the price of the estate would be fixed by arbitrators and they did not fix it there was no contract of sale as the contract as to the mode of fixing the price was of the essence of the contract of sale and the Court could not make a contract where there is none. Similarly it may be said that where the valuation is fixed by a valuer (1) , 847, 848 ; ; (2) ; ; 199 the court will hold it conclusive in the absence of fraud or mistake or misconduct. The Court will not enter into the propriety of the valuation made or substitute its own valuation in place of that determined by the valuer because that will not be an execution of the contract of the parties but making a contract for them. The Transfer of Property Act contains no provision by which the Court is empowered to fix rent of premises demised although by legislation in the case of agricultural holdings certain tribunals have been set up to make such determinations. The appellant relied on The New Beerbhoom Coal Company vs Boloram Mahata (1). The covenant between the parties was: Within that aforesaid mouzah we will not give a pottah, let give settlement to anybody. If you take possession according to your requirement of extra land over and above this pottah, and we shall settle any such lands with you at a proper rate ". A suit was brought by the lessees against the lessor to obtain specific performance to execute a permanent lease of a large area of land claiming benefit of the covenant above given and contended that the defendants were bound to let them the land whenever called upon to do so. The appellant company stated that they had negotiated with the lessor for lease of the adjoining land (not of land which they had agreed to lease) upon the terms that they were to pay Rs. 1 8 0 for waste land and Rs. 3 for cultivable land and the suit was for the grant of specific performance of the agreement by compelling the lessor to grant them the lease at those rates and if the Court would not order the lease at those rates then at such rates as the Court shall think reasonable. The trial Court held that apart from 51 bighas mentioned in the covenant the lessor could not be compelled to grant a lease for the remaining land of the mouzah. The High Court affirmed this decision but on the ground that it was impossible to determine what was the reasonable rate. Sir Barnes Peacock said: (1) (1880) L.R. 7 I.A. 107. 200 " Their Lordships cannot think that in the present case the court, upon a proper inquiry, would have been unable to determine it (proper rent). There might have been considerable difficulty in fixing the rate ; but difficulties often occur in determining what is a reasonable price or a reasonable rate, or in fixing the amount of damages which a man has sustained under particular circumstances. These are difficulties which the Court is bound to overcome ". These observations of the Privy Council are relied upon by the appellants to support the argument that it is open to the Court to determine what the reasonable rate would be. This was not a case where any question of valuation arose nor was it a case where a valuation made by a valuer was sought to be reviewed as not being proper and apart from the fact that the observations are mere obiter this case is no authority for saying that the determination of a valuer is subject to review by courts. Another case which the appellant relied upon was The Secretary of State for India vs Volkart Brothers (1). There, in a deed of lease granted for 99 years by the East India Company there was a clause for renewal for another like period on the lessee paying a sum of money and " upon such terms and conditions as should be judged reasonable ". The Secretary of State assigned a major portion of the holding to a third party and Volkart Brothers before the expiry of the original lease period tendered the due amount and asked for renewal of the lease which the Secretary of State refused to renew and sued to eject the lessees and the latter sued for specific performance of the covenant for renewal. It was held by a majority that the covenant was not unenforceable on account of uncertainty. Krishnan, J., was of the opinion that such a covenant was too vague and uncertain and unenforceable because the clauses to be inserted in the contract were themselves uncertain and the contract could not be enforced. Venkatasubba Rao, J., was of the opinion that if the parties would not agree to a reasonable rent the Court will intervene and fix it; The New Beerbhoom (1) Mad. 201 Coal Company vs Boloram Mahata (1) was relied upon. Courts Trotter, C. J., was also of the opinion that the covenant was not too vague to be enforced. But this again was a case not of interfering with the determination of a valuer but of specific performance of a contract of renewal and it was held that by taking evidence even a vague and indefinite covenant relating to renewal could be made definite. In my opinion, therefore, the Court cannot go into the question of correctness or otherwise of the determination of the lease and the appeal should therefore be dismissed with costs. By COURT. In view of the opinion of the majority, the appeals are allowed, setting aside the judgment and decree of the High Court dated September 30, 1952. No order as to costs of the hearing in this Court.

In 1909, for the purpose of residential accommodation, plots of land were given on lease by the Government to the appellants and others for which a premium of Rs. 350 and an annual rent of Rs. 3 8 0 for each plot had to be paid. Clause III of the deed of lease in each case provided: " And the lessor does further covenant that lie will at the end of the term Of 30 years hereby granted and so on from time to time thereafter at the end of each successive further term of years as shall be granted at the request of the lessee execute to him a renewed lease of the land hereby demised for the term Of 30 years: Provided that the rent of the land hereby demised shall be subject to such fair and equitable enhancement as the lessor shall determine on the grant of every renewal: Provided also that every such renewed lease of the land shall contain such of the covenants, provisions and conditions in these presents contained as shall be applicable and shall always contain a covenant for further renewal of the lease." 181 By the year 1939 the first 30 years ' period of some of the leases came to an end, and the Government sought to enhance the annual rent from Rs. 3 8 0 to Rs. 21 14 0 per plot and also to insert some new terms in the renewed deeds of lease. The appellants brought a suit inter alia for a declaration that the enhancement proposed was not, fair and equitable within the meaning of Clause III of the deed of lease, that the fair and equitable rent should be Rs. 7 per plot and that if the court was of the opinion that Rs. 7 was not a fair and equitable rent then it should fix such sum as it considered fair and equitable. The respondent pleaded that such a suit was incompetent. The question was whether the civil court had jurisdiction to enquire whether the enhancement of the rent determined by the lessor was fair and equitable within the meaning of cl. III of the deed of lease, and whether, in any case, the lease was void for un certainty. Held, (per jafer Imam and section K. Das, jj.), that the lease is not void for uncertainty; that the expression " fair and equitable " in the clause in question means fair and equitable in fact, and not what the lessor subjectively considered to be fair and equitable; and, that reading the clause as a whole and giving effect to all the words used therein, the meaning is that the lessor must first determine what it considers to be fair and equitable enhancement, but, if in fact it is not so, it is open to the lessee to ask the court to determine what is fair and equitable enhancement. Accordingly, the suit was maintainable. The rule laid down in Gourlay vs The Duke of Somerset, (18I5) ; ; , held applicable. The New Beerbhom Coal Company Limited V. Boloram Mahata and others, (1880) L.R. 7 I.A. 107 and Secretary of State for India in Council vs Volkart Brothers, Mad. 595, relied on. Collier vs Mason, ; ; and Tekchand Kapurchand vs Mt. Birzabai, A.I.R. 1942, Nag. 119, distinguished. Per Kapur, J. The correct interpretation to be put on cl. III of the deed of lease is that the lessor was given the authority to determine the enhancement of rent but such enhancement was to be fair and equitable and what would be fair and equitable in any particular case was also to be determined by the lessor. The rule applicable to the present case is that relating to valuation or fixation of prices that where the valuation is fixed by a valuer the court will hold it conclusive in the absence of fraud or mistake or misconduct and the court will not enter into the propriety of the valuation made or substitute its own valuation in place of that determined by the valuer because that will not be an execution of the contract of the parties but making a contract for them. Case law discussed.

Civil Appeal No. 303 of 1956. Appeal from the judgment and decree dated February 7, 1955, of the Calcutta High Court in Appeal from Appellate Order No. 102 of 1953, arising out of the judgment and decree dated August 6, 1953, of the Subordinate Judge, Second Court of Zillah, Howrah, in Misc. Appeal No. 231 of 1953. G., section Pathak, P. K. Chakravarty and B. C. Misra,for the appellant. B. Sen, section N. Mukherjee and P. K. Bose, for the respondent. April 20. The Judgment of the Court was delivered by DAS GUPTA, J. In Calcutta and its suburb Howrah there have existed for many years precarious tenancies popularly known as Thika tenancies, the characteristic feature of which is that the tenant 580 takes lease of the land only and erects structures thereon at his own expense; where there is already a structure on the land the tenant acquires these structures by purchase or gift but takes the land on which the structure stood in tenancy. With the influx of population into these areas that followed the partition of India the position of these Thika tenants became even more insecure than before. With the sharply rising demand for accommodation the landlords found it possible and profitable to put pressure on these Thika tenants to increase their rents or to evict them so that other tenants who would give more rents and high premiums might be brought in. With a view to give some protection to these Thika tenants against eviction and in certain other matters, the West Bengal Legislature enacted in 1949 an Act called the Calcutta Thika Tenancy Act (hereinafter referred to as " the Act "). Some features of the protection afforded by this legislation which deserve mention are that ejectment could be had only on one or more of the six grounds specified in section 3 of the Act; special provisions as regards notice for ejectment were made in section 4; in the same section provision was also made about payment of compensation as a necessary pre requisite for ejectment in certain cases. Section 6 provides that no orders for ejectment on the grounds of arrears of rent shall be executed if the amount of arrears together with costs of proceedings and damages that may be allowed were deposited within 30 days from the date of the order. Not content with giving such protection only in suits and proceedings for eviction that might be instituted by the landlord in future the Legislature in the 29th section of this Act provided that even in suits and proceedings which had already been instituted and were pending for disposal on the, date when the new law came into force, this now law will be applicable, except the provisions as regards notice in section 4. In the 28th section of the Act the Legislature went further and provided that even where the decree or order for recovery of possession had been obtained by the landlord against a Thika tenant but possession had not been actually recovered, courts will have the power to re open the matter and 581 if the decree or order is not in conformity with the beneficent provisions of the Act either to rescind the decree or order altogether or to vary it to bring it into such conformity. Section 28 with which we are specially concerned in this appeal is in these words: " Where any decree or order for the recovery of possession of any holding from a Thika tenant has been made before the date of commencement of this Act but the possession of such holding has not been recovered from the Thika tenant by the execution of such decree or order, the court by which the decree or order was made may, if it is of opinion that the decree or order is not in conformity with any provision of this Act other than sub section (1) of section 5 or section 27, rescind or vary the decree or order in such manner as the Court may think fit for the purpose of giving effect to such provision and a decree or order so varied by any Court shall be transferred to such Court to the Controller for execution under this Act as if it were an order made under and in accordance with the provisions of this Act. " The new law however failed to achieve its object for some years as the Courts interpreted the definition of Thika tenant in the Act in such a manner that speaking generally no tenant was able to establish its requirement. To remedy this the Governor of West Bengal enacted on October 21, 1952, an Ordinance by which the definition of Thika tenant was revised and a few other amendments of the Act were made. The special protection given under sections 28 and 29 of the Act to tenants against whom decrees or orders had been obtained or against whom cases were pending was however kept intact. The Ordinance by its section 5 extended such special protection also to tenants whose cases were pending before a court on the date of the commencement of the Ordinance and those against whom decrees or orders had been made after the date of the Act and before the date of the Ordinance but possession had not been obtained. In 1953 the West Bengal Legislature enacted the Calcutta Thika Tenancy Amendment Act, 1953, revising permanently the definition of Thika tenant and making some, other 76 582 and 29 of the Original Act were omitted. The principal question before us in this appeal is whether the provisions of section 28 could be applied by a Court in a case where an application had been made by a tenant for relief under that section and such application was pending for disposal on the date the omission became effective, by reason of the Amend ment Act coming into force. The decree for possession with which we are concerned in this case was made as far back as August 8, 1941, by a Munsif in Howrah. The tenant 's appeal was dismissed on April 9, 1943. On February 28, 1949, on which date the Calcutta Thika Tenancy Act of 1949 came into force, proceedings for the execution of the decree of ejectment were pending in the Munsif 's Court. On March 19, 1952, when these proceedings were still pending the tenant made an application to the Court which had passed the decree praying that the decree may be rescinded or varied in accordance with the provisions of section 28 of the Act. This application came up for hearing before the Munsif on July 7, 1953. In the meantime the Amendment Act of 1953 had come into force and the omission of section 28 of the Act had become effective. The learned Munsif held that section 28 of the Act being no longer in force he had no power to give the tenant any relief in accordance with the provisions thereof. In that view he dismissed the application. The tenant 's appeal to the District Judge, Howrah, having been rejected, he preferred a second appeal to the High Court. The learned judges of the High Court who heard the appeal agreed with the courts below on a construction of section 1(2) of the Amendment Act that section 28 was not applicable to the proceedings commenced by the tenant by his application for relief and dismissed the Against that decision the tenant has filed the present appeal before us on a certificate of fitness granted by the High Court. The decision of the question raised in this appeal, viz., whether this tenant who had applied for relief 583 under section 28 when that section was in force is entitled to have his application disposed of in accordance with the provisions of that section though it remained undisposed of on the date the Amendment Act came into force, depends on the interpretation of section 1, sub section (2) of the Amendment Act. This section is in these words: "It shall come into force immediately on the Calcutta Thika Tenancy (Amendment) Ordinance, 1952, ceasing to operate: Provided that the provisions of the Calcutta Thika Tenancy Act, 1949, as amended by this Act, shall, subject to the provisions of section 9, also apply and be deemed to have always applied to all suits, appeals and proceedings pending (a) before any Court, or (b) before the Controller or (c) before a person deciding an appeal under section 27 of the said Act, on the date of the commencement of the Calcutta Thika Tenancy (Amendment) Ordinance, 1952. " It is obvious and indeed undisputed that but for any difficulty that may be placed in the tenant 's way by these provisions the tenant would in view of the provisions of section 8 of the Bengal General Clauses Act be entitled to have his application for relief under section 28 of the original Act disposed of as if section 28 still continued. If however a contrary intention has been expressed by the Legislature in its amending Act the contrary intention would prevail. What we have to decide is whether in section 1, sub section (2), the Legislature has clearly expressed an intention that no relief under section 28 of the original Act shall be given in cases like these. The principles that have to be applied for interpretation of statutory provisions of this nature are well established. The first of these is that statutory pro. visions creating substantive rights or taking away substantive rights are ordinarily prospective; they are retrospective only if by express words or by necessary implication the Legislature has made them retrospective; and the retrospective operation will be limited 584 only to the extent to which it has been so made by express words, or by necessary implication. The second rule is that the intention of the Legislature has always to be gathered from the words used by it, giving to ,the words their plain, normal, grammatical meaning. The third rule is that if in any legislation, the general object of which is to benefit a particular class of persons, any provision is ambiguous so that it is capable of two meanings, one which would preserve the benefit and another which would take it away, the meaning which preserves it should be adopted. The fourth rule is that if the strict grammatical interpretation gives rise to an absurdity or inconsistency such interpretation should be discarded and an interpretation which will give effect to the purpose the Legislature may reasonably be considered to have had will be put on the words, if necessary, even by modification of the language used. In applying these principles to the interpretation of section 1(2), it is necessary first to consider a contention that has been raised by Mr. Pathak on behalf of the appellant that the phrase " as amended by this Act " qualifies the word " provisions ". If this be correct, the meaning of the proviso will be that only those provisions of the Act which have been amended by the Act shall apply and be deemed to have applied always to pending proceedings. This will become meaningless, the argument continues, if the word " amended " is interpreted to include omissions. For it makes no sense to say that a provision which has been omitted shall apply. So, it is argued, the word " amended " should be interpreted to mean only amendment by additions or alterations and not an amendment by omissions. The result of the proviso, the appellant 's counsel contends, is to make applicable to pendinn proceedings the altered provisions in place of old provisions but to say nothing as regards such provisions which have been omitted. We are unable to see how it is possible, unless rules of grammar are totally disregarded to read the words as amended by this Act " as to qualify the word provisions. " If ordinary grammatical rules are applied there is no escape from the conclusion that 585 the adjectival phrase " as amended by this Act " qualifies the proximate substantive, viz., the Calcutta, Thika Tenancy Act, 1949. There is no escape from the conclusion therefore that what the Legislature was saying by this was nothing more or less than that the provisions of the amended Thika Tenancy Act shall apply. Mr. Pathak argued that if that was what the Legislature wanted to say, it was reasonable to expect it to use the words " The Thika Tenancy Act, 1949, as amended by this Act," in the proviso; and there was no reason for the use of the words " the provisions of the Thika Tenancy Act ". We are not impressed by this argument. The Legislature might certainly have used the language as suggested by the learned counsel, and as be says, that would have meant an economy of words. But where there are two ways of saying the same thing it is useless to speculate why one way was adopted in preference to the other. It is not unusual to find draftsmen using the words " provisions of the Act " in many statutes where the words " the Act " would have been adequate; and it would be unreason. able to try to read too much in the use of the words " the provisions of the Thika Tenancy Act " instead of " The Thika Tenancy Act " in the proviso. Even so the learned counsel contends, there is no reason to read " amendments " ' so as to include omissions. The word " amendment ", he has submitted is sometimes used in the restricted sense of "addition" or " a alteration" as distinct from omission; and he asks us to read the word " amended " in the proviso, to mean only alterations or additions in the statute, and as not including omissions. It is unnecessary for us in the present case to express any opinion on the general question whether in certain context the word " amended " should be interpreted so as to exclude omissions. What is clear however is that the present is not one of such cases. The amendment Act itself was being called the Calcutta Thika Tenancy (Amendment) Act, 1953. The preamble says " whereas it is expedient to amend the Calcutta Thika Tenancy Act, 1949 ". Section 2 of this amendment Act substitutes a new clause for the old el. (5) of section 2; section 3 adds some words to el. (1) and section 3(b) omits some words in cl. (4) and 586 again adds some words to cl. (5) of section 3 of the Act. Section 4 omits certain words of sub section (1) of section 5. Section 5 substitutes some new words in place of certain words in the original sub sections (1) and (2) of section 10 of the Act. Section 6 omits one section of the original Act, viz., section 1 1 ; section 7 inserts some words in the original section 27 ; section 8 omits two sections, viz., sections 28 and 29 ; the last section, section 9 provides for the continuance of proceedings under section 5, sub section (2) of the Amendment Ordinance if sub sections (2), (3) and (4) thereof were in force. Reading the Amendment Act as a whole there can be no doubt that the Legislature in. using the word " amended " in the proviso to sub section (2) of section 1 sought to make no distinction between amendment by additions, alterations or omissions. It is clear when certain words or sections have been added, altered or omitted by the Amendment Act, the Calcutta Thika Tenancy Act, 1949, took on a new shape with some added features, some altered features and minus those features which have been omitted. What the proviso says is that the Calcutta Thika Tenancy Act in its new shape shall apply and shall be always deemed to have applied to proceedings pending before a Court, a Controller or an appellate authority under section 27 on the date of the commencement of the Thika Tenancy Amendment Ordinance, 1952. As the application which the appellant had made for relief under section 28 of the Tenancy Act was pending for disposal before the Munsif 's court on October 21, 1952, the date of the commencement of the Calcutta Thika Tenancy (Amendment) Ordinance, 1952, the position which cannot be escaped is that the Thika Tenancy Act of 1949 without the provisions as regards relief to tenants against whom decrees had been obtained on the date of the commencement of the original Act but possession had not been actually recovered would be applied to pending applications. In other words, though the application originally was for relief under section 28 no such relief could be granted, the section having ceased to exist retrospectively. It is helpful to remember in this connection the fact that while section 28 of the original Act was giving certain tenants a right to relief which they would have had if 587 the beneficent provisions of the new Act were available to them during the disposal of the suits the manner in which the right is given is by conferring on courts a power to rescind or vary decrees or orders to bring them into conformity with the provisions of the, Act. As soon as section 28 was omitted the courts ceased to have any such power. The effect of the proviso in its strict grammatical meaning is that the courts shall be deemed never to have had this power in respect of applications which were still pending. The inevitable result is that the Court having been deprived of the power to give relief even in respect of applications made at a time when the power could have been exercised, was bound to dismiss the applications. There can be no doubt that this is an unfortunate result. It may very well be true that if as a result of the Amendment Act, many tenants are deprived of the benefit of section 28, this will be mainly because of the Court 's inability to dispose of the applications before the Amendment Act came into force and not for any default on their part. Mr. Pathak has repeatedly stressed this and has asked us to construe section 1 (2) in a way that would retain the benefits of section 28 to tenants whose applications remained to be disposed of on the crucial date. He has in this connection emphasized the fact that the Amendment Act itself is a piece of beneficent legislation and that the amendments made by sections 2,3, 5 and 9 all extend to tenants benefits to which they would not have been entitled under the original Act. This extension of further benefits to tenants, he says, is a guiding principle of the amending legislation. He points out also that except as regards such pending applications under section 28 the effect of section 1(2) of the amending Act will be to give the extended benefits to tenants in pending, proceedings. It will be incongruous, he argued, that while all tenants stand to benefit by the amending legislation only those whose applications under section 28 have, for no fault of theirs, remained pending would be deprived of the benefit they would have had but for the omission in the amending Act, of section 28. It is difficult not to feel sympathy for these tenants. As we have already mentioned it is a sound 588 rule of interpretation of beneficent legislation that in cases of ambiguity the construction which advances the beneficent purpose should be accepted in preference to the one which defeats that purpose. In their anxiety to advance the beneficent purpose of legislation courts must not however yield to the temptation of seeking ambiguity when there is none. On a careful consideration of the language used by the Legislature in section 1(2) we are unable to see that there is any such ambiguity. The language used here has one meaning only and that is that the Act in its new shape with the added benevolent provisions, and minus the former benevolent provisions in section 28 has to be applied to all pending proceedings, including execution proceedings and the proceedings pending under section 28 of the original Act on October 21, 1952. There is therefore no scope for applying in this case the principles of interpretation which are applicable in cases of ambiguity. Nor is it possible to agree with Mr. Pathak 's last contention that the strict grammatical interpretation would result in an absurdity or inconsistency. It is urged that it is unthinkable that the Legislature when undertaking a legislation to help tenants would do anything to deprive them of the existing benefits under section 28. It is in our opinion useless to speculate as to why the Legislature thought it right to take away the benefit. One reason that suggests itself is that the Legislature might have thought that where landlords had already been deprived of the fruits of the decrees they had obtained for a long period from the date when the original Act came into force up to the time when the Amendment Act came into force, it would not be right to continue that deprivation. But whatever the reasons may be the fact remains that the Legislature has used words which in their normal grammatical meaning show that they intentionally deprived this class of tenants, viz., those whose applications under section 28 of the Act were undisposed of on the date the Ordinance came into force, and remained undisposed of, even when the Amendment Act came into force. We have therefore come to the conclusion that the view taken by the High Court in this case that the 589 effect of section 1(2) of the Calcutta Thika Tenancy (Amendment) Act, 1953, is that all pending applications under section 28 of the original Act must be dismissed is correct. The contrary view taken by the same High Court in Deorajan Debi vs Satyadhan Ghosal (1) and other cases is not correct. Before we part with this appeal, however, it is our duty to refer to one incidental matter. We have noticed with some regret that when the earlier decision of two judges of the same High Court in Deorajan 's Case was cited before the learned judges who heard the present appeal they took on themselves to say that the previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring the question to a larger Bench. Judicial decorum no less than legal propriety forms the basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if judges of co ordinate jurisdiction in a High Court start overruling one another 's decisions. If one Division Bench of a High Court is unable to distinguish a previous decision of another Division Bench, and holding the view that the earlier decision is wrong, itself gives effect to that view the result would be utter confusion. The position would be equally bad where a Judge sitting singly in the High Court is of opinion that the previous decision of another single Judge on a question of law is wrong and gives effect to that view instead of referring the matter to a larger Bench. In such a case lawyers would not know how to advise their clients and all courts subordinate to the High Court would find themselves in an embarrassing position of having to choose between dissentient judgments of their own High Court. As far as we are aware it is the uniform practice in all the High Courts in India that if one Division Bench differs from an earlier view on a question of law of another Division Bench, a reference is made to a larger Bench. In the Calcutta High Court a rule to this effect has been in existence since 1867. It is unfortunate (1) 77 590 that the attention of the learned judges was not drawn in the present case to that rule. But quite apart from any rule, considerations of judicial propriety and decorum ought never to be ignored by courts in such matters. On the merits, as we have found that the view of law taken by the High Court in this case is correct, the appeal is dismissed. In view however of the uncertainty that was in the law as regards the applicability of section 28 to proceedings pending on the commencement of the Thika Tenancy Ordinance, 1952, we order that the parties will bear their own costs. Appeal dismissed.

With a view to give protection to Thika tenants against eviction and in certain other matters, the West Bengal Legislature enacted the Calcutta Thika Tenancy Act, 1949. That Act was amended by the Calcutta Thika Tenancy Amendment Act, 1953, which omitted section 28 of the Act. The question for decision in the appeal was whether the appellant against whom proceedings for execution of a decree for ejectment was pending, who had applied for relief under section 28 when that section was in force, was entitled to have his application disposed of in accordance with the provisions of section 28, which had ceased to exist retrospectively though it remained undisposed of on the date the Amendment Act came into force: Held, that section 1, sub section (2) of the Calcutta Thika Tenancy Act 1953, clearly intended that no relief under section 28 of the original 579 Act should be given in cases pending for disposal on the date the amendment became effective and section 28 ceased to exist retrospectively. The principles applicable to interpretation of statutes are four fold in nature, (1)such statutory provisions as create or take away substantive rights are ordinarily prospective ; they can be retrospective if made so expressly or by necessary implication and the retrospective operation must be limited only to the extent to which it has been so made either expressly or by necessary implication, (2)the intention of the legislature has to be gathered from the words used by it, giving them their plain, normal, grammatical meaning, (3)if any provision of a legislation the purpose of which is to benefit a particular class of persons is ambiguous so that it is capable of two meanings the meaning which preserves the benefit should be adopted. , (4)If the strict grammatical interpretation gives rise to an absurdity or inconsistency, such interpretation should be discarded and an interpretation which will give effect to the purpose will be put on the words, if necessary, even by modification of the language used: Held, also, that judicial decorum ought never to be ignored. Where one Division Bench or a judge of a High Court is unable to distinguish a previous decision of another Division Bench or another Single judge and holds the view that the earlier decision was wrong, the matter should be referred to a larger Bench to avoid utter confusion. Deorajan Devi vs Satyadhan Ghosal, , overruled.

Civil Appeal No. 2582 of 1969. From the Judgment and Decree dated 12 12 1961 of the Patna High Court in Appeal from Original Decree No. 50/57. B. P. Singh for the Appellant. D. Gobardhan for Respondents 1 2. U. P. Singh for Respondent No. 3. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The only question for consideration in this appeal is whether the plaint schedule properties are properties in respect of which there is a trust of a public or religious nature so as to attract the provisions of Bihar Hindu Religious Trusts Act (Act I of 1951). The plaintiff appellant filed the suit out of which the appeal arises for a declaration that the properties were his personal properties and that there was no trust of a religious or public nature so as to attract the provisions of the Bihar Act I of 1951. His case, as set out in the plaint, was that one Gurdyal Singh constructed a temple on his own land in the village of Dumri and installed the deities of Ramji, Lakshmanji and Sitaji in the temple. He used to perform puja and raj bhog till his death. The public had no concern with the idols. After his death he was succeeded by his son Gulab Singh who became a bairagi assuming the name of Gulab Das. Apart from the properties left by Gurdyal Singh, Gulab Das also acquired other properties. On his death he was succeeded by his Chela Brahmdas who 1127 in turn was succeeded by his Chela Dwarika Das. Each succeeding Mahant was succeeded by his Chela, the present Mahant being the plaintiff appellant. Properties were acquired by the respective Mahants in their own individual names and were always treated as their personal properties. Brahmdas constructed a temple in the village of Maudehin where also he installed the deities of Ramji, Lakshmanji and Sitaji and used to perform puja and raj bhog. The temple and the properties were the private properties of the Mahant and the public did not have any interest or right in them. The suit was contested by the Bihar State Board of Religious Trusts and others who pleaded that the temples and the properties were not the private properties of the Mahant and that they belonged to a Hindu Religious Trusts to which the provisions of the Bihar Religious Trusts Act were applicable. The suit was dismissed by the Additional Sub Judge of Muzaffarpur and the decree of the Trial Court was confirmed by the High Court of Patna. Shri B. P. Singh, learned counsel for the appellant plaintiff accepted the several findings arrived at by the High Court on various evidential matters and argued that even on those findings it could not be held that the properties belonged to a Trust of a religious or public nature. He invited our attention to the decision of this Court in Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,(1) and submitted that on almost identical facts it had been held in that case that there was no trust for religious or public purposes. In Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,(1) the facts found by the High Court as summarized by this Court were: "(1) that the temple was constructed by Gaibi Ramdasji and it was he who installed the deities therein; (2) that he was succeeded to the mahantship by his chela, and thereafter succession to the mahantship had been from guru to chela; (3) that the appointment of a successor has been all through out from guru to chela, the reigning mahant appointing or nominating his successor from amongst his chelas and the members of the public have had at no time any voice in the selection or nomination; (4) that the properties have always been recorded in the names of the mahants as proprietors and not in the name of the deities in the D registers, Khewats and Khatians; 1128 (5) that the mahants have been in possession and management of the asthal and the properties all throughout; (6) that the mahants acquired properties from time to time in their own names as proprietors and never in the names of the deities or the asthal, without any objection at any time from any one and dealt with some of them through deeds of sales, mortgages, leases etc." Before this Court reliance was placed on the following circumstances to prove that the properties were impressed with a trust for religious or public purposes: "(1) the fact that the mahants were vaishnav bairagis who were life long celibates; (2) that sadhus and others were given food and shelter when they visited the temple; (3) that festivals and other important Hindu dates used to be celebrated; (4) that the members of the public came to the temple for darshan without any hindrance and as of right; (5) that in the deeds and wills, whereby reigning mahants appointed or nominated their successors, the properties were described as appertaining to the asthal, and that the temple being the dominant part of the asthal and maintained for the worship and puja of the presiding deities installed therein, the properties belonged to the temple, and therefore, they were properties of a trust for religious and charitable character. (6) The idols were installed partly on a pedestal and the temple was constructed on grounds separate from the residential quarters of the Mahant". It was held by this Court that everyone of the circumstances was equally consistent with the character of the trust being public or private and that the onus which was on the Bihar State Religious Trust Board to establish the public nature of the trust had not been discharged. In view of the submissions of the learned counsel for the appellant, it is necessary to refer to the findings of the High Court in the present case. The High Court found that there was no evidence to show who the founder of the Mutt was and who built the temples. 1129 It was also found that there was no evidence to show that the temple in the village of Dumri was constructed on the land belonging to Gurdyal Singh or that the temple in the village of Maudah was constructed on land belonging to Brahmdas. It was found that several properties were acquired by various Mahants in their names instead of in the names of the idols but the acquisition of properties was for the purposes of the Asthal or Mutt. It was also found that from time to time gifts of land had been made by the villagers of Dumri. It was found that the Mahants had executed Kebalas for effecting repairs of the temples and had similarly executed deeds of mortgage. It was found that the people of the villages of Dumri and Maudah used to visit the temple without any let or hinderance and that the Mutt was so located as to suit the convenience of the villagers of both Dumri and Harpur. It was situated on the boundary of the two villages and was on a platform at a certain height, open on all sides with plenty of space around it. The temple in the Mutt had three doors with space for visitors. It was noticed by the High Court that the lands were held rent free in consideration of religious services. It is true as submitted by the learned counsel, many of the circumstances are neutral. The fact that members of the public were permitted to go to the temple without any hindrance might not be a circumstance which by itself would conclusively establish that the temple was a public temple in the absence of an element of right in the user of the temple by the public. Conversely the free use of the properties of the temple by the Mahant at a time when he was the sole manager of the temple and its properties would not necessarily lead to the inference that the temple was not a public temple. Patently there can be no simple or conclusive factual tests to determine the character of a trust. The totality of the circumstances and their effect must be considered. Here not only do we find that members of the public were allowed free access to the temple, they were evincing much greater interest in the institution as evidenced by the circumstances that several villagers had made gifts of land to it, a circumstance which would ordinarily be consistent with the nature of the institution being public and not private. Again, as pointed out by Venkatarama Ayyar, J., Deoki Nandan vs Murlidhar,(1) the situation of the temple would be an important circumstance in determining whether it was private or public. The High Court has pointed out that the temple was constructed outside the village on open land between the villages of Dumri and Harpur so as to be convenient to the villagers of both the villages. It was constructed on a high platform and was open on all sides with 1130 plenty or space around it to accommodate large number of people. Obviously the temple was located and constructed so as to attract and accommodate large number of villagers from the two villages. The donation of land by members of the public to the institution and the location of the temple at a place freely accessable and convenient to the public were circumstances which were absent in Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das (supra). We are satisfied that, in the circumstances the High Court was right in holding that there was a trust of a public nature. The appeal is, therefore, dismissed with costs. N.V.K. Appeal dismissed.

The appellant (plaintiff) the present Mahant, filed a suit for a declaration that the plaint schedule properties were his personal properties and that there was no trust of a religious or public nature so as to attract the provisions of the Bihar Hindu Religious Trust Act 1951. It was contended in the suit that one G constructed a temple on his own land in the village, installed deities, performed puja and raj bhog till his death, that the public had no concern with the idols and that after his death he was succeeded by his son who became a bairagi. Apart from the properties left by him, his son also acquired other properties. On the son 's death he was succeeded by his Chela who became a Mahant. Each succeeding Mahant was succeeded by his Chela. Properties were acquired by the respective Mahants in their own name and treated as their personal properties. One of the Mahants constructed a temple in a nearby village where he installed deities and performed puja and raj bhog. It was claimed that the temple and the properties were the private properties of the Mahant and the public did not have any interest or right in them. The suit was contested by respondent No. 1, contending that the temples and the properties were not the private properties of the Mahant and that they belonged to a Hindu Religious Trust to which the provisions of the Bihar Hindu Religious Trusts Act, 1951 were applicable. The Trial Court dismissed the suit and its decree was confirmed by the High Court. In the appeal to this Court, the question was whether the plaint schedule properties were properties in respect of which there was a trust of a public or religious nature so as to attract the provisions of the Bihar Hindu Religious Trusts Act, 1951. ^ HELD: 1. The High Court was right in holding that there was a trust of a public nature. [1130B] 2. The fact that members of the public were permitted to go to the temple without any hinderance might not be a circumstance which by itself would conclusively establish that the temple was a public temple in the absence of an element of right in the user of the temple by the public. Conversely the free use of the properties of the temple by the Mahant at a time when he was the sole manager of the temple and its properties would not necessarily lead to the inference that the temple was not a public temple. [1129E] 3. There can be no simple or conclusive factual test to determine the character of a trust. The totality of the circumstances and their effect must be considered. [1129F] In the instant case not only were the members of the public allowed free access to the temple, but they were evincing much greater interest in the insti 1126 tution as several villagers had made gifts of land to it, a circumstance which would ordinarily be consistent with the nature of the institution being public and not private. [1129F] 4. The situation of the temple would be an important circumstance in determining whether it was private or public. [1129G] Deoki Nandan vs Murlidhar ; referred to. In the instant case the High Court had pointed out that the temple was constructed outside the village on open land between two villages so as to be convenient to the villagers of both the villages. It was constructed on a high platform and was open on all sides with plenty of space around it, so as to attract and accommodate large number of villagers from two villages. This indicated that the trust was of a public nature. [1129H 1130A] 5. The donation of land by members of the public to the institution and location of the temple at a place freely accessible and convenient to the public were circumstances which indicated that the trust was of a public nature. [1130B] Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,[1971] 3 S.C.R. 680, distinguished.

: Special Leave Petition (Crl.) No. 2856 of 1979. From the Judgment and Order dated 6 8 1979 of the Madhya Pradesh High Court in Crl. Revision No. 392/76. Sobhag Mal Jain and section K. Jain for the Petitioner. C. section Chhazed, Miss Manisha Gupta and M. section Gupta for Respondents 1 5. section K. Gambhir for the State. The Order of the Court was delivered by KRISHNA IYER, J. `It is procedural rules ', as this appeal proves, `which infuse life into substantive rights, which activate them to make them effective '. Here, before us, is what looks like a pedestrian quasi criminal litigation under section 133 Cr. P.C., where the Ratlam Municipality the appellant challenges the sense and soundness of the High Court 's affirmation of the trial court 's order directing the construction of drainage facilities and the like, which has spiralled up to this Court. The truth is that a few profound issues of processual jurisprudence of great strategic significance to our legal system face us and we must zero in on them as they involve problems of access to justice for the people beyond the blinkered rules of `standing ' of British Indian vintage. If the centre of gravity of justice is to shift, as the Preamble to the Constitution mandates, from the traditional individualism of locus standi to the community orientation of public interest litigation, these issues must be considered. In that sense, the case before us between the Ratlam Municipality and the citizens of 100 a ward, is a path finder in the field of people 's involvement in the justicing process, sans which as Prof. Sikes points out,(1) the system may `crumble under the burden of its own insensitivity '. The key question we have to answer is whether by affirmative action a court can compel a statutory body to carry out its duty to the community by constructing sanitation facilities at great cost and on a time bound basis. At issue is the coming of age of that branch of public law bearing on community actions and the court 's power to force public bodies under public duties to implement specific plans in response to public grievances. The circumstances of the case are typical and overflow the particular municipality and the solutions to the key questions emerging from the matrix of facts are capable of universal application, especially in the Third World humanscape of silent subjection of groups of people to squalor and of callous public bodies habituated to deleterious inaction. The Ratlam municipal town, like many Indian urban centres, is populous with human and sub human species, is punctuated with affluence and indigence in contrasting co existence, and keeps public sanitation a low priority item. what with cesspools and filth menacing public health. Ward No. 12, New Road, Ratlam town is an area where prosperity and poverty live as strange bedfellows. The rich have bungalows and toilets, the poor live on pavements and litter the street with human excreta because they use roadsides as latrines in the absence of public facilities. And the city fathers being too busy with other issues to bother about the human condition, cesspools and stinks, dirtied the place beyond endurance which made the well to do citizens protest, but the crying demand for basic sanitation and public drains fell on deaf ears. Another contributory cause to the insufferable situation was the discharge from the Alcohol Plant of malodorous fluids into the public street. In this lawless locale, mosquitoes found a stagnant stream of stench so hospitable to breeding and flourishing, with no municipal agent disturbing their stinging music at human expense. The local denizens, driven by desperation, at long last, decided to use the law and call the bluff of the municipal body 's bovine indifference to its basic obligations under section 123 of the M. P. Municipalities Act, 1961 (the Act, for short). That provision casts a mandate: 123. Duties of Council. (1) In addition to the duties imposed upon it by or under this Act or any other enactment for the time being in force, it shall be the duty of a Council to 101 undertake and make reasonable and adequate provision for the following matters within the limits of the Municipality, namely: XX XX XX (b) cleansing public streets, places and sewers, and all places, not being private property, which are open to the enjoyment of the public whether such places are vested in the Council or not; removing noxious vegetation, and abating all public nuisances: (c) disposing of night soil and rubbish and preparation of compost manure from night soil and rubbish. And yet the municipality was obvious to this obligation towards human well being and was directly guilty of breach of duty and public nuisance and active neglect. The Sub Divisional Magistrate, Ratlam, was moved to take action under section 133 Cr. P.C., to abate the nuisance by ordering the municipality to construct drain pipes with flow of water to wash the filth and stop the stench. The Magistrate found the facts proved, made the direction sought and scared by the prospect of prosecution under section 188 I.P.C., for violation of the order under section 133 Cr. P.C., the municipality rushed from court to court till, at last, years after, it reached this Court as the last refuge of lost causes. Had the municipal council and its executive officers spent half this litigative zeal on cleaning up the street and constructing the drains by rousing the people 's sramdan resources and laying out the city 's limited financial resources, the people 's needs might have been largely met long ago. But litigation with other 's funds is an intoxicant, while public service for common benefit is an inspiration; and, in a competition between the two, the former overpowers the latter. Not where a militant people 's will takes over people 's welfare institutions, energises the common human numbers, canalises their community consciousness, forbids the offending factories from polluting the environment, forces the affluent to contribute wealth and the indigent their work and thus transforms the area into a healthy locality vibrant with popular participation and vigilance, not neglected ghettoes noisy with squabbles among the slimy slum dwellers nor with electoral 'sound and fury signifying nothing. ' The Magistrate, whose activist application of section 133 Cr.P.C., for the larger purpose of making the Ratlam municipal body to do its duty and abate the nuisance by affirmative action, has our appreciation. He has summed up the concrete facts which may be usefully quoted in portions: "New Road, Ratlam, is a very important road and so many prosperous and educated persons are living on this Road. On 102 the southern side of this Road some houses are situated and behind these houses and attached to the College boundary, the Municipality has constructed a road and this new Road touches the Government College and its boundary. Just in between the said area a dirty Nala is flowing which is just in the middle of the main road i.e. New Road. In this stream (nala) many a time dirty and filthy water of Alcohol Plant having chemical and obnoxious smell, is also released for which the people of that locality and general public have to face most obnoxious smell. This Nala also produces filth which causes a bulk of mosquitoes breeding. On this very southern side of the said road a few days back municipality has also constructed a drain but it has (?) constructed it completely but left the construction in between and in some of the parts the drain has not at all been constructed because of this the dirty water of half constructed drain and septic tank is flowing on the open land of applicants, where due to insanitation and due to non removing the obstructed earth the water is accumulated in the pits and it also creates dirt and bad smell and produces mosquitoes in large quantities. This water also goes to nearby houses and causes harm to them. For this very reason the applicants and the other people of that locality are unable to live and take rest in their respective houses. This is also injurious to health". There are more dimensions to the environmental pollution which the magistrate points out: "A large area of this locality is having slums where no facility of lavatories is supplied by the municipality. Many such people live in these slums who relieve their lateral dirt on the bank of drain or on the adjacent land. This way an open latrine is created by these people. This creates heavy dirt and mosquitoes. The drains constructed in other part of this Mohalla are also not proper it does not flow the water properly and it creates the water obnoxious. The Malaria Department of the State of M.P. also pays no attention in this direction. The non applicants have not managed the drains, Nallahs and Naliyan properly and due to incomplete construction the non applicants have left no outlet for the rainy water. Owing to above reasons the water is accumulated on the main road, it passes through living houses, sometimes snakes and scorpions come out and this obstruct the people to pass through this road. This also causes financial loss to the people of this area. The road constructed by Nagarpalika is on a high level and due to this, this year more 103 water entered the houses of this locality and it caused this year more harm and loss to the houses also. This way all works done by the non applicants i.e. construction of drain, canal and road come within the purview of public nuisance. The non applicants have given no response to the difficulties of the applicants, and non applicants are careless in their duties towards the public, for which without any reason the applicants are facing the intolerable nuisance. In this relation the people of this locality submitted their returns, notices and given their personal appearance also to the non applicants but the non applicants are shirking from their responsibilities and try to avoid their duty by showing other one responsible for the same, whereas all the non applicants are responsible for the public nuisance. " Litigation is traumatic and so the local people asked first for municipal remedies failing which they moved for magisterial remedies: "At the last the applicants requested to remove all the nuisance stated in their main application and they also requested that under mentioned works must be done by the non applicants and for which suitable orders may be issued forthwith: 1. The drains constructed by Municipality are mismanaged and incomplete, they should be managed and be completed and flow of water in the drains should be made so that the water may pass through the drain without obstruction. The big pits and earthen drains which are situated near the College boundary and on the corners of the road where dirty water usually accumulates, they should be closed and the filth shall be removed therefrom. The big 'Nala ' which is in between the road, should be managed and covered in this way that it must not create overflow in the rainy season. The Malaria Department should be ordered to sprinkle D.D.T. and act in such a manner and use such means so that the mosquitoes may be eradicated completely from the said locality." The proceedings show the justness of the grievances and the indifference of the local body: "Both the parties heard. The court was satisfied on the facts contained in their application dated 12 5 72 and granted conditional order against non applicants No. 1 and 2 u/s 133 of Cr. P.C. (Old Code). In this order all the nuisances were described (which were there in their main application) and the court directed to remove 104 all the nuisances within 15 days and if the non applicants have any objection or dissatisfaction against the order then they must file it on the next date of hearing in the court." XX XX XX "The applicants got examined the following witnesses in their evidence and after producing following documents they closed their evidence." XX XX XX "No evidence has been produced by the non applicants in spite of giving them so many opportunities. Both the parties heard and I have also inspected the site." XX XX XX "The non applicant (Municipal Council) has sought six times to produce evidence but all in vain. Likewise non applicant (Town Improvement Trust) has also produced no evidence. " The Nallah comes into picture after the construction of road and bridge. It has shown that Nallah is property of Nagarpalika according to Ex.p. 10. Many applications were submitted to remove the nuisance but without result. According to Sec. 32 to 43 of the Town Improvement Trust Act, it is shown, that it has only the provisions to make plans. Many a time people tried to attract the attention of Municipal Council and the Town Improvement Trust but the non applicants always tried to throw the responsibility on one another shoulder. XX XX XX It is submitted by non applicant (Municipality) that the said Nallah belongs to whom, it is still disputed i.e. whether it belongs to non applicant 1 or 2. Shastri Colony is within the area of Town Improvement Trust. The Nagarpalika (non applicant No. 1) is financially very weak. But Municipal Council is not careless towards its duties. Non applicant (Town Improvement Trust) argued that primary responsibility lies with the Municipal Council only. There is no drainage system. At the end of it all, the Court recorded: . . . after considering all the facts I come to this conclusion that the said dirty Nallah is in between the main road of Ratlam City. This dirty Nallah affects the Mohalla of New 105 Road, Shastri Colony, Volga Talkies and it is just in the heart of the city. This is the very important road and is between the Railway Station and the main city. In these mohallas, cultured and educated people are living. The Nallah which flows in between the New Road and Shastri Colony the water is not flowing rapidly and on many places there are deep pits in which the dirty water is accumulated. The Nallah is also not straight that is also the reason of accumulation of dirty water. The Nallah is not managed properly by the non applicants. It is unable to gush the rainy water and due to this the adjoining areas always suffer from over flowing of the water and it causes the obstruction to the pedestrians. XX XX XX It is also proved by the evidence given by the applicants that from time to time the Power Alcohol factory which is situated outside the premises of the Municipal Council and it flows its dirty and filthy water into the said Nallah, due to this also the obnoxious smell is spreading throughout the New Road or so it is the bounden duty of the Municipal Council and the Town Improvement Trust to do the needful in this respect. XX XX XX The dirty water which flows from the lavatories and urinals of the residential houses have no outlet and due to this reason there are many pits on the southern side of the New Road and all the pits are full of dirty and stinking water. So it is quite necessary to construct an outlet for the dirty water in the said locality. In this area many a places have no drainage system and if there is any drain it has no proper flow and water never passes through the drain properly. That causes the accumulation of water and by the time it becomes dirty and stink and then it produces mosquitoes there. The Magistrate held in the end: Thus after perusing the evidence I come to this conclusion and after perusing the applications submitted by the persons residing on the New Road area from time to time to draw the attention of the non applicants to remove the nuisance, the non applicants have taken no steps whatsoever to remove all these public nuisances. He issued the following order which was wrongly found unjustified by the Sessions Court, but rightly upheld by the High Court: 106 Therefore, for the health and convenience of the people residing in that particular area of all the nuisance must be removed and for that the following order is hereby passed: (1) The Town Improvement Trust with the help of Municipal Council must prepare a permanent plan to make the proper flow in the said Nallah which is flowing in between Shastri Colony and New Road. Both the non applicants must prepare the plan within six months and they must take proper action to give it a concrete form. (2) According to para 13 a few places are described which are either having the same drains and the other area is having no drain and due to this the water stinks there; so the Municipal Council and the Town Improvement Trust must construct the proper drainage system and within their own premises where there is no drain it must be constructed immediately and all this work should be completed within six months. (3) The Municipal Council should construct drains from the jail to the bridge behind the southern side of the houses so that the water flowing from the septic tanks and the other water flowing outside the residential houses may be channellised and it may stop stinking and it should have a proper flow so that the water may go easily towards the main Nallah. All these drains should be constructed completely within six months by the Municipal Council. (4) The places where the pits are in existence the same should be covered with mud so that the water may not accumulate in those pits and it may not breed mosquitoes. The Municipal Council must complete this work within two months. A notice under Section 141 of the Criminal Procedure Code (Old Code) may be issued to the non applicants Nos. 1 and 2 so that all the works may be carried out within the stipulated period. Case is hereby finalised. Now that we have a hang of the case we may discuss the merits, legal and factual. If the factual findings are good and we do not re evaluate them in the Supreme Court except in exceptional cases one wonders whether our municipal bodies are functional irrelevances, banes rather than booms and 'lawless ' by long neglect, not leaders of the people in local self government. It may be a cynical obiter of pervasive veracity that municipal bodies minus the people and plus the bureaucrats are the bathetic vogue no better than when the British were here: 107 We proceed on the footing, as we indicated even when leave to appeal was sought, that the malignant facts of municipal callousness to public health and sanitation, held proved by the Magistrate, are true. What are the legal pleas to absolve the municipality from the court 's directive under section 133 Cr. P.C. ? That provision reads: section 133(1) whenever a District Magistrate or a Sub Divisional Magistrate or any other Executive Magistrate specially empowered in this behalf by the State Government, on receiving the report of a police officer or other information and on taking such evidence (if any) as he thinks fit, considers (a) that any unlawful obstruction or nuisance should be removed from any public place or from any way, river or channel which is or may be lawfully used by the public; XX XX XX such Magistrate may make a conditional order requiring the person causing such obstruction or nuisance, or carrying on such trade or occupation, or keeping any such goods or merchandise, or owning, possessing or controlling such building, tent, structure, substance, tank, well or excavation or owning or possessing such animal or tree, within a time to be fixed in the order (i) to remove such obstruction or nuisance; or XX XX XX (iii) to prevent or stop the construction of such building, or to alter the disposal of such substance; or if he objects so to do, to appear before himself or some other Executive Magistrate subordinate to him at a time and place to be fixed by the order, and show cause, in the manner hereinafter provided. why the order should not be made absolute. So the guns of section 133 go into action wherever there is public nuisance. The public power of the Magistrate under the Code is a public duty to the members of the public who are victims of the nuisance, and so he shall exercise it when the jurisdictional facts are present as here. "All power is a trust that we are accountable for its exercise that, from the people, and for the people, all springs, and all must exist. "(i) Discretion becomes a duty when the beneficiary brings home the circumstances for its benign exercise. If the order is defied or ignored, section 188 I.P.C. comes into penal play: 108 188. Whoever, knowing that, by an order promulgated by a public servant lawfully empowered to promulgate such order, he is directed to obtain from a certain act, or to take certain order with certain property in his possession or under his management, disobeys such direction and if such disobedience causes or tends to cause danger to human life health or safety, or causes or tends to cause a riot or affray, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. There is no difficulty in locating who has the obligation to abate the public nuisance caused by absence of primary sanitary facilities. Section 123, which is mandatory, (we repeat), reads: 123. Duties of Council : (1) In addition to the duties imposed upon it by or under this Act or any other enactment for the time being in force, it shall be the duty of a Council to undertake and make reasonable and adequate provision for the following matters within the limits of the Municipality, namely: (a). . . (b) cleansing public streets, places and sewers, and all places not being private property, which are open to the enjoyment of the public whether such places are vested in the Council or not; removing noxious vegetation, and abating all public nuisances; (c) disposing of night soil and rubbish and preparation of compost manure from night soil and rubbish. The statutory setting being thus plain, the municipality cannot extricate itself from its responsibility. Its plea is not that the facts are wrong but that the law is not right because the municipal funds being insufficient it cannot carry out the duties under section 123 of the Act. This 'alibi ' made us issue notice to the State which is now represented by counsel, Shri Gambhir, before us. The plea of the municipality that notwithstanding the public nuisance financial inability validly exonerates it from statutory liability has no juridical basis. The Criminal Procedure Code operates against statutory bodies and others regardless of the cash in their coffers, even as human rights under Part III of the Constitution have to be respected by the State regardless of budgetary provision. Likewise, section 123 of the Act has no saving clause when the municipal council is penniless. Otherwise, a profligate 109 statutory body or pachydermic governmental agency may legally defy duties under the law by urging in self defence a self created bankruptcy or perverted expenditure budget. That cannot be. Section 133 Cr. P.C. is categoric, although reads discretionary. Judicial discretion when facts for its exercise are present, has a mandatory import. Therefore, when the sub Divisional Magistrate, Ratlam, has, before him, information and evidence, which disclose the existence of a public nuisance and, on the materials placed, he considers that such unlawful obstruction or nuisance should be removed from any public place which may be lawfully used by the public, he shall act. Thus, his judicial power shall, passing through the procedural barrel, fire upon the obstruction or nuisance, triggered by the jurisdictional facts. The Magistrate 's responsibility under section 133 Cr. P.C. is to order removal of such nuisance within a time to be fixed in the order. This is a public duty implicit in the public power to be exercised on behalf of the public and pursuant to a public proceeding. Failure to comply with the direction will be visited with a punishment contemplated by section 188 I.P.C. Therefore, the Municipal Commissioner or other executive authority bound by the order under section 133 Cr. P.C. shall obey the direction because disobedience, if it causes obstruction or annoyance or injury to any persons lawfully pursuing their employment, shall be punished with simple imprisonment or fine as prescribed in the Section. The offence is aggravated if the disobedience tends to cause danger to human health or safety. The imperative tone of section 133 Cr. P.C. read with the punitive temper of section 188 I.P.C. make the prohibitory act a mandatory duty. Although these two Codes are of ancient vintage, the new social justice orientation imparted to them by the Constitution of India makes it a remedial weapon of versatile use. Social justice is due to the people and, therefore, the people must be able to trigger off the jurisdiction vested for their benefit in any public functionary like a Magistrate under section 133 Cr. In the exercise of such power, the judiciary must be informed by the broader principle of access to justice necessitated by the conditions of developing countries and obligated by article 38 of the Constitution. This brings Indian public law, in its processual branch, in line with the statement of Prof. Kojima :(1) "the urgent need is to focus on the ordinary man one might say the little man. " "Access to Justice" by Cappelletti and B. Garth summarises the new change thus:(2) 110 "The recognition of this urgent need reflects a fundamental change in the concept of "procedural justice". The new attitude to procedural justice reflects what Professor Adolf Homburger has called "a radical change in the hierarchy of values served by civil procedure"; the paramount concern is increasingly with "social justice," i.e., with finding procedures which are conducive to the pursuit and protection of the rights of ordinary people. While the implications of this change are dramatic for instance, insofar as the role of the adjudicator is concerned it is worth emphasizing at the outset that the core values of the more traditional procedural justice must be retained. "Access to justice" must encompass both forms of procedural justice." Public nuisance, because of pollutants being discharged by big factories to the detriment of the poorer sections, is a challenge to the social justice component of the rule of law. Likewise, the grievous failure of local authorities to provide the basic amenity of public conveniences drives the miserable slum dwellers to ease in the streets, on the sly for a time, and openly thereafter, because under Nature 's pressure, bashfulness becomes a luxury and dignity a difficult article A responsible municipal council constituted for the precise purpose of preserving public health and providing better finances cannot run away from its principal duty by pleading financial inability. Decency and dignity are non negotiable facets of human rights and are a first charge on local self governing bodies. Similarly, providing drainage systems not pompous and attractive, but in working condition and sufficient to meet the needs of the people cannot be evaded if the municipality is to justify its existence. A bare study of the statutory provisions makes this position clear. In this view, the Magistrate 's approach appears to be impeccable although in places he seems to have been influenced by the fact that "cultured and educated people" live in this area and "New Road, Ratlam" is a very important road and so many prosperous and educated persons are living on this road. In India 'one man, one value ' is the democracy of remedies and rich or poor the law will call to order where people 's rights are violated. What should also have been emphasised was the neglect of the Malaria Department of the State of Madhya Pradesh to eliminate mosquitoes, especially with open drains, heaps of dirt, public excretion by humans for want of lavatories and slums nearby, had created an intolerable situation for habitation. An order to abate the nuisance by taking affirmative action on a time bound basis is justified in the circumstances. The nature of the judicial process is not purely adjudicatory nor is it functionally that of an umpire only. 111 Affirmative action to make the remedy effective is of the essence of the right which otherwise becomes sterile. Therefore, the court, armed with the provisions of the two Codes and justified by the obligation under section 123 of the Act, must adventure into positive directions as it has done in the present case. Section 133 Cr. P.C. authorises the prescription of a time limit for carrying out the order. The same provision spells out the power to give specific directives. We see no reason to disagree with the order of the Magistrate. The High Court has taken a correct view and followed the observations of this Court in Govind Singh vs Shanti Sarup(1) where it has been observed: "We are of the opinion that in a matter of this nature where what is involved is not merely the right of a private individual but the health, safety and convenience of the public at large, the safer course would be to accept the view of the learned Magistrate, who saw for himself the hazard resulting from the working of the bakery. " We agree with the High Court in rejecting the plea that the time specified in the order is unworkable. The learned judges have rightly said. "It is unfortunate that such contentions are raised in 1979 when these proceedings have been pending since 1972. If in seven year 's time the Municipal Council intended to remedy such a small matter there would have been no difficulty at all. Apart from it, so far as the directions are concerned, the learned Magistrate, it appears, was reasonable. So far as direction No. 1 is concerned, the learned Magistrate only expected the Municipal Council and the Town Improvement Trust to evolve a plan and to start planning about it within six months: the learned Magistrate has rightly not fixed the time limit within which that plan will be completed. Nothing more reasonable could be said about direction No. 1. " A strange plea was put forward by the Municipal Council before the High Court which was justly repelled, viz., that the owners of houses had gone to that locality on their own choice with eyes open and, therefore, could not complain if human excreta was flowing, dirt was stinking, mosquitoes were multiplying and health was held hostage. A public body constituted for the principal statutory duty of ensuring sanitation and health cannot outrage the court by such an ugly plea. 112 Luckily, no such contention was advanced before us. The request for further time for implementation of the Magistrate 's order was turned down by the High Court since no specific time limit was accepted by the municipality for fulfillment of the directions. A doleful statement about the financial difficulties of the municipality and the assurance that construction of drains would be taken up as soon as possible had no meaning. The High Court observed: "Such assurances, it appears, are of no avail as unfortunately these proceedings for petty little things like clearing of dirty water, closing the pits and repairing of drains have taken more than seven years and if these seven years are not sufficient to do the needful, one could understand that by granting some more time it could not be done." The High Court was also right in rejecting the Additional Sessions Judge 's recommendation to quash the Magistrate 's order on the impression that section 133 Cr. P.C. did not provide for enforcement of civic rights. Wherever there is a public nuisance, the presence of section 133 Cr. P.C. must be felt and any contrary opinion is contrary to the law. In short, we have no hesitation in upholding the High Court 's view of the law and affirmation of the Magistrate 's order. Before us the major endeavour of the municipal council was to persuade us to be pragmatic and not to force impracticable orders on it since it had no wherewithal to execute the order. Of course, we agree that law is realistic and not idealistic and what cannot be performed under given circumstances cannot be prescribed as a norm to be carried out. From that angle it may well be that while upholding the order of the Magistrate, we may be inclined to tailor the direction to make it workable. But first things first and we cannot consent to a value judgment where people 's health is a low priority. Nevertheless, we are willing to revise the order into a workable formula the implementation of which would be watch dogged by the court. Three proposals have been put forward before us in regard to the estimated cost of the scheme as directed by the Magistrate. The Magistrate had not adverted to the actual cost of the scheme nor the reasonable time that would be taken to execute it. As stated earlier it is necessary to ascertain how far the scheme is feasible and how heavy the cost is likely to be. The Court must go further to frame a scheme and then fix time limits and even oversee the actual execution of the scheme in compliance with the court 's order. Three schemes placed before us, together with tentative estimates of the costs, have been looked into by us. Judges are laymen and cannot put on expert airs. That was why we allowed the municipality 113 and the respondents to produce before us schemes prepared by expert engineers so that we may modify the directions issued by the Magistrate suitably. Scheme 'A ' is stated to cost an estimated amount of Rs. 1.016 crores. The State Government has revised this proposal and brought down the cost. In our view, what is important is to see that the worst aspects of the insanitary conditions are eliminated, not that a showy scheme beyond the means of the municipality must be undertaken and half done. From that angle we approve scheme 'C ' which costs only around Rs. 6 lakhs. We fix a time limit of one year for completing execution of the work according to that scheme. We further direct that the work shall be begun within two months from to day and the Magistrate shall inspect the progress of the work every three months broadly to be satisfied that the order is being implemented bona fide. Breaches will be visited with the penalty of section 188 I.P.C. We make the further supplementary directions which we specifically enjoin upon the municipal authority and the State Government to carry out. We direct the Ratlam Municipal Council (R1) to take immediate action, within its statutory powers, to stop the effluents from the Alcohol Plant flowing into the street. The State Government also shall take action to stop the pollution. The Sub Divisional Magistrate will also use his power under section 133 I.P.C., to abate the nuisance so caused. Industries cannot make profit at the expense of public health. Why has the Magistrate not pursued this aspect ? 2. The Municipal Council shall, within six months from to day, construct a sufficient number of public latrines for use by men and women separately, provide water supply and scavenging service morning and evening so as to ensure sanitation. The Health Officer of the Municipality will furnish a report, at the end of the six monthly term, that the work has been completed. We need hardly say that the local people will be trained in using and keeping these toilets in clean condition. Conscious cooperation of the consumers is too important to be neglected by representative bodies. The State Government will give special instructions to the Malaria Eradication Wing to stop mosquito breeding in Ward 12. The Sub Divisional Magistrate will issue directions to the officer concerned to file a report before him to the effect that the work has been done in reasonable time. The municipality will not merely construct the drains but also fill up cesspools and other pits of filth and use its sanitary 114 staff to keep the place free from accumulations of filth. After all, what it lays out on prophylactic sanitation is a gain on its hospital budget. We have no hesitation in holding that if these directions are not complied with the Sub Divisional Magistrate will prosecute the officers responsible. Indeed, this court will also consider action to punish for contempt in case of report by the Sub Divisional Magistrate of willful breach by any officer. We are sure that the State Government will make available by way of loans or grants sufficient financial aid to the Ratlam Municipality to enable it to fulfil its obligations under this order. The State will realise that article 47 makes it a paramount principle of governance that steps are taken 'for the improvement of public health as amongst its primary duties '. The municipality also will slim its budget on low priority items and elitist projects to use the savings on sanitation and public health. It is not our intention that the ward which has woken up to its rights alone need be afforded these elementary facilities. We expect all the wards to be benefited without litigation. The pressure of the judicial process, expensive and dilatory, is neither necessary nor desirable if responsible bodies are responsive to duties. Cappelletti holds good for India when he observes :(1) "Our judicial system has been aptly described as follows: Admirable though it may be, (it) is at once slow and costly. It is a finished product of great beauty, but entails an immense sacrifice of time, money and talent. This "beautiful" system is frequently a luxury; it tends to give a high quality of justice only when, for one reason or another, parties can surmount the substantial barriers which it erects to most people and to many types of claims. " Why drive common people to public interest action ? Where Directive Principles have found statutory expression in Do 's and Dont 's the court will not sit idly by and allow municipal government to become a statutory mockery. The law will relentlessly be enforced and the plea of poor finance will be poor alibi when people in misery cry for justice. The dynamics of the judicial process has a new 'enforcement ' dimension not merely through some of the provisions of the Criminal Procedure Code (as here), but also through activated tort consciousness. The officers in charge and even the elected representatives will have 115 to face the penalty of the law if what the Constitution and follow up legislation direct them to do are defied or denied wrongfully. The wages of violation is punishment, corporate and personal. We dismiss this petition subject to the earlier mentioned modifications. N.V.K. Petition dismissed.

The residents (respondents) of a prominent residential locality of the Municipality (petitioner) in their complaint under section 133 Criminal Procedure Code to the Sub Divisional Magistrate averred that the Municipality had failed despite several pleas, to meet its basic obligations, like provision of sanitary facilities on the roads, public conveniences for slum dwellers who were using the road for that purpose, and prevention of the discharge from the nearby Alcohol Plant of maladorous fluids into the public street, and that the Municipality was oblivious to the statutory obligation envisaged in section 123 M. P. Municipalities Act, 1961 The Municipal Council contested the petition on the ground that the owners of houses had gone to that locality on their own choice, fully aware of the insanitary conditions and therefore they could not complain. It also pleaded financial difficulties in the construction of drains and provision of amenities. The Magistrate found the facts proved, and ordered the municipality to provide the amenities and to abate the nuisance by constructing drain pipes with flow of water to wash the filth and stop the stench and that failure would entail prosecution under section 188 I.P.C. The order of the Magistrate was found unjustified by the Sessions Court, but upheld by the High Court. In the Special Leave Petition by the Municipality to this Court on the question whether a Court can by affirmative action compel a statutory body to carry out its duty to the community by constructing sanitation facilities at great cost and on a time bound basis. ^ HELD : 1. Wherever there is a public nuisance, the presence of section 133 Criminal Procedure Code must be felt and any contrary opinion is contrary to the law. [112D] 2. The public power of the Magistrate under the Code is a public duty to the members of the public who are victims of the nuisance and so he shall exercise, it when the jurisdictional facts are present. [107G] 98 3. The Magistrate 's responsibility under section 133 Cr. P.C. is to order removal of such nuisance within a time to be fixed in the order. This is a public duty implicit in the public power to be exercised on behalf of the public and pursuant to a public proceeding. Failure to comply with the direction will be visited with a punishment contemplated by section 188 I.P.C. [109C D] 4. The Municipal Commissioner or other executive authority bound by the order under section 133 Criminal Procedure Code shall obey the direction because disobedience, if causes obstruction or annoyance or injury to any persons lawfully pursuing their employment, shall be punished with simple imprisonment or fine as prescribed in the section. The offence is aggravated if the disobedience tends to cause danger to human health or safety. [109E] 5. Public nuisance, because of pollutants being discharged by big factories to the detriment of the poorer sections, is a challenge to the social justice component of the rule of law. [110C] 6. The imperative tone of section 133 Criminal Procedure Code read with the punitive temper of section 188 I.P.C. make the prohibitory act a mandatory duty. [109E] 7. The Criminal Procedure Code operates against statutory bodies and others regardless of the cash in their coffers, even as human rights under Part III of the Constitution have to be respected by the State regardless of budgetary provision. [108H] 8. Section 123 M. P. Municipalities Act 1961 has no saving clause when the municipal council is penniless. [108H] 9. Although the Cr. P.C. and I.P.C. are of ancient vintage the new social justice orientation imparted to them by the Constitution of India makes them a remedial weapon of versatile use. Social Justice is due to the people and, therefore, the people must be able to trigger off the jurisdiction vested for their benefit in any public functionary like a Magistrate under section 133 Criminal Procedure Code. In the exercise of such power, the judiciary must be informed by the broader principle of access to justice necessitated by the conditions of developing countries and obligated by article 38 of the Constitution. [109F G] 10. A responsible municipal council constituted for the precise purpose of preserving public health and providing better finances cannot run away from its principal duty by pleading financial inability. Decency and dignity are non negotiable facets of human rights and are a first charge on local self governing bodies. Similarly, providing drainage systems not pompous and attractive, but in working condition and sufficient to meet the needs of the people cannot be evaded if the municipality is to justify its existence. [110E] 11. The Court, armed with the provisions of the two Codes and justified by the obligation under section 123 of the Act, must adventure into positive directions as it has done in the present case. Section 133 Criminal Procedure Code authorises the prescription of a time limit for carrying out the order. The same provision spells out the power to give specific directives. [111A B] Govind Singh vs Shanti Sarup, ; , 279 referred to. The state will realise that article 47 makes it a paramount principle of governance that steps are taken for the improvement of public health as amongst its primary duties. The municipality also will slim its budget on 99 low priority items and elitist projects to use the savings on sanitation and public health. [114C] 13. Where Directive Principles have found statutory expression in Do 's and Don 'ts the court will not sit idly by and allow municipal government to become a statutory mockery. The law will relentlessly be enforced and the plea of poor finance will be poor alibi when people in misery cry for justice. The dynamics of the judicial process have a new `enforcement ' dimension not merely through some of the provisions of the Criminal Procedure Code (as here) but also through activated tort consciousness. The officers in charge and even the elected representatives will have to face the penalty of the law if what the Constitution and follow up legislation direct them to do are defied or denied wrongfully. The wages of violation is punishment, corporate and personal. [114G 115A] [The Court approved a scheme of construction work to be undertaken by the Municipality for the elimination of the insanitary conditions and directed that the work be commenced within two months and that the Magistrate inspect the progress of the work every three months and see that it is implemented. [113 D 114 B]

Appeal No. 729 of 1964. Appeal by special leave from the order dated February 1964 of the Rajasthan High Court in D.B. Civil Appeal No. 2 of 1963. O. P. Varma, for the appellants. Mohan Behari Lal, for the respondent. The Judgment of the Court was delivered by Gajendradkar, C.J. This appeal by special leave arises from an application made by the respondent Puniya in the Court of the Senior Civil Judge at Jhalawar under section 25 of the (No. 8 of 1890) (hereinafter called 'the Act '), for the custody of his daughter Mt. Chitra. To this application, the 103 respondent had impleaded the two appellants, Gulab Bai and her, husband Onkar Lal. The respondent is a Kumhar by caste, whereas the appellants are fat. The respondent 's case was that the minor Chitra who was about 11 years of age at the date of the application, had been living with the appellants for the last 4 or 5 years with his consent. Whilst the minor girl was living with the appellants, she used to come to spend some time with the respondent and his wife; but for some time past, the appellants did not allow Chitra to visit her parents. That is why the respondent thought it necessary to move the Court for an order under section 25 of the Act. The claim thus made by the respondent was disputed by the appellants. They alleged that the respondent and his wife had lost some children in their infancy, and so, they decided to leave the minor in the custody of the appellants, in the hope that their custody would save the child. Accordingly, the minor was entrusted to the appellants a few hours after her birth and in fact, she was given away by the respondent and his wife to the appellants to be looked after as if she was their adopted child. During all these years, the appellants have looked after the minor as their own child, have taken fond care of her, and have looked after her education. The appellants. and the respondent and his wife are neighbours, and the appellants denied the allegation made by the respondent that they ever obstructed the minor from visiting her parents. According to the appellants, recently an unfortunate incident had taken place between appellant No. 1 and the wife of the respondent and that was the real cause of the present application. They pleaded that as a result of the ugly incident that took place between the two ladies, the minor was frightened and appeared to be disinclined to visit her parents any longer. On these pleadings, the parties led evidence to support their respective contentions. The learned trial Judge held that the child had been entrusted to the appellants soon after she was born, and that she was looked after by the appellants as if she was their daughter. He felt satisfied that in case the child was removed from the homely atmosphere which she enjoyed in the house of the appellants, that would definitely be detrimental to her welfare and would also affect her health, because she had come to look upon the appellants as her parents. The learned trial Judge examined the child in order to ascertain her own wishes, because he thought that she had attained the age of discretion and could express her wishes intelligently. He was convinced that the child definitely preferred to stay with the appellants. Having come to the conclusion that it would be inconsistent with the interests of the child to allow the application made by the respondent, the learned Judge ordered that 104 appellant No. 2 should be appointed the guardian of the person of the minor under sections 7 and 8 of the Act. He directed that the said Guardian shall give an undertaking to the. Court not to remove the child from the territorial jurisdiction of the Court and not to marry her without the permission of the Court. A direction was also issued that the child shall not, of course, be married outside her caste without the consent of her parents even if she so desires. Against this order, the respondent preferred an appeal before the Rajasthan High Court. This appeal was heard by a learned single Judge of the said High Court who reversed the decision of the trial Judge. He came to the conclusion that it would be in the interests of the minor to deliver her to the custody of the respondent and his wife. He held that under section 6 (a) of the Hindu Minority and Guardianship Act, 1958, the respondent was entitled to be the guardian of his daughter in the absence of any allegation or proof that he was in any way unsuitable to be such a guardian. The learned single Judge also took into account the fact that the appellants and the respondent belonged to different castes. and he held that since the minor was then about 12 years of age, it was in her interest that she went back to be looked after by her own parents. ion this view, the learned single Judge set aside the order passed by the learned trial Judge by which appellant No. 2 was appointed the guardian of the minor and directed him to deliver the minor to the custody of the respondent. The order passed by the learned Judge further provided that if the appellants did not deliver the minor Chitra to her parents on the expiry of three months, the respondent shall apply for execution of the order and that it would be executed as a decree under section 25 (2) of the Act by issue of a warrant under section 100 of the Code of Criminal Procedure. Against this decision, the appellants preferred an appeal under clause 18 of the Rajasthan High Court Ordinance, 1949 (No. 15 of 1949) (hereafter called 'the Ordinance '). This appeal was dismissed by a Division Bench of the High Court on the ground that the appeal was incompetent having regard to the provisions of sections 47 and 48 of the Act. The appellants then moved the High Court for certificate to prefer an appeal to this Court, but the said application was dismissed. That is how the appellants applied for and obtained special leave from this Court, and it is with the said leave that this appeal has come before us. The short question of law which arises for our decision is whether the High Court was right in holding that the appeal under clause 18 (1) of the Ordinance was incompetent and that raises the question about the construction of sections 47 and 48 of the Act. 105 Before dealing with this point, two relevant facts ought to be mentioned. The Act was extended to Rajasthan by the Part B States (Laws) Act, 1951 (Act III of 1951) on the 23rd February; 1951; but before the Act was thus extended to Rajasthan, the Ordinance had already been promulgated. Clause 18(1) of the Ordinance provides, inter alia, that an appeal shall lie to the High Court from the judgment of one Judge of the High Court; it excepts from the purview of this provision certain other judgments with which we are not concerned. It is common ground that the judgment pronounced by the learned single Judge of the High Court on the appeal preferred by the respondent before the High Court, does not fall within the category of the exceptions provided by clause 1 8 ( 1 ) of the ordinance; so that if the question about the competence of the appeal preferred by the appellants before the Division Bench of the High Court had fallen to be considered solely by reference to clause 18(1), the answer to the point raised by the appellants before us would have to be given in their favour. The High Court has, however, held that the result of reading sections 47 and 48 together is to make the present appeal under clause 18(1) of the Ordinance incompetent. The question which arises before us is : is this view of the High Court right ? Section 47 of the Act provides that an appeal shall lie to the High Court from an order made by a Court under sections specified in clauses (a) to (j) thereof. Clause (c) of the said section refers to an appeal against. an order made under section 25, making or refusing to make an order for the return of a ward to the custody of his guardian. It is thus clear that the order passed by the learned trial Judge in the present proceedings was an order under section 25 of the Act, and as such, is appealable under section 47; and when as a result of the rules framed by the Rajasthan High Court the present appeal was placed before a learned single Judge of the said High Court for hearing and was decided by him, his decision became appealable to a Division Bench of the said High Court under cl. 1 8 (1 ) of the Ordinance. Thus far, there is no difficulty or doubt. But the High Court has held that section 48 of the Act, in substance, amounts to a prohibition against an appeal to a Division Bench under cl. 18(1) of the Ordinance; and that makes it necessary to examine the provisions of section 48 carefully. Section 48 reads thus "Save as provided by the last foregoing section and by section 622 of the Code of Civil Procedure, an order made under this Act I shall be final, and shall not be liable to be contested by suit or otherwise. " 106 It is clear that what is made final by section 48 is an order made under this Act; and the context shows that it is an order made by the trial Court under one or the other provision of the Act. This position is made perfectly clear if the first part of section 48 is examined. The finality prescribed for the order made under this Act is subject to the provisions of section 47 and section 622 of the earlier Code which corresponds to section 115 of the present Code. In other words, the saving clause unambiguously means that an order passed by the trial Court shall be final, except in cases where an appeal is taken against the said order under section 47 of the Act, or the propriety, validity, or legality of the said order is challenged by a revision application preferred under section II 5 of the Code. It is, therefore, essential to bear in mind that the scope and purpose of 'section 48 is to make the orders passed by the trial Court under the relevant provisions of the Act final, subject to the result of the appeals which may be preferred against them, or subject to the result of the revision applications which may be filed against them. In other words, an order passed on appeal under section 47 of the Act, or an order passed in revision under section II 5 of the Code, are, strictly speaking, outside the purview of the finality prescribed for the orders passed under the Act, plainly because they would be final by themselves without any such provision, subject, of course, to any appeal provided by law or by a constitutional pro vision, as for instance, article 136. The construction of section 48, therefore, is that it attaches finality to the orders passed by the trial Court subject to the provisions prescribed by section 47 of the Act, and section 115 of the Code. That is one aspect of the matter which is material. The other aspect of the matter which is equally material is that the provisions of section 47 are expressly saved by section 48, and that means that section 47 will work out in an ordinary way without any restriction imposed by, section 48. In considering the question as to whether a judgment pronounced by a single Judge in an appeal preferred before the High Court against one or the other of the orders which are made appealable by section 47 will be subject to an appeal under clause 1 8 (1) of the Ordinance, section 48 will have no restrictive impact. The competence of an appeal before the Division Bench will have to be judged by the provisions of cl. 18 itself. Section 48 saves the provisions of section 47, and as we have already indicated, considered by themselves the provisions of section 47 undoubtedly do not create any bar against the competence of an appeal under cl. 18(1) of the Ordinance where the appeal permitted by section 47 is heard by a learned single Judge of the High Court. Therefore, we are satisfied that the High Court was in error in coming to the conclusion that an appeal before a Division Bench of the said High Court under clause 18 (1) of the Ordinance was incompetent. 107 It is true that in upholding the respondent 's plea that the appeal preferred by the appellants under clause 18(1) of the Ordinance was incompetent, the High Court has no doubt purported to rely upon and apply its earlier decision in the case of Temple of Shri Bankteshwar Balai Through Rampal vs The Collector, Ajmer(1). The said decision, however, was concerned with the effect of the provisions prescribed by section 66(3) of the Ajmer Abolition of Intermediaries and Land Reforms Act (No. III of 1955) in relation to clause 18 of the Ordinance, and since we are not called upon to consider the correctness of the conclusion reached in that behalf, it is unnecessary for us to examine whether the High Court was right in holding that the provisions of the said section 66(3) created a bar against the competence of the appeal under cl. 18(1) of the Ordinance. All that we are concerned to deal with in the present appeal is the effect of section 48 of the Act, and in our opinion, the High Court was in error in holding that section 48 excluded the application of clause 1 8 (1) of the Ordinance to the decision of the learned single Judge in the present proceedings. In this connection, we may incidentally refer to the decision of this Court in Union of India vs Mohindra Supply Company(1). In that case, this Court has held that an appeal against the appellate order of the single Judge was barred under section 39(2) of the Indian , because the expression "second appeal" in section 39(2) means a further appeal from an order passed in appeal under section 39 (1) and not an appeal under section 100 of the Code, and as such, the said expression "second appeal" includes an appeal under the Letters Patent. In substance. the effect of the decision of this Court in the case of Mohindra Supply Co.(2) is that by enacting section 39(2) the has prohibited an appeal under the Letters Patent against an order passed under section 39 (1). This decision again turned upon the specific words used it section 39(1) & (2) of the and is not of any assistance in interpreting the provisions of section 48 of the Act with which. we are concerned in the present proceedings. The question a,, to whether an appeal permitted by the relevant clause of the Letters Patent of a High Court can be taken away by implication, had been considered in relation to the provisions of section 588 of the Codes of Civil Procedure of 1877 and 1882. The first part of the said section had provided for an appeal from the orders specified by clauses (1) to (29) thereof, and the latter part of the said section had laid down that the orders passed in appeals under this section shall be final. Before the enactment of (1) LL.R. (2) ; Sup CI/66 8 108 the present Code, High Courts in India had occasion to consider whether the provision as to the finality of the appellate orders prescribed by section 588 precluded an appeal under the relevant clauses of the Letters Patent of different High Courts. There was a conflict of decisions on this point. When the matter was raised before the Privy Council in Harrish Chunder Chowdhry vs Kali Sundari Debia(1), the Privy Council thus tersely expressed its conclusion: "It only remains to observe that their Lordships do not think that section 588 of Act X of 1877, which has the effect of restricting certain appeals, applies to such a case as this, where the appeal is from one of the Judges of the Court to the Full Court". Basing themselves on these observations, the High Courts of Calcutta, Madras, and Bombay had held that section 588 did not take away the right of appeal given by clause 15 of the Letters Patent, vide Toolsee Money Dassee & Others vs Sudevi Dassee & Others(2), Sabhapathi Chetti & Others vs Narayanasami Chetti(3), and The Secretary of State for India in Council vs Jehangir Maneckji Cursetji (4 ) respectively. On the other hand, the Allahabad High Court took a different view, vide Banno Bibi and others vs Mehdi Husain and Others(5), and Muhammad Naim ul Lah Khan vs Ihsan Ullah Khan(6). Ultimately, when the present Code was enacted, section 104 took the place of section 588 of the earlier Code. Section 104(1) provides that an appeal shall lie from the following orders, and save as otherwise expressly provided in the body of this Code or by any law for the time being in force, from no other orders. It will be noticed that the saving clause which refers to the provisions of the Code, or to the provi sions of an law for the time being in force, gives effect to the view taken by the Calcutta, Madras and Bombay High Courts. In fact, later, the Allahabad High Court itself has accepted the same view in L. Ram Sarup vs Mt. Kaniz Ummehani (7 ). We have referred to these decisions to emphasise the fact that even where the relevant provision of section 5 8 8 of the earlier Code made certain appellate orders final, the consensus of judicial opinion was that the said provision did not preclude an appeal being filed under the relevant clause of the Letters Patent of the High Court. In the present case, as we have already indicated, section 48 in terms saves the provisions of section 47 of the Act as well as those of section 115 of the (1) 10 I.A. 4 at p. 17. (2) (3) (1902))5 Mad. (4) (5) (1889) 11 Alld. (6) (1892) 14 AIId. 226 (F.P.) (7) A.I.R. 1937 Alld. 109 Code, and that gives full scope to an appeal under clause 18 of the Ordinance which would be competent when we deal with the question about appeals under section 47 of the Act considered by itself. The result is, the appeal is allowed, the order passed by the Division Bench of the High Court dismissing the appeal preferred by the appellants under cl. 18(1) of the Ordinance on the ground that it is incompetent, is set aside, and the said appeal is remitted to the High Court for disposal in accordance with law. In view of the unusual circumstances of this case, we direct that parties should bear their own costs incurred so far.

The respondent 's application under section 25 of the Guardians and Wards Act for the custody of respondent 's daughter was rejected by the Civil Judge. When the decision was reversed in appeal by a single Judge of the Rajasthan High Court, the appellants preferred an appeal to the Division Bench under cl. 18 of the Rajasthan High Court Ordinance. This was dismissed on the ground that the appeal was incompetent having regard to sq. 47 and 48 of the Guardians and Wards Act. In appeal to this Court, HELD:The appeal before the Division Bench of the Rajasthan High Court under cl. 18(1) of the Ordinance was competent. [106 H] The competence of an appeal before the Division Bench will have to be judged by the provisions of cl. 18 of the Ordinance itself and section 48 of the Act has no restrictive impact. Section 48 saves the provisions of section 47 of the Act and section 115 of the Code of Civil Procedure; and considered by themselves the provisions of section 47 do not create any bar against the competence of an appeal under cl. 18(1) of the Ordinance where the appeal permitted by section 47 is heard by a single Judge. [106 G] Section 48 attaches finality to the order passed by the trial Court subject to the provisions prescribed by section 47 of the Act and section 115 of the Code of Civil Procedure. [106 E]

Appeal No. 589 of 1960. Appeal by special leave from the judgment and decree dated April 28, 1953, of the Madras High Court in A.S. No. 695 of 1949. K.N. Rajagopal Sastri, K. Jayram and R. Ganapthy Iyer. for the appellant. A. V. Viswanatha Sastri and T.V.R. Tatachari, for respondent nos. 1, 3, 4 and 6 to 8. B. Kalyana Sundaram, M. Rajagopalan, K. Rajendr Choudhry, M. R. Krishna Pillai for K. R. Chaudhuri, for respondent No. 2. March 26, 1964. The Judgment of the Court was delivered by DAs GUPTA, J. Three brothers, Ramakrishna, Narayanaswamy and Mahadeva. , who are eighty three, seventy nine and sixty nine years of age respectively, are the main figures in this litigation. After their father 's death in 1908 the three brothers continued as members of a joint family. The eldest brother, Ramakrishna became under the law the Karta of the family. When the father died the family was possessed of about 10 acres of land. But he had left some debts and one of the first acts which Ramakrishna had to do as the Manager was the repayment of those debts. Ramakrishna had become the Karnam in Narasingampettai in 1902 and even during his father 's life time started acquiring property. Property to the extent of about 25 acres was acquired for the joint family between the years 1911 to 1931. In 1927 Ramakrishna had been transferred to the bigger village of Vepatthur and continued to be there till 1930. On his retirement in that year his son Venkatarama succeeded him as the Karnam of Vepatthur. Between 1931 to 1946 properties in Vepatthur and other villages were acquired in the name of Ramakrishna 's son Vankatarama, his wife Mangalathammal, his grandson (Ven katarama 's son) Mahalingam. Some property was acquired also in the name of Mangalathammal 's brother Raja Ayyar. Monies were also invested in loans in the names of Ramakrishna 's wife. Mangalathammal, his son Venkatarama and his grandson, Mahalingam. 492 The second brother Narayanaswami became a Vakil 's clerk in Kumbakonam in 1910. The third brother Mahadeva who was a boy a of thirteen at the time of his father 's death was put into the medical school and qualified as a doctor. He was in service as a Sub Assistant Surgeon at the time when the present suit was instituted by Narayanaswamy. Both of them earned well and have admittedly acquired properties for themselves out of their own earnings. As early as the thirties feelings became strained between Ramakrishna, the eldest brother and Narayanaswami the second brother. Mahadeva who had to remain away at different places in connection with his service demanded partition of the joint family properties and in this Narayanaswami also seems to have joined him. The extreme action of going to courts was however not taken so long as mother was alive. She died early in 1945 at the age of 90 years. In December, (12th December) 1946 Narayanaswami sent a lawyer 's notice to Ramakrishna in which he claimed that not only the 25 acres acquired between 1911 and 1931 but also the properties ac quired in the name of Ramakrishna 's wife, his son and brother in law had been acquired with the income of the family and formed part of the joint family properties. He claimed also in this notice that family funds of about Rs. 25.000/ was in the hands of Ramakrishna in the shape of cash and Benami investments. He demanded a partition of all these properties and of the cattle and other movable properties owned by the family. He also called upon Ramakrishana to account for the income derived from the family properties "for the last three years at least". In all these he claimed a one third share. To this Ramakrishna replied on December 1, 1946. He stated that the joint family properties consisted only of 10 acres left by their father and about 25 acres acquired later on and denied that the other properties belonged to the family. Soon after this, on the 1st February 1947. Narayanaswami brought this suit for partition and accounts in the court of the Subordinate Judge, Kumbakonam. The eldest brother Rama krishna was impleaded as the first defendant; Mahadeva the third brother, was the second defendant, Ramakrishna 's son Venkatarama. his wife Mangalathammal and his brother inlaw Raja lyer were in pleaded as the third, fourth and the fifth defendants respectively. Mahalingam was impleaded as the sixth defendant. Two other minor sons of Venkatarama were also impleaded. They are the seventh and the eighth defendants in the case. The plaintiff 's case was short and simple. He claimed that Ramakrishna as the Karta of the joint family managed the family properties and acquired properties with the family funds from 1911 to 1946. He thus claimed that not only the 34 493 acres and 58 cents of land in the village Kumarakshi (men tioned in the A Schedule) which the first defendant Rama krishna 's wife or son or grandson or brother in law were joint ties mentioned in the Schedules B, Bl and B2, and C, C1 and C2 and D for which the sale deeds stood in the name of Ramakrishna 's wife or son or grandson or brother in law were joint family properties. He claimed also that between 1931 and 1946 Ramakrishna. the Karta. had invested family funds in the name of his wife. his son and his grandson and these were also joint family properties. The movable properties claimed to be joint family properties were mentioned in Schedule A2, while the house in Thiagarajapuram. also claimed to be joint family property was mentioned in AI Schedule. The plaintiff prayed for allotment to him of one third share of these properties by division in metes and bounds into three equal shares. He further prayed for a direction on the first defendant to account for the management of the family properties for three years and for payment to the plaintiff of his share in the amount that may be found due. The second defendant Mahadeva generally supported the plaintiff though as regards the years, 1940, 1941, 1942 and 1943 his case in the written statement was that it was the plaintiff Narayanaswamy and not the first defendant who collected the income from the join family properties. For these four years, he pleaded that the plaintiff was liable to render an account while for the remaining period the first defendant was said to be liable. In a Schedule to his written statement he mentioned several other items of properties which he claimed belonged to the joint family though one of the sale deeds stood in the name of the sixth defendant Mahalingam and the other in the name of the fifth defendant Raja Ayyar. The other defendants contested the suit. The first defendant 's case was that though on his father 's death he became in law the Karta of the joint Hindu family the actual management was carried on by the mother till 1940 and from 1940 till the mother 's death in 1945 by the plaintiff Narayanaswami. It was only after the mother 's death that he has taken up the management of the properties. He pleaded that of the properties mentioned in the plaint only 34.58 acres mentioned in the A Schedule formed the joint family property. (In addition to some of the movable properties mentioned in A2 Schedule). He further pleaded that a house in Kumbakonam town which was acquired by the plaintiff in his own name as also some lands in Manalur village in Kumbakonam and Rs. 8,000/ in cash which the plaintiff had obtained on sale of certain lands also formed part of the joint family property. His wife Mangalathammal, the fourth defendant also pleaded that the properties and the investments standing in her 494 name were made by her on her own account with the monies which her husband Ramakrishna gave to her from his own earnings. These therefore were not part of the joint family property and consequently not liable to partition. The third defendant (Venkatarama 's) case was that the purchases of land and investments of money standing in his name were all with his own earnings since he became Qarnam and did not form part of the joint family property. As regards what stood in the name of his son Mahalingam the third defendant pleaded that these were with his own earnings. The fifth defendant also pleaded that whatever stood in his name was acquired by him with his own money and did not form part of the joint family of the plaintiff and his brothers. The learned Subordinate Judge held on a consideration of the evidence that the plaintiff 's case 'that the oldest brother Ramakrishna managed the family property as the Karta from and after their father 's death in 1908 till the date of the suit had been established. He also came to the conclusion that in about 1931 Ramakrishna had with him an accumulated income of about Rs. 14,000/ belonging to the family and but very little money of his own,, From these findings it was an easy step to hold, as the learned Judge did. that the immovable properties mentioned in Schedules A, Al, B, B1., C. Cl, C2 and D as also Item 5 in Schedule B2 were all properties belonging to the joint family. Out of these he found that the properties in Schedule Al, that is, a house in Thiagarajapuram had been, given away to the sister Rukmaniammal and was no longer a joint family property and therefore not liable to division. The rest of the properties, he held, was liable to be divided among the three brothers, the plaintiff and the defendants 1 and 2. The Court also held that the mortgages and promissory notes on which money had been lent in the names of defendants 3 to 5 belonged to the joint family with the exception of a few standing in the name of the third defendant (Venkatarama) which was held to be the third defendant 's personal property. A preliminary decree was made by the Court in accordancewith these findings with a direction that an account be taken with reference to income of the properties in Schedules A, A1, B, B1, C, C1 and D and Item 5 in Sch. B2 and the house at Kumbakonam mentioned in the Schedule to the first defendant 's written statement, for three years prior to the date of the suit and from the date of the suit till the passing of the final decree. As regards the properties in Schedule A it was, directed that the accounting will cease from the date on which the parties took possession of their share in accordance with the interim decree. Against this decision the first defendant appealed to the High Court of Judicature at Madras. The plaintiff also filed 495 an appeal challenging the decision of the Subordinate Judge that the house in Kumbakonam was a joint family property. 'The High Court allowed the plaintiff 's appeal holding that the Kumbakonam house was a separate self Acquisition of the plaintiff. Against this decision of the High Court no appeal has been preferred and we are no longer concerned with the question whether this house was plaintiff 's property or not. In the appeal preferred by the first defendant the High Court came to the conclusion, disagreeing with the Trial court, that the first defendant Ramakrishna had saved enough from his separate earnings from which it was quite possible for him to make all the acquisitions and investments in the name of his son, wife and grandson subsequent to 1930. In the opinion of the High Court the view of the Subordinate Judge that by 1930 the first defendant had in his hands a sum of Rs. 14,000/ accumulated from the income of the joint family lands was "surprising and untenable". It did not disturb the Trial Court 's findings that Schedule D land acquired in the name of the 3rd defendant was joint family property, apparently because no appeal had been filed as regards this property. Taking these 14 acres to be acquisitions for the family the High Court recorded its conclusion thus: "When we consider that the joint family nucleus has been more than quadrupled, it is difficult to see what grievance the younger coparceners really have, particularly the second defendant, who after keeping for himself his earnings as a Doctor in Government Service finds himself entitled to a share in a greatly increased ancestral patrimony. " Finally the High Court concluded "that the plaintiff has not shown that any of the acquisitions or investments in the names of defendants 3, 4 and 6 were made from joint family funds. " Accordingly, it allowed also the appeal preferred by the first defendant, holding that the only items liable for partition as joint property assets were those in Schedules A and D. It also ordered that the first defendant would account for the income from 12th December 1946, the date on which notice demanding partition was sent to him by the plaintiff. The present appeal has been preferred by the plaintiff against this decision of the High Court. Two main arguments were advanced before us by Mr. Rajagopala Sastri in support of the appeal. The first is as regards the properties purchased in the name of the first defen dant 's wife, his son, and his grandson. Learned Counsel submitted that the High Court did not record any clear conclusion that at the date of the acquisition of these properties the joint family had not a sufficient nucleus for acquiring these. He argued that the acquisitions in the name of the first defendant 's wife was admittedly with funds advanced by the first defendant himself; and if at the date of the acquisition in her name the joint family had sufficient nucleus for acquiring them, the presumption would be that they were acquired with joint family funds notwithstanding the fact that the first defendant may have sufficient funds of his own for the same purpose. It was rightly argued that in such a case the property should be held to be joint family property unless the presurmption of the acquired property also being joint family property was rebutted by the first defendant. It was also argued that acquisitions in the name of the third defendant and the sixth defendant should also be held to have been made with funds advanced by the first defendant himself and so these also should be presumed to have been acquired with joint family funds if it is shown that the joint family had sufficient nucleus for acquiring these at the date of the acquisitions and the first defendant does not show positively that the funds with which they were acquired did not belong to the joint family. The legal position is well settled that if in fact at the date of acquisition of a particular property the joint family had sufficient nucleus for acquiring it, the property In the name of any member of the joint family should be presumed to be acquired from out of family funds and so to form part of the joint family property, unless the contrary is shown. (Vide Amritlal Sen & ors., vs Surath Lal Sen & others(1) Appalaswami vs Suryanarayanamurthy & others(2). In the case before us, it is not disputed that the acquisi tions in the name of the first defendant 's wife were made with funds advanced by him. As regards the acquisitions in the name of the third defendant and his minor son the sixth defendant also we find it reasonable to hold from the evidence, as regards the earnings of the third defendant and other circumstances, that for these acquisitions also money was paid by the first defendant. The question whether the joint family had at the time of each of these acquisitions sufficient nucleus from which the acquisitions could have been made is therefore of great importance. On a consideration of the evidence, as discussed below, we have come to the conclusion that it does not appear that the joint family had at the date of the acquisitions made in the names of the first defendant 's wife. his son, and his grandson sufficient nucleus from which these properties could be acquired. In coming to this conclusion we have taken into consideration the fact that family funds were spent in purchasing 14 acres of land mentioned in the name of the 5th defendant. (1) A.I.R. 1942 Cal. (2) I.L.R. [1948] Mad. (P.C.) 440. 497 The period during which acquisitions admittedly for the joint family were made came to an end in about 1931. At that time the first defendant had, according to his own evidence, about Rs. 15,0001 in his hand. His case is that this entire K. amount was what he had accumulated out of his own earnings. The Subordinate Judge held that a little more than Rs. 14,000 / out of this amount was the savings from the family funds. We agree with the High Court that this conclusion is not justified by the evidence on the record. As rightly pointed out by the High Court properties worth about Rs. 20,000/had been purchased out of the family income during this period. During part of this period at least monies had to be spent for other requirements of the family including the expenses on the education of the third brother Mahadeva. The several documents produced in the case show that at the time of more than one purchase the first defendant had to borrow money on promissory notes to pay the consideration mentioned in the documents. It is worth mentioning that even the plaintiff was not prepared to say that the family income was sufficient to pay for these purchases. In cross examination a question was put to him in these words: "Q. From 1911 out of the family income Rs. 20,000/worth of lands had been purchased? Can there have been more income from the family lands?" The answer is significant. It was in these words: "A. From the family income, the joint income of myself and Defendant 1 certainly exceeded Rs. 20,000/ . The income of myself and Defen dant 1 which went in the purchase of lands may have come to Rs. 10,000/ ". In other words, the plaintiff himself seem to concede that only Rs. 10,000/ of the family income was available during this period for purchase of lands. The claim made here that he also contributed to the purchase is clearly inconsistent with his own written statement and with other parts of his evidence and cannot be accepted. The learned Subordinate Judge, appears to have been con vinced that Ramakrishna 's personal earnings were very little. He thought also that what little Ramakrishna earned was required for the expenses of his own branch of the family. The learned Judge concluded that he could not have saved out of these earnings. This view appears to have been mainly responsible for this conclusion that almost the whole of Rs. 15,0001which the defendant No. 1 admitted to have with him in about 1931 came out of the family funds. In our opinion, the materials on the record do not justify the Trial Court 's view that Ramakrishna could not have accumulated a sum of 498 Rs. 15,000/ out of his own income. The mamools which he received as Karnam of Narasingampettai and later on of the bigger village Vepatthur amounted to a considerable quan tity of paddy and must have fetched him a goodly income. There was apart from this, his income from the banana plan tations which he had at Narasingampettai. One of the lease deeds shows a receipt of Rs. 450/ for one season. Taking good years with bad, it would not be unreasonable to think that this also brought him a few thousands of rupees. We are convinced also on a consideration of his evidence, taken with the entries in the account book of Appaswamy Iyer (exhibit B IO 1) that he received a sum of Rs. 2,500/ as reward for successfully maintaining the litigation on Appalaswamy 's behalf. There can be little doubt that he received good sum also as fees for writing documents. One of his witnesses, Narayanaswami Reddiar, DW 7, has given evidence that he paid the defendant Rs. 1,000/ as fees for the documents written for him. Even if this be considered an exaggeration, it s quite clear from, the evidence of this witness that Ramakrishha who, it may be noted, was a man of some education, did a flourishing side business as a writer of documents, saved two or three thousand rupees, earned by him by this work during the entire period he served as a Karnam. It is more than probable that he had other sources of income which he did not think it prudent to mention in the witness box. On a consideration of the circumstances we are convinced that this story that he had Rs. 15,O0O/ in his hands in about 1931 as accumulated out of his own earnings is sub stantially true. Mr. Rajagopala Sastri has however rightly pointed out that a finding that in 1931 very little remained out of the family income would not be sufficient to show that there was no sufficient nucleus for the acquisition of the different pro perties in the name of the defendant 's wife, his son and his grandson after 1931 For a proper decision of this question it is necessary to consider roughly the income and expenditure out of the admittedly family properties during this period. We shall first consider the period, 1931 to 1939, as it is clear from the evidence that during this period the defendant No. 1 carried on the actual management of the joint family properties. It is common case of both the parties that the paddy yield in 1931 was 856 kalams; during 1932 1,000 kalams and during 1933 1,118 kalams. For the next five years paddy yield was, according to the respondent 's counsel, 1,058, 1,058, 958, 958, and 958 kalams. The appellant 's counsel puts his estimates and 1,160 kalams respectively. These differences in the estimates for these years at the higher figures of 1,360, 1,360, 1,160, 1,160 seem to be mainly due to the fact that while, 499 according to the respondent, the family was in possession of only six acres of mortgaged land in addition to the 35 acres, the appellant 's case was that an additional area of six acres of mortgaged land was also in the family 's possession during these years. Mr. Rajagopala Sastri was not however able to point out anything on the record in support of this claim. We think it reasonable therefore to accept as substantially correct the estimate of paddy yield as mentioned before us on behalf of the respondent for these years. For the year 1939 the yield may be taken as 1,153 kalams roughly as in that year the D Schedule lands now found to be the property of the joint family had also been acquired. On an examination of the evidence on the record we accept the the price for each kalam of paddy to be Rs. 2.50 nP for each of the years 1931 and 1932 and 1.19, 1.25, 1.37, 1.40, 1.50, 1.56 and 1.62 for the years 1933 to 1939 respectively, as contended before us on behalf of the respondent. The total income received from paddy in these nine years thus appears to be about Rs. 14,976/ . To this has to be added the receipts from the dry crops like black grams and green rams grown on some of the lands. We accept the evidence given by the defendant that dry crops were not grown in every year and also not on all the lands. The sale proceeds of black grams and green grams amounted to Rs. 72/ for the year 1935 according to the account book exhibit A 98. Taking this to be the average receipt per year from the dry crops the receipts from these crops during the nine years under consideration amounted to about Rs. 648/ . The total income from the crops grown on the joint family lands during the years 1931 to 1939 thus works out approximately to be about Rs. 15,624/ . Adding to this the sum of Rs. 1,100/ received on repayment of the mortgage loan on exhibit 187 the joint family earnings during these nine years appears to have amounted to about Rs. 16,724/ . It is now necessary to have some idea of the expenditure incurred during these years. The claim of expenditure of Rs. 5,172/ during these years made before us on behalf of the respondent is not disputed by the appellant. We think also that the respondent 's claim that Rs. 1,100/ advanced on the mortgage bond (exhibit 187) was paid from family funds should be accepted. We have next to add the sum of Rs. 6,500/ that was paid for the purchase of the D Schedule lands, Rs. 4,030/ paid as kists and Rs. 2.000 / as cultivation expenses including Kariasthan 's pay. The total expenditure during the nine years 1931 to 1939 amounted thus to more than Rs. 18,000 / . Proceeding therefore on the basis on which there is no longer any dispute, that the D Schedule lands were acquired out of the family funds, it appears clear that the joint family did not possess sufficient nucleus for making any of the other purchases. made during this period, viz., the properties mentioned in Schedules B and BI purchased by the document exhibit 125, the properties mentioned in Schedule Cl purchased by the document exhibit B 124, the properties mentioned in Schedule C purchased by exhibit 129, the properties mentioned in the Schedule to the written statement of the second defendant purchased by documents Exhibits B 134 and B 135. The High Court 's conclusion as regards these properties that they did not form part of the joint family properties and are not liable to partition in the present suit is therefore clearly correct. The properties mentioned in Schedule C2 were purchased on the 24th April 1941 by exhibit 136 in the name of the 4 th defendant while properties mentioned in Item 1 of B2 Schedule were purchased on the 19th August 1942 by exhibit 126 in the name of the sixth defendant. Though it was the first defendant 's case that he had nothing to do with these purchases we are convinced on a consideration of the evidence that the monies for these purchases were also advanced by him. To decide whether these properties or the properties mentioned in Item 5 of Schedule B2, a house in Vepatthur, of which mortgage was taken in the name of the first defendant himself by exhibit B 1929 on the 10th May 1942, formed part of the joint family property, it is necessary to examine what funds, if any, belonging to the joint family were with the first defendant during these years. The first defendant 's case, as already indicated, is that from 1940 till the mother 's death in 1945 the plaintiff and not he managed the joint family properties so that he did not receive any portion of the joint family earnings during the period. The plaintiff has strenuously denied the truth of this statement. There are several circumstances however which make us think that the first defendant 's version is true. The most imoprtant of these is the fact that the youngest brother Mahadeva, who is clearly siding with the plaintiff in this family quarrel, made a definite assertion in his written statement in these words: "Similarly the plaintiff has been collecting the income from the joint family properties during the years 1940, 1941, 1942 and 1943. " He also stated there that the plaintiff had assured him that he would maintain proper accounts for the collection and expenditure of the income joint family for his period of management and made the definite claim that the plaintiff was liable to render an account for the period of his management. It is true that at the trial Mahadeva tried to explain away this assertion in the written statement by saying that this was based on information given to him by the defendant No. 1. In the very next sentence, however, he again said that this view that the plaintiff was exclusively managing for certain years was his coiiclusion. It is important to notice in this connection that at the bottom of exhibit B 190 dated the 13th March 1941 which Mahadeva 501 received from Ramakrishna, Mahadeva made in his own hand an entry in red ink to the following effect: "1939 Kuruvai (paddy) sold by Nana 1939 Semba Mudal (harvest) by Nana, sold in 1940. " It is true that there are some letters which indicate that even during 1941 and thereafter Ramakrishna was issuing some instructions to the Kariasthan. But, considering the facts mentioned above along with the letters Exibits B 177 and B 72 in which detailed instructions about the cultivation were being given by the plaintiff to the Kariasthan, we have come to the conclusion that from about 1940 till the mother 's death early in 1945 the plaintiff displaced the first defendant from the management of the family lands and took away all the family lands in Kumarakshi and took away all the income from them. The only income from joint family properties that appears to have come into the hands of the first defendant during this period was that from D Schedule lands. The yield from these lands may roughly be estimated at about 300 kalams for each year. The price per kalam in 1941 appears from exhibit 100 to have been Rs. 2/6/ . The net income, after payment of the kist and debiting the expenses of cultivation etc., may be placed there fore at about Rs. 500 It is undoubtedly a very rough estimate. But in the absence of anything more specific on the record we think it proper to accept this as a reasonable basis for ascertaining the nucleus available in the first defendant 's hands from the D Schedule property. On this calculation the first defendant appears to have had in his hands about Rs. 1,5001 during the years 1940 to 1942. There was already however a deficit of more than this amount on his management of the properties during the previous period 1931 to 1939. It is reasonable therefore to think that there was no nucleus from the joint family properties which the first defendant could have possibly used in making the acquisitions during 1941 and 1942. The conclusion of the High Court that these properties did not belong to the joint family and are therefore not liable to partition cannot therefore be disturbed. Some of the properties mentioned in Schedule B2 to the plaint were purchased in 1945 and 1946 by exhibit B 127 aid B. 128 in the name of the third defendant, Venkatarama. At the time of these acquisitions the third defendant had been karnam of Vepatthur for over 15 years. It is not unlikely he would have saved some portion of his own earnings during this period so as to be able to pay for these purchases out of his own earnings. It cannot therefore be said reasonably that these purchases were made from funds advanced by the first defendant. Apart from this, it appears that the plaintiff has not been able to show that at the time of these acquisitions the first defendant had 502 with him sufficient income out of the joint family properties for purchasing all these lands. We have already found that the first defendant resumed management of the joint family properties on his mother 's death in 1945. On the question about the income and expenses during this period there is hardly any evidence worth the name on the record. On a consideration of all these circumstances, we are of opinion that the High Court 's conclusion as regards these properties also that they did not form part of the joint family property is correct. The brings us to Mr. Rajagopala Sastri 's second argument. While admitting the legal position that in the absence of any evidence of fraud or misappropriation the Karta cannot be called upon to account for the past transactions, learned Counsel stresses the responsibility of the Karta to establish what are the assets available for partition. In support of this, the learned Counsel drew our attention to the decision in Parmeshwar Dube vs Gobind Dube(1). That case laid down the rule that in the absence of fraud or other improper conduct the only account the Karta of a joint family is liable for is to the existing state of the property divisible; but that this did not mean that the parties were bound to accept the statement of the Karta as to what the property consisted of and an enquiry should be directed by the court in a manner usually adopted to discover what in fact the property consisted of at the date of the partition. About the correctness of this proposition there is no dispute. In what manner this principle can be applied depends however on the facts and circumstances of each case. Where, as in the present case, the evidence already adduced before the court shows prima facie that the Karta could not reasonably be expected to have in his hands at the date of the suit any accumulation worth the name in addition to the immovable properties found on evidence to have been acquired for the family, there can be no justification for calling the Karta to account for his past dealings with the joint family property and its income. In the circumstances of this case therefore the order of the High Court that there was no liability on the first defendant as managing member to render any account of any kind prior to the 12th December 1946, on which notice demanding partition was issued, does not call for any modification. In the result, the appeal is dismissed with costs. Appeal dismissed.

There were three brothers who continued as members of a joint family with the eldest of them, the first respondent as the karta. Certain properties were acquired thereafter for the joint family. Certain properties were also acquired in the name of the first respondent 's son his wife and grandson. The two other brothers of respondent No. 1 acquired properties for themselves out of their own earnings. Relations became strained between the brothers and the second brother the present appellant filed suit for partition claiming not only the original properties of the joint family and the properties acquired for the joint family by the Karta, the present respondent but also the properties acquired by the respondent No. 1 in the name of his wife, son and grandson as joint family properties. He also called on the first respondent to account for the past years. The third brother was impleaded as second defendant. Respondent No. 1 's contention was that the last mentioned properties were bought by him from his own savings and therefore were not part of the join, family property and consequently not liable to partition. The learned trial Judge held that those properties were joint family property and were liable to be partitioned. Respondent No. 1 thereupon appealed to the High Court and the High Court allowed the appeal regarding substantial part of the schedule properties. Thereupon the appellant filed the present appeal. Held: (i) Where properties were acquired in the name of a joint family member, if at the date of such acquisition the joint family had sufficient nucleus for acquiring it, the property should be presumed to have been acquired from out of family funds and so to form part of the joint family property, unless the contrary is shown. In the present case on a consideration of the evidence it is found that the joint family had at the date of the acquisition Of the properties in question sufficient nucleus from which these properties could be acquired. Amritlal Sen & Ors. vs Surath Lal Sen, A.I.R. 1942 Cal. 553 and Appalaswami vs Suryanarayanamurthy, I.L.R. [1948] Mad. (P.C.) 440, referred to. (ii) In the absence of any evidence of fraud or misrepresentation the Karta of a joint family cannot be called upon to account for the past transactions, but this does net mean that the parties were bound to accept the statement of the Karta as to what the property consisted of and an enquiry should be directed by the court in a manner usually adopted to discover that in fact the property consisted of at the date of the partition. In what manner this principle can be applied depends on the facts and circumstances of each case. Where as in the present case the evidence ,on record shows prima facie that the Karta could not reasonably 491 be expected to have in his hands at the date of the suit any accumulaties found on evidence to have been acquired by the family, there can be no justification for calling the Karta to account for his past dealing with the joint family property and its income. Parameshwar Dube vs Govind Dube, I.L.R., , explained.

Appeals Nos. 746 and 747 of 1957. Appeals by special leave from the judgments and orders dated June 3, 1955, and May 21, 1956, of the Labour Appellate Tribunal of India, Calcutta, in Appeal No. Cal. 366/52 and Misc. Case No. 145 of 1955 respectively, arising out of an Award dated September 22, 1952, of the Industrial Tribunal, Bihar, and published in the Bihar State Government Gazette on October 21, 1952. M. C. Setalvad, Attorney General for India and R. C. Prasad, for the appellant. The respondent did not appear. April 29. The Judgment of the Court was delivered by WANCHOO, J. These are two appeals by the management by special leave in an industrial matter arising out of two applications under section 33 of the Industrial Disputes Act (hereinafter called the Act). The facts of the case are briefly these : The appellant, Messrs. Sasa Musa Sugar Works (Private) Ltd. is a sugar factory in District Saran (Bihar). The factory was established in 1932. In June 1942, a trade union was formed in this factory. In July 1943, trouble arose between the workmen and the management resulting in the discharge of three office bearers of the union, including one Shams ud din, who was then the 838 joint secretary. That matter ",as referred to adjudication and the discharged workmen were ordered to be reinstated in the beginning of 1944. In December 1944, there was trouble again and a large number of workmen were dismissed, including Shams ud din, who had by now become the president of the union. This dispute was again referred to an Industrial Tribunal, which again ordered reinstatement of the dismissed workmen in August 1947. There was peace for some time after this. But in June 1951, the management again discharged seventeen workmen, including Shams ud din, who was at that time secretary of the union. The trouble continued up to December 1951, when an agreement was arrived at between the union and the management, as a result of which twelve of the workmen were reinstated but five, including Shams ud din, were not and their cases were to be referred to adjudication. It appears, however, that another reference between the management and its workmen was already pending since September 8, 1951, before an Industrial Tribunal, when this agreement was arrived at. Thereafter the work in the factory proceeded smoothly for some time. But on January 1, 1952, a notice was issued by the union to the management enlisting as many as 40 demands and it was threatened that if the demands were not met within seven days, the union would have to advise the work men to adopt go slow and call upon them to offer passive resistance with effect from January 9, 1952, and take all legitimate means to see that the decision of go slow was carried out till the demands of the union were fulfilled. This notice was received by the management on January 4, which immediately contacted the officers of the Labour Department as well as the Sub Divisional Magistrate at Gopalganj. On January 8, the Deputy Labour Commissioner wrote to the union that as the conciliation officer was busy in the general elections, the status quo should be maintained till the elections were over, so that the matter might be looked into by the conciliation officer. The union, however, gave no heed to this advice and go slow began from January 9 and 839 was continued till January 12, 1952. Then the Labour Commissioner himself came to the factory on January 12 and advised Shams ud din who was the s moving spirit behind all this to call off the go slow, as it was proposed to start conciliation proceedings at Patna on January 17, 1952. Conciliation proceedings then began on January 17 and an agreement was arrived at as to some of the demands on January 23, and it was decided that further conciliation proceedings would be held in February. But in spite of this agreement go slow was again resorted to from January 24 to January 31. In the meantime, the Labour Officer had arrived at the factory on January 28, 1952, and further talks took place. The workmen, however, did not pay heed to the advice of the Labour Officer. He, therefore, reported on January 31 to the Labour Commissioner that go slow was still continuing. The Labour Commissioner then ordered the Labour Officer to tell the workmen that no further conciliation proceedings would take place until the goslow was called of. The Labour Officer then informed the management that it could take disciplinary action against the workmen concerned with the permission of the Industrial Tribunal. Consequently, the management suspended thirty three workmen by a notice given on the night of January 31 as from February 1. It was said in the notice that these thirty three workmen had been found taking a leading part in the unjustified go slow which was in contravention of the Act and they were therefore suspended from service until further orders. This notice had some good effect and work improved for four days; but from February 5 goslow was started again. Consequently, the management suspended seven more workmen from February 6 and eight more from February 7 by giving notice to them in the same terms in which the notice had been given to the thirty three workmen, on January 31. As adjudication proceedings were pending since September 1951 between the management and its workmen, the former applied on February 6, 1952, under section 33 of the Act for permission to dismiss the thirty three workmen and on February 11, 1952, for permission to 840 dismiss the remaining fifteen workmen who had been suspended later. The forty eight workmen in their turn applied on March 29, 1952, under section 33 A of the Act to the Industrial Tribunal and their case was that they had been suspended as a measure of punishment and that as this was done without the sanction of the Industrial Tribunal, the management had committed a breach of section 33. The three applications were tried together by the Industrial Tribunal and the contentions raised before it were these : (1) The management 's applications under section 33 had not been preceded by any enquiry into the misconduct of the workmen and were, therefore, liable to be rejected ; (2) The order of suspension in this case amounted to punishment and therefore section 33 had been contraven ed; and (3) There was an unjustified go slow by the workmen in January and February 1952. On the first point, the Industrial Tribunal found that Do enquiry had been held by the management before the two applications, under section 33 were made; but it held that all the evidence which could have been taken in the enquiry by the management had been led before it and it was in full possession of the facts, and no question of any prejudice to the workmen arose, as it would be open to it on a review of the entire evidence before it to decide whether the applica tions for permission to dismiss should be granted or not. On the second point, it held that the order of suspension was not as a measure of punisment in the circumstances of this case and that it was an order pending enquiry by the management and proceedings under section 33 before the tribunal and that, as there were no Standing Orders as to suspension in this factory, the management 's liability to pay the workmen their wages during the period of suspension remained. On the third point, the Industrial Tribunal, after an elaborate discussion of the evidence, came to the ' conclusion that there was a deliberate go slow resorted to by the workmen in January and February 1952 and 841 that it was unjustified as it took place while conciliation proceedings were pending. Having given these findings, the Industrial Tribunal had then to decide what orders it should pass on the applications under section 33 and section 33 A. It held that there was no evidence to show that of the forty eight workmen concerned, sixteen workmen named by it had taken part in the go slow or instigated it. It therefore refused the application under section 33 with respect to these sixteen workmen. As to the remaining thirtytwo workmen it held that as some Standing Orders which were under contemplation at the time provided either dismissal or suspension for seven days in case of misconduct, it was proper to grant leave to the management to suspend the workmen for seven days, in view of some opinion expressed by a Go Slow Committee appointed some time before by the Bihar Central (Standing) Labour Advisory Board. In effect, therefore, it rejected the prayer of the management for dismissal with respect to these thirty two workmen also. Finally, it rejected the application under section 33 A. This award led to two appeals before the Labour Appellate Tribunal; one was by the management against the entire award so far as it related to its applications under section 33, and the other by the workmen against the dismissal of their application under section 33 A and against the award relating to the applications of the management under section 33. When the matter came up for hearing before the Appellate Tribunal, the workmen withdrew their appeal with respect to their application under section 33 A and it was consequently dismissed. The result of the dismissal of the appeal of the workmen was that the finding of the Industrial Tribunal that the suspension was not a punishment and was only pending enquiry by the management and the proceedings before the tribunal, stood confirmed. As to the *appeal by the management with respect to the applications under section 33, it was contended on its behalf before the Appellate Tribunal that the Industrial Tribunal had gone wrong on two substantial questions of law, namely (1) the Industrial Tribunal could either grant or 106 842 refuse permission to dismiss on an application for such permission under section 33 and it could not substitute its own judgment about the quantum of punishment; and (2) it was wrong in rejecting the applications against sixteen workmen on the ground that there was no evidence. The Appellate Tribunal was of the opinion that the contention of the management on both these points was correct and that the appeal involved substantial questions of law. It also found that the Industrial Tribunal 's finding that the workmen had resorted to go slow was not perverse and could be the only finding on the evidence. It then went on to say that go slow was insidious in nature and could not be countenanced, and that it was serious misconduct normal punishment for which was dismissal. It also held that the Industrial Tribunal was not right in relying upon the recommendations of the Go Slow Committee and the contemplated Standing Orders which were not till then in force. Having said all this, we should have expect ed that the Appellate Tribunal would set aside the order of the Industrial Tribunal and grant permission to the management to dismiss the workmen for what was serious misconduct of an insidious nature which could not be countenanced. But it went on to say that it was well settled that where an employer could not punish a workman without obtaining permission from the tribunal under section 33, an application for permission would be mala fide if it was made after any punishment had already been meted out to the workman. It held that in the present case, the suspension of the workmen by the management was substantive punishment, because the notice did not in so many words state that it was pending enquiry and therefore the applications for permission having been made after punishment had been meted out were mala fide. In coming to this conclusion, the Appellate Tribunal seems to have forgotten that it had already dismissed the appeal of the workmen from the order of the Industrial Tribunal on their application under section 33 A, which in effect amounted to confirming the order of the Industrial Tribunal that the suspension was not a punishment but was rightly made pending enquiry by 843 the management and proceedings before the tribunal. The Appellate Tribunal supported its decision on this question of punishment by stating that the mala fides of the management were clear from the fact that though the suspensions had been made between January 31 and February 7, 1952, the application was filed by the management on March 29, 1952, after the application by the workmen under section 33 A had been filed. This observation was clearly wrong, for the applications under section 33 were filed on February 6 and 11 by the management, and it was the application of the workmen under section 33 A which was filed on March 29. Having thus inverted the order in which the applications were made to the Industrial Tribunal, the Appel. late Tribunal held that the applications of the management under section 33 were Dot bona fide. It then dismissed the appeal of the management, thus upholding the order of the Industrial Tribunal so far as the suspension of thirty two workmen for seven days was con cerned on the ground that the workmen had withdrawn their appeal, though in the earlier part of the judgment all that was said was that the workmen had withdrawn their appeal against the order under section 33 A. As the Appellate Tribunal had obviously made a mistake and inverted the order in which the applications under sections 33 and 33 A had been made, a review application was filed by the management. It, however, held that though the dates had been wrongly mentioned by accident, it saw no reason to review its order. That is how the management filed two special leave petitions in this Court. We are of opinion that on the findings of the Industrial Tribunal on the three points formulated by it which have not been upset by the Appellate Tribunal, the only order possible on the applications of the management under section 33 was to permit it to dismiss the forty eight workmen, provided there was evidence against them all. It was not open to the Industrial Tribunal when it was asked to give permission to dismiss to substitute some other kind of punishment and give permission for that. The Industrial Tribunal was satisfied that there was misconduct and that finding has been upheld by the Appellate Tribunal. As such 844 if there was evidence that these forty eight workmen were guilty of misconduct, the Industrial Tribunal was bound to accord permission asked for. We cannot agree with the Appellate Tribunal that the suspension in this case was substantive punishment and was not an interim order pending enquiry and proceedings before the Industrial Tribunal under section 33. We have already pointed out that the Labour Officer told the management on January 31, 1952, that it was free to take disciplinary action with the permission of the Industrial Tribunal. It was thereafter that thirtythree workmen were suspended on January 31 and the notice clearly said that the suspension was pending further orders, thus intimating to the workmen that the order of suspension was an interim measure. This notice of January 31 was followed by an application on February 6 to the Industrial Tribunal for permission to dismiss the thirty three workmen involved in it, and this also clearly shows that the suspension was pending enquiry (if any) by the management and proceedings before the Industrial Tribunal. Similarly, the suspension notices of February 5 and 6 relating to fifteen workmen said that they were suspended till further orders and were followed on February II by an application under section 33 to the Industrial Tribunal for permission to dismiss them. In the circumstances it is quite clear that suspension in this case was not a punishment but was an interim measure pending enquiry and proceedings before the tribunal. We have already pointed out that this was the finding of the Industrial Tribunal on the basis of which the application under section 33 A was dismissed and this finding stood confirmed when the workmen withdrew their appeal with respect to their application under section 33 A. The Appellate Tribunal therefore was clearly in error in holding . that the suspension was punishment. The only question that remains is about the sixteen workmen about whom the Industrial Tribunal held that there was no evidence to connect them with the go slow. The Appellate Tribunal 's view in this matter was that the contention of the management that the Industrial Tribunal was wrong in holding that there was no evidence against these sixteen workmen was 845 correct. It has been shown to us that evidence against these sixteen workmen is of exactly the same witnesses and of the same kind as the evidence against the remaining thirty two. The finding, therefore, of the Industrial Tribunal that there was no evidence against the sixteen workmen is patently perverse, for there was the same evidence against them as against the remaining thirty two. It follows, therefore, that all the forty eight workmen (two of whom are since said to have died) are exactly in the same position. As held by the. Appellate Tribunal, go slow is serious misconduct which is insidious in its nature and cannot be countenanced. In these circumstances as these fortyeight workmen were taking part in the go slow and were thus guilty of serious misconduct, the management was entitled to get permission to dismiss them. But as the management held no enquiry after suspending the workmen and proceedings under section 33 were practically converted into the enquiry which normally the management should have held before applying to the Industrial Tribunal, the management is bound to pay the wages of the workmen till a case for dismissal was made out in the proceedings under section 33; (see the decision of this Court in the Management of Ranipur Col liery vs Bhuban Singh (1) ). As already pointed out, this is the view taken by the Industrial Tribunal while dealing with the application under section 33 A which stood confirmed by the dismissal of the appeal by the workmen in that behalf. The management will therefore have to pay the wages during the period of suspension till the award of the Industrial Tribunal. We therefore allow the appeals and set aside the orders of the two Tribunals so far as the applications under section 33 are concerned and grant the appellant the permission sought for by it in these applications subject to the workmen being paid all their wages during the period of suspension up to the date of the award of the Industrial Tribunal, i. e., 22 9 1952. As the workmen did not appear to contest these appeals, we pass no order as to costs. Appeals allowed. (1) [1959] Suppl. 2 S.C.R. 719.

Pending an adjudication proceeding between the workmen and the Mills, the management of the appellant Mills served notices on thirty three of its workmen and thereafter suspended them for taking a leading part in a protracted go slow in contravention of the Industrial Disputes Act. For similar reasons, a few days later, it again served similar notices on fifteen others and suspended them. Thereafter the management made two applications under section 33 Of the Industrial Disputes Act for permission to dismiss the said workmen. The forty eight workmen in their turn applied under section 33A of the Act alleging breach of section 33 by the management in suspending them by way of punishment. The Industrial Tribunal found that the suspension was not by way of punishment and that there was a deliberate resort to go slow by the workmen which was unjustified; it refused the permission with respect to sixteen of the workmen on the ground of want of evidence but granted leave to the management to suspend the rest for seven days, thus disallowing the prayer for dismissal. It also rejected the workmen 's application under section 33A of the Act. Appeals were filed by both the parties and when they came up for hearing, the Appellate Tribunal allowed the workmen to withdraw their appeal so far as it related to their application under section 33A of the Act, with the result that the finding of the Tribunal that the suspension was not a punishment but only pending enquiry by the management and proceedings before the Tribunal, stood confirmed. While agreeing with all other findings of the Tribunal, the Appellate Tribunal took the view that the suspension ordered by the management was substantive punishment since the notices did not state that it was pending enquiry, and the subsequent application for permisson to dismiss the workmen was, therefore, mala fide and dismissed the appeal of the management. Held, that the material findings arrived at by the Industrial Tribunal not having been upset by the Appellate Tribunal, the only possible order on the applications of the management under section 33 of the Act was to permit it to dismiss the workmen provided there was evidence against them all. It was not open to the Industrial Tribunal to substitute some other form of punisliment and give permission therefor. 837 The Appellate Tribunal was clearly in error in holding that suspension, in the instant case, was not an interim order pending .enquiry and proceedings before the Tribunal under section 33, but substantive punishment, contrary to the finding of the Industrial Tribunal which stood confirmed by its own order permitting the withdrawal of the appeal against it by the workmen. The finding of the Industrial Tribunal that there was no evidence against sixteen workmen was, on the face of it, perverse, since the evidence against them was the same as against the thirty two others. As go slow was serious misconduct, insidious in nature and could not be countenanced, and since the workmen were found guilty of such misconduct, the management must be granted the permission to dismiss them.

Appeal No. 9 of 1958. Appeal by special leave from the judgment and order dated February 24, 1955, of the former Bombay High Court in Income tax Reference No. 50/X of 1954. K. N. Rajagopal Sastri and D. Gupta, for the appellant. R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent. August 10. The Judgment of the Court was delivered by SHAH, J. Aktiebolaget Svenska Kullakerfabriken of Gothenburg is a company incorporated under the laws of Sweden, and is engaged in the manufacture of ball bearing equipment. section K. F. Ball Bearing Co., Ltd., which will hereinafter be referred to as " the section K. F." is a company registered under the Indian Companies Act, 1913. By an agreement dated January 1, 1939, the section K. F. was appointed by the Swedish company as its sole selling agent in India. On account ,of the commencement of hostilities in the second world war, a corporation known as the Panrope Corporation was incorporated in the Republic of Panama in 1940, to take over as a war time arrangement the assets and business of that Swedish company. With effect from July 1, 1947, the Panrope Corporation conveyed the property and business to the Swedish company. In the years 1947, 1948, 1949 and 1950 the section K. F. sold in India as the agent 'of the Swedish and Panamian companies which will hereinafter be collectively referred to as the " foreign corporations " the goods manufactured by them. A small quantity of goods was bought by the section K. F. 143 and sold by it in India, but no question arises in this appeal about the liability to pay income tax in respect, of sale of those goods and no reference is made herein in respect of those sales. The Income tax Officer, Companies Circle 11(3), Bombay, exercising powers vested in him by section 43 of the Indian Income tax Act, 1922, having appointed the section K. F. as the statutory agent of the foreign corporations for the assessment year 1948 49, and of the Swedish company for the assessment years 1949 50, 1950 51 and 1951 52, the section K. F. submitted returns of income for these years in the taxable territory on behalf of the foreign corporations. Clauses 13, 22 and 23 of the agreement dated January 1, 1939, between the section K. F. and the Swedish company which are material for the purpose of this appeal are as follows: Clause 13: The Agent shall render before the tenth day of each month a true and detailed statement of the said Products that have been sold by him or his Sub Agents during the preceding month. This statement is to be prepared in accordance with instructions that are to be given by section K. F. and it shall contain the names and addresses of the parties to whom the said Products have been supplied, together with a description of the Products and the prices at which they have been sold. Clause 22: The Agent shall sell the said Products either for cash or on credit. Notwithstanding the fact that permission is hereby granted by section K. F. to the Agent to sell on credit any credit given by the Agent to the buyer of the said Products shall be deemed to have been given by the Agent for his own account and on his own responsibility. If the buyer has not paid the Agent the amount that is owing by the date on which the Agent is to render a statement and make payment to section K. F. for such sales that have been made on credit, the Agent shall nevertheless be liable to effect payment to section K. F. in accordance with the terms and conditions that are defined in this Agreement. Clause 23: The Agent shall pay to section K. F. the 144 net sales value of the said Products that are sold each month, after deduction of the commission that has been agreed upon (cf 20) and the import expenses that have been paid (of. 21). Payment shall be made in Sweden thirty (30) days, at the latest, following the last day of the month in which the sales have been effected. The Income tax Appellate Tribunal has found that for rendering accounts of the net sales and also for making payments according to the terms of el. 13 of the agreement, the section K. F. maintained for the relevant periods a current account in the names of the foreign corporations in respect of goods " received on consignment ". When goods were sold by the section K. F., the account of the principal was credited with the price and the account of the buyers to whom the goods were sold on credit was debited. In a majority of cases of sales, remittances of "sale value" after deducting commission were made after sale of the goods to the buyers but before the sale proceeds were recovered. In a few cases, remittances were made even before the goods were sold, and in the remaining, remittances were made after the sale proceeds were realized from the buyers. The Income tax Officer assessed the foreign corporations under section 4(1)(a) of the Indian Income tax Act for payment of tax on the profits included in the price realized by the section K. F. by sale of goods " received on consignment " without making any distinction between sales in respect of which the remittances were made after recovery of sale proceeds and sales in respect of which remittances were made before reco very of the sale proceeds. The order passed by the Income tax Officer was confirmed by the Appellate Assistant Commissioner and also by the Income tax Appellate Tribunal. At the instance of the section K. F., the following questions were referred to the High Court of Judicature at Bombay under section 66(1) of the Indian Income tax Act, 1922: (1) Whether there was evidence on which the Tribunal could have held that the Panrope Corporation and the non resident company had a business 145 connection in the taxable territories in the years of account ? (2) Whether the profits of the Panrope Corporation and the non resident company in respect of the consignment goods were received in the taxable territories on their behalf ? At the hearing of the reference before the High, Court, counsel for the assessee having conceded that the section K. F. was not a purchaser of the goods " received on consignment " from the foreign corporations, but was their agent for sale of the goods, an answer in the affirmative was recorded on the first question. On the second question, the High Court opined that as the remittances by the section K. F. pursuant to the terms of cl. 23 of the agreement before the sale pro ceeds were realized from the buyers were received by the foreign corporations outside the taxable territory, the same could not be taken into account under section 4(1)(a) of the Indian Income tax Act in assessing the taxable income of the foreign corporations. The High Court observed that the section K. F. was liable to pay tax on behalf of the foreign corporations under section 4(1)(a) only if the taxing authority established that the foreign corporations had received the sale proceeds within the taxable territories; that the sale proceeds were received by the foreign corporations when the section K. F. made remittances under cl. 23 of the agreement, but somewhat inconsistently the High Court observed that the remittances made by the section K. F. before the sale proceeds were realized, were remittances not of sale proceeds, but in discharge of its obligation under el. 23 of the agreement; and that the realizations by the section K. F. from the buyers of the goods subsequent to the remittances were not of sale proceeds on behalf of the foreign corporations but were receipts on its own behalf and in its own right, and in recoupment of the amounts remitted to the foreign corporations. The High Court accordingly answered the second question in the affirmative " to the extent that the remittances were made after the sale proceeds were received by the assessee company". 19 146 We are unable to agree with the reasoning and the ,,conclusion of the High Court. The terms of the agreement make it abundantly clear that the goods " received on consignment " from the foreign corporations were received by the section K. F. as their selling agent and not as purchaser. The goods, it is true, were sold by the section K. F. in its own name and not in the name of the foreign corporations, but the goods were still sold for and on behalf of the foreign corporations and the sale proceeds received by the section K. F. were received not on its own behalf but for and on behalf of its principals. Clauses 9, 12, 13, 14, 17, 18 and 20 of the agreement clearly show that the goods received by the section K. F. continued to remain the property of the foreign cor porations till they were sold to the buyers. In the price received for sale of the goods, the profit of the owner was in truth embedded and that profit was liable to be taxed under section 4(1)(a) of the Indian Income. tax Act if it was received in the taxable territory. It is not disputed that the sale proceeds realized by the section K. F. in the taxable territory as agent of the foreign corporations before remittances under the terms of the agreement were liable to be taxed. Does the circumstance that the section K. F. had in discharge of an obligation undertaken by it made remittances under the terms of the agreement before it realized the price of the goods sold alter the nature of the realizations ? The remittances made by the section K. F. indisputably reached the foreign corporations in respect of all sales outside the taxable territory. But the section K. F. was their agent for sale of the goods, and for receiving the price in the taxable territory. The relation between the section K. F. and the foreign corporations was not altered because before realizing the price from the buyers remittances were made to the foreign corporations. The price of goods sold by the section K. F. whether before or after remittance was realized as the agent of the foreign corporations. If remittance in respect of a sale was made before the price was realized, the section K. F. became entitled to adjust the account and to take credit for the amount paid out of the realization. What the foreign corporations received under remittances 147 made before or after realization of the price was not the sale proceeds in respect of sales, but amounts. due by the section K. F. under an obligation expressly undertaken by it under cl. 23 of the agreement. The price of goods sold by the section K. F. were in all cases received by it within the taxable territory ; and the section K. F. being the agent for sale, and for receiving the price, the income embedded in the sale proceeds must be deemed to be received by the foreign corporations also within the taxable territory. It is the receipt of income which gives rise under section 4(1)(a) of the Indian Income tax Act to liability to pay tax: and the place where the price is received is determinative of the question whether the income is received in the taxable territory. The price for the goods sold was received only when the buyer paid it and not before, and when the price was received by the section K. F., the income was received. The remittances by the section K. F. to the foreign corporations before the price was received did not include income, because income in fact was never received till the price was realized. Again we are unable to agree with the contention of counsel for the section K. F. that there was a contract of suretyship between the foreign corporations and the section K. F. and the receipt by the former of the remittances amounted to receipt of the price of the goods. It is not pretended that there was a tripartite contract and the foreign corporations sold the goods directly to the purchasers in India, the section K. F. having guaranteed payment of the price by the buyers to whom the goods had been sold. The price received by the section K. F. being received within the taxable territory for and on behalf of the foreign corporations in respect of goods sold, we are unable to hold that the realization of the price in which is embedded the profit is not liable to tax under section 4(1)(a) as income received, merely because under an independent obligation, the section K. F. has rendered itself liable to pay the amount equivalent to the price (less commission) even before the price has been realized and has discharged that obligation. In the view taken by us, the second question will be 148 answered in the affirmative in respect of sale of all ,goods where the price has been received by the S.K.F. in the taxable territory, and irrespective of whether the remittance has been made in respect of the goods sold before or after the price was received. The appeal is accordingly allowed to the extent indicated. The appellant will be entitled to his costs in this court and also the costs of the reference in the High Court. Appeal partly allowed.

A Swedish company manufacturing ball bearing equipment entered into an agreement with the respondent, section K. F. Ball Bearing Co. Ltd. registered under the Indian Companies Act, 1913, appointing the latter as its sole selling agent in India. The material portion of the Agreement ran thus: " Clause 23: The Agent shall pay to section K. F. net sales value of the said products that are sold each month, after deduction of the Commission that has been agreed upon and the import expenses that have been paid. Payment shall be made in Sweden thirty days at the latest following the last day of the month in which the sales have been effected." During the second world war a corporation known as the Pan rope Corporation was incorporated in the Republic of Panama to take over the assets and business of the Swedish company and the said Panrope Corporation in its turn conveyed the property and business to the Swedish company. Thereafter the respondent company sold in India as the agent of the foreign Corporations goods manufactured by them, and in a majority of the sales the respondent company remitted the " sale value " to the foreign corporations after the goods were sold but before the sale proceeds were recovered from the buyers. In some cases remittances were made even before the goods were sold and in others remittances were made after the sale proceeds were realised from the buyers. The Income tax Officer assessed the foreign corporations under section 4(1)(a) of the Indian Income tax Act for payment of tax on the profit included in the price realised by the respondent company without making any distinction between remittances made before recovery of the sale proceeds and remittances made after recovery of the sale proceeds. This order was confirmed by the higher income tax authorities. On a reference made at the instance of the respondent company the High Court came to the conclusion that the foreign corporations had a business connection in the taxable territories in the years of account and the respondent company was liable to pay tax on their behalf only with regard to remittances made after the sale proceeds were recovered. On appeal by the Commissioner of Income tax by special leave, 142 Held, that the liability to pay income tax finder s, 4(1)(a) arose on the receipt of the income and the question whether the income was received in the taxable territory was determined by the place where the price was received. Profits were received by the respondent company on behalf of the foreign corporations in the taxable territory in respect of all sales of consigned goods irrespective of whether the remittances were made either before or after the price was received.

Criminal Appeal No. 128 of 1990. From the Judgment and Order dated 19.8.1989 of the Patna High Court in Criminal Miscellaneous No. 2314 of 1989. A.D. Sikri, Ranjan Mukherjee and D. Goburdhan for the Appellant. R.K. Garg and A. Sharan for the Respondents. The Judgment of the Court was delivered by FATHIMA BEEVI, J. Special leave granted. 790 The legality of the order of the High Court dated 19.8. 1989 passed on an application made under section 482 Cr. P.C. is challenged in this appeal. In a case instituted on a private complaint by the appellant for offences under sec tions 452 and 323 I.P.C., the Judicial Magistrate First Class, Patna, in exercise of power under section 192(2) Cr. P.C. transferred the case for enquiry under section 202 of the Code. The Court of the Second Class Magistrate, after examining witnesses, by order dated 22.3. 1985 issued proc ess to the two accused, the respondents herein. The order of the Magistrate issuing process was challenged by the re spondents under section 482 before the High Court. The main ground urged before the High Court was that the First Class Magistrate had transferred the case without taking cogni zance of the offence and the subsequent proceedings were, therefore, illegal. The High Court, by its order dated 20.8.88, dismissed the petition. It was found that there was no such illegality. The respondents again made Crl. Petition 2314/89 under section 482 Cr. P.C. before the High Court alleging, inter alia, that the record of the proceed ings on close scrutiny would indicate that the case had not been taken cognizance of before the transfer. The learned Single Judge accepted the case of the respondents and quashed the proceedings by the impugned order. The learned counsel for the appellant contended before us that the second application under section 482 Cr. P.C. was not entertainable, the exercise of power under section 482, on a second application by the same party on the same ground virtually amounts to the review of the earlier order and is contrary to the spirit of section 362 of the Cr. P.C. and the High Court was, therefore, clearly in error in having quashed the proceedings by adopting that course. We find considerable force in the contention of the learned counsel. The inherent power under section 482 is intended to prevent the abuse of the process of the Court and to secure ends of justice. Such power cannot be exercised to do something which is expressly barred under the Code. If any considera tion of the facts by way of review is not permissible under the Code and is expressly barred, it is not for the Court to exercise its inherent power to reconsider the matter and record a conflicting decision. If there had been change in the circumstances of the case, it would be in order for the High Court to exercise its inherent powers in the prevailing circumstances and pass appropriate orders to secure the ends of justice or to prevent the abuse of the process of the Court. Where there is no such changed circumstances and the decision has to be arrived at on the facts that existed as on the date of the earlier order, the exercise of the power to reconsider the 791 same materials to arrive at different conclusion is in effect a review, which is expressly barred under section 362. In the present case, there had been a definite finding that the complaint was taken cognizance of by the Magistrate before he transferred the proceedings under section 192(2) for enquiry under section 202 Cr. This finding has been arrived at after perusal of the record of the proceedings before the Magistrate and on a consideration of the report of the concerned Magistrate. A reappraisal of the facts on record to determine whether such cognizance had been taken of in a subsequent proceeding is not, therefore, warranted. The only ground on which relief was claimed is the alleged irregularity in the transfer of the proceedings. It was not open to the parties to reagitate the question by a fresh application nor was the court empowered under section 482 to reconsider the matter. Section 362 of the Code expressly provides that no court when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error save as otherwise provided by the Code. Section 482 enables the High Court to make such order as may be necessary to give effect to any order under the Code or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. The inherent pow ers, however, as much are controlled by principle and prece dent as are its express powers by statute. If a matter is covered by an express letter of law, the court cannot give a go by to the statutory provisions and instead evolve a new provision in the garb of inherent jurisdiction. In Superintendent & Remembrancer of Legal Affairs vs Mohan Singh, , this Court held that section 561A preserves the inherent power of the High Court to make such orders as it deemed fit to prevent abuse of the process of the Court or to secure the ends of justice and the High Court must therefore exercise its inherent powers having regard to the situation prevailing at the particular point of time when its inherent jurisdiction is sought to be invoked. In that case the facts and circumstances obtaining at the time of the subsequent application were clearly different from what they were at the time of the earlier application. The question as to the scope and ambit of the inherent power of the High Court vis a vis an earlier order made by it was, therefore, not concluded by this decision. The inherent jurisdiction of the High Court cannot be invoked to override bar of review under section 362. It is clearly stated in Sooraj 792 Devi vs Pyare Lal, ; that the inherent power of the court cannot be exercised for doing that which is specifically prohibited by the Code. The law is therefore clear that the inherent power cannot be exercised for doing that which cannot be done on account of the bar under other provisions of the Code. The court is not empowered to review its own decision under the purported exercise of inherent power. We find that the impugned order in this case is in effect one reviewing the earlier order on a reconsideration of the same materials. The High Court has grievously erred in doing so. Even on merits, we do not find any compelling reasons to quash the proceedings at that stage. We allow the appeal and set aside the order of the High Court. G.N. Appeal allowed.

A case was instituted on a private complaint by the appellant for offences under Sections 323 and 452 IPC before the Judicial Magistrate First Class, who transferred the case to Second Class Magistrate for enquiry. The Second Class Magistrate issued process to the respondents, which was challenged under Section 482 Cr. P.C., on the ground that the First Class Magistrate transferred the case without taking cognizance and that the subsequent proceedings were illegal. The High Court dismissed the petition. Again the respondents approached the High Court under Section 482 Cr. P.C. alleging that the case had not been taken cognizance of, before it was transferred. This time the High Court accepted the plea and quashed the proceedings. This appeal, by special leave, challenges the High Court 's order on the grounds that the second application under Section 482 Cr. P.C. ought not to have been entertained as it amounted to review of the earlier order and it was contrary to the spirit of section 362 Cr. Allowing the appeal, this Court, HELD: 1.1 The inherent power under Section 482 Cr. P.C. is intended to prevent the abuse of the process of the Court and to secure ends of justice. Such power cannot be exer cised to do something which is expressly barred under the Code. If any consideration of the facts by way of review is not permissible under the Code and is expressly barred, it is not for the Court to exercise its inherent power to reconsider the matter and record a conflicting decision. If there had been change in the circumstances of the case, it would be in order for the High Court to exercise its inher ent power in the prevailing circumstances and pass appropri ate orders to secure the ends of justice or to 789 prevent the abuse of the process of the Court. Where there is no such changed circumstance and the decision has to be arrived at on the facts that existed as on the date of earlier order, the exercise of the power to reconsider the same materials to arrive at different conclusion is in effect a review, which is expressly barred under section 362. [790F H; 791A] 1.2 Ira matter is covered by an express letter of law, the court cannot give a go by to the statutory provisions and instead evolve a new provision in the garb of inherent jurisdiction. The inherent jurisdiction of the High Court cannot be invoked to override bar of review under Section 362 Cr. P.C. [791E H] Sooraj Devi vs Pyare Lal, ; , relied on. Superintendent & Rememberancer of Legal Affairs vs Mohan Singh, , referred to. 2. In the instant case, there had been a definite find ing that the complaint was taken cognizance of by the Magis trate before he transferred the proceedings under section 192(2) Cr. P.C. for enquiry under section 202 Cr. This finding has been arrived at after perusal of the record of the proceedings before the Magistrate and on a consideration of the report of the concerned Magistrate. A reappraisal of the facts on record to determine whether such cognizance had been taken in a subsequent proceeding is not, therefore, warranted. It was not open to the parties to reagitate the question by a fresh application nor was the court empowered under section 482 to reconsider the matter. [791 B C]

section 86, 147, and 155 of 1952) under article 32 of the Constitution for writs in the nature of habeas corpus. Petitioners in person in ,petitions Nos. 86, 147 and 157 of 1952. Rajani Patel for the petitioner in petition No. 155. M.C. Setalvad, Attorney General for India, (G. N. Joshi, with him) for the respondents. R. Ganapathi Iyer for the intervener (State of Hydera bad). May 26. The Judgment of the Court was delivered by BOSE J. This petition and three others, namely peti tions Nos. 147, 155 and 157 of 1952, raise issues regarding the vires and applicability to these cases of section 3 of the Preventive Detention (Amendment) Act, 1952. This judg ment is confined to those points and will govern these cases only in so far as they raise those points. The remaining points which do not touch these issues will be dealt with by another Bench. The only exception is a point raised in petition No. 155 of 1952 with which the other petitions are not concerned. We will deal with that separately. The present petition (No. 86 of 1952) was argued very ably and with commendable conciseness by the petitioner in person. The fact that he has not been able to persuade us to his view is not due to any defect in his presentation of the case. The petitioner was arrested on the 15th of November, 1951, and an order of detention under the Preventive Deten tion Act of 1950 was served on him the same day, and he was given the grounds of detention on the following day, the 16th. His case was placed before an Advisory Board and on the 8th of February, 1952, the Bombay Government "confirmed and continued" the detention under section 11 (1) of the Preventive Detention Act of 1950. This Act, as it originally stood, was due to expire on the 1st of April, 1951, but in that year an amending 686 Act was passed which, among other things, prolonged its life to the 1st of April, 1952. The order of detention in this case was passed under the Act of 1950 as amended by the ,Act of 1951. According to past decisions of this Court, the detention would have expired on the 1st of April, 1952, when the Act of 1950 as amended in 1951 would itself have expired. But a fresh Act was passed in 1952 (Act XXXIV of 1952), the Preventive Detention (Amendment) Act, 1952. The effect of this Act was to prolong the life of the Act of 1950 for a further six months, namely till the 1st of Octo ber, 1952. The question is whether that Act also prolonged the detention and whether it had the vires to do so. It was contended that the mere prolongation of the life of an Act does not, by reason of that alone, prolong the life of a detention which was due to expire when the Act under which it was made expired. Therefore, as the Act under which the present detention was made was due to expire on the 1st of ApriL, 1952, the mere prolongation of its life by the amending Act did not affect a prolongation of the detention. Accordingly, the petitioner should have been released on the 1st of April, 1952, and as there is no fresh order of detention he is entitled to immediate release. We need not express any opinion on that point because there is present in the amending Act something more than a mere prolongation of the life of the old one. There is section a which is in these terms: "Validity and duration of detention in certain cases Every detention order confirmed under section 11 of the principal Act and in force immediately before the commence ment of this Act shall have effect as if it had been con firmed under the provisions of the principal Act as amended by this Act; and accordingly, where the period of detention is either not specified in such detention order or specified (by whatever form of words) to be for the duration or until the expiry of the principal Act or until the 31st day of March, 1952, such detention order shall continue to 687 remain in force for so long as the principal Act is in force, but without prejudice to the power of the appropriate Government to revoke or modify it at any time. " It will be noticed that the concluding part of this section states that the detention order shall remain in force "for so long as the principal Act is in force." Sec tion 2 of the amending Act defines the "principal Act" to mean the Act of 1950. Therefore, it was argued, as the Act of 1950 was due to expire on the 1st of April, 1952, the present detention also came to an end on that date and so, in the absence of a fresh order of detention, the petition er 's detention after that date was illegal. This argument, though ingenious, is fallacious. The construction of an Act which has been amended is now governed by technical rules and we mast first be clear regarding the proper canons of construction. The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed (except where that would lead to a repugnancy, inconsistency or absurdity) as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all. This is the rule in England:see Craies on Statute Law, 5th edition, page 207; it is the law in Amenca: see Crawford on Statutory Construc tion, page 110; and it is the law which the Privy Council applied to India in Keshoram Poddar vs Nundo Lal Mallick(1). Bearing this in mind it will be seen that the Act of 1950 remains the Act of 1950 all the way through even with its subsequent amendments. Therefore, the moment the Act of 1952 was passed and section 2 came into operation, the Act of 1950 meant the Act of 1950 as amended by section 2, that is to say, the Act of 1950 now due to expire on the 1st of October, 1952. (1)(1927) 54 I.A. 152 at 155. 688 Turning now to section 3, whose vires is questioned, and examining it clause by clause we first get these words: "Every detention order confirmed under section 11 of the principal Act and in force immediately before the commencement of this Act. " According to the rule of construction just examined, the words "principal Act" mean the Act of 1950 as amended by the Acts of 1951 and of 1952, 'that is to say, the Act of 1950 due to expire on the 1st of October, 1952. Incidental ly, in the particular context it could not mean the Act of 1950 as it stood in 1950 because no order confirmed under it as it then stood could have been alive "at the commencement of this Act", namely on the 15th of March, 1952. The section contin ues "shall have effect as if it had been confirmed under the provisions of the principal Act as amended ' by this Act. " The underlined words "as amended by this Act" were relied on to show that wherever the words "the principal Act" were referred to they meant the unamended original Act of 1950, otherwise these words would have been unnecessary. In our opinion, they were unnecessary in the sense that their absence would not have made any difference to the interpretation though it would have made the section harder to follow and understand. We say that for this reason. Without the underlined words the section paraphrased would read "Every detention order confirmed under the original Act shall have effect as if confirmed under its provisions. " If this were to be read literally it would lead to an absurdity, for if the order is actually confirmed under the original unamended Act it would be pointless to introduce a fiction and say that the order shall be deemed to be con firmed under that Act as unamended. But even apart from a strictly technical construction, the language of the section is accurate because, as we 689 have said, the rule is that an amended Act must be read as if the words of amendment had been written into the Act except where that would lead to an inconsistency, and this would be one of those cases unless the words are construed in a sensible and commonsense way. The draughtsman there fore had either to leave the words as they were, with an apparent inconsistency, or make his meaning clear by adding the words he did. But we do not think the addition made any difference to the result. We now turn to the second half of section 3, that is to say, to the words following the semi co]on. It is important to note here that this part is consequential on the first and merely explains the effect of the first half. It is also relevant to note that it deals with four different kinds of orders, different, that is to say, in the form of the words used though in the end they all come to the same thing. It deals with the following kinds of order: (1) an order in which the period of detention is not specified at all; in that event the detention would end at midnight on the night of the gist of March, 1952. It is clear that in this context the words "the principal Act" cannot mean the Act expiring on the 1st of October, 1952, because it envisages an order made before the Act of 1952 was in being and so on the date of its making the order could only refer to the Act then in being; (2) an order in which the period is stated to be "for the duration of the principal Act", that is to say, till the 31st of March, 1952 , (3) an order in which the period is specified to be until the expiry of the principal Act, which again brings us back to the 31st of March, 1952, as the last day of deten tion; (4) an order in which the period is specified to be till the 31st of March, 1952. In all these four cases the section says that the detention order shall "continue to remain in force, for so long as the principal Act is in force", that , is to say, till the 1st October, 1952. 690 That follows from the first part of the section because that is the meaning which the law directs shall be placed on these words unless the context otherwise directs and the context does not direct otherwise here. This part of the section is only explanatory. But we wish to found deeper than this. It is the duty of Courts to give effect to the meaning of an Act when the meaning can be fairly gathered from the words used, that is to say, if one construction will lead to an absurdity while another will give effect to what common sense would show was obviously intended the construction which would defeat the ends of the Act must be rejected even if the same words used in the same section, and even the same sentence, have to be construed differently. Indeed, the law goes so far as to require the Courts sometimes even to modify the grammatical and ordinary sense of the words if by doing so absurdity and inconsistency can be avoided. See the speech of Lord Wens leydale in Grey vs Pearson (1) quoted with approval by the Privy Council in Narayana Swami vs Emperor (2); also Salmon vs Duncombe(3). The rule is also set out in the text books: See Maxwell on the Interpretation of Statutes, 9th edition, page 236, and Craies on Statute Law, 5th edition, pages 89 to 93. The meaning of section 3 is quite plain and only desperate hair splitting can reduce it to an absurdity. Courts should not be astute to defeat the provisions of an Act whose meaning is, on the face of it, reasonably plain. Of course, this does not mean that an Act, or any part of it, can be recast. It must be possible to spell the meaning contended for out of the words actually used. We hold that there is no difficulty of construction. It was next argued that in any event the extended deten tion became a fresh detention (because of the Act of 1952) from the date the Act came into force, and reliance was placed upon the judgments of two of us, Mahajan and Das JJ. in section Krishnan vs The State of Madras(4). It is enough to say that was not the (1) r at 106. (3) 11 App. 627 at 634. (2) A.I.R. 1939 P.C. 47. (4) ; at 635 and 640. 691 decision of the Court in that case, and further, that the two Judges who held it was a fresh detention nevertheless considered that a fresh order with its concomitant fresh grounds and a fresh reference to the Advisory Board were not required; therefore, either way the petitioner must fail. Reference was made to the equality clause in article 14 of the Constitution but that argument is easily met because the classification which section 3 makes is reasonable. In one class it places all those whose cases have already been considered by the Advisory Board and in the other those whose cases have yet to go before it; also the law is fair, or at any rate as fair as detention laws can be, despite this distinction because power is left to the appropriate Government to revoke or modify these orders, or any of them, at any time. Substantially therefore there is no differenti ation. Article 14 was considered at length in The Slate of West Bengal vs Anwar Ali Sarkar (1), and according to the law laid down there, the Court must be satisfied on two points before it can strike at a law on the ground of unlawful discrimination. It must be satis fied (1) that the law in fact discriminates and (2) that such discrimination is not permissible on the principle of a rational classification made for the purposes of the legislation. The argument here was that section a discriminated against those detenus whose cases had been referred to the Advisory Board and whose detention was confirmed, on the strength of its report, under section 11 (1) before the amending Act of 1952 was passed. The reason given was that these detentions are automatically extended up to the 1st of October, 1952, by section 3 without further reference to an Advisory Board, whereas in other cases, that is to say, in the case of those who were detained before the amending Act but whose cases had not been referred at the date it came into force, and in the case of those detained after the (1)[1952] S.c.R.284 692 amending Act, the Advisory Board is called into play and individual attention is given to each case with the result that many of those detentions might not be for as long as six months. They might, for example, be only for one month or two. It was urged that this was discrimination of a kind which cannot be supported by any principle of permissible classification because classification into the above catego ries has no reasonable relation to the objects of the legis lation, such as security of the State, maintenance of public order and so forth. We are unable to accept this line of reasoning. To say that section. 3 automatically extends the detention of persons in the petitioner 's position to the 1st of October, 1952, and stops there, is only to make a partial statement of the effect of section 3 because the extension is subject to the power of the appropriate Government to revoke or modify it at any time. In other words, the automatic con tinuation of the detention till the 1st of October is not absolute and irrevocable but is made dependent on the power of the appropriate Government to revoke or modify it at its discretion under section 13 of the Act. The State may or may not continue the detention for the whole of the extended period. In both classes of cases the duration the deten tion within the overall limit of the life of the Act is left to the discretion of the State. The only difference is that in the one class of cases the discretion is exercised after the period has been extended by the amending Act, in the other the appropriate Government fixes the period itself in its discretion and can again at its discretion revoke or modify it. In both cases, the substance of the law is that the period of detention is left to the discretion of the State, and so there is no substantial discrimination. It was argued that however fair this may look on paper, in practice there will be grave discrimination because, as a matter of fact, the State will not apply its mind in the majority of cases like the petitioner 'section That is an argument we cannot accept and no material Was placed before us t0 justify such a conclusion, 693 We turn now to the next point. It was contended that sec tion 3 offends the Constitution because article 22 (4) and (7) do not envisage the direct intervention of Parliament in a whole batch of cases. The protection guaranteed is that there shall be individual attention and consideration to each separate case by some duly specified and constituted authority. In our opinion, this is not accurate. Article 22 (4) guarantees that there shall be no preven tive detention for more than three months unless the law authorising it makes provision for an Advisory Board and the Board after considering each individual case separately reports that there is in its opinion sufficient cause for such detention. To that extent there must be individual consideration of each case, but once the report is made and is unfavourable to the detenu, then the detention can be for a longer period provided it does not exceed "the maximum period prescribed by any law made by Parliament under sub clause (b) of clause (7). " Sub clause (b) of clause (7) empowers Parliament to prescribe "the maximum period for which any person may in any class or . . . of cases be detained under any law providing for preventive deten tion. " Parliament is accordingly empowered to specify a class. It has done so. The class is all persons whose cases have already been considered by an Advisory Board. It is empowered to prescribe a maximum period. That also it has done. The extended detention (that is to say, for more than three months) can then be "under any law providing for preventive detention. " A law made by Parliament falls within these words. Parliament is equally authorised to say who shall determine the period of detention, and as there is nothing in the Constitution to prevent it can itself exer cise the authority it is empowered to delegate to others. Stress was laid on the words "any person" in subclause (b) of clause (7) and it was contended that this contem plates individual attention in each case. But 694 if that is so, then it means that Parliament must itself direct the maximum period for each separate person falling within the class individually. The words are, we think, reasonably plain and we hold that Parliament can prescribe the maximum for a class taken as a whole as it has done in section 3. It was next argued that once the power given under clause (7) to fix a maximum period has been exercised the power exhausts itself and cannot be exercised again in respect of the same detention. In our opinion, no such limitation is imposed upon Parliament by the Constitution. Then it was said that section 3 stands on a footing different from section 12 of the amending Act of 1951 as it introduces the idea of potentially indefinite detention and accordingly is repugnant to the Constitution, and in any event is a fraud upon it. In so far as this means that section a fixes no time limit, the contention is unsound because the section specifies the exact period of the deten tion, namely till the expiry of the Act of 1950, that is to say, till the 1st of October, 1952. In so far as it means that Parliament is enabled to continue detentions indefi nitely by the expedient of periodic amendments in the Act of 1950, the answer is that Parliament has the power. This was precisely the power exercised in the amending Act of 1951 and upheld by this Court in section Krishnan vs The State of Madras(1). The present Act is no different from that in this respect. So far, we have dealt with the facts in petition No. 86 of 1952. The facts in the other three petitions naturally differ in their details but they all conform to the same general pattern so far as the points discussed above are concerned, so there is no need to discuss them individually. We hold that section 3 of the amending Act of 1952 is intra vires and that the detentions are not bad on any of the grounds discussed above. The rest of the points raised in each individual case are left open except for one point which (1) ; 695 arises in petition No. 155 of 1952. That point is as fol lows. The first ground of detention given to the petitioner in this case reads: "Being the President of Jamat of Agris you have used your position as such to increase your influence over the residents of Uran Peta, have created a band of obedient and trusted associates, have inflicted heavy fines on villagers in Uran Peta who have disregarded your wishes and have imposed on them boycott or excommunication in cases of their refusal to pay the fines. " It was argued that at the very outset 'these allegations import nothing more than an exercise of functions such as the infliction of fines and excommunication which the peti tioner as head of the caste had authority to do. They do not touch any of the matters covered by section 3 (1) (a) of the , under which the petitioner is detained. For example, they do not touch the security of the State or the maintenance of public order or any of the other matters specified in section 3. They are therefore irrelevant to the detention, and as it is impossible to say how far these irrelevant matters influenced the detention, the petitioner is entitled to release. Reliance was placed upon certain observations of the Federal Court in Rex vs Basudev(1). We think it unnecessary to examine this point because we do not think the ground is irrelevant nor do we agree that it means what the petitioner says. In our opinion, the grounds of detention must be regarded as a whole and when that is done the relevance of the first ground becomes plain. The gravamen of the charge against the petitioner is that he aimed at setting up a parallel government in the Uran Peta area and that in order to achieve that end he did various acts such as intimidating the workers in the salt pans with threats of murder, and his own workers with threats of death, unless they carried out his (1) at 651. 696 orders; and among the lesser instances given to illustrate the exercise of parallel governmental authority are the ones set out in the first ground, namely the infliction of fines with the sanction of excommunication and boycott to ensure their payment and due obedience to his orders. This point has no force and is decided against the petitioner. It will not be open to him to re agitate this afresh when his case is reheard on the remaining issues. All the four cases will now be set down for hearing on the remaining points which arise in them. As they do not involve constitutional issues they need not go before a Constitution Bench. Agent for the petitioner in Petition No. 155: M.S.K. Sastri for P.G. Gokhale. Agent for the respondents and Intervener:P. A. Mehta.

An order directing the detention of the petitioner was made on the 15th of November, 1951, under the Preventive Detention Act of 1950 as amended by the Amending Act of 1951, which prolonged the duration of the Act of 1950 up to the 1st April, 1952. The Preventive Detention (Amendment) Act of 1952 extended the duration of the Act of 1950 for a further period of six months, that is to say, until the 1st October, 1952. Section 3 of the Act of 1952 provided further that detention orders confirmed under the principal Act and in force immediately before the commencement of the Act of 1952, shall, where the period of detention is not specified in the order, remain in force "for so long as the principal Act (which was defined as the Act of 1950) was in force. " It was contended on behalf of the petitioner that his detention after 1st April, 1952, was illegal. Held, (i)When a subsequent Act amends an earlier one in such a way as to incorporate itself or a part of itself into the earlier, then the earlier Act must thereafter be read and construed (except where that would lead to a repug nancy, inconsistency or absurdity) as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that there is no need to refer to the amending Act at all. After the passing of the Act of 1952 the expressions "the Act of 1950" and "the principal Act" meant the Act of 1950 as amended by the Act of 1952, and the effect of section 3 of the Act of 1952 was that the detention of the petitioner would remain in force until the 1st October, 1952, without prejudice to the power of the Government to modify or revoke it; (ii) section 3 did not contravene article 14of the Constitu tion as there was a rational classification of the cases of detention orders in the section, and the period of detention was left in every case to the discretion of the State; (iii) the words "any person" in sub cl. (b) of c1.7 of article 22 of the Constitution do not contemplate that individ ual attention should be paid to each case; on the contrary, the words used in the said sub clause empower the Parliament to prescribe the maximum for a class taken as a whole as it has done in section 3, and section 3 does not therefore offend cl. (4) or cl. (7) of article 22; (iv) the power of the Parliament to fix a maximum period does not exhaust itself once it has exercised that power but can be exercised again in respect of the same detention; (v) section 3 is not repugnant tO the Constitution on the ground that it does not fix a time limit, for it speci fies the period as until the expiry of the Act; nor on the ground that it introduces the idea of potentially indefinite detention by periodical amendments; for the Parliament has the power to do that: 685

: Criminal Appeal No. 17 of 1979. Appeal by Special Leave from the judgement and order dated 16 3 1978 of the Kerala High Court in Crl. M.P. No. 124/77. T. C. Raghavan and N. Sudhakaran for the Appellant. Nemo for the Respondent. 675 The Judgment of the Court was delivered by A DESAI, J. Nemo tenetu prodere no man is bound to 'accuse himself which finds constitutional recognition in Article 20(3) of he Constitution, conferring immunity from compelling an accused person to be a witness against himself by giving self incriminating evidence, has been put into forefront to support a prayer for quashing he search warrant issued by the Sub Divisional Magistrate, Always, on 4th January ]977 directing The Deputy Superintendent of Police, Always, to search the premises styled as the office of H.M.D.P. Sabha ( 'Sabha ' for short), Moothakunam, and to seize the books, documents and papers as set out in the application for issuance of search warmly. The Magistrate had before him a complaint filed by the first respondent Ramakrishnan against the petitioner and S others for having committed offences under sections 403, 409, 420 and 477A read with section 34, Indian Penal Code. Original accused 1, and accused 2 the present petitioner, were respectively President and Secretary of the Sabha and original accused 3 to 6 were described as Managers of the Institution. The complainant made an application on 4th January 1977 requesting the learned Magistrate to issue a search warrant to search the office premises of the Sabha and seize the books, documents, etc. described in the application, if found therein. On the very day the Magistrate issued a search warrant and in fact it was executed and certain books, vouchers and papers were produced before the Court. The present petitioner (original accused 2) requested the learned Magistrate to recall the warrant and to return the books and documents seized under the authority of the search warrant. The learned Magistrate was of the opinion that in view of the decision of this Court in Shyamlal Mohanlal vs State of Gujarat(l), and an earlier decision of V. Khalid, J. Of Kerala High Court, no search warrant could be issued under section 91 of the Code of Criminal Procedure, 1973 ( 'new Code ' for short), and accordingly directed that anything recovered pursuant to the search warrant Issued by him be returned to the person from whom the same were recovered. The order was, however, to take effect after the decision on the requisition which was by then received from the Income Tax officer under section 132A of the Income Tax Act. First respondent (original complainant) preferred a revision application to the High Court of Kerala questioning the correctness of the decision of the learned Magistrate and the claim to constitutional immunity of the accused from search and seizure of books, documents, etc. directed with a view to collecting evidence against him, being violative of article 20(3) of the Cons 676 titution was canvassed before the Court. The High Court after an exhaustive review of the decisions of this Court as well as those bearing on the Fifth Amendment to the American constitution held that the provisions relating to search contained in section 93(1) of the Criminal Procedure Code, 1973, are not hit by Article 20(3) of the Constitution. Section 91 confers power on the Court or an officer in charge of a J police station to issue a summons or written order as the case may be, to any person in whose possession or power a document, the production of which the Court or the officer considers necessary or desirable for the purposes of any investigation, inquiry, trial or other proceeding under the Code. Section 93 confers power on the Court to issue search warrant under three different situations. Sections 91 and 93, so far as they are relevant, read as under: "91. (1) Whenever any Court or any officer in charge of a police station considers that the production of any document or other thing is necessary or desirable for the purposes of any investigation, inquiry, trial or other proceeding under this Code by or before such Court or officer, such Court may issue a summons, or such officer a written order, to the person m whose possession or power such document or thing is believed to be, requiring him to attend and produce it, or to produce it, at the time and place stat ed in the summons or order." "93. (l)(a) Where any Court has reason to believe that a person to whom a summons or order under section 91 or a requisition under sub section ( 1 ) of section 92 has been, or might, be, addressed, will not or would not produce the document or thing as required by such summons or requisition, or (b) where such document or thing is not known to the Court to be in the possession of any person, or (c) where the Court considers that the purposes of any inquiry, trial or other proceeding under this Code will be served by a general search or inspection, it may issue a search warrant; and the person to whom such warrant is directed, may search or inspect in accordance therewith and the provisions hereinafter contained". In exercise of the power conferred by section 91 a summons can be issued by the Court to a person in whose possession or power any 677 document or other thing considered necessary or desirable for the purpose of any investigation, inquiry, trial or other proceeding under the Code calling upon him to produce the document or thing at the time and place to be mentioned in the summons. On the advent of the Constitution, and especially in view of the provision contained in article 20(3), Courts were faced with a problem whether the person referred to in section 91(1) of the Code (s 94 of old Code) would include an accused. In other words, the question was whether a summons can be addressed to the accused calling upon him to produce any document which may be in his possession or power and which is necessary or desirable for the purpose of an investigation, inquiry, trial, etc. in which such person was an accused person. The wider question that was raised soon after the enforcement of the Constitution was whether search of the premises occupied or in possession of a person accused of an offence or seizure of anything therefrom would violate the immunity from self incrimination enacted in Article 20(3). In M. P. Sharma & others vs Satish Chandra, District Magistrate, Delhi & ors. ,(ll) the contention put forth was that a search to obtain document for investigation into an offence is a compulsory procuring of incriminatory evidence from the accused himself and is, therefore, hit by article 20(3) as unconstitutional and illegal. A specific reference was made to sections 94 and 96 of the Criminal Procedure Code, 1898 ( 'old Code ' for short), both of which are re enacted in almost identical language as sections 91 and 93 in the new Code, in support of the submission that a seizure of documents on search is in the contemplation or law a compelled production of documents. A Constitution Bench of 8 judges of this Court unanimously negatived this contention observing: "A power of search and seizure is in any system of jurisprudence an overriding power of the State for the protection of social security and that power is necessarily regulated by law. When the Constitution makers have thought fit not to subject such regulation to constitutional limitations by recognition of a fundamental right to privacy, analogous to the American Fourth Amendment, we have no justification to import it, into a totally different fundamental right, by some process of strained construction. Nor is it legitimate to assume that the constitutional protection under Article 20(3) would be defeated by the statutory provisions for searches". 678 It was concluded that a search under the enabling provisions of the Criminal Procedure Code cannot be challenged as illegal on the ground of violation of Article 20(3). It must be made clear that the question whether there is any element of compulsion in issuing a summons to a person accused of an offence under section 94 (old) section 91 (new) to produce a document or thing in his possession or power considered n necessary or desirable for any inquiry, investigation or, trial under the Code of Criminal Procedure was kept open. In other words, the question whether the expression 'person ' in section 94 (old) section 91 (new) would comprehend a person accused of an offence was left open. Following the decision in M. P. Sharma 's case, a Division Bench of the Madras High Court in Swarnalingam Chettiar vs Assistant Labour Inspector, Karaikudi(l) held that a summons could not be issued under section 94 of the old Code to the accused for production of certain documents in his possession irrespective of the fact whether those documents contained some statement of the accused made of his personal knowledge and accordingly the summons issued to the accused to produce certain documents was quashed. After the matter went back to the trial court, on an application of the Sub Inspector investigating the case, for a search warrant to be issued to obtain documents mentioned in the list attached to the petition and likely to be found upon a search of the premises of Karaikudi Railway out Agency, the Magistrate issued a notice to the accused to show cause E, why a general search warrant as asked for should not be issued. Again the accused moved the High Court in revision and in Swarnalingam Chettiar vs Assistant Inspector of Labour Karaikudi(2) the High Court quashed the notice holding that such notice practically amounts to stating that either he produces the document or else the premises will be searched and this will amount to testimonial compulsion held impermissible by the decision of the Supreme Court in M. P. Sharma 's case (supra). This view of the Madras High Court is no more good law in view of the later decisions of this Court. In The Slate of Bombay vs Kathi Kalu Oghad & Ors. ,(3) a question arose whether obtaining specimen hand writing or thumb impression of the accused would contravene the constitutional guarantee in article 20(3). In this case there was some controversy about certain observations in M. P. Sharma 's case (supra) and, therefore, the matter was heard by a Bench of 11 Judges. Two opinions were handed down, one by Chief Justice Sinha for himself and 7 brother judges, and another by Das Gupta, J. for himself and 2 other colleagues. In Sinha, CJ 's opinion, the observation in M. P. 679 Sharma 's case (supra) that section 139 of the Evidence Act has no bearing on the connotation of the word 'witness ' is not entirely well founded in law. Immunity from self incrimination as re enacted in article 20(3) was held to mean conveying information based upon the personal knowledge of the person giving the information and could not include merely the mechanical process of producing documents in court which may throw a light on any of the points in controversy, but which do not contain any statement of the accused based on his personal knowledge. It was concluded that to be a witness is not equivalent to furnishing evidence in its widest significance; that is to say, as including not merely making of oral or written statement but also production of document or giving materials which may be relevant at trial to determine the innocence or guilt of the ' accused. What was kept open in Sharma 's case (supra) whether a person accused of an offence could be served with a summons to produce documents was decided when it was observed that immunity from self incrimination would not comprehend the mechanical process of producing documents in court which may throw a light on any of the points in controversy but which do not contain a statement of the accused based on his personal knowledge. The matter again came up before a Constitution Bench of this Court in Shyamlal Mohanlal vs State of Gujarat(l). In that case appellant Shyamlal Mohanlal was a licensed money lender and according to the provisions of the relevant Money Lending Act and Rules he was under an obligation to maintain books. He was prosecuted for failing to maintain books in accordance with the provisions of the Act and the Rules. The police prosecutor incharge of the case on behalf of the prosecution presented an application requesting the Court to order the appellant Shyamlal Mohanlal to produce daily book and ledger for a certain year. Presumably it was a request to issue summons as contemplated by section 94 of the old Code. The Learned Magistrate rejected the request on the ground that in so doing the guarantee of immunity from self incrimination would be violated. The matter ultimately came to this Court and the question that was put in forefront before the Court was whether the expression 'person ' in section 94(1) which is the sale as section 91(1) of the new Code, comprehends within its sweep a person accused of an offence and if it does, whether an issue of summons to produce a document in his possession or power would violate the immunity against self incrimination guaranteed by Article 20(3). The majority opinion handed down by Sikri, J. ruled that section 94(1) upon its true construction does not 680 apply to an accused person. While recording this opinion there is no reference to the decision of the larger Bench in Kathi Kalu oghad 's case (supra). Shah, J. in his dissenting judgment referred to the observation that the accused may have documentary evidence in his possession which may throw some light on the controversy and if it is a document which is not his statement conveying his personal Knowledge relating to the charge against him, he may be called upon to produce it. Proceeding further it was observed that article 20(3) would be no bar to the summons being issued to a person accused of an offence to produce a thing or document except in the circumstances herein above mentioned. Whatever that may be, it is indisputable that according to the majority opinion the expression 'person ' in section 91(1) (new Code) does not take within its sweep a person accused of an offence which would mean that a summons issued to an accused person to produce a thing or document considered necessary or desirable for the purpose of an investigation, inquiry or trial would imply compulsion and the document or thing so produced would be compelled testimony and would be violative of the constitutional immunity against self incrimination. There appears to be some conflict between the observations in M. P. Sharma 's case (supra) as reconsidered in Kothi Kala oghad 's case (supra) and the one in the case of Shyamlal Mohanlal (supra). However, as this case is not directly relatable to a summons issued under section 91(1), we do not consider it necessary to refer the matter to a larger Bench to resolve the conflict. In view of the decision in Shyamlal Mohanlal 's case (supra) one must proceed on the basis that a summons to produce a thing or document as contemplated by section 91(1) cannot be issued to a person accused of an offence calling upon him to produce document or thing considered necessary or desirable for the purpose of an investigation, inquiry, trial or other proceeding under the Code of Criminal Procedure. If summons as hereinbefore discussed cannot be issued to an accused person under section 91(1), ipso facto a search warrant contemplated by section 93(1) (a) cannot be issued by the Court for the obvious reason that it can only be issued where the Court could have issued a summons but would not issue the same under the apprehension that the person to whom such summons is issued will not or would not produce the thing as required by such summons or requisition. A search warrant under section 93(1)(a) could only be issued where a summons could have been issued under section 91(1) but the same would not be issued on an apprehension that the person, to whom 681 the summons is directed would not comply with the same and, there A fore, in order to obtain the document or thing to produce which the summons was to be. issued, a search warrant may be issued under section 93 (1) (a) . Section 93, however, also envisages situations other than one contemplated by section 93(1)(a) for issuance of a search warrant. It must be made distinctly clear that the present search warrant is not issued under section 93 ( 1 ) (a) . Section 93(1) (b) comprehends a situation where a search warrant may be issued to procure a document or thing not known to the Court to be in the possession of any person. In other words, a general search warrant may be issued to procure the document or thing and it can be recovered from any person who may be ultimately found in possession of it and it was not known to the Court that the person from whose possession it was found was in possession of it. In the present case the search warrant was to be executed at the office of the Sabha and it can be said that office bearers of the Sabha were the persons who were in possession of the documents in respect of which the search warrant was issued. Therefore, clause (b) of section 93(1) would not be attracted. Section 93(1) (c) of the new Code comprehends a situation where the Court may issue a search warrant when it considers that the purpose of an inquiry, trial or other proceeding under the Code will be served by a general search or inspection to search, seize and produce the documents mentioned in the list. When such a general search warrant is issued, in execution of it the premises even in possession of the accused can be searched and documents found therein can be seized irrespective of the fact that the documents may contain some statement made by the accused upon his personal knowledge and which when proved may have the tendency to incriminate the accused. However, such a search and seizure pursuant to a search warrant issued under section 93(1) (c) will not have even the remotest tendency to compel the accused to incriminate himself. He is expected to do nothing. He is not required to participate in the search. He may remain a passive spectator. He may even remain absent. Search can be conducted under the authority of such warrant in the presence of the accused. Merely because he is occupying the premises which is to be searched under the authority of the search warrant it cannot even remotely be said that by such search and consequent seizure of documents including the documents which may contain statements attributable to the personal knowledge of the 682 accused and which may have tendency to incriminate him, would violate the constitutional guarantee against self incrimination because he is not compelled to do anything. A passive submission to search cannot be styled as a compulsion on the accused to submit to search and if anything is recovered during search which may provide incriminating evidence against the accused it cannot be styled as compelled testimony. This is too obvious to need any precedent in support. The immunity against self crimination extends to any incriminating evidence which the accused may be compelled to give. It does not extend to cover such situation as where evidence which may have tendency to incriminate the accused is being collected without in any manner compelling him or asking him to be a party to the collection of the evidence. Search of the premises occupied by the accused without the accused being compelled to be a party to such search would not be violative of the constitutional guarantee enshrined in Article 20(3). It was, however, urged that section 93(1) (c) must be read in the context of section 93(1) (b) and it would mean that where documents are known to be at a certain place and in possession of a certain person any general search warrant as contemplated by section 93(1) (c) will have to be ruled out because in such a situation section 93(1)(a) alone would be attracted. Section 93(1)(b) comprehends a situation where the Court issues a search warrant in respect of a document or a thing to be recovered from a certain place but it is not known to the Court whether that document or thing is in possession of any particular person. Under clause (b) there is a definite allegation to recover certain document or thing from a certain specific place but the Court is unaware of the fact whether that document or thing or the place is in possession of a particular person. Section 93(1)(c) comprehends a situation where a search warrant can be issued as the Court is unaware of not only the person but even the place where the documents may be found and that a general search is necessary. One cannot, therefore, cut down the power of the Court under section 93(1) (c) by importing into it some of the requirements of section 93(1)(b). No canon of construction would permit such an erosion of power of the Court to issue a general search warrant. It also comprehends not merely a general search but even an inspection meaning thereby inspection of a place and a general search thereof and seizure of documents or things which the Court considers necessary or desirable for the purpose of an investigation, inquiry, trial or other proceeding under the Code. The High Court accordingly sustained the general search warrant in this case under section 93(1)(c). 683 Turning to the facts of this case it was contended that the order of the Magistrate clearly disclosed an utter non application of mind and a mere mechanical disposal of the application before the Court. Undoubtedly the order is of a laconic nature. But then there are certain aspects of the case which cannot be overlooked before this Court would interfere in such an interlocutory order. The appellant and his co accused are office bearers of a public institution styled as H.M.D.P. Sabha. We were informed at the hearing of this petition that this Sabha is a public institution engaged in the. activity of running educational institutions and supporting objects or activities of a general charitable nature. When the first complaint was filed, the allegation therein was that criminal breach of trust in respect of funds of the public institution has been committed by the office bearers thereof. A search warrant was issued but it was quashed by the Kerala High Court. Thereafter an other complaint was filed making some more serious allegations and a search warrant was sought. Now, this search warrant was being issued to conduct search of the premises used as office of an institution. The place will be in possession of the institution. The office bearers of the Sabha are accused of an offence. Documents and books of accounts of the institution are required for the purpose of the trial against the office bearers of the institution. The office premises could not be said to be in possession of any individual accused but stricto sensu it would be in possession of the institution. Books of accounts and other documents of the institution could not be said to be in personal custody or possession of the office bearers of the institution but they are in possession of the institution and are lying in the office of the institution. A search of such a public place under the authority of a general search warrant can easily be sustained under section 93(1)(c). If the order of the learned Magistrate is construed to mean this, there is no, illegality committed in issuing a search warrant. Of course, issuance of a search warrant is a serious matter and it would be advisable not to dispose of an application for search warrant in a mechanical way by a laconic order. Issue of search warrant being in the discretion of the Magistrate it would be reasonable to expect of the Magistrate to give reasons which swayed his discretion in favour of granting the request. A clear application of mind by the learned Magistrate must be discernible in the order granting the search warrant. Having said this, we see no justification for interfering with the order of the High Court in this case. P.B.R. Appeal dismissed.

Section 91 of the Code of Criminal Procedure, 1973 confers power on the court or an officer in charge of a police station to issue a summons or written order to any person in whose possession or power a document the production of which the court or the officer considers necessary or desirable for the purposes of any investigation, inquiry, trial or other proceeding under D. the Code calling upon him to produce the document. Section 93 of the Code contemplates three situations in which the court may issue a search warrant: (a) where the Court has reason to believe that a person to whom the summons or order under section 91 has been or might be addressed will not or would not produce the document or thing as required by such summons or requisition or (b) where such document or thing is not known to the court to be in the possession of any person or (c) where the court considers that the purposes of any enquiry, trial or other proceeding under this code will not be served by a general search or inspection, then it may issue a search warrant; and the person to whom such warrant is directed may search or inspect in accordance therewith and the provisions contained in the code. The complainant (respondent No. 1 ) made an application before a magistrate for the issue of a warrant for the search and seizure of certain books and documents of a Sabha of which the accused were office bearers. After the seizure of the books and documents, on the application of one of the accused persons, the magistrate directed their return to the persons from whom they were recovered. In the respondent revision petition the High Court held that the provisions contained in section 93(1) of the Cr. P.C. were not hit by article 20(3) of the Constitution. Dismissing the appeal, ^ HELD: The High Court was right in sustaining the general search warrant under section 93(1)(c) of the Code. [682 H] 1. The immunity against self incrimination extends to any incriminating evidence which the accused may be compelled to give but does not extend to cover a situation where evidence which may have tendency to incrinate 674 the accused is being collected without compelling him to be a party to the collection of the evidence. The search of the premises occupied by the accused, without compelling the accused to be party to such search, would not be violative of article 20(3) of the Constitution. [682C] 2. A search and seizure pursuant to a search warrant under section 93 ( 1 ) (c) 8 of the Code would not have the remotest tendency to compel an accused to incriminate himself. He is not required to participate in the search. He may remain a passive spectator or may even be absent. Merely because the accused is occupying the premises to be searched it cannot be said that by such search and consequent seizure of documents, including the document which may contain statements attributable to the personal Knowledge of the accused and which may have a tendency to incriminate him, would violate the constitutional guarantee against self incrimination because he is not compelled to do anything. A passive submission to search cannot be styled as compulsion on the accused to submit to search. If anything is recovered during the search which may provide incriminating evidence against the accused it cannot be called a compelled testimony. [681 G H] 3. Section 93(1)(c) comprehends a situation where a search warrant can be issued as the court is unaware of not only the person but even the place where the documents may be found and that a general search is necessary. Therefore, power of the court under this clause cannot be cut down by importing some of the requirements of cl. (b) of the section 93(1). [682 F G] In the instant case although the order of the magistrate was laconic certain important aspects could not be over looked. The objects of the Sabha were of a general charitable nature. An earlier search warrant was quashed by the High Court. When the complainant made more serious allegation a search warrant was issued to conduct a search of the institution. The office premises, the books and other documents of the Sabha could not be said to be in possession of any individual accused. They were in the possession of the institution. A search of such a public place under the authority of a general search warrant can easily be sustained under section 93(1)(c). Viewed this way there was no illegality in the Magistrate 's order. Shyamlal Mohanlal vs State of Gujarat, , M. P. Sharma & others vs Satish Chandra District Magistrate, Delhi & ors., [19541 SCR 1077, The State of Bombay vs Kathi Kalu Gohad & Ors. ; explained.

ivil Appeal No. 1935 of 1981. From the Judgment and Order dated 8.4. 1980 of the Calcutta High Court in Matter No. 143 of 1980. Sukumar Bhattacharya and G.S. Chaterjee for the Appellant. J. Ramamurthy. g. Rajappa and Ms. A. Subhashini for the Respondents. The Judgment of the Court was delivered by K.N. SINGH, J. The appellant is a Government Corporation engaged in jute industry. It was assessed to income tax for the assessment year 1974 75 by the Income Tax Officer. The assessee preferred appeal before the Appellate Assistant Commissioner. During the hearing of the appeal, the assessee raised an additional ground claiming deduction of Rs. 11,54,995 on the ground of liability of Purchase Tax. The assessee claimed that in view of the decision of this Court in Kedarnath Jute Company Limited vs Commissioner of Income Tax, [19771 the aforesaid amount being tax liability should be deducted from its income for purposes of charging tax. The Appellate Assistant Commissioner permitted the assessee to raise the additional ground and after hear ing the Income Tax Officer, he accepted the assessee 's claim and allowed deduction of Rs. 11,54,995 in computing the total income of the assessee for the assessment year 1974 75. The Revenue preferred appeal before the Income Tax Appellate Tribunal. The Tribunal held that the Appellate Assistant Commissioner had no jurisdiction to entertain an additional ground or to grant relief to the assessee on a ground which had not been raised before the Income Tax Officer. The Tribunal set aside the order of the Appellate Assistant Commissioner placing reliance on the decision of this Court in Addl. Commissioner of Income Tax, Gujarat vs Gurjargravures P. Ltd. [1978] 111 I.T.R.I. The assessee made application before the Tribunal under Section 256(1) of the Income Tax Act, 1961 for making reference to the High Court. The Tribunal refused to refer the question on 343 the findings that the question stood covered by this Court 's decision in Gurjargravures (supra). The assessee thereupon approached the High Court under Section 256(2) of the Act for calling the statement of case and reference from the Appellate Tribunal. A Division Bench of the Calcutta High Court held that the Tribunal was right in rejecting the assessee 's application, therefore it refused to call state ment of case. The assessee thereupon approached this Court under Article 136 of the Constitution. and obtained leave. Hence this Appeal. The question of law which the assessee sought to be referred to the High Court under Section 256(1) of the Act was: "Whether on the facts and in the circumstances of the case. the Income Tax Appellate Tribunal was justified in holding that the Appellate Assistant Commissioner of Income Tax had exceeded his powers in entertaining the additional ground of appeal taken before him in respect of the claim for deduc tion of a sum of Rs. 11,54,995 representing liability for raw jute Purchase Tax. " Section 251 of the Income Tax Act (hereinafter referred to as the 'Act ') prescribes power of the Appellate Authority hearing appeal against the order of. Income Tax Officer. Clause (a) of Section 25 1(1) confers power on the Appellate Authority namely the Appellate Assistant Commissioner [now after the Amendment of 1987 the Deputy Commissioner (Ap peals)] according to which Appellate AUthority while hearing appeal against an order of assessment. has power to confirm. reduce, enhance or annual the assessment; he is further empowered to set aside the assessment and remit the case back to the Assessing Officer for making a fresh assessment in accordance with its directions. after making such further inquiry as may be necessary. If a direction is issued by the Appellate Authority, the Assessing Officer is required to proceed to make such fresh assessment and determine the amount of tax, if any. payable on the basis of fresh assess ment. The Appellate Assistant Commissioner is thus invested with wide powers under section 251(1)(a) of the Act while hearing an appeal against the order of assessment made by the Income Tax Officer. The amplitude of the power includes power to set aside the assessment order or modify the same. The question is whether the Appellate Assistant Commissioner while hearing an appeal under section 251(1)(a) has jurisdiction to allow the assessee to raise an additional ground in assailing the order of the assessment before it. The Act does not contain any express provision debarring an assessee from raising an addi 344 tional ground in appeal and there is no provision in the Act placing restriction on the power of the Appellate Authority in entertaining an additional ground in appeal. In the absence of any statutory provision. general principle relat ing to the amplitude of appellate authority 's power being co terminus with that of the initial authority should nor mally be applicable. But this question for the purposes of the Income Tax Act has been an intricate and vexed one. There is no uniformity in the judicial opinion on this question. Section 31 of the Income Tax Act, 1922 also conferred power on the Appellate Assistant Commissioner to hear appeal against the assessment order made by the Income Tax Officer. The Chagla, CJ of the Bombay High Court considered the question in detail in Narrondas Manordass vs Commissioner of Income Tax, and held that the Appellate Assistant Commissioner was empowered to correct the Income Tax Officer not only with regard to a matter which had been raised by the assessee but also with regard to a matter which may have been considered by the Income Tax Officer and determined in the course of the assessment. The High Court observed that since the Appellate Assistant Commissioner had revising authority against the decisions of the Income Tax Officer; a revising authority not in the narrow sense of revising those matters, which the assessee makes a grievance but the subject matter of the appeal not only he had the same powers which could be exercised by the Income Tax Officer. These observations were approved by this Court in Commissioner of Income Tax vs McMillan & Co., ; the Appellate Assistant Commissioner on an appeal preferred by the assessee had jurisdiction to invoke, for the first time provisions of Rule 33 of the Income Tax Rules, 1922, for the purpose of computing the income of a nonresident even if the Income Tax Officer had not done so in the assessment proceedings. But in Commissioner of Income Tax, Bombay vs Shapporji Pallon Ji Mistry, [1962] 44 I.T.R. 891 this Court while considering the extent of the power of the Appellate Assistant Commissioner referred to a number of cases decided by various High Courts including Bombay High Court judgment in Narrondas case and also the decision of this Court in McMillan & Co. case and held that in an appeal filed by the assessee, the Appellate Assistant Commissioner has no power to enhance the assessment by discovering new sources of income, not considered by the Income Tax Officer in the order appealed against. It was urged on behalf of the Revenue that the words "enhance the assessment" occurring in section 31 were not confined to the assessment reached through particular process but the amount which ought to have been computed if the true total income had been 345 found. " The Court observed that there was no doubt that this view was also possible, but having regard to the provisions of Sections 34 and 33B, which made provisions for assessment of escaped income from new sources, the interpretation suggested on behalf of the Revenue would be against the view which had held the field for nearly 37 years. In this view the Court held that the Appellate Assistant Commissioner had no power to enhance the assessment by discovering new sources of income. This decision does not directly deal with the question which we are concerned. Power to enhance Tax on discovery of new source of income is quite different than granting deduction on the admitted facts fully supported by the decision of this Court. If the tax liability of the assessee is admitted and if the Income Tax Officer is af forded opportunity of hearing by the Appellate Authority is allowing the assessee 's claim for deduction on the settled view of law, these appears to be no good reason to curtail the powers of the appellate authority under Section 25 1(1)(a) of the Act. In Commissioner of Income Tax, U.P.v. Kanpur Coal Syndi cate, a three Judge Bench of this Court discussed the scope of Section 31(3)(a) of the Income Tax Act, 1922 which is almost identical to Section 251(1)(a). The Court held as under: "If an appeal, lies, Section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under Section 31(3)(a) in disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income Tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is conterminous with that of the Income Tax Officer. He can do what the Income Tax Officer can do and also direct him to do what he has failed tO do. " (emphasis supplied) The above observations are squarely applicable to the interpretation of section 25 1(1)(a) of the Act. The declaration of law is clear that the power of the Appellate Assistant Commissioner is co terminus with that of the Income Tax Officer, if that he so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No 346 exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provi sions. In the absence of any statutory provision the Appel late Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assist ant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income Tax Officer. In Additional Commissioner of Income Tax, Gujarat vs Gurjargravures P. Ltd. (supra) this Court has taken a dif ferent view, holding that in the absence of any claim made by the assessee before the Income Tax Officer regarding relief, he is not entitled to raise the question of exemp tion under Section 84 before the Appellate Assistant Commis sioner hearing appeal against the order of Income Tax Offi cer. In that case the assessee had made no claim before the Income Tax Officer for exemption under Section 84 of the Act, no such claim was made in the return nor any material was placed on record supporting such a claim before the Income Tax Officer at the time of assessment. The assessee for the first time made claim for exemption under Section 84 before the Appellate Assistant Commissioner who rejected the claim but on further appeal the Appellate Tribunal held that since the entire assessment was open before the Appellate Assistant Commissioner there was no reason for his not entertaining the claim, or directing the Income Tax Officer to allow appropriate relief. On a reference the High Court upheld the view taken by the Tribunal. On appeal this Court set aside the order of the High Court as it was of the view that the Appellate Assistant Commissioner had no power to interfere with the order of assessment made by Income Tax Officer on a new ground not raised before the Income Tax Officer, and therefore the Tribunal committed error in directing the Appellate Assistant Commissioner to allow the claim of the assessee under Section 84 of the Act. Apparent ly this view taken by two Judge Bench of this Court appears to be in conflict with the view taken by the three Judge Bench of the Court in Kanpur Coal Syndicate 's case (supra). It appears from the report of the decision in Gujarat case the three Judge Bench decision in Kanpur Coal Syndicate (supra) case was not brought to the notice of the Bench in the Gurjargravures P. Ltd. (supra). In the 347 circumstances the view of the larger Bench in the Kanpur Coal Syndicate, (supra) holds the field. However we do not consider it necessary to over rule the view taken in Gurjar gravures P. Ltd. (supra) case as in our opinion that deci sion is rounded on the special facts of the case, as would appear from the following observations made by the Court; "As we have pointed out earlier, the statement of case drawn up by the Tribunal does not mention that there was any material on record to sustain the claim for exemption which was made for the first time before the Appellate Assistant Commissioner. We are not here called upon to consider a case where the assessee failed to make a claim though there was no evidence on record to support it, or a case where a claim was made but no evidence or insufficient evidence was ad duced in support. In the present case neither any claim was made before the Income Tax Officer, nor was there any mate rial on record supporting such a claim. " The above observa tions do not rule out a case for raising an additional ground before the Appellate Assistant Commissioner if the ground so raised could not have been raised at that particu lar stage when the return was filed or when the assessment order was made, or that the ground became available on account of change of circumstances or law. There may be several factors justifying raising of such new plea in appeal, and each case has to be considered on its own facts. If the Appellate Assistant Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects. Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discre tion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The satisfac tion of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid prin ciples or any hard and fast rule can be laid down for this purpose. In Rai Kumar Srimal vs Commissioner of Income Tax, West Bengal 111, a Division Bench of Cal cutta High Court presided over by Sabyasachi Mukharji, J., as he then was held that the Appellate Assistant Commission er was entitled to admit new ground or evidence either suo motu or at the invitation of the parties. If he is acting on being invited by the assessee, then there must be some ground for admitting new evidence in the sense that there must be some explanation to show that the failure to adduce earlier the evidence sought to be adduced before the Appel late Assistant Commissioner was not wilful and not unreason able. This view is reasonable and it finds favour with us. 348 In the instant case the assessee was carrying on manu facture and sale of jute. In the assessment year of 1974 75 he did not claim any deduction on its liability to pay Purchase Tax under the provisions of the Bengal Raw Jute Taxation Act, 1941, as the appellant entertained a belief that it was not liable to pay Purchase Tax under the afore said Act. But later on it was assessed to Purchase Tax and the order of assessment was received by it on 23.11. The appellant disputed the demand and filed an appeal before the Appellate Authority and obtained stay order. The asses see thereafter claimed deduction for the amount of Rs. 11,54,995 towards his liability to pay Purchase Tax as deduction for the assessment year 1974 75. The assessee had not actually paid the Purchase Tax as he had obtained stay from the Appellate Authority nonetheless its liability to pay tax existed, and it was entitled to deduction of Rs. 11,54,995 as was held by this Court in Kedarnath Jute Mfg. Co. Ltd. vs Commissioner of Income Tax (Central), Calcutta, There was no dispute about these facts. In these circumstances the Appellate Assistant Com missioner allowed the assessee to raise this question and after hearing the Income Tax Officer, he granted the deduc tion from the assessee 's income. The Tribunal took a con trary view placing reliance on the decision of this Court in Gujargravures P. Ltd. (supra). As already discussed the facts in the instant case are quite clear, unlike the facts involved in Gurjargravures case. We are, therefore, of the view that the view taken by the Appellate Tribunal and the High Court is not sustainable in law. In our opinion, the High Court and Tribunal both committed error in refusing to state the case, or making a reference. The next question which arises for consideration is to know what order should be passed in the present circum stances. In view of the findings recorded by us ordinarily we should direct the High Court to call for the statement of case from the Tribunal and thereupon decide the matter afresh, but this procedure would be time consuming. Since we have already discussed the correct position of law we do not consider it necessary to follow the usual procedure. Since the view taken by the Income Tax Appellate Tribunal is not sustainable in law we grant leave against the order of the Appellate Income Tax Tribunal under Article 136 and set aside the same and remit the matter to the Appellate Income Tax Tribunal to consider the merit of the deduction permit ted by the Appellate Assistant Commissioner. If the Tribunal thinks it necessary it may remand the matter to the Appel late Assistant Commissioner (now Deputy Commissioner of Appeals) for reheating. The appeal is accordingly disposed of. There will be no order as to costs. G.N. Appeal disposed of.

In respect of the assessment for the assessment year 1974 75, the appellant assessee preferred an appeal before the Appellate Assistant Commissioner. During the hearing of the appeal, the assessee raised an additional ground as regards its liability to Purchase Tax and claimed a deduc tion of Rs.11,54,995. After giving an opportunity of hearing to the Income Tax Officer, the Appellate Assistant Commis sioner allowed the said claim. The Revenue preferred an appeal before the Income Tax Appellate Tribunal. The Tribunal held that the Appellate Assistant Commissioner had no jurisdiction to entertain any additional ground not raised before the Income Tax Officer and set aside the order of the Appellate Assistant Commis sioner. The assessee 's application for making reference to the High Court was refused by the Tribunal. The High Court also rejected the assessee 's application for calling the state ment of the case and reference from the Tribunal. Hence, this appeal by special leave. Disposing of the appeal, the Court, HELD: 1.1 The declaration of law is clear that the power of the Appellate Assistant Commissioner is co terminus with that of the Income Tax Officer. If that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to this view as the Act does not place any restric tion or limitation on the exercise of appellate power. Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original 341 authority may have in deciding the question before it sub ject to the restrictions or limitation if any prescribed by the statutory provisions. In the absence of any statutory provisions to the contrary the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. [155G H; 156A B] 1.2 If the Appellate Assistant Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects. Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discre tion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The satisfac tion of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid prin ciples or any hard and fast rules can be laid down for this purpose. [157D F] Commissioner of Income Tax vs Mc Millan & Co., ; ; Commissioner of Income Tax, U.P. vs Kanpur Coal Syndicate,, ; Kedarnath Jute Mfg. Co. Ltd. vs Commissioner of Income Tax (Central), Calcutta, ; relied on. Commissioner of Income Tax, Bombay vs Shapporji Patton Ji Mistry, ; Addl. Commissioner of Income Tax Gujarat vs Gurjargravures ?. Ltd., ; distinguished. Rai Kumar Srimal vs Commissioner of Income Tax, West Bengal 111, , approved. Narrondas Manordass vs Commissioner of Income Tax, [1957] 31 referred to. 2. In the instant case, the assessee was assessed to Purchase Tax. The appellant disputed the demand and filed an appeal before the Appellate Authority and obtained stay order. The assessee thereafter claimed deduction for the amount of Rs.11,54,995 towards his liability to pay Purchase Tax as deduction for the assessment year 1974 75. The asses see had not actually paid the Purchase Tax as it had ob tained stay from the Appellate Authority; nonetheless its liability to pay tax existed, and it was entitled to deduc tion of Rs. 11,54,995. [158B C] 3. Since the view taken by the Income Tax Appellate Tribunal is 342 not sustainable in law, the order of the Tribunal is set aside and the matter is remitted to the Tribunal to consider the merit of the deduction permitted by the Appellate As sistant Commissioner. If the Tribunal thinks it necessary, it may remand the matter to the Appellate Assistant Commissioner (Deputy Commissioner of Appeals) for hearing [158F H]

Civil Appeal No. 491 of 1975. Appeal by Special Leave from the Judgment and order dated the 24th June 1974 of the Orissa High Court in Second Appeal No. 8 of 471 Gobind Das and B. Parthasarthi, for the Appellant. Santosh Chatterjee and G.S. Chatterjee, for the Respondent. The Judgment of the Court was delivered by JASWANT SINGH, J. This appeal by special leave which is directed against the judgment and decree dated June 24, 1974, of the High Court of Orissa at Cuttack reversing the judgment and decree dated September 23, 1970, of the first appellate court which in turn reversed the judgement and decree dated April 10, 1970, of the Trial Court relates to the controversy regarding the appellants right to store and sell dry 'Mahaprasad ' in the suit premises consisting of two pucca rooms standing on plot No. 167 in 'Bihar Bedha ' (outer compound) of the Hoary Holy public temple of Lord Jagannath Ji in Puri (here in after referred to as 'the Temple '), which to use the language of the illuminating and instructive preamble of Shri Jagannath Temple Act, 1954 (Orissa Act No. 11 of 1955) (hereinafter referred to as 'the Act ', has ever since its inception been an institution of unique national importance, in which millions of Hindu devotees from regions far and 103 wide have reposed their faith and belief and have regarded it as the epitome of their tradition and culture. The facts giving rise to this appeal are: on August 7, 1969, one Gopal Suar, since deceased, who was the father and predecessor in interest of the present appellants describing himself as sevak of the temple brought a Suit in the Court of the Munsiff, Puri, being suit No. 160 of 1969, for permanent injunction restraining, the respondents herein from interfering with his right of storing and selling dry 'Mahaprasad ' in the suit premises. The case of the original plaintiff was that by means of 'Sanand ' (Exhibit I) Raja Sri Dibyasingha Deb, the then Superintendent of the Temple, granted to his great grandfather, Gangadhar Suar, a permanent lease of the site on which the two suit rooms stood on an annual rent of Rs. 7/ that it was provided in the 'Sanad ' that the grantee or lessee would be entitled to enjoy the site from generation to generation and in case a permanent structure was constructed thereon, the rent would be enhanced to Rs. 14/ per year; that as a result of the death of his great grandfather, Gangadhar Suar, of his grandfather Bela Suar, and of his father, Chakhi Suar, he had become the sole owner of the property; that a few days after the commencement of the lease, two permanent pucca rooms for storing and selling 'Mahaprasad ' where constructed by his great grandfather, Gangadhar Suar, who according to the stipulation contained in the aforesaid Sanad ' became liable to pay an annual rent of Rs. 14% that since the commencement of the lease, his ancestors had from generation to generation been using the suit property as a store room and as a shop for selling dry 'Mahaprasad ' in their capacity as tenants of the Raja of Puri who was the Superintendent of the Temple and the said right of his had been acknowledged and duly recorded in the record of rights. that ever since the taking over of the management of the Temple by tile Government, he had been paying annual rent as per terms of the lease to the respondent who had accepted him as a tenant; that he had been occupying and enjoying the suit property as before without any let or hinderence either by the respondents or by their predecessor in interest; that on August 1, 1969, his son intimated to him that respondent No. 2 had, by means of notice dated July 31, 1969, called upon him to close the shop on pain of daily fine of Rs. 100/ , as in the opinion of the respondent, he had been using the land in inner bedha of` the Temple for storage and sale of 'Mahaprasad ' which adversely affected the discipline and dignity of the Temple; that on being so informed, he personally approached respondent No. 2 and represented to him that he was the permanent lessee of the suit property and had acquired indefeasible right of storing and selling 'Mahaprasad ' thereon and the respondents could not interfere with that right but his representation fell flat and respondent No. 2 threatened to close his shop forcibly, to impose penalty on him, and to dismiss him from the 'seva '; that after sometime, respondent No. 2 served him within another notice imposing on accumulated penalty of Rs. 4,600/ at the rate of Rs. 100/ per diem and that there being no provision in the Act empowering the respondents to do any of the aforesaid things, there action was arbitrary, illegal and without jurisdiction. 104 The suit was vigorously contested by the respondent. While denying The grant of the open site to the plaintiff 's ancestor. Gangadhar Suar. , as alleged, as also the construction of two pucca rooms by the latter and the storage and sale thereon of 'Mahaprasad ' by the plaintiffs ' ancestors, the respondents averred inter alia that the Raja of Puri being merely a Superintendent or a Manager of the Temple it was beyond his competence to transfer a portion of the Temple permanently in favour of any individual and the 'Sanand ' set up by the plaintiff was as such ineffectual, invalid and inoperative and did not confer any right , title or interest on him or his ancestors and was not binding on the Respondents; that according to the established custom and usage of. the Temple. 'Mahaprasad ' could not be stored and sold in a 'saraghara ' but was to be sold in Anand Bazar the place specifically set apart for the purpose, and that since the plaintiff had been committing a breach of discipline and violating the orders of the respondents be storing and selling 'Mahaprasad ' in the 'Saraghara ' standing on plot No. 167 (which had been recorded in the record of rights as 'khas dakhali ' land of the respondents and was never intended for storage and sale of 'Mahaprasad ') and was thus acting in a manner derogatory to the dignity of the Temple, the respondents in whom the governance and administration of the Temple and its endowments vested under section 5 of the Act were competent to take action under sections 21 (A) and 30(A) of the Act. After framing the necessary issues and recording the evidence adduced by the parties, the Trial Court dismissed the suit holding that as sections 15 and 30(A) of the Act cast statutory obligation on the respondents to ensure maintenance of order and discipline and proper hygienic conditions in the Temple and proper standard of cleanliness and purity of the offerings made therein, they could not be restrained by a permanent injunction from stopping the plaintiff to sell 'Mahaprasad ' at a place other than the one specified for the purpose. On appeal, however, the Sub Judge (Additional District Magistrate) Puri, decreed the suit. Aggrieved by this decision, the respondents preferred an appeal to the High Court which accepted the same and dismissed the suit Counsel for the appellants has urged before us suit the suit property did not form part of the Temple; that the transaction, evidenced by 'Sanands ' (Exhibits I & II) issued by the Raja of Puri as Superintendent of the Temple in exercise of his right of superintendent and management of the Temple amounted to a permanent lease of the suit property and not merely to a licence, and that the appellants had an indefeasible right of storing and selling Mahaprasad in the suit Saraonara. We shall deal with these contention seriatim Regarding the first contention raised on behalf of the appellants we may observe that according to section 2(d) of Act No. XIV of 1952 called the Puri Shri Jagannath Temple (Administration) Act, 1952, 'Temple ' means "the Temple of Lord Jagannath of Puri, other temples within its premises, all their appurtenant and subordinate shrines other sacred places and tanks and any additions which may be made thereto after the commencement of the Act". It may also he 105 mentioned that pursuant to section 3 of that Act a Special officer with prescribed qualifications was appointed by the State Government for preparation of the consolidated record of rights and duties of different sevaks and pujaries and other persons connected with the seva, puja or management of the Temple as also for preparation of a list of List immovable properties endowed to L ord Jagannath Temple and the extent of the premises of the Temple and what it comprises. In the report prepared by the said officer which was published in the Orissa Gazette (Extraordinary) and is final and entries whereof cannot be questioned except in the manner provided in section 5 of that Act, it is recorded that the Temple of Lord Jagannath occupies an area of 10 acres and its premises include all appurtenance and subordinate shrines and the outer and inner compounds and that the suit plot No. 167 lies in the Baisi Pahacha ' area in between the inner and outer compounds of the Temple and that access to it is though the main gate li e. 'Singhadawara ' (lion 's gate) of the Temple. It is, therefore, clear beyond any manner of doubt that the Suit premises form part of the Temple. The first contention of counsel for the appellants is, therefore, repelled. For a proper appreciation of the second contention, it is necessary to bear in mind the essential difference between a lease and a licence. It is now well settled by a catena of decisions of this Court that it is the creation of an interest in immovable property that distinguishes a lease from a licence. Reference in this connection may be made with advantage to the decision of this Court in Associated Hotels of India Ltd vs R. N. Kapoor(1) where Subba Rao, J. (with whom Das, J. agreed observed as follows: "If a document gives only a right to use the property in a Particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be With the owner of the property, but the licensee in permitted to make use of the premises for a particular purpose. But for the permission, his occupation would he unlawful. It does not create in his favour any estate or interest in the property. There is, therefore, clear distinction between the two con concepts. The dividing line is clear though sometimes it be becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in Errington vs Errington , wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p. 155: The result of all these cases is that, although a person who is let into exclusive possession is, prima facie, to be considered to be tenant, nevertheless he will not be held to be so (1) A.I.R.1959.S.C.1262 106 if the circumstances negative any intention to create a tenancy". "The Court of Appeal again in Cobb vs Lane 1952 I All ER 1199, considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document. At p. 1201, Somervell L.J., stated: ". the solution that would seem to have been found is, has one would expect, that it must depend on the intention of the parties". Denning L.J. said much to the same effect at p. 1202: 'The question in all these cases is one of intention: did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have personal privilege with no interest in the land ?" The following propositions may, therefore, be taken as will established: (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the forms; (2) the real test is the intention of the parties whether they intended to create a lease or a licence; (3) if the document creates all interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document. a party gets exclusive possession of the property, 'perima facie ' he is considered to be a tenant. but circumstances may be established which negative the intention to create a lease". Again in Quadrat Ullah vs Municipal Board, Bareiliy(1) this Court observed: "There is no simple litmus test to distinguish a lease as defined in section 105, Transfer of Property Act from a licence as defined in section 52, Easements Act, but the character of the transaction turns on the operative intent of the parties. To put it pithily, if an interest is immovable property; entitling the transferees to enjoyment, is created, it is a lease; if permission to use land without right to exclusive possession is alone granted, a licence is the legal result. " Then again in Board of revenue vs A. M.Ansari(2)this very Bench while approving the observations made by Lord Shaw while delivering the judgement of the Board in Kauri T Timber Company Limited vs The Commissioner of Taxes(3) held that in order that a (1) ; (2) ; (3) [1913] A. C. 771 (776). 107 agreement can be said to partake of the character of lease, it is necessary that the grantee should have obtained an interest m and possession of land. The following observations made therein are apposite: "A licence does not create an interest ill the property to which it relates while a lease does. There is in other words transfer of a right to enjoy the property in case of a lease. As to whether d particular transaction creates a lease or a licence is always a question of intention of the parties which is to be inferred from the circumstances of each case. For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential, therefore, to look to the substance and essence of the agreement and not lo its from. " Bearing in mind the above observations, let us now scrutinize the terms of Sanand (Exhibit I) which reads thus: "Order hereby is issued to the Parichhas Karjees (Officers) of the temple as follows: one Gangadhara Suar of Kundhaibenta Sahi has filed an application before the Raja for opening a 'Sera Ghara ' (store Room of Mahaprasad) at the top step of twenty two steps adjoining the inner compound of the temple and the Eastern Gate Way having space of 10 cubits of length to wards south and width of 10 cubits. It is ordered that he is permitted to open the said store room with hereditary right on payment of` one gold Mohara as Salami and rupees seven as annual rent. If he at any time constructs a pucca house, he shall pay rupees fourteen as annual rent. " A careful '. persual of the recitals in the Sanand (which does not reveal the identity of the plot with precision) would show that the Sanand did not create any interest in the size in question in favour of the plaintiff 's great grandfather. It merely permitted him to open a Saraghara which meant a room for storing articles for the sole purpose of preparing Bhog for the three presiding deities. The Sanand did not also confer the right of exclusive possession of the suit property on the grantee. This is evident from the right of 'dakhale khas ' of the respondents in the suit property as also from the proved fact that 'Saraghara ' was not kept open by the Temple authorities from midnight to 6.00 A.M. during which interval, the plaintiff could in no case occupy it nor could he have access to it. lt has also been found to have been established from the plaintiff 's evidence itself that the employees of the Raja of Puri used to clean the refuse etc. which got accumulated before the suit 'Saraghara '. Thus none of the elements of lease can be said to be present in the instant case. In M N Chubwala vs Eide Hussain Sahib(1) this Court rejected the claim of holders of certain stalls in a market that they were lessees and not (1) A. I. R. 108 licences there of the ground that they had no right to us them after the closure of the market at night and the responsibility of cleaning and disinfecting the stalls and closing the market at night lay on the landlord and not on the stall holders. No help can be derived by the appellants from Exhibit II which relates to a quarrel in 'Kotha Bhog Nities ' and is not relevant for the purpose with which we are concerned at the present stage. Now assuming without holding that the Sanand amounted to a lease, it cannot even then be held to be valid as permanent alienation of the temple debutter property is prohibited. The position is stated thus at page 489 of Mulla 's Treatise on Principles of Hindu law (11th Edition): "The power of a shebait or a mohunt to alienate debenture property is analogous to that of a manager for an infant heir as defined by the Judicial Committee in Hunooman Pershad vs Mussamat Babooee As held in that case, he has no power to alienate debutter property expect in a case of need or for the benefit of the estate. He is not entitled to sell the property for the purpose of investing , the price of it so as to bring in an income larger than that derived from the property itself. Nor can he, except for legal necessity grant a permanent lease of debutter property , though he may create proper derivative tenures and estates conformable to usage. " In the present case, the position of the Raja of Puri who granted the Sanand (exhibit) was merely that of a shebait. He could not have granted a permanent lease of the property in question to the great grandfather of the plaintiff without necessity or without benefit to the estat e which have not at all been made out hl this case Again the lease being a permanent one for a fixed rent could not have been granted at all by the Raja of Puri. Reference in this connection may usefully be made to page 931 of Mayne`s Treatise on Hindu Law (11th Edition), where the position is stated as follows: "It is beyond the powers of a manager to grant a permanent lease at a fixed rent in the absence of unavoidable necessity ; for, to fix the rent, though adequate at the time in perpetuity. in lieu of giving the endowment the benefit of an augmentation of a variable rent from time to lime would be a breach of duty on the part of the manager. In Palaniappa Chetty vs Streemath Deivasikamony (1917 ) 44 I.A. 147. Lord Atkinson observed: "Three authorities have been cited which establish that it is a breach of duty on the part or a shebait, unless constrained thereto by unavoidable necessity, to grant a lease in perpetuity of debutter lands at a fixed rent. however adequate that rent may be at the time of granting, reason of the fact that, by this means, the debutter estate (1) 44 I. A 147 109 Is deprived of the chance it would have, if the rent were variable of deriving benefit from the enhancement in value in the future of the lands leased. " In Palaniappa Chetty & Anr. vs Deivasikamony Pandara(1) alluded to in the above quoted passage, it was also held: "A permanent lease of temple lands at a fixed rent, or rent free for a premium, whether the lands are agricultural lands or a building site, is valid only if made for a necessity of the institution. It is not justified by a local custom, or by a practice of the institution, to grant lands in that manner. The phrase "benefit of the estate", as used in the decisions with regard to the circumstances justifying an alienation by the manager for an infant heir or by the trustee of a religious endowment cannot be precisely defined but includes the preservation of the estate from extinction, its defence against hostile litigation, its protection from inundation, and similar circumstances. " The present case is, in our opinion, fully covered by the decision in Shibessouree Debia vs Mothooranath Acharjo(2) where it was laid down a general rule that apart from unavoidable necessity to create a new and fixed rent for all time, though adequate at the time, in lieu of giving the endowment the benefit of an augmentation of a variable rent from time to time would be a breach duty in the mohunt. Thus viewed from any angle the 'Sanand ' could not be held to be any more than a licence and could not clothe the ancestors of the plaintiff or the plaintiff with the status of a lessee. This takes us to the last contention raised before us by counsel for the appellants which is also devoid of substance. A bare perusal of Exhibit I is enough to show that it does not confer any right of selling 'Mahaprasad ' on the plaintiff or on his legal representatives. Exhibit II cannot also be usefully pressed into service by the appellants as it relates to the sale of 'Rahani Bhog ', and not of 'dry Mahaprasad '. Thus all the contentions raised by counsel for the appellants fail. For the foregoing reasons, we affirm the judgment of the High Court and dismiss the appeal with costs. The appellants are, however, as mutually agreed to between the parties, given one month 's time to vacate the premises. The cumulative penalty of Rs. 4,600/ to which the appellants have been subjected also being excessive is reduced to Rs. 500%` P P. Appeal dismissed. (1) 441. A. 147 (2) 13 M. 1. A. 270.

The appellant 's great grandfather was granted a Sanad in respect of 2 rooms in the Jagannath temple by the Superintendent of temple at the annual rent of Rs. 7/ . The Sanad provided that the grantee would be entitled to enjoy the said 2 rooms from generation to generation and in case a permanent structure was constructed thereon the rent would be enhanced to Rs. 14/ per year. After the death of great grand father of the appellant the grand father and thereafter the father of the appellant continued storing and selling dry 'Mahaprasad ' in the said property and continued to pay Rs. 14/ per year. The respondents who have the management of Jagannath temple at present under the Puri Jagannath Temple (Administration) Act, 1952, called upon the appellants ' father to close and to hand over the possession of the two rooms to the management on the ground that the storage and sale of Mahaprasad in the Bihar Bedha of the temple affected adversely the discipline and dignity of the temple. The appellant 's father was threatened with imposition of a penalty of Rs. 100/ per day in case he did not vacate the premises in question. The appellant 's father, therefore, tiled the suit in the civil court which after his death has been continued by the present appellant for permanent injunction restraining the respondents from interfering with his right of storing and selling dry Mahaprasad in the suit premises. According to the plaintiff the permanent lease was granted to him by the Raja Dibyasingha and that since he was continuing to pay the rent regularly he was entitled to continue in the suit premises from generation to generation. The respondents contested the suit on the ground that it was beyond the competence of Raja of Puri as Manager of the temple to grant a permanent lease and that, therefore, the Sanad was ineffectual, invalid and inoperative, and conferred no rights on the appellant and his ancestors which would bind the present respondents. Secondly, since the act of storing and selling Mahaprasad at the suit premises constitute a breach of order and discipline, the respondents under the above statute had right to ask the appellant to vacate. Thirdly what was granted by the Sanad was licence and not a lease. The trial court dismissed the suit. However, an appeal was allowed. The High Court accepted the second appeal and dismissed the suit. In an appeal by special leave it was contended by the appellants : (1) The suit property did not form part of the temple. (2) The Sanad granted a permanent lease of the suit property and not merely a licence and therefore the appellant had an indefeasible right of storing and selling Mahaprasad. Dismissing the appeal, ^ HELD: (1) Section 2(d) of the Puri Sri Jagannath Temple (Administration Act, 1952, defines temple as including the temple of Lord Jagannath of Puri. Other temples within its premises and all other appurtenant and subordinate shrines, other sacred places and tanks and any additions which may be 102 made there after commencement of the Act. Records of right prepared under said Act also include the suit premises within the meaning of temple. [104 H] (2) It is now well settled by a catena of decisions of the Supreme Court that it is the creation of an interest in immovable property that distinguishes a lease from a licence. The intention of the parties is the real test for ascertaining the character of a document. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises it would conclusively establish that he was a lessee. However, the result of the subsequent cases is that although a person who is let into exclusive possession in prima facie to be considered to be a tenant nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. To ascertain whether a document creates a licence or lease the substance of the document must be preferred to the form (entire English and Indian case Law reviewed). [105 D H, 106 A, D] (3) A careful perusal of the recital in the Sanad, which does not revival the identity of the plot with precision would show that the Sanad did not create any interest in the rooms in question in favour of the grantee. l he Sanad also did not confer the right of exclusive possession of the premises. It is also evident from the right of "Dakhale Khas" of the respondents in the suit property as also from the proved facts that the Sarghara was not kept open by the temple authorities from mid night to 6 a.m. during which interval the plaintiff could in no case occupy it nor could he have access to it. It proved that the employees of the Raja of Puri used to clean the refuse etc., which got accumulated in the suit premises. The Sanad, therefore, created a licence and not a lease. [107 E H] (4) Even if it is assumed that the Sanad created a lease it could not be valid lease since the Mohant or manager of a Hindu temple is prohibited from grantee a permanent lease except far legal necessity or benefit of the estate. Tn the present case no such legal necessity or benefit of estate has been proved. [108 B E]

: Criminal Appeal Nos. 452 53 of 1990. From the Judgment and Order dated 23.3.1989 of the Rajasthan High Court in S.B. Cr. R. No. 426 and 325 of 1982. Badridas Sharma, Manoj Jain, H. Shekhar, Anil Kumar Gupta, Indra Makwana, Prem Sunder Jha, Lahoty and Ms. Meeta Sharma for the Appearing Parties. The Judgment of the Court was delivered by K.N. SAIKIA, J. Special leave granted. These two criminal appeals are from the common Judgment of 812 the High Court of Rajasthan dated 23.3.1989 in S.B. Criminal Revision No. 426 of 1982 filed by the appellants Nos. 1, 2 and 3 and S.B. Criminal Revision No. 325 of 1982 filed by the appellants Nos. 4 and 5 herein. On 21.4.1980 one Shanti Lal lodged a report at Bikaner Police Station stating therein that the appellants and two others namely Uttam Chand and Hanuman Chand at about 2 P.M that day were pelting stones at the informant 's house caus ing damage to it and that Durgabai, Tara and Sunita who at the relevant time were sitting at the chowk of the house were injured. After recording F.I.R. No. 22 dated 21.4. 1980 and on completion of investigation police framed charges under section 147, 323, 325, 336 and 427 I.P.C. and the charge sheet was forwarded to the Judicial Magistrate No. 2 Bikaner under section 173 Cr. After taking cognizance and after hearing the arguments, the Judicial Magistrate, Bikaner by his order dated 3.10.1980 in Criminal Case No. 165 of 1980 had been pleased to discharge the appellants Nos. 4 and 5, namely, Bijya Bai and Jiya Bai of all the charges levelled against them. Appellants Nos. 1, 2 and 3, namely, Sohan Lal, Padam Chand and Vishnu were ordered to be charged only under section 427 I.P.C. on the basis of site inspection and injury report: On 25.2.82 the Assistant Public Prosecutor submitted an application to the Magistrate under section 216 Cr. P.C. signed by Durga Bai stating: "The accused have been charged under section 427 I.P.C., whereas from the entire evidence and the medical evidence prima facie case under various sections i.e. 147, 325 and 336 I.P.C. is made out. Hence it is prayed that accused be charged in accordance with the evidence and the charge be amended in the light of the evidence. " After recording the plea of the accused persons, prose cution led evidence and examined P.W. 1 Shanti Lal, P.W. 2 Sampat Lal, P.W. 3 Chagan Lal on 12.5.82 and P.W. 4 Durga Bai on 8.7.82. The learned Magistrate on 8.9.82 after referring to the aforesaid application submitted by A.P.P. dated 25.2.82 and heating the A.P.P. and the learned advocate for the accused and discussing the evidence and observing that if any ac cused was discharged of any charge under any section then there would be no bar for taking fresh cognizance and recon sideration against him according to section 2 16 Cr. P.C. and that 813 the provision of section 319 Cr. P.C. was also clear in that connection, recorded the following order: "Hence cognizance for offences under sections 147, 427, 336, 323,325 I.P.C. is taken against accused Sohan Lal, Padam Chand, Smt. Vijya Bai, Jiya Bai, Vishnu, Hanuman Chand and Uttam Chand. Orders for framing the charges against accused Sohan Lal, Padam Chand, Vishnu under the aforesaid sections are passed and accused Smt. Jiya Bai, Vijya Bai, Uttam Chand and Hanuman Chand be summoned through bailable warrants in the sum of Rs.500 each. File to come on 20.10.82 for framing the amended charge against the accused present. Exemption from appearance of accused Vishnu Chand and Padam Chand is canceled until further order. The advocate for the accused shall present the said accused in the Court in future. " The above order was challenged in the aforesaid two criminal revision petitions in the High Court of Rajasthan and the same were dismissed by the order under appeal. According to the learned Single Judge the question that arose for consideration in those revision petitions was whether a Magistrate was competent to take cognizance of the offence after recording some evidence against the accused persons who had been earlier discharged of those offences. It was urged by the revision petitioners that having once discharged them it was not open to the Magistrate to proceed against them and the only remedy was to go in revision and the Magistrate could not review his own order. The learned Judge dismissed the petitions taking the view that it was not a case of reviewing the order of discharge passed by the Magistrate but was a case of taking cognizance of the of fence on the basis of the evidence recorded by the Magis trate himself which was not in any way prohibited in law, and that under the provisions of section 3 19 Cr. P.C. the Magis trate was fully competent to take cognizance of the offences on the basis of evidence recorded by him though for the same offences order of discharge was passed by him earlier. Mr. B.D. Sharma, the learned counsel for the appellants, firstly, submits that the learned Magistrate while deciding the application dated 25.2.82 submitted by the A.P.P. under section 216 Cr. P.C. committed error of jurisdiction in passing an order far beyond what was prayed in the application and could not have revised his own order of discharging the appellants. Secondly, section 319 Cr. P.C. was applicable only to a person not being the accused and the appellants having been 814 accused but discharged could not have been charged as was done in this case. Counsel submits that the High Court having failed to notice this fact if this order is allowed to stand it will cause grave miscarriage of justice to the appellants. The learned counsel for the State supports the impugned order submitting that the learned Magistrate found enough materials for taking cognizance and framing charges against the appellants after examining P. Ws. 1 to 4 and accordingly framed charges under sections 147, 323, 325 and 336 against them and summoned the appellants through bailable warrants and he had the jurisdiction to do so under section 3 19 Cr. P.C. irrespective of the application under section 216 Cr. P.C. filed by the A.P.P. We may now proceed to examine the contentions. From the application submitted by the A.P.P. dated 25.5.82 there could be no doubt that what he prayed for was the charging the accused in addition to section 427 I.P.C. whereunder they were already charged, under sections 147, 323, 325 and 336 I.P.C. of which they were already discharged. This application ex facie did not envisage the appellants Vijya Bai and Jiya Bai who were wholly discharged.under all the above sections. Under section 219 Cr. P.C. the court may alter charge. It says: "2 16. Court may alter charge. (1) Any court may alter or add to any charge at any time before judgment is pronounced. (2) Every such alteration or addition shall be read and explained to t. he accused. (3) If the alteration or addition to a charge is such that proceeding immediately with the trial is not likely, in the opinion of the Court, to prejudice the accused in his de fence or the prosecutor in the conduct of the case, the Court may, in its discretion, after such alteration or addition has been made, proceed with the trial as if the altered or added charge had been the original charge. (4) If the alteration or addition is such that proceeding immediately with the trial is likely, in the opinion of the court, to prejudice the accused or the prosecutor as 815 aforesaid, the Court may either direct a new trial or ad journ the trial for such period as may be necessary. (5) xxxxx Add to any charge means the addition of a new charge. An alteration of a charge means changing or variation of an existing charge or making of a different charge. Under this section addition to and alteration of a charge or charges implies one or more existing charge or charges. When the appellants Vijya Bai and Jiya Bai were discharged of all the charges and no charge existed against them, naturally an application under section 216 Cr. P.C. was not maintainable in their case. In cases of appellants Sohan Lal, Padam Chand and Vishnu against whom the charge under section 427 I.P.C. was already in existence there of course could arise the ques tion of addition to or alteration of the charge. The learned Magistrate therefore while disposing of the application under section 216 Cr. P.C. only had no jurisdiction to frame charges against the appellants Vijya Bai and Jiya Bai. In his order the learned Magistrate did not say that he has proceeding suo motu against Vijya Bai and Jiya Bai though he said that section 319 Cr. P.C. was also clear in this connection. As regards the other three appellants, namely, Sohan Lal, Padam Chand and Vishnu they were already accused in the case. Section 2 16 Cr. P.C. envisages the accused and the additions to and alterations of charge may be done at any time before Judgment is pronounced. The learned Magistrate on the basis of the evidence on record was satisfied that charges ought also to be framed under the other sections with which they were charged in the charge sheet. That was also the prayer in the A.P.P. 's application. However the learned Magistrate invoked his jurisdiction under section 3 19 Cr. P.C. which says: "3 19. Power to proceed against other persons appearing to be guilty of offence (1) Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed. (2) Where such person is not attending the Court, he may 816 be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid. (3) Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the inquiry into, or trial of, the offence which he appears to have committed. (4) Where the Court proceeds against any person under sub section (1) then (a) the proceedings in respect of such person shall be commenced afresh, and the witnesses reheard; (b) subject to the provisions of clause (a), the case may proceed at if such person had been an accused person when the Court took cognizance of the offence upon which the inquiry or trial was commenced. " The crucial words in the section are, 'any person not being the accused. ' This section empowers the Court to proceed against persons not being the accused appearing to be guilty of offence. Sub sections 1 and 2 of this section pro vide for a situation when a Court heating a case against certain accused person finds from the evidence that some person or persons, other than the accused before it is or are also connected in this very offence or any connected offence; and it empowers the court to proceed against such person or persons for the offence which he or they appears or appear to have committed and issue process for the pur pose. It provides that the cognizance against newly added accused is deemed to have been taken in the same manner in which cognizance was first taken of the offence against the earlier accused. It naturally deals with a matter arising from the course of the proceeding already initiated. The scope of the section is wide enough to include cases insti tuted on private complaint. There could be no doubt that the appellants 1, 2 and 3 were the accused in the case at the time of passing the impugned order by the Magistrate and as such section 319 Cr. P.C. would not cover them. Could appellants 4 and 5 be brought under that section.? Were they accused in the case? Precise ly when a person can be called the accused? Generally speaking, to accuse means to allege whether the person is really guilty of the crime or not. Accusation according to 817 Black 's Law Dictionary means a formal charge against a person, to the effect that he is guilty of a punishable offence laid before a Court or Magistrate having jurisdic tion to inquire into the alleged crime. In this sense accu sation may be said to be equivalent of information at common law which is mere allegation of prosecuting officer by whom it is preferred. In the Code of Criminal Procedure 1973, hereinafter called the Code, the expression 'the accused ' has been used in a narrower sense. Chapter XII of the Code deals with information to the police and their power to investigate. Section 154 deals with information in cognizable cases and section 155 with information as to non cognizable cases and investigation of such cases. Section 167, dealing with procedure when investigation cannot be completed in 24 hours, says: "(1) Whenever any person is arrested and detained in custody and it appears that the investigation cannot be completed within the period of 24 hours fixed by section 57, and there are grounds for believing that the accusation or information is well rounded, the officer in charge of the police station or the police officer making the investigation, if he is not below the rank of sub inspector, shall forthwith transmit to the nearest Judicial Magistrate a copy of the entries in the diary hereinafter prescribed relating to case, and shall at the same time forward the accused to such Magistrate. (2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdic tion to try the case, from time to time, authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding 'fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnec essary, he may order the accused to be forwarded to a Magis trate having such jurisdiction." (Emphasis ours) Thus the words 'the accused ' have been used only in respect of a case where there are grounds for believing that the accusation or information is well founded. 'Information ' and 'accusation ' are synonymously used. 818 Chapter XV deals with complaints to Magistrate. SectiOn 200 provides for examination of complainant. Section 202 deals with postponement of issue of process and says in sub section (1) that any Magistrate, on receipt of a com plaint of an offence which he is authorised to take cogni zance or which has been made over to him under section 192, may, if he thinks fit, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there sufficient ground for proceed ing. Thus we find that the expression "the accused" has been used in relation to a complaint case under this section even before issue of process. It also appears that in the Code the expression "the accused" is used after cognizance is taken by the Magistrate. Chapter XVI of the Code deals with commencement of proceedings before Magistrates. Section 204 dealing with issue of process uses the expression "the accused". Under sub section (1) thereof if in the opinion of a Magistrate taking cognizance of an offence there is sufficient ground for proceeding and the case appears to be (a) a summon scase, he shall issue his summons for the attendance of the accused, or (b) a warrant case, he may issue a warrant, or, if he thinks fit, a summons, for causing the accused to be brought or to appear at a certain time before such Magis trate or (if he has no jurisdiction himself) some other Magistrate having jurisdiction. Under sub section (2), no summons or warrant shall be issued against the accused under sub section (1) until a list of the prosecution witnesses has been filed. Thereafter the expression 'the accused ' has been used in subsequent sections. Thus one is referred to as 'the accused ' even before issue of process. Section 273 provides for evidence to be taken in presence of the accused in the course of trial or other proceedings. The explanation to the section says that "accused" includes a person in relation to whom any proceed ing under Chapter VIII (Security for keeping the peace and Good Behavior) has been commenced under this Code. In Chandra Deo Singh vs Prokash Chandra Bose & Anr., ; , during the pendency of the first complaint on which the Magistrate directed an inquiry, the nephew of the deceased filed a complaint alleging that the respondent No. 1 had committed the murder. The Sub Divisional Magis trate directed the First Class Magistrate to inquire into that complaint and also to report. During the 819 inquiry, apart from the witness produced by the complainant respondent No. 1 was allowed to be represented by a counsel and two persons who had been named in the First Information Report alongwith respondent No. 1 were examined with court witnesses. The First Class Magistrate after conducting the inquiry under section made a report stating that a prima facie case had been made out against the persons mentioned in the first complaint. He made anoth er report on the second complaint stating that no prima facie case has been made against respondent No. 1. The Sub Divisional Magistrate directed the initiation of committal proceedings against the persons mentioned in the first complaint. On a revision application filed by the complain ant of the second complaint the Sessions Judge directed the Sub Divisional Magistrate to conduct further inquiry against respondent No. 1 who took the matter in revision to the High Court. The Revision Applications by respondent No. 1 and three others were allowed wherefrom there was an appeal to this Court by certificate. The main contentions of the appellant before this Court were that the respondent No. 1 had no locus standi to appear and contest a criminal case before the issue of process. This Court held: "It seems to us clear from the entire scheme of Chapter XVI of the Code of Criminal Procedure (1898) that an accused person does not come into the picture at all till process is issued. This does not mean that he is precluded from being present when an enquiry is held by a Magistrate. He may remain present either in person or through a counsel or agent with a view to be informed of what is going on. But since the very question for consideration being whether he should be called upon to face an accusation, he has no right to take part in the proceedings nor had the Magistrate any jurisdiction to permit him to do so." Joginder Singh & Anr. vs State of Punjab and Anr., reported in ; is an authority for the propo sition that the expression "any person not being the ac cused" clearly covers any person who is not being tried already by the Court. A criminal complaint was registered against 5 persons including the 2 appellants. The police having found that the two appellants were innocent charge sheeted the remaining 3 persons and they were committed to trial. At the trial evidence having shown the appellants ' involvement in the crime the prosecution moved an applica tion that they be tried along with the three accused and the Sessions Judge directed the appellants to stand trial to gether with other accused. Their revision application in the 820 High Court was dismissed. In their appeal in this Court it was inter alia submitted that Section 3 19 Cr. P.C. was inapplicable to the facts of this case because the phrase "any person not being the accused" occurring in the section excluded from its operation an accused who had been released by the police. This Court rejected the contention holding that the said expression clearly covered by person who has not been tried already by the Court and the very purpose of enacting such a provision like section 3 19 clearly showed that even a person who had been dropped by the police during investigation but against him evidence showing his involve ment in the offence came before the criminal court were included in the said expression. In Municipal Corporation of Delhi vs Ram Kishan Rohtagi & Ors., [ ; , under the Food Adulteration Act, the respondent No. 1 was Manager of the company and the respondent No. 2 to 5 were the directors of the company including the company. The High Court quashed the proceed ings against the directors as also against the manager. This court set aside a part of the Judgment of the High Court which quashed the proceedings against the manager respondent No. 1. It was held that where the allegations set out in the complaint did not constitute any offence and the High Court quashed the order passed by the Magistrate taking cognizance of the offence there would be no bar to the Court 's discre tion under section 3 19 Cr. P.C. if it was made out on the additional evidence laid before it. Section 3 19 gives ample powers to any Court to take cognizance against any person not being an accused before it and try him along with the other accused. This Court clearly observed: "In these circumstances, therefore, if the prosecution can at any stage produce evidence which satisfies the court that the other accused or those who have not been arrayed as accused against whom proceedings have been quashed have also committed the offence the Court can take cognizance against them and try them along with the other accused. But we would hasten to add that this is really an extraordinary power which is conferred on the Court and should be used very sparingly and only if compelling reasons exist for taking cognizance against the other person against whom action has not been taken. More than this we would not like to say anything further at this stage. We leave the entire matter to the discretion of the Court concerned so that it may act according to law. We would, however, make it plain that the mere fact that the proceedings have been 821 quashed against respondent Nos. 2 to 5 will not present the court from exercising its discretion if it is fully satis fied that a case for taking cognizance against them has been made out on the additional evidence led before it. " It was pointed out that under the Cr. P.C. 1973 the Court can take cognizance against persons who have not been made accused and try them in the same manner along with other accused. In the old Code, Section 35 1 contained a lacuna in the mode of taking cognizance if a new person was to be added as an accused. The Law Commission in its 41st Report (para 24.81) adverted to this aspect of the law and section 3 19 of the present Code gave full effect to the recommenda tion of the Law Commission by removing the lacuna which was found to exist in section 35 1 of the old Code. In Dr. S.S. Khanna vs Chief Secretary, Patna & Ors., reported in ; this Court had to consider wheth er a person against whom a complaint was filed along with some other persons and who after an enquiry under section 202 of the Code was not proceeded against by the Court, could be summoned at a later stage under section 3 19 of the latter Code to stand trial for the same or a connected offence or of fences along with the other persons against whom process had been issued earlier by the Court. It was held that having regard to the nature of the proceedings under section 202 of the Cr. P.C. it may be difficult to hold that there is a legal bar based on the principle of issue estoppel to proceed under section 3 19 against a person complained against on the same material, if the Court has dismissed a complaint under section 203. But the Court did not express any final opinion on the question. In that case, however, the Magistrate decided to take action under section 3 19 of the Code on the basis of fresh evidence which was brought on record in the course of proceedings that took place after the enquiry contemplated under section 202 of the Code was over. It was further held that even when an order of the Magistrate declining to issue process under section 202 was confirmed by a higher Court the jurisdiction of the Magistrate under section 3 19 remained unaf fected, if other conditions were satisfied and the autre low principle adumbrated in section 300 of the Code could not, howev er, apply to such a case. In the instant case, Vijya Bai and Jiya Bai were dis charged by the Magistrate of all the charges and the three other appellants were discharged of the sections other than section 427 I.P.C. After the police submitted charge sheet against them the order of discharge, according to Mr. B.D. Sharma, could not be taken to be one under 822 section 203 but under section 245 which is included in Chapter XIX and deals with trial of warrant cases by the Magistrates. This submission has not been refuted. That section says: "245. When accused shall be discharged. (1) If, upon taking all the evidence referred to in section 244, the Magistrate considers, for reasons to be recorded, that no case against the accused has been made out which, if unrebutted, would warrant his conviction, the Magistrate shall discharge him. (2) Nothing in this section shall be deemed to prevent a Magistrate from discharging the accused at any previous stage of the case if, for reasons to be recorded by such Magistrate, he considers the charge to be groundless. " If that was so, the question is what would be the effect of the order of discharge? Should the protection resulting from such an order of discharge be allowed to be taken away by allowing the same Magistrate to take cognizance of the offence or offences against them at a later stage of the trial, without further enquiry where the order of discharge was not challenged or even if the order of discharge was taken in revision and the same was affirmed by the revision al court? Section 397 empowers the High Court or any Ses sions Judge to call for examining the records or any pro ceedings before any inferior criminal court within its jurisdiction for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed etc. Section 398 empowers the High Court or the Sessions Judge to order inquiry. It says: "On examining any record under section 397 or otherwise, the High Court or the Sessions Judge may direct the Chief Judicial Magistrate by himself or by any of the Magistrates subordi nate to him to make, and the Chief Judicial Magistrate may himself make or direct any subordinate Magistrate to make, further inquiry into any complaint which has been dismissed under section 203 or sub section (4) of section 204, or into the case of any person accused of an offence who has been discharged. Provided that no Court shall make any direction under this section for inquiry into the case of any person who has been discharged unless such person has had an oppor tunity of showing cause why such direction should not be made." 823 Thus this provision empowers, the Courts to direct further inquiry into any complaint which has been dismissed under section 203 or sub section (4) of section 204 or in the case of any person accused of the offence who has been discharged and no such order shall be made unless such person has had an opportunity of showing cause why such direction should not be made. The question therefore is whether the necessity of making a further inquiry as envisaged in section 398 could be obviated or circumvented by taking resort to section 319. As has already been held by this Court, there is need for caution in resorting to section 3 19. Once a person was an accused in the case he would be out of reach of this section. The word "discharge" in section 398 means discharge of an offence relating to the charge within the meaning of sections 227,239,245 and 249. Refusing to proceed further after issue of process is dis charge. The discharge has to be in substance and effect though there is no formal order. The language of the section does not indicate that the word "discharge" should be given a restricted meaning in the sense of absolute discharge where the accused is set at liberty after examination of the whole case. The cases of appellants 4 and 5 would be one of total discharge. But it could not be said that they were not some of the accused in the case, or that cognizance was not taken of the offences against them. A personmay be accused of several offences and he may be discharged of some of fences and proceeded against for trial in respect of other offences. This was the position regarding appellants 1, 2 & 3, who were partially discharged. The High Court did not subscribe to the view taken in State vs Gangaram Kalite reported in AIR 1965 Assam and Nagaland 9. Therein a chargesheet having been filed against 9 accused persons in his Court the Sub Divisional Magistrate called for report from the police and on receipt of the final report ordered the discharge of the accused persons on 26.6.1961. Subsequently on 22.8.1961, without any fresh chargesheet or a complaint, Sub Divisional Magistrate decid ed to proceed afresh against the accused persons and ordered summons to be issued to them, fixing a later date for evi dence. On a reference by the Additional District Magistrate, calling into question the procedure followed by the Sub Divisional Magistrate a single bench of the High Court of Assam and Nagaland on the basis of Section 241 A of the old Code of the Criminal Procedure held that assuming that the discharge order had been validly passed, the Magistrate became functus officio so far as the case was concerned and unless there was a fresh complaint or a fresh chargesheet no action in the matter could have been taken by the Sub Divi sional Magistrate. It was observed that as the order 824 passed was an order of discharge and not one of acquittal, a fresh complaint could under law have been entertained by the Magistrate and in the absence of any such complaint, any attempt to go back on the order of discharge passed by him and to revive the case, as if the case had not been dis charged, would amount in law to a review of the Judgment of the Magistrate which was not permissible having regard to section 369 of the Code of Criminal Procedure. Section 369 provided that no Court when it had signed its Judgment, shall alter or review the same, except to correct clerical errors. The High Court in the instant case followed the decision in Saraswatiben vs Thakurlal Hitnatlal & Anr., reported in AIR 1967 Gujarat 263, holding that if at one stage on the evidence before him the Magistrate found that there was no prima facie case against the accused, subsequently on en quiry as a result of further evidence if he felt that there was prima facie case against the accused whom he had dis charged under section 251 A (2) Cr. P.C., it was open to him to frame a charge against the accused and that it was not necessary to take cognizance again and the Magistrate did not become functus officio. The same view was taken in Amarjit Singh @ Amba vs The State of Punjab, reported in Punjab Law Reporter Vol. 85 (1983) p. 324. The above views have to yield to what is laid down by this Court in the decisions above referred to. The provi sions of section 319 had to be read in consonance with the provi sions of section 398 of the Code. Once a person is found to have been the accused in the case he goes out of the reach of section 3 19. Whether he can be dealt with under any other provi sions of the Code is a different question. In the case of the accused who has been discharged under the relevant provisions of the Code, the nature of finality to such order and the resultant protection of the persons discharged subject to revision under section 398 of the Code may not be lost sight of. This should be so because the complainant 's desire for vengeance has to be tempered with though it may be, as Sir James Stephen says; "The Criminal law stands to the passion of revenge in much the same relation as marriage to the sexual appetite." (General view of the Criminal Law of England, p. 99). The A.P.P. 's application under section 2 16, in so far as the appellants 1 to 3 were concerned could be dealt with under section 2 16. Appellants 4 & 5 could be dealt with neither under section 2 16 nor under section 3 19. In that view of the matter the impugned order of the Magistrate as well as that of the High Court in so far as the appellants 4 & 5, namely, Vijya Bai and Jiya Bai are concerned, have to be set aside which we hereby do. The appeals are allowed to that extent. G.N. Appeals allowed.

One 'S ' lodged a First Information Report alleging that the appellants and two others were pelting stones at the house of informant, thereby causing damage to it and injur ing three women who were sitting at the chowk of the house. After completing investigation the police framed charges under sections 147, 323, 325, 335 and 427 IPC and forwarded the charge sheet to the Judicial Magistrate under section 173 Cr. P.C. Taking cognizance and after hearing the argu ments, the Judicial Magistrate discharged appellants 4 and 5 of all the charges and ordered that appellants 1, 2 and 3 be charged only under section 427 IPC. Later, the Assistant Public Prosecutor submitted an application to the Magistrate under Section 2 16 Cr. P.C. signed by one of the Prosecution Witnesses, for amending the charge claiming that a prima facie case under sections 147, 325 and 336 IPC was made out. After hearing the parties, the Magistrate allowed the said application. This order was challenged before the High Court by way of Revision Peti tions. The Petitions were dismissed by the High Court, holding that it was not a case of reviewing the order of discharge passed by the Magistrate, but was a case of taking cognizance of the offence on the basis of evidence recorded by the Magistrate himself, which was not prohibited in law. It was also held that under section 319 Cr. P.C. the Magis trate was fully competent to take cognizance of the offences on the basis of evidence recorded by him though for the same offences order of discharge was passed by him earlier. Aggrieved at the aforesaid order of the High Court, the appellants have preferred these appeals, by special leave. On behalf of the appellants it was contended that the Magis trate 810 committed error of jurisdiction in passing the subsequent order and that he could not have revised his own order discharging the appellants. It was also contended that section 319 Cr. P.C. was applicable only to a person not being the accused, and so the accused could not have been discharged. The Respondent State contended that the Magistrate found enough materials for taking cognizance and framing charges under sections 147, 323, 325 and 336 IPC and he had juris diction to do so under section 319 Cr. P.C. irrespective of the application under section 216 Cr. P.C. filed by the Assistant Public Prosecutor. Allowing the appeals, HELD: 1.1. Under Section 216 Cr. P.C., 'and to any charge ' means the addition of a new charge. An alteration of a charge means changing or variation of an existing charge or making of a different charge. Addition to and alteration of a charge or charges implies one or more existing charge or charges. When the appellants 4 and 5 were discharged of all the charges and no charge existed against them, natural ly an application under section 216 Cr. P.C. was not maintainable in their case. The Magistrate therefore while disposing of the application under section 216 Cr. P.C. only had no jurisdic tion to frame charges against the appellants 4 and 5. In his order the Magistrate did not say that he was proceeding suo motu against them though he said that section 319 Cr. P.C. was also clear in this connection. [815B D] 1.2. As regards appellants 1, 2 and 3, they were already accused in the case. Section 216 Cr. P.C. envisages the accused and the additions to and alterations of charge may be done at any time before record was satisfied that charges ought also to be framed under the other sections with which they were charged in the charge sheet. That was also the prayer in the Assistant Public Prosecutor 's application. However, the Magistrate invoked his jurisdiction under section 319 Cr. P.C. [815E F] 2. The provisions of section 319 had to be read in consonance with the provisions of section 398 of the Code. Once a person is found to have been the accused in the case he goes out of the reach of section 319. Whether he can be dealt with under any other provisions of the Code is a different question. In the case of the accused who has been discharged under the rele vant provisions of the Code, the nature of finality to such order 811 and the resultant protection ' of the persons discharged subject to revision under s, 398 of the Code may not be lost sight of. This should be so because the complainant 's desire for vengeance has to be tempered with. [824E F] Chandra Deo Singh vs Prokash Chandra Bose & Anr., ; ; Joginder Singh & Anr. vs State of Punjab and Anr. , ; ; Municipal Corporation of Delhi vs Ram Kishan Rohtagi & Ors., ; ; Dr. S.S. Khanna vs Chief Secretary, Patna & Ors., ; ; relied on. State vs Gangaram Kalite, AIR 1965 Assam and Nagaland 91 approved. Saraswatiben vs Thakurlal Himmatlal & Anr., AIR 1967 Gujarat 263: Amarjit Singh @ Amba vs The State of Punjab, Punjab Law Reporter Vols. 85 (1983) p. 324, disapproved. General view of the Criminal Law of England by James Stephen, p. 99 referred to. 3. The Assistant Public Prosecutor 's application under section 216, in so far as the appellants 1 to 3 were concerned, could be dealt with under section 216. Appellants 3 & 5 could be dealt with neither under section 216 nor under section 319. The order of the Magistrate as well as that of the High Court in so far as the appellants 4 and 5 are concerned, are set aside. [824G H]

ition (Criminals No. 126 of 1982. (Under Article 32 of the Constitution of India) Ram Jethmalani, Miss Rani . Jethmalani, Harjinder Singh and K. K. Sood for the Petitioner. O.P. Rana and R.N. Poddar for the Respondent. The Judgment of the Court was delivered by VARADARAJAN, J. On 31st March, 1982, after hearing learned counsel for both the parties, we quashed the order of detention in this case, observing that our reasons will follow. We proceed to give the reasons. This Writ Petition under Article 32 of the Constitution of India is by Smt. Bimla Dewan, wife of the detenu Shri Dev Raj Dewan, 44 resident of House, No. 53, Gadodia Road, 146/2 THAN Singh Nagar, Anand Parbat, Delhi, for quashing the order of detention dated 25.9.1981 issued by the Commissioner of Police, Delhi under section 3 (2) of the . The detenu was detained from 26. 9. 1981. The order of detention is said to have been approved by the respondent, Lieutenant, Governor, Delhi, by order dated 1.10.1981 under sec. 3 (4) of the Act. The detenu had been detained in the Central Jail. Tihar. New Delhi. It is alleged in the petition that the detenu is a social worker, who is in active politics, and had contested the Municipal Elections of the Municipal Corporation of Delhi from the Anand Parbat constituency in 1977 and was defeated by a Congress l candidate by a narrow margin of 360 votes, and due to political rivalry he has been involved from time to time in a number of false cases, in most of which he has succeeded in proving his innocence and was acquit ted. It is further alleged in the petition that out of sheer political vendetta the detenu has been detained maliciously with full know ledge that the alleged activities of the detenu, even if true, do not fall within the concept of threat to public order. The arrest or prosecution of the detenu, cannot by itself, be a ground of detention It is only the material on the basis of which the detenu is arrested, prosecuted or convicted that can constitute a ground of detention. But no such material, including the blue film mentioned in item 28 of paragraph 2 of the grounds of detention has been supplied to the detenu and it has, therefore, become impossible for him to make any effective representation against his detention. No opportunity was given to the detenu to make a representation to the detaining authority. The detenu challenged his detention by filing Criminal Writ Petition No. 126 of 1981 in the High Court of Delhi on 13.10.1981. But since no order had been passed in that petition though arguments were heard in November 1981, this writ petition has been filed in the Supreme Court on 3.3.1982. It is alleged in the grounds of detention in which 32 instances have been given that those acts of the detenu show that he is a desperate and dangerous character who acts in a manner which is prejudicial to maintenance of public order, that his activities are hazardous to the community and he has not stopped his violent, anti social and criminal activities in spite of his prosecution in a number of cases, and that in these circumstances his detention under 45 section 3 (2) of the National security Act, 1980 has been considered A essential n order to stop his criminal activities. In the counter affidavit it is stated at the outset that the High Court of Delhi has by an order dated 4.3.1982 dismissed Criminal Writ Petition No. 126 of 1981 which was filed for quashing the very same order of detention dated 25.9.1981 and that the present Writ Petition is consequently not maintainable and only an appeal to this Court against the judgment of the High Court could be filed. It is contended that there is nothing on record to show that the detenu is a social worker. The counter affidavit further proceeds to state that the criminal history of the detenu as disclosed in the grounds of detention goes to show that he has been a serious threat to maintenance of public order and that whenever any police officer or any other agency tried to interfere in the matter he had assaulted, obstructed or attempted to murder him and that detention under the Act is the only way to prevent him from indulging in activities which are prejudicial to maintenance of public order. It is stated that copies of all first information reports mentioned in the grounds of detention were supplied to the detenu and that the detaining authority has specifically mentioned in the grounds of detention that the detenu has a right of representation to the Lieutenant Governor and the Advisory Board. The respondent has prayed for dismissal of the Writ Petition for the aforesaid reasons. Instances Nos. I to 22, 24 and 28 relate to criminal cases, in all of which the detenu has been found to be not guilty and acquitted. Instance No. 23 relates to a case in which the detenu has been discharged. Instance No. 28 relates to a blue film of naked picture for public circulation/exhibition alleged to have been recovered on 23/24.6.1979 by the Police from the Karnal Restaurant of the detenu. Since all these instances relate to cases in which the detenu has been found to be not guilty and acquitted none of these instances can legitimately be taken into consideration for detaining the detenu under section 3 (2) of the . Mr. Ram Jethmalani, Senior Advocate who , appeared for the petitioner in this case submitted that in the there is no provision like section SA in COFEPOSA (Conservation of Foreign Exchange and Prevention of Smuggling Act) and, therefore, if one of the grounds Is bad the order of detention has to be quashed in its entirety and that as the detaining authority has based the order of detention on, 46 grounds Nos. 1 to 24 and 28 also, the order of detention is unsustainable. The learned counsel for the respondent did not submit anything to controvert that submission of Mr. Ram Jethmalani. We are of the opinion that since the detaining authority would naturally have been influenced by these grounds as well for coming to the conclusion that the detenu requires to be detained under the provisions of the Act, the entire order of detention ii unsustainable. Before considering the other instances, it is necessary to note what Hidayatullah, C.J. has observed in Arun Ghosh vs State of West Bengal.(1) It is this: "Take the case of assault on girls. A guest at a hotel may kiss or make advances to half a dozen chamber maids. He may annoy them and also the management but he does not cause disturbance of public order. He may even have a fracas with the friends of one of the girls but even then it would be a case of breach of law and order only. Take another case of a man who molests women in lonely places. As a result of his activities girls going to colleges and schools are in constant danger and fear. Women going for their ordinary business are afraid of being way laid and assaulted. The activity of this man in its essential quality is not different from the act of the other man but in its potentiality and in its effect upon the public tranquillity there is a vast difference. The act of the man who molests the girls in lonely places causes a disturbance in the even tempo of living which is the first requirement of public order. He disturbs the society and the community. His act makes all the women apprehensive of their honour and he can be said to be causing disturbance of public order and not merely committing individual actions which may be taken note of by the criminal prosecution agencies." Instances Nos. 25 to 27 and 29 to 32 relate to criminal cases which are said to have been pending against the detenu on the date of order of detention. We shall first consider instances Nos. 25 to 27 and 30 to 32. Instances 25 and 27 relate to cases in which the detenu is alleged to have been arrested I for the reason that whisky was being served in a restaurant belonging to him. instances No. 26 relates to the alleged recovery of a loaded English revolver and 5 live cartridges from the detenu 's Kamal Restaurant on 24.6.1979. Instance No. 30 relates to a case in which the detenu is said to have. (1) AIR. 1970 SC. 47 been arrested on the complaint of a lady that the detenu bad A conspired for the murder of her husband, who was murdered while he was returning after Seeing a cinema on 16.8.1981. Instance No. 31 relates to a case arising out of a report sent by a Sub Inspector of Police, Anand Parbat against the detenu alleging that Smt. Praveen Kapoor and Smt. Shielawati Kapoor, members of the family of deceased Vinod Kapoor apprehended danger to their lives at the hands of the detenu. Instance No. 32 relates to the arrest of the detenu on the complaint of Smt. Sheilawati Kapoor that the detenu threatened her with dire consequences when she went to Tees Hazari Courts to see her son Ashok on 10.9.1981. We are clearly of the opinion that these instances cannot in law amount to any interference with the maintenance of public order and could not constitute grounds for detention under the . We now come to instance No. 29 which lates to the arrest of the detenu on the complaint of one Prem Kumar Narang Municipal Councillor that when the Corporation Staff wanted some persons for prosecution, one Ram Singh came to rescue them and that later on the detenu came alongwith 70 other persons and started throwing stones etc. resulting in damage to a building. On that complaint a First Information Report dated 28.12.1979 under sections 147, 148, 149 323 and 427 I.P.C. is said to have been submitted by the Police. A mere allegation in the report of the Municipal Councillor, without anything more, cannot constitute a ground for detention under the There is no allegation in that instance that law enforcement authorities had any valid reason to believe the allegations made in the complaint to be true even while the case registered on that complaint was pending trial and posted to 29.10.1981. There is no allegation in that instance that the building at which stones etc. are alleged to have been thrown is situate in a public place and that the alleged act of the detenu and 70 other persons has caused apprehension in the minds of the residents of the locality in regard to maintenance of public order. We are, there fore, unable to hold that this instance has any potentiality to interfere with and has effect upon the public tranquillity and order and, that it cannot constitute a ground for detention under the . It is necessary to mention in passing the fact that it is admitted in the Writ Petition itself that Criminal Writ Petition No. 126 of 1981 had been filed in the High Court of Delhi on 13.10.1981 48 for quashing the very same order of detention dated 25.9.1981 and that arguments in that Petition had been heard in November 1981 itself. In the counter affidavit it is stated that the High Court of Delhi has by an order dated 4.3.1982 dismissed that Writ Petition and, therefore, only an appeal against that order would lie to this Court and this Writ Petition is not maintainable. Though the learned counsel for the respondent invited our attention to certain portions of that order dated 4.3. 1982 of a Division Bench of the Delhi High Court dismissing Writ Petition No. 126 of 1981 it was not contended by him that only an appeal against that order would lie to this Court and that this Writ Petition is not maintainable. It is, therefore, unnecessary for us to go in detail into this ground of objection taken in the counter, affidavit. For the reasons mentioned above we are of the opinion that the order of detention dated 25.9.1981 is unsustainable and liable to be quashed. There will be no order as to costs. H.L.C. Petition allowed.

The husband of the petitioner was detained by an order made under section 3(2) of the Act. The grounds of detention in support of the order referred to a number of criminal cases involving the detenu in many of which he had been acquitted The allegations in cases pending against the detenu were: that a Municipal Councillor had complained that when the staff of the Corporation wanted to apprehend some persons for purposes of prosecution, the detenu along with 70 others had pelted stones etc. resulting in damage to a building; that whisky was being served in his restaurant; that a loaded revolver along with live cartridges had been recovered from his restaurant; that a lady had complained that he had conspired for the murder of her husband; that a police officer had reported that two ladies of the family of a deceased person apprehended danger from him; and that a lady had complained that he had threatened her with dire consequences. It was stated in the grounds that these acts of the detenu showed that he was a desperate and dangerous character who was prone to act in a manner prejudicial to the maintenance of public order and therefore his detention under the provisions of the Act had been considered essential. The detenu had challenged his detention by I writ petition filed under Article 226 but the High Court which had heard the matter several months before the filing of the present petition under Article 32, had not passed any order thereon. It was alleged in the petition that the detenu was a social worker who was active in politics, that due to political rivalry he had been involved from time to time in a number of false cases, that he had succeeded in proving his innocence in most of them and that he had now been detained on account of political vendetta. It was submitted that the alleged activities of the detenu, even if true, did not fall within the concept of threat to public order. Counsel for the petitioner contended that since the National Security Act did not contain a provision like section SA of the Conservation of Foreign Exchange and Prevention of Smuggling Act, if one of the grounds was bad, the order of detention had to be quashed in its entirety. 43 Allowing the petition. ^ HELD :1. None of the instances in which the detenu had been found to be not guilty and acquitted could have legitimately been taken into consideration for detaining the detenu under section 3(2) of the National Security Act. Since the detaining authority would naturally have been influenced by these grounds as well for coming to the conclusion That the detenu was required to be detained under the provisions of the Act, the entire order of detention was unsustainable. [45 F G: 46 B] 2. It is the potentiality of the act to disturb the even tempo of living in a community or society which makes it prejudicial to the maintenance of public order or public tranquillity. A mere allegation in the complaint of the Municipal Councillor without anything more could not constitute a ground for detention under the Act. There was no allegation in that instances that the law enforcement authorities had any valid reason to) believe that the allegations made in the complaint were true. There was also no allegation that the building at which stones etc. were alleged to have been thrown was situate in a public place and that the alleged act of the detenu and 70 other persons had caused apprehension in the minds of the residents of the locality in regard to maintenance of public order. This instance could not constitute a ground for detention under the Act as it had no potentiality to interfere with or affect public order or public tranquillity. The instances mentioned in other cases pending against the detenu could not in law amount to any interference with the maintenance of public order and could not constitute grounds of detention under the Act.[47G; 46E F; 47E G;47C] Arun Ghosh vs State of West Bengal, AIR 1970 S.C. 1228, referred to.

ns Nos. 108 and 174 177 of 1976. (Under Article 32 of the Constitution of India). R. K. Garg, section C. Agarwala & Aruneshwar Gupta for the petitioners in WP 108 Somnath Chatterjee, P. K. Chatterjee & Rathin Das for the petitioners in 174 77 section V. Gupte, Attorney Genl., U. R. Lalit, R. N. Sacluhey & A. Subhashini for r. 2 in all the WPs. section V. Gupte, Attorney Gent. & D. N. Mishra for rr. 2 & 3 in WP 108 and rr. 2 4 in WP 174 77. P. section Khera for the Intervener (AIN LIC Employees Federation) The following Judgments were delivered BEG, C.J. The Life Insurance Corporation was constituted under the Life Insurance Corporation Act 31 of 1956 (hereinafter to be referred to as "the Act"). On 1 6 1957, the Central Government issued, under section 11 (1) of the Act, an order prescribing the 'Pay scales, dearness allowance and conditions of service applicable to Class III and IV employees. Among these conditions it is, stated that no bonus would be paid but amenities like insurance and medical treatment free of cost would be provided. On 26 6 1959, an order was passed by the Central Government under section 11(2) of the Act, amending para 9 of the 1957 Order inasmuch as it was provided that bonus other than profit sharing bonus would be paid to the employees drawing the salary not exceeding Rs. 5001 per month. On 2nd of July 1959, there was. a settlement between the L.I.C. and the employees providing for payment of cash bonus at the rate of one and a half month 's basic salary which was to be effective from 1 9 1956 and valid upto 31 12 1961. In July 1960, regulations were framed under section 49 to regulate the conditions of service of classes of employees and regulation 58 provided for payment of non profit sharing bonus to the employees. Orders were again passed on 14 4 1962 and 3rd August 1963, the effect of which was to remove the restriction of Rs. 5001 for eligibility for payment of bonus. On 29th January 1963, another settlement was arrived at between the L.I.C. and its employees for payment of cash bonus at the rate of one and a half month 's basic salary. This was to continue in operation until 31st March 1969. On 20th June 1970, a third settlement was reached for payment of cash bonus at the same rate which was to be effective upto 31st March 1972. On 26 6 1972, a fourth settlement for payment of cash bonus at the rate of 10 per cent of gross wages (basic and special pay and dearness allowance) was made effective from 1st 'April 1972 to 1973. On 21st January 1974 and 6th February 1974, settlements for payment of cash bonus at 15 per cent of gross wages, valid for four years from 1st April 1973 to 31st March 1977, were reached. It is clear that this so called "bonus" did not depend upon profits earned but was nothing short of increas 340 ed wages. The settlements were approved by the Board of Directors of the L.I.C. and also by the Central Government. On 29th March, 1974, a circular was issued by the L.I.C. for payment of bonus in accordance with the settlement along with the salary in April. In April 1974, the payment of bonus for the year 1973 74 was actually made in accordance with the settlement. Again, in April 1975, *bonus for the year 1974 75 was made in accordance. with the settlements. On 25th September 1975, however, a Payment of Bonus Amendment Ordinance was promulgated. On 26 9 1975, the L.I.C. issued a circular stating that, as the payment of bonus was being reviewed in the light of the Ordinance, and, on 22nd of March, 1976, payment of bonus for the year 1975 76 was to, be withheld until a final decision was) taken. Against this, a writ petition was filed in the; High Court of Calcutta. On 21st May 1976, the Calcutta High Court passed an order recognising the right of petitioners to payment of bonus for the year 1975 76 which had become payable along with the salary in April 1976 and ordered that it must be paid to the employees. Apparently, bonus was treated as part of the right of the petitioners to property protected by Article 19( and 31(1) of the Constitution. On 29th May 1976, the Life Insurance Corporation Modification of Settlement Act 1976 was enacted by Parliament denying to the petitioners the right which had been recognised by the settlements, approved by the Central Government and acted upon by the actual payment of bonus to the employees, and, finally, converted into right under the decision of the Calcutta High Court on 21st May 1976. Provisions. of section 1 1 (2) may read as follows "(2) Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions. of service applicable to employees of insurers whose controlled busi ness has been transferred to, and vested in, the Corporation, it is necessary so to do, or that, in the interests of the Corporation and its policy holders,, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, the Central Government may, notwithstanding anything contained in sub section (1), or in the , or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions. of service to such extent, and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months ' remuneration unless the contract of service with such employee provides for a shorter notice of termination. Explanation : The compensation payable to an employee under this sub section shall be in addition to, and shall not affect, any pension, gratuity, provident fund money 341 or any other benefit to which the employee may be entitled under his contract of service. " Section 1 1 (2) of the Act shows that the Central Government had ample power to revise the scales of remuneration and other terms and conditions of service if it was satisfied that the interest of the Corporation or the policy holders demanded this. Of course, such orders had to be passed as a result of satisfaction upon material placed before the Central Government relating to the interests of the Corporation or its policy holders. But, no such order was passed. What was actually done was that the Act was passed to set aside the terms of the settlements which had been incorporated in the Judgment inter parties of the Calcutta High Court. The objects and reasons of the Act were set out as follows "The provisions of the do not apply to the employees employed by the Life Insurance Corporation of India. However, the Corporation has, as a matter of practice, been paying bonus to its employees. The bonus to Class I and Class II employees is being paid in pursuance of agreements between the Corporation and such employees. The bonus to Class III and ,Class IV employees is being paid under the terms of settlement arrived at between the Corporation and such employees from time to time. In terms of the settlement arrived at between the Corporation and its Class III and class IV employees on 24th January, 1974 under the , which is in force upto the 31st March, 1977, bonus is payable by the Corporation to its Class III and Class IV employees at the rate of fifteen per cent, of their annual salary without any maximum limit. It is proposed to set aside, with effect from the 1st April, 1975, these provisions of the settlement arrived at between the Corporation and its Class III and Class IV employees on 24th January, 1974 to enable the Corporation to make ex gratia payments to such employees at the rates determined on the basis of the general Government policy for making ex gratia payments to the employees of the non competing public sector undertakings. The bill seems to, achieve the above object. " The statement of objects and reasons discloses that the purpose ,of the impugned Act was to undo settlements which had been arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974, and actually recognised by the order of the Calcutta High Court. The question could well arise whether this was really the exercise of a legislative power or of a power comparable to that of an appellate authority considering the merits of what had passed into a right to property recognised by the This Court has decided in Shrimati Indira 342 Narain(1) that even a constitutional amendment cannot authorise the assumption of a judicial power by Parliament. One of the tests laid down there was whether the decision is of a kind which requires hearing to be given to the parties, or, in other words, involves at least a quasi judicial procedure, which the Parliament does not, in exercise of its legislative power, follow. A decision reached by the Central Government, under section 11(2) of the Act, is the result of a satisfaction on matters stated there and would imply quasi judicial procedure where the terms of a settlement had to be reviewed or revised. But, the legislative procedure, followed here, does not require that to be done. It would, in any event, be unfair to adopt legislative procedure to undo such a settlement which had become the basis of a decision of a High Court. Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of the section 18 of the , which had been held to be valid and enforceable by a High Court. Such selective exclusion could also offend Article 14. If Parliament steps in to set aside such a settlement, which the Central Government could much more reasonably 'have examined after going into the need for it or for its revision, the question also arises whether it violates the fundamental right to property guaranteed under Article 19 (1 ) (f ) of the Constitution, inasmuch as the right to get bonus is part of wages and, by its deprivation, a judicially recognised right to property is taken away and not saved by the provisions of Article 19 (6) of the Constitution? A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public. Where was the question of any restriction here in the interests of the general public ? it seems a pure and simple case of a deprivation of rights of Class III and Class TV employees without any apparent nexus with any public interest. The first hurdle in the way of this attack upon the Act undoing the settlement under Article 19 (1) (f) of the Constitution placed before us what that the Act of 1976 notified on 29 5 1976 was passed during the emergency. Hence, it was submitted that Article, 358 of the Constitution is an absolute bar against giving effect to any right arising under Article 19 of the Constitution. Furthermore, it was submitted that the effect of the Act was to wash off. the liability altogether after 1 4 1975 so that nothing remained to be enforced after 1 4 1975. The Act is a very short one of 3 sections. After defining the settlement as the one which was arrived at between the Corporation and their workers on 24 1 1974 under section 18, read with clause (p) of section 2, of the and the similar further settlement of 6 2 1974, section 3 lays down (1) [1976](2)S.C.R.347. 343 "Notwithstanding anything contained in the , the provisions of each of the settlements, in so far as they relate to the payment of an annual cash bonus to every Class, III and Class IV employees of the Corporation at the rate of fifteen per cent of his annual salary, shall not have any force or effect and shall not be deemed to have any force or effect on and from 1st day of April, 1975. " The object of the Act was, in effect, to take away the force of the judgment of the Calcutta High Court recognising the settlements in favour of Class III and Class IV employees of the Corporation. Rights under that judgment could be said to arise independently of Article 19 of the Constitution. I find my self in complete agreement with my learned brother Bhagwati that to give effect to the judgment of the Calcutta High Court is not the same thing as enforcing a right under Article 19 of the Constitution. It may be that a right under Article 19 of the Constitution becomes linked up with the enforceability of the judgment. Nevertheless, the two could be viewed as separable sets of rights. If the right conferred by the judgment independently is sought to be set aside, section 3 of the Act, would, in my opinion, be invalid for trenching upon the judicial power. I may, however, observe that even though the real object of the Act may be to set aside the result of the mandamus issued by the Calcutta High Court, yet, the section does not mention this object at all. Probably this was so because the jurisdiction of a High Court and the effectiveness of its orders derived their force from Article 226 of the Constitution itself, These could not be touched by an ordinary act of Parliament. Even if section 3 of the Act seeks to take away the basis of the judgment of the Calcutta High Court, without mentioning it, by enacting what may appear to be a law, yet, I think that, where the rights of the citizen against the State are concerned, we should adopt an interpretation which upholds those rights. Therefore, according to the interpretation, I prefer to adopt the rights which had passed into those embodied in a judgment and became the basis of a Mandamus from the High Court could not be taken away in this indirect fashion. Apart from the consideration mentioned above there are also other considerations put forward, with his usual vehemence, by Mr. R. K. Garg who relies upon the directive principles of the State Policy as part of the basic structure of our Constitution. At any rate, he submits that in judging the reasonableness of a provision the directive principles of State policy can be used, as this Court has repeatedly done, as criteria of reasonableness, and, therefore, of validity. Garg bad relied strongly upon the provisions of Article 43 of the Constitution which says : "43. The State shall endeavour to secure by suitable legislation or economic Organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage,, conditions of work ensuring a decent standard 344 of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co operative basis in rural areas. " He submits that Article 43 casts an obligation on the State to secure a living wage for the workers and is part of the principles "declared fundamental in the governance of the country". In other words, he would have us use Article 43 as conferring practically a fundamental right which can be enforced. I do not think that we can go so far as that because, even though the directive principles of State policy, including the very important general ones contained in Article 38 and 39 of the Constitution, give the direction in which the fundamental policies of the State must be oriented yet, we cannot direct either the Central Government or Parliament to proceed in that direction. Article 37 says that they "shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws." Thus, even if they are not directly enforceable by a court they cannot be declared ineffective. They have the life and force of fundamentals. The best way in which they can be, without being directly enforced, given vitality and effect in Courts of laws is to use them as criteria of reasonableness, and, therefore, of validity, as we have been doing. Thus, if progress towards goals found in Articles 38 and 39 and 43 are desired, there should not be any, curtailment of wage rates arbitrarily without disclosing any valid reason for it as is. the case here. It is quite reasonable, in my opinion, to submit that the measure which seeks to deprive workers of the benefits of a settlement arrived at and assented to by the Central Government, under the provisions of the , should not be set at naught by an Act designed to defeat a particular settlement. If this be the purpose of the Act, as it evidently is, it could very well be said to be contrary to public interest, and, therefore, not protected by Article 19(6) of the Constitution. Furthermore, I think that the principle laid down by this Court in Union of India & Ors. vs M/s. Indo Afghan Agencies Ltd.(1) can also be taken into account in judging the reasonableness of the provision in this case. It was held there (at p. 385) : "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its, own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." (1) [1968] (2)S.C.R.365. 34 5 In that case, equitable principles were invoked against the Government. It is true that, in the instant case, it is a provision of the Act of Parliament and not merely a governmental order whose validity is challenged before us. Nevertheless, we cannot forget that the Act is the result of a proposal made by the Government of the day which, instead of proceeding under section 11(2) of the Life Insurance Corporation Act, chose to make an Act of Parliament protected by emergency provisions. I think that the prospects held out, the representations made , the conduct of the Government, and equities arising therefrom, may all be taken into consideration for judging whether a particular piece of legislation, initiated by the Government and en acted by Parliament, is reasonable. Mr. Garg has also strongly attacked section 3 of the Act as, violative of Article 14 of the Constitution which was also not available to the petitioners during the emergency. He alleges that the Corporation has been making very handsome profits so that the question of jeopardising the interests of the Corporation or Policyholders could not arise. He submits that the Act is nothing more than selective discrimination practised against the lower levels of the staff of the Life Insurance Corporation. I do not think that these contentions are devoid of force. I am sorry that due to the very short interval left for me to dictate my opinion in this case I have not been able to fully set out the reasoning or to cite all the authorities I would have liked to have done. The pressure of work on hand is too great. I have several judgments to pronounce tomorrow, the last day on which I shall have the authority to participate as a Judge in the decisions of this Court. I have, however, thought it to be my duty to indicate my line of thinking briefly as I have my doubts whether Article 31(2A) is not an effective answer to complete reliance upon Article 31(2) of the Constitution. It is true that the right to receive bonus which had been recognised by the Central Government both by its orders and conduct under a settlement is a right to property. Nevertheless, since acquisition is defined by Article 31(2A) of the 'Constitution, I seriously doubt whether that definition of acquisition really satisfied by the facts in the case before us. The provision reads as follows : "31(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a Corporation evened or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning, of property, notwithstanding that it deprives any person of his property. " I have, however, no doubt that the conclusion reached by my learned brother Bhagwati is quite correct inasmuch as the benefits of the rights recognised by the judgment of the Calcutta High Court could not be indirectly taken away by section 3 of the Act selectively directed against specified settlements only. 346 I think that section 3 of the impugned Act is struck by the provisions of Article 19(1) (f) of the Constitution and not saved by Article 19(6) of the Constitution. It is also struck by Article 14. If the fundamental rights guaranteed by Articles 14 and 19 are not suspended, but their operation is only suspended, a view which I expressed in A. D. M. Jabalpur vs Shivkant Shukla(1) the effect of the suspension is to restore the status quo ante. Would this not mean that only the validity of an attack based on Articles 14 and 19 is suspended during the Emergency ? But, once this embargo is lifted Articles 14 and 19 of the Constitution whose use was suspended, would strike down any legislation which would have been bad. In other words, the declaration of invalidity is stayed during the emergency. Both Articles 358 and 359(1A) provide that, as soon as a proclamation of emergency ceases to operate, the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect". The things done or omitted to be done could certainly not mean that the rights conferred under the settlements were washed off completely as the learned Attorney General suggested. To hold that would be to convert the suspension of invalidity into a validation of law made during the emergency. If the law was not validated but only its invalidation was suspended, we should not give any wider effect to the suspension. I think we should interpret "things done or omitted to be done" very narrowly. If this be so, it means that the settlements are not to be deemed to be wiped off. No doubt payments under them were temporarily suspended. This must obviously mean that no payment could be demanded under them during the emergency, but, as soon as the emergency was over, the settlements would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended. Otherwise the enactment will have effect even after the emergency had ceased. This would clearly be contrary to the express provisions of Article 358 and 359(1A). In other words, valid claims cannot be washed off by the emergency per se. They can only be suspended by a law passed during the operation of Article 358 and 359(1A) of the Constitution. For the reasons given above, I reach the same conclusion as my learned brother Bhagwati although perhaps by a difference route. concur in the final order made by my learned Brother Bhagwati. BHAGWATI, J. These writ petitions are filed by employees of the Life Insurance Corporation challenging the constitutional validity of the Life Insurance Corporation (Modification of Settlement) Act, 1976. This unusual piece of legislation was enacted by Parliament during the emergency at a time when there could hardly be any effective debate or discussion and it sought to render ineffective a solemn and deliberate Settlement arrived at between the Life Insurance Corporation and four different associations of its employees for payment of cash bonus. It is necessary, in order to appreciate the various (1) A.T.R. Suppl. S.C.R. 172. 347 contentions arising in the writ petitions to recapitulate briefly the facts leading up to the enactment of the Life Insurance Corporation (Modification of Settlement) Act, 1976, hereinafter referred to as the impugned Act. The Life Insurance Corporation is a statutory authority established under the and under section 6 it is the general duty of the Life Insurance Corporation to carry On life insurance business, whether in or outside India, and it is required to so exercise its powers as to secure that life insurance business is developed to the best advantage of the community. It is not necessary to refer to the various provisions of the which define the powers, duties and functions of the , since we are not concerned with them in these writ petitions. It would be enough to refer to section 49 which confers power on the Life Insurance Corporation to make regulations. 'Sub section (1) of that section provides that the Life Insurance Corporation may,. with the previous approval of the Central Government, make regulations, not in consistent with the Act, "to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions" of the Act and sub section (2) enacts that in particular and without prejudice to the generality of the power conferred under sub section (1), such regulations may provide for "(b) the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents; (bb) the terms and conditions of service of persons who have become employees of the Corporation under subsection (1) of section 11;" The Life Insurance Corporation has in exercise of the power conferred under clauses (b) and (bb) of sub section (2). of section 49 and with the previous approval of the Central Government, made the Life Insurance Corporation (Staff) Regulations, 1960 defining the terms and conditions of service of its employees. There is only one Regulation which is material for our purpose, and that is Regulation 58 which is in the following terms "The Corporation may, subject to such directions as the Central Government may issue, grant non profit sharing bonus to its employees and the payment thereof, including conditions of eligibility for the bonus, shall be regulated by instructions issued by the Chairman from time to time. " We have set out Regulation 58 in its present form as that is the form in which it stood throughout the relevant period. It will be a matter for consideration as to what is the effect of this Regulation on the Settlement arrived at between the Life Insurance Corporation and its employees in regard to bonus. 348 It appears that right from 1959 Settlement were arrived at between the Life Insurance Corporation and its employees from time to time in regard to various matters relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them. The last of such Settlement dated 20th June, 1970, as modified by the Settlement dated 26th June, 1972, expired on 31st March, 1973. Thereupon four different associations of employees of the Life Insurance Corporation submitted their charter of demands for revision of scales of pay, allowances and other terms and conditions of service on behalf of Class III and Class IV employees. The Life Insurance Corporation carried on negotiations with these associations. between July 1973 and January 1974 at which there was free and frank exchange of views in regard to various matters including the obligation of the Life Insurance Corporation to the policy holders and;. the community and ultimately these negotiations culminated in a Settlement: dated 24th January, 1974 between the Life Insurance Corporation and these associations. The Settlement having been arrived at other wise than in the course of conciliation proceeding, was binding on the parties under section 18, sub section (1) of the and since the four associations which were parties to the. employees, the Settlement was binding on the Life Insurance Corporation and all its Class III and Class IV employees. The Settlement provided for various matters relating to the terms and conditions of: service but we are concerned only with Clause (8) which made provision in regard to bonus. That clause was in the following terms "(i) No profit sharing bonus shall be paid. However, the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III & IV employees. (ii) An annual cash bonus will be paid to all Class III and ' Class IV employees at the rate of 15% of the annual salary (i.e. basic pay including of,special pay, if any, and dearness allowance and additional dearness allowance) actually drawn by an employee in respect of the financial year to which thebonus relates. (iii) Save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated tile 26th, June, 1972. " It is also necessary to reproduce here Clause (12) as that has some bearing on the controversy between the parties "PERIOD OF SETTLEMENT: (1) This Settlement shall be effective from 1st April, 1973 and shall be for a period of four years, i.e., from 1st April,, 1973 to 31st March, 1977. 349 (2) The terms of this Settlement shall be subject to the approval of the Board of the Corporation and the Central Government. (3) This Settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service. (4) Except as otherwise provided or modified by this Settlement, the workmen shall continue to be governed by all the terms and conditions of service as set forth and regulated by the Life Insurance Corporation of India (Staff) Regulations, 1960 as also the administrative instructions issued from time to time and they shall, subject to the provisions thereof including any period of operation specified therein be entitled to, the benefits thereunder. " It was common ground between the parties that the Settlement was approved by the Board of the Life Insurance Corporation as also by the Central Government and the Chief of Personnel by his Circular dated 12th March, 1974 intimated to the Zonal and Divisional Managers that the approval of the Central Government to the Settlement having been received the Life Insurance Corporation should proceed to implement the terms of the Settlement. The Executive Director also issued a circular dated 29th March, 1974 containing administrative instructions in regard to, payment of cash bonus under clause 8 (ii) of the Settlement. These administrative instructions set out directions in regard to Various matters relating to payment of cash bonus and of these, two are material. One was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose of determining the amount of bonus payable to the employee, or his heirs and the other was that the bonus shall be paid along with the salary for the month of April, but in case of retirement or death, payment will be made "soon after the contingency". There was no dispute that for the first two years, 1st April, 1973 to 31st March, 1974 and 1st April, 1974 to 31st March, 1975, the Life Insurance Corporation paid bonus to its Class III and Class IV employees in accordance with the provisions of Clause 8(ii) of the Settlement read with the administrative instructions dated 29th March, 1974. But then came the declaration of emergency on 26th June, 1975 and troubles began for Class III and Class IV ,employees of the Life Insurance Corporation. On 25th September, 1975 an Ordinance was promulgated by the President of India called the Payment of Bonus (Amendment) Ordinance, 1975 which came into force with immediate effect. Subsequently, this Ordinance was replaced by the Payment of Bonus (Amendment) Act, 1976 which was brought into force with retrospective effect from the date of the Ordinance, namely, 25th September, 1975. This amending law considerably curtailed the rights of the employees to bonus in industrial establishments, but it had no impact so far as the employees of the Life Insurance Corporation were concerned since the original was not applicable to the life Insurance Corporation by reason of section 32 which exempted the Life Insurance L5 277SCI/78 350 Corporation from its operation. The Central Government, however, decided that the employees of establishments which were not covered by the would not be eligible for payment of bonus but ex gratia cash payment in lieu of bonus would be made "as may be determined by the Government taking into account the wage level, financial circumstances etc. in each case and such payment will be subject to a maximum of 10% and pursuant to this decision, the Life Insurance Corporation was advised by the Ministry of Finance that no further payment of bonus should be made to the employees "without getting the same cleared by the Government". The Life Insurance Corporation thereupon by its Circular dated 26th September, 1975 informed all its offices that since the question of payment of bonus was being reviewed in the light of the Bonus Ordinance dated 25th September,, 1975, no bonus should be paid to the employees "under the existing provisions until further instructions". The ' All India Insurance Employees ' Association protested against this stand taken by the Life Insurance Corporation and pointed out that the Life Insurance Corporation was bound to pay bonus in accordance with the terms of the Settlement and the direction not to pay bonus was clearly illegal and unjustified. The Life Insurance Corporation conceded that payment of bonus was covered by the settlement but contended that it was subject to such directions as the Central Government might issue from time to time and since the Central Government had advised the Life Insurance Corporation not to make any payment of bonus without their specific approval, the Life Insurance Corporation was justified in not making payment to the employees. This stand was taken by the Life Insurance Corporation in its letter dated 7th February, 1976 addressed to, the All India Insurance Employees ' Association and this was followed by a Circular dated 22nd March, 1976 instructing all the offices of the Life Insurance Corporation not to make payment by way of bonus. The All India Insurance Employees ' Association and some others thereupon filed writ petition No. 371 of 1976 in the High Court of Calcutta for a writ of Mandamus and Prohibition directing the Life Insurance Corporation to act in accordance with the terms of the Settlement dated 24th January. 1974 read with the administrative instructions dated 29th March, 1974 and to rescind or cancel the Circulars dated 26th September, 1975, 7th February, 1976 and 22nd March, 1976 and not to refuse to pay cash bonus to Class III and Class IV employees along with their salary for the month of April 1976 as provided by the Settlement read with the administrative instructions. The writ petition was resisted by the Life Insurance Corporation on various grounds to which it is not necessary to refer since we are not concerned with the correctness of the judgment of the Calcutta High Court disposing of the writ petition. Suffice it to state, and that is material for our purpose, that by a judgment dated 21st May, 1976 a Single Judge of the Calcutta High Court allowed the writ petition and issued a writ of Mandamus and Prohibition as prayed for in the writ petition. The Life Insurance Corporation preferred a Letters Patent Appeal against the judgment of the learned Single Judge but in the mean time the impugned Act bad already come into force and it was, therefore, stated on behalf of the Life Insurance Corporation before the Division Bench that there was 351 no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal. The result was that the judgment of the learned Single Judge remained intact : with what effect, is a matter we shall presently consider. On 29th May, 1976 Parliament enacted the impugned Act providing inter alia for modification ' of the Settlement dated 24th January, 1974 arrived at between the Life Insurance Corporation and its employees. The impugned Act was a very short statute consisting only of three sections. Section 1 gave the short title of the impugned Act, section 2 contained definitions and section 3, which was the operative section, provided as follows : "Notwithstanding anything contained in the , the provisions of the settlement in so far as they relate to the payment of an annual cash bonus to every Class III and Class IV employees of the Corporation at the rate of fifteen per cent, of his annual salary, shall not have any force or effect and shall not be deemed to have had any force or effect on and from the 1st day of April, 1975. " Since the impugned Act did not set at naught the entire settlement dated 24th January, 1974 but merely rendered without force and effect the provisions of the Settlement in so far as they related to payment of annual cash bonus to Class III and Class IV employees and that too not from the date when the Settlement became operative but from 1st April, 1975, it was said to be a statute modifying the pro visions of the Settlement. The plain and undoubted effect of the impugned Act was to deprive Class III and Class IV employees of the annual cash bonus to which they were entitled under clause 8(ii) of the Settlement for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 3 1 St March, 1977 and therefore, two of the associations along with their office bearers field the present writ peti tions challenging the constitutional validity of the impugned Act. There were two grounds on which the constitutionality of the impugned Act was assailed on behalf of the petitioners and they were as follows : A. The right of Class III and Class TV employees to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under clause 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property without payment of compensation, the impunged Act was violative of Article 31(2) of the Constitution and was hence null and void. B. The impugned Act deprived Class III and Class IV employees of the right to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 which was vested in them under clause 8(ii) of the Settlement and there was, therefore, clear infringement of their fundamental right under Article 3 52 19(1) (f) and since this deprivation of the right to annual cash bonus, which was secured under a Settlement arrived at as a result of collective bargaining and with full and mature deliberation on the part of the Life Insurance Corporation and the Central Government after taking into account the interests of the policy holders and the community and with a view to approximating towards the goal of a living wage as envisaged in Article 43 of the Constitution, amounted to an unreasonable restriction, the impugned Act was not saved by Article 19(5) and hence it was liable to be struck down as invalid. We shall proceed to consider these grounds in the order in which we have set them out, though we may point out that if either ground succeeds, it would be unnecessary to consider the other. But before we proceed, further, it would be convenient at this stage to refer to one other contention of the petitioner based on the judgment of the Calcutta High Court in Writ Petition No. 371 of 1976. The contention was that since the Calcutta High Court had by its judgment dated 21st May, 1976 issued a writ of Mandamus directing the Life Insurance Corporation to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 along with their salary for the month of April, 1976 as provided by the Settlement and this judgment had be come final by reason of withdrawal of the Letters Patent Appeal preferred against it, the Life Insurance Corporation was bound to obey the writ of Mandamus and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 in accordance with the terms of clause 8(ii) of the Settlement. It is, no doubt, true, said the petitioners, that the impugned Act, if valid, struck at clause 8(ii) of the Settlement and rendered it ineffective and without force with effect from 1st April, 1975 but it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandwnus. There was, according to the petitioners, nothing in the impugned Act which set at naught the effect of the judgment of the Calcutta High Court or the binding character of the writ of Mandamus issued against the Life Insurance Corporation. This contention of the petitioners requires serious consideration and we are inclined to accept it. It is significant to note that there was no reference to the judgment of the Calcutta High Court in the Statement of Objects and Reasons, nor any non obstante clause referring to a judgment of a court in section 3 of the impugned Act. The attention of Parliament does not appear to have been drawn to the fact that the Calcutta High Court had already issued a writ of Mandamus commanding the Life Insurance Corporation to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976. It appears that unfortunately the judgment of the Calcutta High Court remained almost unnoticed and the impugned Act was passed in ignorance of that judgment. Section 3 of the impugned Act provided that the provisions of the Settlement in so far as they relate to payment of annual cash bonus to Class III 353 and Class IV employees shall not have any force or effect and shall not be deemed to have had any force or effect from 1st April, 1975. But the writ of Mandamus issued by the Calcutta High Court directing the Life Insurance Corporation to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976 remained untouched by the impugned Act. So far as the right of Class III and Class IV employees to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 was concerned, it became crystallised in the judgment and thereafter they became entitled to enforce the writ of Mandamus granted by the judgment and not any right to annual cash bonus under the settlement. This right under the, judgment was not sought to be taken away by the impugned Act. The judgment continued to subsist and the Life Insurance Corporation was bound to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 in obedience to the writ of Mandamus. The error committed by the Life. Insurance Corporation was that it withdrew the Letters Patent Appeal and allowed the judgment of the learned Single Judge to become final. By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Life Insurance Corporation could, therefore, have successfully contained in the Letters Patent Appeal that, since the Settlement, in as far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975, Class III and Class IV employees were not entitled to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 and hence no writ of Mandamus could issue directing the Life Insurance Corporation to make payment of such bonus. If such contention had been raised, there is little doubt, subject of course to any constitutional challenge to the validity of the impugned Act, that the judgment of the learned Single Judge would have been upturned and the Writ petition dismissed. But on account of some inexplicable reason, which is difficult to appreciate, the Life Insurance Corporation did not press the Letters Patent Appeal and the result was that the judgment of the learned Single Judge granting writ of Mandamus became final and binding on the parties. It is difficult to see how in these circumstances the Life Insurance Corporation could claim to be absolved from the obligation imposed by the judgment to carry out the Writ of Mandamus by relying on the impugned Act. The Life Insurance Corporation leaned heavily on the decision of this Court in Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality( ' ) in support of its contention that when the settlement in so far as it provided for payment of annual cash bonus was set at naught by the impugned Act with effect from 1st April, 1975, the basis on which the judgment proceeded was fundamentally altered and that rendered the judgment ineffective and not binding on the parties. We do not think this decision lays down any such wide proposition as is contended for and on behalf of the Life Insurance Corporation. It does not say that whenever any actual or legal situation is altered by retrospective legislation, a judicial decision rendered by a court on the basis of such factual or legal situation prior to the alteration, would (1) [1970]1 S.C.R. 388. 354 straightaway, without more, cease to be effective and binding on the parties. It is true that there, are certain observations in this decision which seem to suggest that a court decision may cease to be binding when the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. But these observations have to be read in the light of the question which arose for consideration in that case. There, the validity of the Gujarat Imposition of Taxes by Municipalities (Validation) Act, 1963 was assailed on behalf of the petitioners. The Validation Act had to be enacted because it was held by this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad(1) that since section 73 of the Bombay Municipality Boroughs Act, 1925 allowed the Municipality to levy a 'rate? on buildings or lands and the term 'rate? was confined to, an imposition on the basis of annual letting value, tax levied by the Municipality on lands, and buildings on the basis of capital value was invalid. Section 3 of the Validation Act provided that notwithstanding anything contained in any judgment, decree or order of a court or tribunal or any other authority, no tax assessed or purported to have been assessed by a municipality on the, basis of capital value of a building or land and imposed, collected or recovered by the municipality at any time before the commencement of the Validation Act shall be deemed to have invalidly assessed, imposed, collected or recovered and the imposition, collection or recovery of the tax so assessed shall be valid and shall be deemed to have always been valid and shall not be called in question merely on the ground that the assessment the tax on the basis of capital value of the building or land was not authorised by law and accordingly any tax so assessed before the commencement of the Validation Act and leviable for a period prior to such commencement but not collected or recovered before such commencement may be collected or recovered in accordance with the relevant municipal law. It will be seen that by section 3 of the impugned Act the Legislature retrospectively imposed tax on building or land on the basis of capital value and if the tax was already imposed, levied and collected on that basis, made the imposition levy, collection and recovery of the tax valid, notwithstanding the declaration by the Court that as 'rate, the levy was incompetent. This was clearly permissible to the Legislature because in doing so, the Legislature did not seek to reverse the decision of this Court on the interpretation of the word 'rate,, but retrospectively amended the law by providing for imposition of tax on land or building on the basis of capital value and validated the imposition, levy, collection and recovery of tax on that basis. The decision of this Court holding the levy of tax to be incompetent on the basis of the unamended law, therefore, became irrelevant and could not stand in the way of the tax being assessed, collected and recovered on the, basis of capital value under the law as retrospectively amended. That is why this Court held that the Validation Act was effective to validate imposition, levy, collection and recovery of tax on land or building on the basis of capital value. It is difficult to see bow this decision given in the context of a validating statute can be of any help to the life Insurance Corporation. Here, the judgment given by the (1) [1964] 2S.C.R.608. 355 Calcutta High Court, which is relied upon by the petitioners, is not a mere declaratory judgment holding an impost or tax to be invalid, so that a validation statute can remove the defect pointed out by the judgment amending the law with retrospective effect and validate such impost or tax. But it is a judgment giving effect to the right of the petitioners to annual cash bonus under the Settlement by issuing a writ of Mandamus directing the Life Insurance Corporation to pay the amount of such bonus. If by reason of retrospective, alteration of the factual or legal situation, the judgment is rendered erroneous, the remedy may be by way of appeal or review, but so long as the judgment stands, it cannot be disregarded or ignored and it must be obeyed by the Life Insurance Corporation. We are, therefore, of the view that, in any event, irrespective of whether the impugned Act is constitutionally valid or not, the Life Insurance Corporation is bound to obey the writ of Mandamus issued by the Calcutta High Court and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 to Class III and Class IV employees. Now, to the grounds of constitutional challenge Re: Ground A : This ground raise & the question whether the impugned Act is violative of clause, (2) of Article 31. This clause provides safeguards against compulsory acquisition or requisitioning of property by laying down conditions subject to which alone property may be compulsorily acquired or requisitioned and at the date when the impugned Act was enacted, it was in the following terms "No property shall be, compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no, such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash Clause (2) in this form was substituted in Article 31 by the Constitution (Twenty fifth Amendment) Act, 1971 and by this amending Act, clauses (2A) and (2B) were also introduced in Article 31 and they read as follows : "(2A) Where a, law does not provide for the transfer of the ownership or right to, possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of Property, notwithstanding that it does any person of his property. (2B) Nothing in sub clause (f) of clause (1) of Article 19 shall effect any such law as is referred to in clause (2) 356 The argument of the petitioners was that the right of Class III and Class IV employees to annual cash bonus ' for the, years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under Act provided for Insurance, Corporation 12, it was a law providing for compulsory acquisition of property as contemplated under clause (2A) of Article 31 and it was, therefore, required to meet the challenge of Article 31, clause (2). The compulsory acquisition of the right to annual cash bonus ' sought to be effectuated by the impugned Act, said the petitioners, was not supported by public purpose nor did the impugned Act. provide for payment of any compensation for the same and hence the impugned Act was void as contravening clause (2) of Article 21. The first question which arises for consideration on this. contention is whether the right of Class III and Class IV employees to 'annual cash bonus ' for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under the Settlement was property so as to attract the inhibition of Article 31, clause (2). The Life Insurance Corporation submitted that at the date when the, impugned Act was enacted, Class III and Class IV employees had no absolute right to receive 'annual cash bonus ' either for the, year 1st April, 1975 to 31st March, 1976 or for the year 1st April, 1976 to 31st March, 1977 and there was, therefore,, no property which could be compulsorily acquired under the impugned Act. The argument of the Life Insurance Corporation was that the Life Insurance Corporation (Staff) Regulations, 1960 which laid down the terms and conditions of services inter alia of Class III and Class IV employees did not contain any provision for payment of bonus except Regulation 58 and since under this Regulation, grant of annual cash bonus by the life Insurance Corporation was subject to such directions as the Central Government might issue, the right of Class III and Class IV employees to receive annual cash bonus could not be said to be an absolute right. It was a right which was liable to, be set at naught by any directions that might be issued by the Central Government and in fact the Central Government did issue a direction to the life Insurance Corporation not to make payment of bonus to the employees "without getting the same cleared by the Government" and consequently, Class III and Class IV employees had no absolute right to claim bonus. The result, according to the Life Insurance Corporation, also followed on a proper interpretation of clauses 8 (i) and 8(ii) of the Settlement, for it was clear on a proper reading of these two clauses that annual cash bonus payable to Class III and Class IV employees under clause 8 (ii) was, by reason of clause 8 (i) , subject to such directions as the Central Government might issue from time to time and the Central Government having directed that no further payment of bonus should be made to the employees, Class III and Class TV employees were not entitled to claim annual cash bonus from the Life Insurance Corporation. This argument of the Life Insurance Corporation is plainly erroneous and it is, not possible to accept it. Regulation 58 undoubtedly says that non profit sharing bonus may be granted by the Settlement was property and since the impugned transfer of the ownership of this right to the Life which was 'State ' within the meaning of Article 35 7 the Life Insurance Corporation to its employees, subject to such directions as the Central Government may issue and, therefore, if the Central Government issues a direction to the contrary, nonprofit sharing bonus cannot be granted by the Life Insurance Corporation to any class of employees. But here, in the present case, grant of annual cash bonus by the Life Insurance Corporation to Class III and Class IV employees under clause 8(ii) of the Settlement was approved by the Central Government as provided it clause 12 and the 'direction contemplated by Regulation 58 was given by the Central Government that annual cash bonus may be granted as provided in clause 8(ii) of the Settlement. It was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Life Insurance Corporation to commit a breach of its obligation under section '18, sub section (1) of the to pay annual cash bonus in terms of clause 8 (ii) of the Settlement. Tumina to clause 8(i) of the Settlement, it is true that under this, clause non profit sharing bonus could be granted by the Life Insurance Corporation 'subject to such directions as the Central Government may issue from time to time but these words giving overriding power to the Central Government to issue directions from time to time are conspicuously absent in clause 8(ii) and it is difficult to see bow they could be projected or read into that clause,. Clauses 8(i) and 8(ii are distinct and independent clauses and while clause 8(i) enacts a general provision that non profit sharing bonus may be paid by the Life Insurance Corporation to Class III and Class IV employees subject to such directions as the Central Government might issue from time to time, clause 8(ii) picks out one kind of non profit sharing bonus and specifically provided that annual cash bonus shall be paid to all Class III and Class IV employees at the rate of 15 per cent of the annual salary and this specific provision in regard to payment of annual cash bonus is made subject to only the approval of the Central Government which was admittedly obtained. It is, therefore, clear that Class III and Class IV employees had absolute right to receive annual cash bonus from the Life Insurance Corporation in terms of clause 8(ii) of the Settlement and it was not competent to the Central Government to issue any directions to the Life Insurance Corporation to refuse or withhold payment of the same. It is true that under clause 8(ii) of the Settlement the annual cast bonus for a particular year was payable at the rate of 15 per cent. of the annual salary actually drawn by the employee in respect of the financial year to which the bonus, related and it would, therefore, seem that the bonus was payable at the end of. the year and not before, but it was not disputed on behalf of the Life Insurance Corporation that even an employee who retired or resigned before the, expiration of that year, as also the heirs of a deceased employee who died during the. currency of the year, were entitled to receive, proportionate bonus and the Life Insurance Corporation in fact recognised this to be the correct position in its administrative instructions dated 29th March, 1974 and actually paid proportionate bonus to the retiring or resigning employee and the heirs; of the deceased employee. The annual cash bonus payable under clause 8(ii) of the Settlement, therefore, accrued 358 from day to day, though payable in case of retirement resignation or death, on the happening of that contingency and otherwise, on the expiration of the year to which the bonus related. There was thus plainly and unquestionably a debt in respect of annual cash bonus accruing to each Class III or Class IV employees from day to day and consequently, on the expiration of the year 1st April, 1975 to 31st March. 1976, the annual cash bonus payable under clause 8(ii) of the Settlement was a debt due and owing from the Life Insurance Corporation to each Class III or Class IV employee and so also at the date when the impugned Act came into force, each Class III or Class IV employee was entitled to a debt due and owing to him from the Life Insurance Corporation in respect of the annual cash bonus from 1st April, 1976 upto that date. The question is whether these debts due and owing from the Life Insurance Corporation were property of Class III and Class IV employees within the meaning of Article 31(2). So also, was the right of each Class III and Class IV employee to receive annual cash bonus for the period from the date of commencement of the impugned Act upto 31st March, 1977 property for the purpose of Article 31(2) ? These questions we shall now proceed to consider, for on the answer to them depends the applicability of Article 31(2). It is clear from the scheme of fundamental rights embodied in Part III of the Constitution that the guarantee of the right to property is contained in Article 19 (1 ) (f) and clauses ( 1 ) and (2) of Article 31. It stands to reason that 'property ' cannot have one meaning in Article 19(1) (f), another in Article 31 clause (1) and still another in Article 31, clause (2). 'Property ' must have the same connotation in all the three Articles and since these are constitutional provisions intended to secure a fundamental right, they must receive the widest interpretation and must be held to refer to property of every kind. While discussing the scope and content of Entry 42 in List III of the Seventh Schedule to the Constitution, which confers power on Parliament and the Legislatures to legislate with respect to "acquisition and requisitioning of property" It was J., speaking on behalf of the majority in R. India(1) that property which can be compulsorily aquired by legislation under this Entry means the "highest anything, being that right which one has to with respect to "acquisition and requisition of property", it was pointed out by Shah, C. Cooper vs Union of acquired by legislative a man can have to lands or tenements, goods or chattels which does not depend on another 's courtesy : it includes ownership, estates and interests in corporeal things, and also rights such as trade marks, copyrights, patents and even rights in persona capable of transfer or transmission, such, as debts; and signifies a beneficial right to or a thing considered as having a money value, especially with reference to transfer or succession, and to their capacity of being injured". It would, therefore, seem that, according to the decision of the majority in R. C. Cooper '.s case, debts and other rights in personam capable of transfer or transmission are property which can form the subject matter of compulsory acquisition. And this would seem to be unquestionable on principle, since even jurisprudentially debts and other rights of action are property and there is no (1) ; 359 reason why they should be excluded from the protection of the constitutional guarantee. Hidayatullah, C.J., had occasion to consider the true nature of debt in H. H. Maharajadhiraja Madhav Rao Jiwaji Rao Scindia Bahadur & Ors. vs Union of India(1) where the question was whether the Privy Purse payable to the Ruler was property of which he could be said to be deprived by the Order of the President withdrawing his recognition as Ruler. The learned Chief Justice, making a very penetrating analysis of the jural relationship involved, in a debt, pointed out that " a debt or a liability to pay money passes through four stages. First there is a debt not yet due. The debt has not yet become a part of the obliger 's 'things ' because. no net liability has yet arisen. The Second stage is when the liability may have arisen but is not either ascertained or admitted. Here again the amount due has not become a part of the obligor 's things, The third stage is reached when the liability is both ascertained and admitted. Then it is property proper of the debtor in the creditor 's hands. The law begins to recognise such property in insolvency, in ,dealing with it in fraud of creditors, fraudulent preference of one creditor against another, subrogation, equitable estoppel, stoppage intransitive etc. A credit debt is then a debt fully provable and which is fixed and absolutely owing. The last stage is when the debt becomes a judgment debt by reason of a decree of a Court." and apply ing this test, concluded that the Privy Purse would be property and proceeded to add : "As, soon as an Appropriation Act is passed there is established a credit debt and the outstanding Privy Purse becomes the property of the Ruler in the hands of Government. It is also a sum certain and absolutely payable." Since the effect of the Order of the President was to deprive the, Ruler of his Privy Purse which was his property the learned Chief Justice held that there was infringement of the fundamental right of the Ruler under Article 3 1 (2). Hegde, J., also pointed out in a separate but concurring judgment that since the right to get the Privy Purse was a legal right "enforceable through the courts", it was undoubtedly property and its deprivation was sufficient to, found a petition based on contravention of Article 31(2). It was also held by this Court in State of Madhya Pradesh vs Ranajirao Shinde & Anr. (2) that a right to receive cash grant annually from the State was property within the, meaning of that expression in Article 19(1)(f) and clause (2) of Article 31. The right to pension was also regarded as property for the purpose of Article 19(1) (f) by the decisions of this Court in Deokinanda Prasad vs State of Bihar(1) and State of Punjab vs K. R. Erry & Sobhag Rai Mehta(4). This Court adopted the same line of reasoning when it said in State of Gujarat and Anr. vs Shri Ambica Mills Lid. , Ahmedabad(5) that "unpaid accumulations represent the obligation of the, employers to the employees and they are the property of the employees". Mathew, J., speaking on behalf of the Court, observed that the obligation to, the employees owned by the employers was (1) ; (3) [1971] Supp. S.C.R. 634. (4) ; (5) ; (2) 360 "property from the standpoint of the employees". It would, therefore, be seen that Property within the meaning of Article 19(1)(f) and clause (2) of Article 31 comprises every form of property, tangible or intangible, including debts and chooses in action, such as unpaid accumulation of wages, pension, cash grant and constitutionally protected Privy Purse. The debts due and owing from the Life Insurance Corporation in respect of annual cash bonus were, therefore, clearly property of Class III and Class IV employees within the meaning of Article 31, clause (2). And so also was their right to receive annual cash bonus for the period; from the date of commencement of the impugned. Act upto 31st March, 1977, for that was a legal right enforceable through a court of law by issue of a writ of Mandamus, Vide the observation of Hegde, J., at page 194 in the Privy Purse case. But a question was raised on behalf of the Respondents whether debts and choses in action, though undoubtedly property, could form the subject matter of compulsory acquisition so as to attract the applicability of Article 31, clause (2). There is divergence of opinion amongst jurists in the United States of America on this question and though in the earlier decisions of the American courts, it was said that the power of eminent domain cannot be exercised in respect of money and choses in action, the modern trend, as pointed by Nicholas on Eminent Domain, Vol. 1, page 99, para 2, seems to be, that the right of eminent domain can be exercised on choses in action. But even if the preponderant view in the United States were that choses in action cannot come within the power of eminent domain, it would not be right to allow us to be unduly influenced by this view in the interpretation of the scope and ambit of clause (2) of Article 31. We must interpret Article 31, clause (2) on its own terms without any preconceived notions borrowed from the law in the United States on the subject of eminent domain. Let us see how this interpretative exercise has been performed by this (Court in the decisions that have been rendered so far and what light they throw on the question as to whether choses in action can be compulsorily acquired under clause (2) of Article 31. We shall confine our attention only to the question of compulsory acquisition of choses in action and not say anything in regard to compulsory acquisition of money, for in these appeals the question arises only in regard to choses in action and it is not necessary to consider whether money can form the subject matter of compulsory acquisition. This question came to be considered by a constitution Bench of this Court in State of Bihar vs Kameshwar Singh( ',). Section 4(b) of the Bihar Land Reforms Act, 1950, which provided. for vesting in the State, of arrears of rent due to the pro prietors or tenure holders for the period prior to the date of vesting of the estates or tenures held by them, on payment of only 50 per cent of the amount as compensation, was challenged as constitutionally invalid on the ground that there was no public purpose for which such acquisition could be said to have been made. The necessity for existence of public purpose was not sought to be spelt out from Article 31, clause (2), because even if there were violation of that (1) 361 clause, it would be protected by Article 31A and the Ninth Schedule read with Article 31 B, the. Act being included as Item in the Ninth Schedule, but it was said that public purpose was an essential element in the very nature of the power of acquisition and even apart from Article 31, clause (2), no acquisition could be made save for a public purpose. It was in the context of this argument that Mahajan, J., observed that money and choses in action could not be taken under the power of compulsory acquisition, since the only purpose which such taking would serve would be to augment the revenues of the State and that would clearly not be a public purpose. The learned judge pointed out at pages 942 944 of the Report : "It is a well accepted proposition of law that property of individuals cannot be appropriated by the State under the power of compulsory acquisition for the, mere purposes of adding to the, revenues of the State no instance is known in which it has been taken for the mere purpose of raising a revenue by sale, or otherwise Taking money under the right of eminent domain, when it must be compensated in money afterwards is nothing more or less than a forced loan Money or that which in ordinary use passes as such and which the Government may reach by taxation and also rights in action which can only be available when made to produce money, cannot be taken under this power". for the taking would not be for a public purpose, and proceeded to and that the only purpose, to support the acquisition of the arrears of rent was "to raise revenue to pay compensation to some of the zamindars whose estates are being taken" and this purpose did not fall within any definition, however, wide, of the phrase 'public purpose and the law was, therefore, to this extent unconstitutional. Mukherjea, J., came to the same conclusion and observed at page 961 of the Report "Money as such and also rights in action are ordinarily excluded from this List by American jurists and for good reasons. There could be no possible necessity for taking either of them under the power of eminent domain. Money in the hands of a citizen can be reached by the exercise of the power of taxation, it may be confiscated as a penalty under judicial order But, as Cooley has pointed out, taking money under the right of eminent domain when it must be compensated by money afterwards could be nothing more or less than a forced loan and it is difficult to say that it comes under the head of acquisition and is embraced within its ordinary connotation. " Chandrasekhara Aiyer, J., also took the same view and held that money. and choses in action were exempt from compulsory acquisition "not on the ground that they are movable property, but on the ground that generally speaking there could be no public purpose in their 362 acquisition". Patanjali Sastri, C.J., and Das, J., on the other hand held that the arrears of rent constituted a debt due by the tenants. It was nothing but an actionable claim, against the tenants which was undoubtedly a species of 'property ' which was assignable and, therefore, it could equally be acquired by the State as a species of 'property '. These two rival views were referred to by Venkatarama Aiyer, J. speaking on behalf of the Court in Bombay Dyeing & Manufacturing Co. Ltd. vs The State of Bombay & Ors.(1) but the learned Judge did not treat the majority view as finally settling the law on the subject. It appears that in the subsequent case of State of Madhya Pradesh vs Ranajirao Shinde (supra) Hegde, J., delivering the judgment of the Court observed that the majority view in Kameshwar Singh 's case was followed by this Court in Bombay Dyeing & Manufacturing Co. 's case, but we do not think that this observation correctly represents what was decided in Bombay Dyeing & Manufacturing Co 's case. Venkatarama Aiyer, J., rested his decision in Bombay Dyeing & Manufacturing Co '$ case on alternative grounds : if, the impugned section provided for the acquisition of money, and if money could not be acquired, then the section was void under Article 19 (1) (f) as imposing an unreasonable restriction on the right to hold property. If, on the other hand, money could be acquired , the section was void as offending Article 31, clause (2) since the section did not provide for payment of compensation. The decision in Bombay Dyeing & Manufacturing Co. 's case did not, therefore, lay down that money and choses in action could not be acquired under Article 31, clause (2). But in State of Madhya Pradesh vs Ranojirao Shinde (supra) this Court did hold that money and choses in action could not form the subject matter of acquisition under Article 31, clause (2) and the reason it gave for taking this view was the same as that which prevailed with the majority judges in Kameshwar Singh 's case. This Court held that the power of compulsory acquisition conferred under Article 31, clause (2) could not be utilised for enriching the coffers of the State; that power could be exercised only for a public purpose and augmenting the resources of the State could not be regarded as public purpose. Hegde, J., speaking on behalf of the Court, pointed out that if it were otherwise, "it would be permissible for the legislatures to enact laws acquiring all public debts due from the State, annuity deposits returnable by it and provident fund payable by it by providing for the payment of some nominal compensation to the persons whose rights are acquired, as the acquisitions in question would augment the resources of the State", but nothing so bad could be said to be within the contemplation of clause (2) of Article 31. Let us first examine on principles whether this reasoning qua choses in action is sound and commends itself for our acceptance. This premise on which this reasoning is based is that the only purpose for which choses in action may be acquired is augmenting the revenues of the State and there can be no other purpose for such (1) ; 363 acquisition. But this premise is plainly incorrect and so is the reasoning based upon it. Why can choses in action 'not be acquired for a public purpose other than mere adding to the revenues of the State ? There may be debts due and owing by poor and deprived tillers, artisans and landless labourers to moneylenders and the State may acquire such debts with a view to relieving the weak and exploited debtors from the harassment and oppression to which they might be subjected by their economically powerful creditors. The purpose of the acquisition in such a case would not be to enrich the coffers of the State. In fact, the coffers of the State would not be enriched by such acquisition, because having regard to the financial condition of the debtors, it may not be possible for the State to recover much, or perhaps anything at all, from the impoverished debtors. The purpose of such acquisition being relief of the distress of the poor and helpless debtors would be clearly a public purpose. We have taken one example by way of illustration, but in a modern welfare State, dedicated to a socialist pattern of society, myriad situations may arise where it may be necessary to acquire choses in action for achieving a public purpose. It is not correct to say that in every case where choses in action may be acquired, the purpose of acquisition would necessarily and always be augmenting of the revenues of the State and nothing else. Even the theory of forced loan may break down in case of acquisition of choses in action. There is a fundamental difference between chose in action and money, in that the former has not the same mobility and liquidity as the latter and its values is not measured by the amount recoverable under it, but it depends on a variety of factors such as the financial condition of the person liable, the speed and effectiveness of the litigative process and the eventual uncertainty as to when and to what extent it may be possible to realise the chose in action. Even after the chose in action is acquired, the State may not be able to recover the amount due under it and there may even be cases where the chose in action may be released by the State. Where money is given as compensation for taking of money, the theory of forced loan may apply,. but it is difficult to see how it can be applicable where chose in action is taken and money representing its value, which in a large majority of cases would be less than the amount recoverable under it, is given as compensation. Moreover, the theory of forced loan stands considerably eroded after the amendment of Article 31, clause (2) by the Constitution (Twenty fifth Amendment) Act, 1971, because under the amended clause, even if an amount less than the just equivalent is given as compensation for acquisition of property, it would not be violative of the constitutional guarantee. It is true, and this thought was also expressed by Krishna Iyer, J., and myself in our separate but concurring Judgment in the State of Kerala vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd.(1) that, notwithstanding the amended clause (2) of Article 31, the legislature would be expected, save in exceptional socio historical setting to provide just compensation for acquisition of property, but if for any reason the legislature provides a lesser amount than the just equivalent, it would not be open to challenge on the ground of infringement of clause (2) of Article (1) [1974] 1 S.C.R.671. 364 31. Then, how can the theory of forced loan apply when chose in action is acquired and what is paid for it is not the just equivalent but a much lesser amount, which is of course not illusory. Moreover, there is also one other fallacy underlying the argument that there can be no public purpose in the acquisition of choses in action and that is based on the assumption that the public purpose contemplated by Article 31, clause (2) lies in the use to which the pro perty acquired is to be put as for example, where land or building or other movable property is acquired for being used for a public purpose. But this assumption is hot justified by the language of Article 31, clause (2), because all that this clause requires is that the purpose for which the acquisition is made must be a public purpose, or, in other words, the, acquisitions must be made to achieve a public purpose. Article 31, clause (2) does not require that the property acquired must itself be used for a public purpose. So long as the acquisition subserves a public purpose, it would satisfy the requirement of clause (2) of Article 31 and, therefore, if it can be shown that the acquisition of choses in action is for subserving a public purpose, it would be constitutionally valid. Hegde, J., expressed an apprehension in State of Madhya Pradesh vs Ranojirao Shinde (supra) that if this view were accepted, it would be permissible for the legislature to enact laws acquiring the public debts due from the State, the annuity deposits returnable by it and the provident fund payable by it by providing for payment of some nominal compensation to the persons whose rights were acquired. We do not think this apprehension is well founded. It is difficult to see what public purposes can possibly Justify a law acquiring the public debts due to the State or the annuity deposits returnable by it or the provident fund payable by it. If the legislature enacts a law acquiring any of these choses in action, it could only be for the purpose of augmenting the revenues of the State or reducing State expenditure and that would clearly not be a public purpose and the legislation would plainly be violative of the constitutional guarantee embodied in Article 31, clause (2). We would, therefore, prefer the minority view of Das, J., in Kameshwar singh 's case (supra) as against the majority view of Mahajan, J., Mukherjea, J. and Chandrasekhara Aiyer, J. So much on principle. Turning now to the authorities, we find that, apart from the view of the majority judges in Kameshwar Singh 's case and the decision in the State of Madhya Pradesh vs Ranojirao Shinde (supra), there is no other decision of this Court which has taken the view that choses in action cannot be compulsorily acquired under Article 31, clause (2). There are in fact subsequent decisions which clearly seem to suggest the, contrary. We have already referred to R. C. Cooper 's case. The majority judgment case gives the widest meaning to 'property which of Shah, J., in that can be, compulsorily acquired and includes within it ::rights in personam capable of transfer or transmission, such as debts. The majority view in Kameshwar Singh 's case (supra) and the decision in State of Madhya Pradesh vs Ranojirao Shinde (supra) on this point can no longer be regarded as good law in view of this statement of the law in the majority judgment of Shah, J. Then again, in the Privy Purse case (supra), 365 Hidayatullah, C.J., held that the Privy Purse payable to a Ruler was a credit debt owned by him and since he was deprived of it by the Order of the President, there was violation of his fundamental right under Article 31, clause (2). The learned Chief Justice thus clearly recognised that debt or chose in action could form the subject matter of compulsory acquisition under Article 31, clause (2). Hegde, J., also took the same view in his separate but concurring judgment in the Privy Purse case. It will, therefore, be seen that the trend of the recent decisions has been to regard debt or chose in action as property which can be compulsorily acquired under clause (2) of Article 31. We are accordingly of the view that the debts due and owing from the Life Insurance Corporation to Class III and Class IV em ployees in respect of annual cash bonus were 'property ' within the meaning of Article 3 1, clause (2) and they could be compulsorily acquired under that clause. The question, however, still remains whether by the impugned Act there was compulsory acquisition of the debt due and owing from the Life Insurance Corporation to Class III and Class IV employees in respect of annual cash bonus. It was not disputed on behalf of the Life Insurance Corporation that if the impugned Act had the affect of compulsorily acquiring these debts belonging to Class III and Class IV employees, it would be void as offending Article 31, clause (2), since it admittedly did not provide for payment of any compensation. The Statement of Objects and Reasons undoubtedly said that the provisions of the Settlement in regard to payment of annual cash bonus were being set aside with effect from 1st April, 1975 with a view to enabling the Life Insurance Corporation to make ex gratia payment to the employees "at the rates determined on the basis of the general Government policy for making ex gratia payments to the, employees of non competing public sector undertaking". But the impugned Act did not contain any provision to that effect and Class III and Class IV employees were deprived of the debts due and owing to them without any provision in the statute for payment of compensation. The learned Attorney General on behalf of the Life Insurance Corporation, however, strenuously contended that there was no compulsory acquisition of the debts due and owing to, Class III and Class IV employees under the impugned Act, but all that the impugned Act did was to extinguish those debts by annihilating the provisions of the Settlement in regard to payment of annual cash bonus with effect from 1st April, 1975. The debts due and owing from the Life Insurance Corporation to Class III and Class IV employees, said the learned Attorney General, were extinguished and not compulsorily acquired and hence there was no contravention of Article 31, clause (2). Now, prior to the Constitution (Fourth Amendment) Act, 1955, which introduced clauses (2A) and (2B) in Article 3 1, there was considerable controversy as to the inter relation between clauses (1) and. (2) and that coloured the interpretation of the words "taken possession of or acquired" in clause (2) as it stood prior to the amendment. The majority view in The State of West Bengal vs Subodh Gopal Bose & Ors.(1) and Dwarkadas Shrinivas of (1) ; 6 277SCI/78 366 Bombay vs The Sholapur Spinning & Weaving Co. Ltd. & Ors:(1) was that clauses (1) and (2) of Article 31 were not mutually exclusive; but they dealt with same topic and the deprivation contemplated in clause (1) was no, other than the compulsory acquisition or taking possession of property referred to in clause (2) and hence where the deprivation was so substantial as to amount to compulsory acquisition or taking possession, Article 31 was attracted. The introduction of clause ( ' )A) in Article, 31 snapped the link between clauses (1) and (2) and brought about a dichotomy between these two clauses. Thereafter, clause. (2) alone dealt with compulsory acquisition or requisitioning of property by the State and clause (1) dealt with deprivation of property in other ways and what should be regarded as compulsory acquisition or requisitioning of property for the Purpose of clause (2) was defined in clause (2A). It was if clause (2A) supplied the dictionary for the mean of 'compulsory acquisition and requisitioning of property in clause (2). Clause (2A) declared that a law shall not be deemed, to provide for the compulsory acquisition or requisitioning of property, if it does not provide for the transfer of the ownership or right to possession of the property to the State or to a corporation owned or controlled by the State. It is only where a law provides for the transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State that it would have to meet the challenge of clause (2) of Article 31 as a law providing for compulsory acquisition or requisitioning of property. Whenever, therefore, the constitutional validity of a law is challenged on the ground of infraction of Article 31, clause (2), the question has to be asked whether the law provides for the transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State. Here, the Life Insurance Corporation is a corporation owned by the State as its entire capital has been provided by the Central Government. The debts due, and owing to Class III and Class IV employees from the Life Insurance Corporation are cancelled or extinguished by the impugned Act. Does that amount to transfer of ownership of any property to the Life Insurance Corporation within the meaning of clause (2A) of Article 31 ? If it does, Article 31, clause (2) would be attracted, but not otherwise. That depends on the true interpretation of Article 31, clause (2A). Now, whilst interpreting Article 31, clause (2A), it must be remembered that the interpretation we place upon it will determine the scope and ambit of the constitutional guarantee under clause (2) of Article 31. We must not, therefore, construe clause (2A) in a narrow pedantic manner nor adopt a doctrinaire or legalistic approach. Our interpretation must be guided by the substance of the matter and not by lex scripts. When clause (2A) says that in order to attract the applicability of clause (2) the law must provide for the transfer of ownership of property to the State or to a corporation owned or controlled by the State, it is not necessary that the law should in so many words provide for such transfer. No particular verbal formula need be adopted. It is not a ritualistic mantra which is required to be repeated in the law. What (1) ; 3 67 has to be considered is the substance of the law and not its form. The question that is to be asked is : does the law in substance provide for transfer of ownership of property, whatever be the linguistic formula employed ? What is the effect of the law : does it bring about transfer of ownership of property ? Now, 'transfer of ownership is also a term of wide import and it comprises every mode by which ownership may be transferred from one person to another. The mode of transfer may vary from one kind of property to another : it would depend on the nature of the property to be transferred. And moreover, the court would have to look to the substance of the transaction in order to determine whether there is transfer of ownership involved in what has been brought about by the law. There is no doubt that in the present case the impugned Act extinguished or put an end to the debts due and owing from the Life Insurance Corporation to Class III and Class IV employees. that was the, direct effect of. the impugned Act and it can, therefore, be legitimately said that in substance the impugned Act provided for extinguishment of these debts, though it did not say so in so many words. This much indeed was not disputed on behalf of the Life Insurance Corporation and the controversy between the parties only centred round the question whether the extinguishment of these debts involved any transfer of ownership of property to the Life Insurance Corporation. The learned Attorney General on behalf of the Life Insurance Corporation sought to make a distinction between extinguishment and transfer of ownership of a debt and contended that when ownership of a debt is transferred, it continues to exist as a debt in the hands of the transferee, but when a debt is extinguished it ceases to exist as a debt and it is not possible to say that the debtor has become the owner of the debt. There can be no transfer of ownership of a debt, said the learned Attorney General unless the debt continues to exist as such in the hands of the transferee, and, therefore, extinguishment of a debt does not involve transfer of ownership of the debt to the debtor. This contention of the learned Attorney General, though attractive at first blush, is, in our opinion not well founded. It is not correct to say that there can be no transfer of ownership of a right or interest unless such right or interest continues to have a separate identifiable existence in the hands of the transferee. It is not difficult to find instances where ownership of a right or interest may be transferred from one person to, another by extinguishment. Take for example, a case where the lessor terminates the lease granted by him to the lessee by exercising his right of forfeiture or the lessee surrenders the lease in favour of the lessor. The lease would in such a case come to an end and the interest of the lessee would be extinguished and correspondingly, the reversion of the lessor would be enlarged into full ownership by the return of the leasehold interest. There would clearly be transfer of the lease hold interest from the lessee to the lessor as a result of the determination of the lease and the extinguishment of the interest of the lessee. The same would be the position where A law provides for cancellation, of the lease and in such a case, if the lessor is the State or a corporation owned or controlled by the State, it would amount to compulsory acquisition of the leasehold interest of the lessees within meaning of clause (2A) of Article 31. It was in fact to held by this 368 Court and in our opinion rightly in Ajit Singh vs State of Punjab(1) where sikri, J., speaking on behalf of the majority, pointed out at page 149 that if "the State is the landlord of an estate and there is a lease of that property and a law provides for the extinguishment of leases held in an estate it would properly fall under the category of acquisition by the State because the beneficiary of extinguishment would be the State". Where by reason of extinguishment of a right or interest of a person, detriment is suffered by him, and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State. The question would always be : who is the, beneficiary of the extinguishment of the right or interest effectuated by the law? If it is the State, then there would be transfer of ownership of the right or interest to the State , because what the owner of the right or interest would have lost by reason of the extinguishment would be the benefit accrued to the State. This was precisely the reason why Hegde, J., speaking on behalf of the Court observed in the State of Madhya Pradesh vs Ranojirao Shinde (supra) that it was possible to view the abolition of cash grants under the Madhya Pradesh law impugned in that case "as a statutory transfer of rights of the grantees to the State". It was pointed out in that case that there was no difference between taking by the State of money that is in the hands of others and the abrogation of the liability of the State to make payment to others, for in the former case the State would be compulsorily taking others ' property, while in the latter it would be seeking to appropriate to itself the property of others which is in its hands. It is, therefore, clear that when a debt due and owing by the State or a corporation owned or controlled by the State is extinguished by law, there is transfer of ownership of the money representing the debt from the creditor to the State or the State owned/controlled corporation. So long as the debt is due and owing to, the creditor, the State or the State owned/controlled corporation is under a liability to pay the amount of the debt to the creditor and, therefore, if the amount of the debt is X, the total wealth of the creditor would be A plus X, while that of the State or State owned/controlled corporation would be B minus X. But if the debt is extinguished, the total wealth of the creditor would be reduced by X and that of the State or State owned/controlled corporation augmented by the same amount. Would this not be in substance and effect of transfer of X from the creditor to the State or State owned/controlled corporation ? The extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled corporation would plainly and indubitably involve transfer of ownership of the amount representing the debt from the former to the latter. This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled corpo ration cannot obtain benefit at the cost of the creditor and yet avoid the applicability of Article 31, clause (2). The verbal veil constructed by employing the device of extinguishment of debt cannot be permitted to conceal or hide the real nature of the transaction. It is necessary to remember that we are dealing here with a case where a constitutionally guaranteed right is sought to be enforced and the protection of such right should not be allowed to be defeated or rendered illusory by legis 3 69 lative stratagems. The courts should be ready to rip open such stratagems and devices and find out whether in effect and substance the legislation trenches upon any fundamental rights. The encroachments on fundamental rights are often subtle and sophisticated and they are disguised in language which apparently seems to steer clear of the constitutional inhibitions. The need for a perspective and alert Bar is, therefore, very great and the courts too have to adopt a bold and dynamic approach, if the fundamental rights are to be protected against dilution or erosion. In the light of this discussion, the conclusion is inevitable that the direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to the Life Insurance Corporation and since the Life Insurance Corporation is a corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of these debts by the State within the meaning of clause (2A) of Article 31. If that be so, the, impugned Act must be held to be violative of Article 31, clause (2) since it did not provide for payment of any compensation at ail. for the compulsory acquisition of these debts. Re : Ground (B) Since the impugned Act has been held void as offending Article 3 1, clause (2) under Ground (A), it is unnecessary to consider Ground (B) based on infraction of Article 19 ( 1) (f). It is the settled practice of this Court to decide no more than what is absolutely necessary for the decision of a case. Moreover, once it is held that the impugned Act falls within Article 31, clause (2), its validity cannot be tested by reference to Article 19 (1) (f) by reason of clause (2B) of Article 31. Hence we do not propose to discuss the very interesting arguments advanced before us in regard to Article 19 (1) (f). We accordingly allow the writ petitions and declare the Life Insurance Corporation (Modification of Settlement) Act, 1976 void as offending Article 31, clause (2) of the Constitution and issue a writ of Mandamus directing the union of India and the Life Insurance Corporation to forebear from implementing or enforcing the provisions of that Act and to, pay annual cash bonus for the years 1st April, 1975 to 3 1 st March, 1976 and 1 st April, 1976 to 3 1 st March, 1977 to, Class III and Class IV employees in accordance with the terms of clause 8(ii) of the Settlement dated 24th January, 1974. The respondents will pay the costs of the writ petitions to the petitioners. ORDER We agree with the conclusion of Brother Bhagwati but prefer to rest our decision on the ground that the impugned Act violates the provisions of Article 31(2) and is, therefore, void. We consider it unnecessary to express any opinion on the effect of the judgment of the Calcutta High Court in W.P. No. 371 of 1976. P.B.R. Petitions allowed.

From time to time the Life Insurance Corporation and its employees arrived at settlement relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them. Clause (8) of the Settle ment dated January 24, 1974, which related to payment of bonus, provided (i) that no profit sharing bonus shall be paid but the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III and Class IV employees; (ii) that an annual cash bonus will be paid to all Class III and Class IV employees at the rate of 15% of the annual salary actually drawn by an employee in respect of the financial year to which the bonus relates and (iii) that save as provided therein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated June 26, 1972. Clause (12) of the Settlement which refers to the, period of settlement provided (1) that the Settlement shall be effective from April 1, 1973 for a period of four years and (2) that the, terms of the Settlement shall be subject to the approval of the Board of the Corporation and the Central Government. One of the administrative instructions issued by the Corporation in regard to the payment of cash bonus under cl. 8(ii) of the Settlement was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose, of determining the amount of bonus payable to the employee or his heirs and the other was that the bonus shall be paid along with the salary for the month of April but in case of retirement or death, payment will be made soon after the contingency. The payment of Bonus (Amendment) Act. 1976 considerably curtailed the rights of the employees to bonus in industrial establishments. But in so far as the employees of the Corporation were concerned this Act had no application because by reason of section 32 of the Payment of Bonus Act, the Corporation was outside the purview of its operation. The Central Government however decided that the employees of establishments which were not covered by the Bonus Act would not be eligible for payment of bonus but exgratia payment in lieu of bonus would be made to them. Pursuant to this decision the L.T C. was advised by the Ministry of Finance, Government of India, that no further payment of bonus should be made to its employees without getting the same cleared by the Government. The Corporation accordingly issued administrative instructions not to pay bonus to its employees under the existing provisions until further instructions. To the employees ' assertion that the Corporation was bound to, 335 pay bonus in accordance with the terms of the Settlement the Corporation cOntended that payment of bonus by the Corporation was subject to such directions as the Central Government might issue from time to time, and since the Central Government had advised it not to make any payment of bonus without its specific approval, bonus could not be paid to the employees. Thereupon, the All India Insurance Employees ' Association moved the High Court for issue of a writ directing the Corporation to act in accordance with the terms of the Settlement dated January 24, 1974 read with administrative instructions dated March 29, 1974 and not to refuse to pay cash bonus to Class III and Class IV employees. A single Judge of the High Court allowed the writ petition. While the Letters Patent Appeal was pending, Parliament passed the Life Insurance Corporation (Modification of Settlement) Act, 1976 (which is the Act impugned in this case). In the Letters Patent Appeal the Corporation stated that in view of the impugned Act , there was no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal. Since the effect of the impugned Act was to deprive Class III and Class IV employees of bonus payable to them in accordance with the terms of the Settlement, two of the associations filed writ petitions in this Court challenging the constitutional validity of the impugned Act. It was contended on their behalf that even if the impugned Act rendered cl. (8) (ii) ineffective with effect from April 1, 1975 it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandamus issued by the High Court and (2) that the right of Class III and Class IV employees to annual cash bonus for the years 1975 76 and 1976 77 under Cl. 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property. without payment of compensation, it was violative of article 31(2) of the Constitution. Allowing the writ petitions Beg C.J. (concurring with the majority) HELD : Section 3 of the Life Insurance Corporation (Modification of Settlement) Act, 1976 is struck by the provisions of article 19(1)(f) and is not saved by article 19(6) of the Constitution. [346 A] 1. The Statement of Objects and Reasons of the Act discloses that the purpose of the impugned Act was to undo settlements arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974 and recognised by the High Court. In Smt. Indira Gandhi vs Raj Narain this Court held that even a constitutional amendment cannot authorise the assumption of judicial power by Parliament. One of the tests laid down was whether the decision is of a kind which requires hearing to be given to the parties i.e., whether it involves a quasi judicial procedure. A decision reached by the Central Government is the result of a satisfaction on matters stated there and would imply quasi judicial procedure where the terms of a settlement had to be reviewed or revised. But, the legislative procedure. followed in this case does not require that to, be done. It would be unfair to adopt legislative procedure to undo a settlement which had become the basis of a decision of a High Court. Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of section 18 of the which had been held to be valid and enforceable by a High Court. [341 G, H, 342 A C] 2(a) The object of the Act was in effect to take away the force of the judgment of the High Court. Rights under that judgment could be said to, rise independently of article 19, of the Constitution. To give effect to that judgment is not the same thing as enforcing a right under article 19. It may be that a right under article 19 becomes linked up with the enforceability of the judgment. Nevertheless the two could be viewed as separable sets of rights. If the right conferred by the judgment independently is sought to be set aside section 3 would be invalid for trenching upon the judicial power. [343 B D] 336 (b) A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public. But the present is a pure and simple case of deprivation of rights of the employees without any apparent nexus with any public interest. In the instant case the impugned Act is a measure which seeks to deprive workers of the benefits of settlement arrived at and assented to by the Central Government under the provisions of the . Such a settlement should not be set at naught by an Act designed to defeat the purpose. In judging the reasonableness of an Act the prospects held out, the representations made, the conduct of the Government and equities arising therefrom may all be taken into consideration. [342 E F, 344 E F] 3. Even though the real object of the Act was to set aside the result of mandamaus, the section does not mention this object. This was perhaps because the jurisdiction of a High Court and the effectiveness of its orders derived their force from article 226 of the Constitution. Even if section 3 seeks to take away the basis of the judgment without mentioning it, yet where the rights of the citizens against the State are concerned the court should adopt an interpretation which upholds those rights. Therefore, the rights which had passed into those embodied in a judgment and become the basis of a mandamus from the High Court, could not be taken away in an indirect fashion. [343 D E]. Even though the Directive Principles contained in article 43, cast an obligation on the State to secure a living wage for the workers and is part of the principles declared fundamental in the governance of the country, it is not a fundamental right which can be enforced. Even though the Directive Principles give a direction in which the fundamental policies of the State must be oriented, yet this Court cannot direct either the Central Government or the Parliament to proceed in that direction. Even if the Directives are not directly enforceable by a Court they cannot be declared ineffective. They have the life and force of fundamentals. The best way to give vitality and effect to them is to use them as criteria of reasonableness. [344 B C] 5(a) Articles 358 and 359(1A) provide that as soon as the Proclamation of emergency cease to operate the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect. ' [346 B C] (b) The term "things done or omitted to be done", should be interpreted very narrowly. In the present case it means that the settlements are not to be deemed to be wiped off. All that it means is that no payment of bonus could be demanded during the emergency but as soon as the emergency was over, the settlement would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended. In other words valid claims cannot be washed off by the emergency per se. They can only be suspended by a law passed during the operation of articles 358 and 359(1A). [346 C F] (Per Chandrachud, Fazal Ali and Shinghal, JJ.). Concurring with the majority. The impugned Act violates article 31(2) and is, therefore, void. [369 G] (Per Bhagwati, Iyer and Desai, JJ.) Irrespective whether the impugned Act is constitutionally valid or not, the Corporation is bound to obey the Writ of Mandamus issued by the, High Court and to pay annual cash bonus for the year 1975 76 to Class III and Class IV employees. [352 D E] 1. Section 3 of the impugned Act merely provided that the provisions of the Settlement, in so far as they related to payment of annual cash bonus to Class in and Class IV employees, shall not have any force or effect and shall not be deemed to have had any force or effect from April 1, 1975. The writ of Mandamus issued by the High Court was not touched by the impugned Act. The right of the employees to annual cash bonus ' for the year 1975 76 became 337 crystallised in the judgment and this right was not sought to be taken away by the impugned Act. The Judgment continued to subsist and the corporation was bound to pay bonus in obedience to the writ of Mandamus. By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Corporation could have successfully contended in the appeal that since the Settlement, in so far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975 and so the employees were not entitled to bonus for the year 1975 76 and hence no writ of Mandamus could issue against the Corporation directing it to make payment of bonus. If such contention had been raised, there is little doubt that the judgment of the single Judge would have been upturned. But that was not done, and the judgment of the single Judge became final and binding oil the parties. [353 A F, 355 C] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality, [1970] 1 SCR 358 and Patel Gordhandas Hargovindas vs Municipal Commissioner, Alimedabad, ; ; distinguished and held inapplicable. 2(a). The argument on behalf of the Corporation that on a proper interpretation of the clauses annual cash bonus payable under cl. 8(ii) was, by reason of cl. 8(i) subject to the directions issued by the Central Government from time to time and the Government having stopped further payment of bonus, the employees were not entitled to claim annual cash bonus, is erroneous. The employees had absolute right to receive annual cash bonus from the Corporation in terms of el. 8(ii) and it was not competent to the Central Government to issue any directions to the Corporation to refuse or withhold payment of the same. [356 D H] (b) Although under regulation 58 of the Service Regulations non profit sharing bonus could be granted subject to the directions of the Central Government and if the Government issues a direction to the contrary bonus could not be paid by the Corporation, in the instant case, as provided in cl. 12 of the Settlement, the Central Government approved the payment of bonus under cl. 8(ii). That having been done it was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Corporation to commit a breach of its obligation under section 18(1) of the to pay annual cash bonus under clause 8(ii). The overriding power given to the Central Government to issue directions from time to time contained in cl. 8(i) is conspicuously absent in cl. 8(ii). The power contained in cl. 8(i) cannot be projected or read into cl. 8(ii). These two clauses are distinct and independent. While cl. 8(i) is a general provision, el. 8(ii) specifically provides that cash bonus in the manner prescribed therein shall be paid to the employees. This specific provision is made subject only to the approval of the Central Government, which was obtained. [357 A F] (c) Moreover, under cl. 8(ii) read with the administrative instruction issued by the Corporation, annual cash bonus accrued from day to day, though payable in case of retirement, resignation or death on the happening of that contingency and otherwise on the expiration of the year to which the bonus related, Thus the annual cash bonus payable for the year 1975 76 was a debt due and owing from the Corporation to each of the employees. , On the date when the impugned Act came into force each of the employees was entitled to a debt due and owing to him from the Corporation. [357 H, 358 A] 3(a) The impugned Act must be held to be violative of article 31(2) since it did not provide for payment of any compensation for the compulsory acquisition of the debts. [369 C] (b) The direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of cash bonus to the Life Insurance Corporation and since the Corporation is a Corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of the debts by the State within the meaning of article 31(2A). 1369 B C] 338 (c) Choses in action can be acquired by the State. So long as the acquisition sub serves a public purpose, it would satisfy the requirement of article 31(2). There is a fundamental distinction between a chose in action and money. A chose in action has not the same mobility and liquidity as money, and its value is not measured by the amount recoverable under it but depends on a variety of factors. Where money is given as compensation for taking money the theory of forced loan may apply, but it is not applicable where a chose in action is taken and money representing its value is given as compensation. [363 A, D F] R. C. Cooper vs Union of India, ; ; Madhav Rao Scindia vs Union of India : ; reiterated. State of Bihar vs Kameshwar Singh, ; State of Madhya Pradesh vs Ranojirao Shinde, ; ; dissented; Deokinandan Prasad vs State of Bihar, [1971] Suppl. S.C.R. 634; State of Punjab vs K. R. Erray & Sobhag Rai Mehta, ; ; State of Gujarat, vs Sri Ambica Mills Ltd., ; and Slat(, of Kerala vs The Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd., ; followed; State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489; State of Bihar vs Kameshwar Singh, and Bombay Dyeing and Manufacturing Co. Ltd. vs State of Bombay, ; explained; ; and ; held no longer good law. (d) The debts due and owing from the Corporation in respect of annual cash bonus were clearly property of the employees within the meaning of article 31(2) and they could be compulsorily acquired under article 31(2). Similarly their right to receive cash bonus for the period from the date of commencement of the impugned Act upto March 31, 1977 was a legal right enforceable through Court of law. [360 B C] (a) Property within the meaning of articles 19(1)(f) and 31(2) comprises every form of property, tangible or intangible, including debts and choses in action such is unpaid accumulation of wages, pension, cash grants etc. [360 A] R. C. Cooper vs Union of India, ; ; H. H. Maharajadhiraja Madhay Rao Jiwaji Rao Scindia Bahadur & Ors. vs Union of India; , ; State of M.P. vs Ranojirao Shinde & Anr., ; ; Deokinandan Prasad vs State of Bihar, [1971] Supp. S.C.R. 634; State of Punjab vs K. R. Erry & Sobhag Rai Mehta, [1973] 2 S.C.R. 485; and State of Gujarat & Anr vs Shri Ambica Mills Ltd., Ahmedabad, ; referred to. 4(a) The contention of the Corporation that when ownership of a debt is transferred it continues to exist as a debt but that when the debt is extinguished it ceases to exist as a debt and that extinguishment of a debt does not therefore involve transfer of ownership of the debt to the debtor is not well founded. Where, by reason of extinguishment of a right or interest of a person, detriment is suffered by him and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State. The question would always be : who is the beneficiary of the extinguishment of the right or interest effectuated by the law ? If it is the State, then there would be transfer of ownership of the right or interest to the State, because what the owner of the right or interest would lose by reason of the extinguishment would be the benefit accrued to the State [367 H, 368 B C] (b) Extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled Corporation would involve transfer of ownership of the amount representing the debt from the former to the latter. This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled Corporation cannot obtain benefit at the cost of the creditor and yet avoid ' the applicability of 339 article 31(2). The verbal veil constructed by employing the device of extinguishment of debt cannot lot permitted to conceal or hide the real nature of the transaction [368 F B]

Appeal No. 830 of 1993. From the Judgment and Order dated 6.4.87 of the Allahabad High Court in Civil Misc. W.P. No. 20544 of 1986. section Markandeya for the Appellant 152 Pankaj Kalra for the Respondents. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. The appeal is directed against the judgment and order of a Division Bench of the Allahabad High Court allowing Writ Petition 20544 of 1986 with certain directions. The first respondent Gem Cap (India) Pvt. Ltd. is a private limited company. Second respondment is its Managing Director. At the request of the respondents, the appellant, U.P. Financial Corporation, sanctioned a loan of Rs. 29.70 lakhs. The terms and conditions of loan and the manner of repayment of the loan are contained in the agreement and hypothecation deeds executed in 1981. Suffice it to note that loan was repayable in certain specified instalments alongwith interest. A sum of Rs. 26, 29, 578 was released to the respondents. The first respondent went into production in December 1982. Within a few months i.e., in March 1983 its operations ceased. By an order dated February 21, 1984 the first respondent unit was declared a sick unit. The respondents did not make any repayment as stipulated in the agreement and hypothecation deeds whereupon the Corporation took steps to take over the unit under Section 29 of the for recovering an amount of Rs. 38.57 lakhs due to it by that date vide notice dated July 10, 1984. Then started a series of Writ Petitions by the respondents, all designed to stall the appellant from taking over and/or recovering the amount due to it. It is not necessary to trace the course of the several writ petitions except the one from which the present appeal arises. Writ Petition 20544 of 1986 was filed questioning the taking over of the first respondent unit by the appellant Corporation under Section 29 of the Act and for a direction to the appellant to reschedule the repayment of debt in accordance with the earlier orders of the High Court. The writ petition has been allowed with the following directions : "(1) Having regard to the discussion made above we direct the U.P. Financial Corporation : (1) to consider expeditiously the resolution dated 29.1.1986aimed at the rehabilitation of the industrial concern in question in the light of the feasibility report of the U.P. Industrial Consultants Ltd. the Financial aid 153 forthcoming from the Bank of Baroda and other financial institutions and the reports of the managing director of the corporation dated 18.12.85 and 29.1.1986; (2) to restore back possession of the unit to the petition No. 1 forthwith. The notice dated 11.6.1986 issued by the Corporation under Section 29 of the State Financial Corporation Act, 1951 shall, however, remain alive it being open to the Corporation to proceed further in pursuance thereof in case the rehabilitation deal is given a fair trial but does not bear fruit. The petition is allowed accordingly with no order, however, as to costs." With great respect to the Learned Judges who allowed the writ petition we feel constrained to say this : a reading of the judgment shows that they have not kept in mind the well recognised limitations of their jurisdiction under Article 226 of the Constitution. The judgment reads as If they were setting as an Appellate Authority over the appellate Corporation. Not a single provision of law is said to have been violated. The exclusive concern of the court appears to be to revive and resurrect the respondent Company, with the aid of public funds, without giving any thought to the interest of public financial institutions. The approach is : "the Corporafion is supposed to act in the best interest of the industrial concern with the object primarily to promote and advance the industrial activity without, of course, undue involvement or risk of its financial commitment 'section . It needs no emphasis to say that the Corporation is conceived '.Regional Development Bank with the principal object to accelerate the industrial growth in the State by providing financial assistance mainly to small and smaller of the medium scale industries. The approach has to be business like in conformity with the declared policy of the State Govt. If the unit is potentially viable or such as maY be capable of being rehabilitated, it would deserve being administered proper treatment and not lead to its liquidation. " Here was a company which drew substantial public funds and became sick within three months of its going into production. One of the main reasons for its sickness appears to be the inter necine fight between the two groups controlling the Company. The 154 unit was closed. It was not paying a single pie in repayment of the loan neither the principal nor the interest. Already a huge amount was due to the appellant. There was no prospect of its recovery. And yet other financial corporations were being asked by the court, four years after its closure, to sink more money into the sick unit. Though a passing reference is made to the financial risk of appellant. this concern was not translated into appropriate directions. The Corporation was not allowed to sell the unit when it wanted to in 1984 85. Now, it is difficult to sell it, because it has been lying closed for about 8 years and more. The machinery must have become junk. While the Company could not be revived, the appellant corporation now stands to lose more than a crore of rupees all public money in this one instance. To continue the factual narration against the judgment of the Allahabad High Court aforesaid (dated April 6, 1987) the appellant filed this appeal and on May 8, 1987 this Court while issuing notice on the SLP directed stay of operation of the judgment of the High court. After the respondents filed a counter affidavit this Court made the following order on September 18, 1987 : "Stay made absolute with the direction that there shall be no sale of the industrial unit. Hearing expedited. To be heard alongwith Civil Appeal No. 568 of 1987. " The S.L.P. could not be heard finally though it was posted for hearing on certain dates. On November 13, 1991, the counsel for the respondents made an offer which is recorded in the order of that date. It reads "This matter is adjourned for 11.12.91. Mr. Shanti Bhushan, Sr. Adv., suggests that in view of the lapse of time of more than 5 years the position has changed and the Corporation should now consider the feasibility of taking over the assets in liquidation of the dues by making an assessment and consider relieving the directors from their personal responsibilities to the corporation and the other creditors. " The subsequent order dated December 12, 1991, however, shows that the appellant corporation refused to bite the bait. The amount due to it had risen to over a crore of rupees by now. Whereupon, this Court passed 155 the following order : "The appellant in consultation with the other creditors is permitted to put up the industrial undertaking of the firstrespondent for sale. It may do so either by public auction or by inviting tenders or by an combination of both. It may proceed to do so within a period of two months from today. While permitting the appellant to take steps for the sale, we make it clear that before accepting the offers, the appellant should obtain prior permission of this Court. List this matter after 10 weeks, i.e., in the first week of March, 92. " It is clear as to why the unit could not be sold . On March 13, 1992, this Court passed the following further order: "We have heard learned counsel on both sides. Apart from the merits of the issues raised, it appears to us that the present impasse is to nobody 's advantage. The dispute has to be resolved in some meaningful way. We accordingly direct the respondent Company and Sri K.P. Chaturvedi, who claims to be in charge of the affairs of the Company, to confirm in writing to the petitioner Cor poration within three weeks from today that they unconditionally agree to settle the claims of the. Financial Corporation at a figure which would represent the principal amount said to be Rs. 26.30 lacs and interest thereon from the inception at 13.5% per year with half yearly rests calculated upto 25.7.1986. If such an offer is made, the Financial Corporation will assess the merit and acceptability of that offer and take within six weeks thereafter, an appropriate decision including the manner in which and the period over which the payment should be completed, and if the Financial Corporation agrees to grant time for payment, the rate of interest for the deferred period. The decision taken by the Corporation will be placed before this Court. 156 If, however, any offer, as indicated above, is not communicated by the company or Sri Chaturvedi within a period of three weeks from today, then the Financial Corporation shall be at liberty to initiate, with notice to the respondents, steps for the sale by public auction of the subjectmatter of the security in its favour and to treat and hold the proceeds of sale as substituted security in the place of the subject matter of the security, subject to the final result of this S.L.P. Call this matter in the 3rd week of May, 1992. " Pursuant to the said order the second respondent, Managing Director of the first respondent Company merely wrote a letter addressed to the appellant Corporation, to the following effect : "We, herewith, attach a photo copy of the captioned order which is self explicit. We, however, unconditionally agree to abide with the directions given to us by the Hon 'ble Supreme Court. Further, as the Corporation is aware that the Unit (Company) as well as The Registered Office of the Company, both are in possession of the Corporation, we shall feel obliged if you kindly communicate your views to us at the below given address. " It is evident that the letter written by the second respondent is not in terms of the order to this Court dated March 13, 1992. No figure is mentioned nor is it mentioned as to how and in what manner the said huge debt is sought to be repaid by the respondents. Evidently, the appellant corporation could not pay any heed to such a letter. When the matter came before this Court the second respondent appeared in person stating that he has discharged his advocate and that he will argue the matter himself. The matter again came up before us on 19.2.1993 when we heard the appellant 's counsel and the second respondent in person. We allowed the appeal stating that the reasons would follow. There are the reasons for the order. It is true that the appellant Corporation is an instrumentality of the 157 State created under the State Finance Corporation Act, 1951. The said Act was made by the Parliament with a view to promote industrialisation of the States by encouraging small and medium industries by giving financial assistance in the shape of loans and advances, repayable within a period not exceeding 20 years from the date of loan. We agree that the Corporation is not like an ordinary money lender or a Bank which lends money. It is a lender with a purpose the purpose being promoting the small and medium industries. At the same time, it is necessary to keep certain basic facts in view. The relationship between the Corporation and the borrower is that of creditor and debtor. The corporation is not supposed to give loans once and go out of business. It has also to recover them so that it can give fresh loans to others. The Corporation no doubt has to act within the four corners of the Act and in furtherance of the object underlying the Act. But this factor cannot be carried to the extent of obligating the Corporation to revive and resurrect every sick industry irrespective of the cost involved. Promoting industrialisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account. The fairness required of the Corporation cannot be carried to the extent of disabling it from recovering what is due to it. While not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled hand and foot in the name of fairness. Fairness is not a one way street, mote particularly it? matters like the present one. The above narration of facts shows that the respondents have no intention of repaying any part of the debt. They are merely putting forward one or other ploy to keep the Corporation at bay. Approaching the Courts through successive writ petitions is but a part of this game. Another circumstance. These Corporation are not sitting on King Solomon 's mines. They too borrow monies from Government or other 'financial corporation. They too have to pay interest thereon. The fairness required of it must be tempered nay, determined, in the light of all these circumstances. Indeed, in a matter between the Corporation and its debtor, a writ court has no say except in two situation : (1) there is a statutory violation on the part of the Corporation or (21) Where the Corporation acts unfairly i.e., unreasonably. While the former does not present any difficulty, the latter needs a little reiteration of its precise meaning. What does acting unfairly or unreasonably mean? Does it mean that the High Court exercising its jurisdiction under Article 226 of the Constitution can sit as an Appellate Authority over the acts and deeds of the corporation and seek 158 to correct them ? Surely, it cannot be. That is not the function of the High Court under Article 226. Doctrine of fairness, evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints self imposed undoubtedly of writ jurisdiction still remain. Ignoring them would lead to confusion and uncertainty. The jurisdiction may become rudderless. The obligation to act fairly on the part of the administrative authorities was evolved to ensure the Rule of Law and to prevent failure of justice. This doctrine is complementary to the principles of natural justice which the Quasi Judicial Authorities are bound to observe. It is true that the distinction between a quasi judicial and the administrative action has become thin, as pointed out by this Court as far back as 1970 in A.K. Kraipak & Ors. vs Union of India & Ors., AIR 1970 S.C. 150. Even so the extent of judicial scrutiny/judicial review in the case of administrative action cannot be larger than in the case of quasi judicial action. If the High Court cannot sit as an appellate authority over the decisions and orders of quasi judicial authorities it follows equally that it cannot do so in the case of administrative authorities. In the matter of administrative action, it is well known, more than one choice is available to the administrative authorities; they have a certain amount of discretion available to them. They have "a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred ' (Lord Diplock in Secretary of State for Education vs Tameside Metropolitan Borough Counsel, ; at 1064). The Court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the Court intervene. To quote the classic passage from the judgment of Lord Greene MR in Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, (1948) 1 KB at 229. "It is true the discretion must be exercised reasonably. Now what does than mean ? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word "unreasonable" in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the 159 things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably '. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. ' While this is not the occasion to examine the content and contours of the doctrine of fairness, it is enough to reiterate for the purpose of this case that the power of the High Court while reviewing the administrative action is not that of an appellate court. The judgment under appeal precisely does that and for that reason is liable to be and is herewith set aside. On behalf of the appellant reliance has been placed upon the decision of this court in Mahesh Chandra vs Regional Manager, U.P. Financial Corporation & Ors., (1992) 2 J.T. 326. We have perused the decision. That was a case where the debtor was anxious to pay off the debt and had been taking several steps to discharge his obligation. On the facts of that particular 'case it was found that the corporation was acting reasonably. In that context certain observations were made. The decision also deals with the procedure to be adopted by the Corporation while selling the units taken over under Section 29. That aspect is not relevant in this case. We are, therefore, of the opinion that the said decision is of no help to the appellant herein. The appeal is accordingly allowed. The respondents shall pay the .costs of the appellant assessed at Rs. 10,000 consolidated. T.N.A. Appeal allowed.

The respondent Company obtained loan from the appellant Financial Corporation. Soon after obtaining the loan it ceased to, operate and was declared a sick unit. Consequently, it did not make any repayment of loan as stipulated in the agreement and the hypothecation deeds. Thereafter, the appellant Corporation issued notice under section 29 of the for taking over the respondent 's unit for recovery of the amount due Rs.38.57 lakhs. Ile respondent Company filed a writ petition in the Allahabad High Court questioning the appellant 's action. Ile High Court allowed the petition and directed (1) expeditious rehabilitation of the concern and (2) to restore back the 150 possession of the unit to the respondent Company. Against the judgment of the High Court the Financial Corporation riled an appeal in this Court. Allowing the appeal and setting aside the order of the High Court, this Court, HELD : 1. It is true that the appellant Corporation which Is an instrumentality of the State created under the is not like an ordinary money lender or a Bank which lends money. It is a lender with a purpose the purpose being promoting the small and medium industries. At the same time, It is necessary to keep certain basic facts In view. The relationship between the Corporation and the borrower is that of creditor and debtor. the Corporation is not supposed to give loans once and go out of business. It has also to recover them so that it can give fresh loans to others. Corporations too borrow monies from Government or other financial corporations and they too have to pay interest thereon. No doubt it has to act within the four corners of the Act and in furtherance of the object underlying the Act. But this factor cannot be carried to the extent of obligating the Corporation to revive and resurrect every sick industry irrespective of the cost involved. [156H, 157A C,F,] Promoting industrilisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account. The fairness required of the Corporation cannot be carried to the extent of disabling it from recovering what Is due to it. While not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled band and foot in the name of fairness. Fairness is not a one way street more particularly in matters like the present one. The fairness required of it must be tempered nay, determined in the light of all these circumstances. In the instant case the respondents have no intention of repaying any part of the debt. They were merely putting forward one or other ploy to keep the Corporation at bay. [157D F] Mahesh Chandra vs Regional Manager, U.P. Financial Corporation Ors., (1992) 2 J.T. 326, held Inapplicable. In a matter between the corporation and Its debtor, a writ court has no say except in two situations : (1) there is a statutory violation on the part of the Corporation or (2) where the Corporation acts unfairly i.e. 151 unreasonably. The High Court exercising its jurisdiction under Article 226 of the Constitution cannot sit as an Appellate Authority over the acts and deeds of the Corporation and seek to correct them. Doctrine of fairness. evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints self imposed undoubtedly of writ jurisdiction still remain. Ignoring them would lead to confusion and uncertainty. The jurisdiction way become rudderless. [157G H, 158A] 2.1. The obligation to act fairly on the part of the administrative authorities was evolved to ensure the Rule of law and to prevent failure of justice. This doctrine is complementary to the principle of natural justice which the Quasi judicial Authorities are bound to observe. It is true that the distinction between a quasi judicial and the administrative action has become thin. But even so the extent of judicial scrutiny/judicial review in the case of administrative action cannot be larger than in the case of quasi judicial action. If the High Court cannot sit as an appellate authority over the decisions and orders of quasi judicial authorities it follows equally that it cannot do so in the case of administrative authorities. The Court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the Court intervenes. [158C F] A.K Kraipak & Ors. vs Union of India & Ors. , A.I.R. 1970 S.C. 150; Secretary of State for Education vs Talimeside Metropolitan Borough Council, ; and Associated Provincial Picture Houses Ltd., vs Wednesbury Corporation, ; , relied on. While passing the impugned order the High Court has not kept in mind the well recognised limitations of its jurisdiction under Article 226 of the Constitution. While reviewing the administrative action it was not justified in acting as an appellate court. [153D,159C]

Civil Appeal Nos. 2 166/87 & 2 146/84. From the Judgment and Order dated 26.6. 1987 & 16.11. 1983 of the Bombay High Court in W.P. Nos. 2161/86 and 500 of 1983. V.A. Bobde. R.N. Keshwani, A.G. Ratnaparkhi and S.D. Mudaliar for the Appellant. 523 S.B. Bhasme, Dr. N.M. Ghatate, S.V. Deshpande and A.S. Bhasme for the Respondents. The Judgment of the Court was delivered by V. RAMASWAMI, J. The interpretation of Rule 3 of the Maharashtra Ground Water Service, Class I (Recruitment) Rules. 1976 (hereinafter called 'the rule ') arises for consideration in these appeals. That Rule related to the appointment to the post of a Deputy Director in Maharashtra Ground Water Service, Class I and the relevant portions of it as is stood in 1983 read as follows: "3.(1) Appointment to the post of a Deputy Director in the Maharashtra Ground Water service Class 1 shall be made either (a) by promotion from amongst Senior Geologists in the Ground Water Surveys and Development Agency of Government, possessing the qualifications mentioned in sub clauses (ii) and (iii) of Clause (c) of this sub rule; (b) by transfer of a suitable officer from the Department of Geology and Mining of Government; (c) by nomination from amongst the candidates who (i) unless already in the service of Government are not more than 45 years of age on the first day of the month in which the post is advertised, and (ii) Possess a post graduate degree in Geology or Applied Geology of a recognised University or Diploma in Applied Geology of the Indian School of Mine, Dhanbad, or any quali fications recognised by Government to be equivalent thereto, and (iii) have practical experience in the field of (a) carrying out systematic hydro geological surveys in ingeneous sedi mentary and metamorphic terrains (b) ground water explora tion and assessment by drilling and testing and (c) process ing, interpretation of field date and in preparing and editing technical reports for a total period of ten years out of which three years. experience shall be in organising. supervising and guiding field units. " We are now concerned with the case of promotion from amongst the Senior Geologists under Sub Clause (a) of Rule 3(1) of the Rules. 524 The appellant herein joined in the Agricultural Depart ment of the State some time in the year 1963 and at that time he possessed the qualification of B.Sc. with Geology as a principal subject. He was promoted as Senior Geologist on 25.6. 1979. He passed his M.Sc. (Geology) in 1982 with first class and he was also first in the Nagpur University in the subject of pure Geology. He is also the senior most in the seniority list of senior Geologists. He was also holding the additional charge as Deputy Director from 16.6. 1982 for quite some time. The Maharashtra Public Service Commission by the notification dated 21st May. 1983 called applications for direct recruitment to the post of Deputy Director in the Ground Water Survey and Development Agency. which is gov erned by Rule 3(1)(c) of the Rules. In regard to the quali fication for appointment the advertisement stated: Qualifications: Candidates must possess: (i) A post graduate degree in Geology or Applied Geology of a recognised University or Diploma in Applied Geology of the Indian School of Mines, Dhanbad or any qualification recog nised by Govt., to be equivalent thereto; (ii) 10 years practical experience in the field of (a) Carrying out systematic hydrological surveys in ingene ous sedimentary and metamorphic terrains. (b) Ground water exploration and assessment by drilling and testing and (c) Processing, interpretation of field data and in prepar ing and editing technical reports, of which three years ' experience shall be in organising supervising and guiding field units. N.B. (1) The academic qualifications and experience ac quired upto the last date prescribed for receipt of applica tions alone will be taken into account in determining the eligibility of candidates for the posts and for selecting them for the interview. (2) Academic qualification shall be deemed to have been acquired on the date on which the result of the relevant examination is declared by the competent authority. (3) Experience acquired after obtaining the prescribed 525 academic qualifications only will be taken into account. " The appellant applied to the Service Commission but he was not called for an interview on the ground that he acquired the post graduate degree in Geology only in the year 1982 and he does not possess the necessary qualification of 10 years practical experience after obtaining the post graduate degree. The appellant filed Writ Petition No. 500 of 1983 before the High Court of Judicature of Bombay at Aurangabad contending that rule 3(1)(c) of the Maharashtra rules does require the practical experience after obtaining the quali fication of a post graduate degree in Geology and the in sistence on such experience after obtaining the prescribed academic qualification was illegal. In this connection he contended that sub clauses (ii) and (iii) of clause (c) of Rule 3(1) of the rules are two independent requirements, that they have to be read disjunctively and the experience required under subclause (iii) need not be after possessing the basic educational qualification of a post graduate degree in Geology. This contention was not accepted by a Division Bench of that Court and by order dated 16. 1983 Writ Petition No. 500 of 1983 was dismissed. Against that judgment the appellant has preferred Civil Appeal No. 2146 of 1984. While granting special leave this Court in its order dated 16.4. 1984 observed "The Government will decide itself as to whether the petitioner should or should not be reverted". However it appears the petitioner was reverted on 4.7. 1985 to the position of Senior Geologist. Subsequently the Government created a new post of Deputy Director Ground Water Survey at Aurangabad. This post was sought to be filled by promotion under Rule 3(1)(a) of the rules by the Selection Committee. The appellant was selected and appoint ed as Deputy Director on 14.12. This appointment was challenged under Writ Petition No. 2161 of 1986 on the file of Nagpur Bench of the Bombay High Court by one Bhaiyya s/o Govindrao Karale on the ground that even for promotion from amongst the Senior Geologists the candidate should possess not only a post graduate degree in Geology but also IO years experience posterior to such acquisition of post graduate degree and that since the appellant does not have the neces sary experience he is not qualified to be promoted under clause (a) of Rule 3(1) of the rules. This Division Bench also took similar view as in the earlier case and by an order dated 26th June, 1987 the writ petition was allowed and the selection and promotion of the appellant as Deputy Director under Rule 3(1)(a) of the rules was also quashed. Against this judgment Civil Appeal 2 166 of 1987 has been filed. When this appeal was pending the Government of Maha rashtra amended Rule 3(1)(a) by 526 substituting for the words "sub clauses (ii) and (iii) of clause (c)", the words "sub clause (ii) of clause (c)". Thus the requirement of 10 years experience mentioned in sub clause (iii) of clause (c) was deleted in respect of ap pointment by promotion. In the counter affidavit filed by the State Government it is stated that this was done because in the case of a promotion the requirement of 10 years experience subsequent to the acquisition of post graduate degree in Geology was redundant and, therefore. should not be insisted upon and it is in that view the rule was amend ed. However, in direct recruitment the 10 years experience after acquiring the post graduate qualification was re tained. On the interpretation of the rule prior to its amendment which was relevant for considering Civil Appeal No. 2 146 of 1984 we are of the view that the view taken by the Aurangabad bench does not call for any interference. Normally when we talk of an experience, unless the context otherwise demands, it should be taken as experience after acquiring the minimum qualifications required and. there fore. necessarily will have to be posterior to the acquisi tion of the qualification. However, in the case of a promo tion the same interpretation may not be just or warranted. It would depend on the relevant provisions as also the particular type of experience which is required. However. this need not detain us because as we have already stated the Government have now omitted the requirement of experi ence by the said Amendment. The Amendment was made on 16th February. 1988 and published in the Gazette on 24.3. Though the Rule does not say anything about its retrospec tive operation there could be no doubt that it is retroac tive. This amendment shall be deemed to apply to the present case as well especially when the matter is pending in this Court and this appointment is with reference to a case of promotion and appointment, It is true that at the time when the appellant was promoted the Rule had not been amended. However it may also be mentioned that the appellant is the senior most among the Senior Geologists and even if he is to be considered again trader the amended rules he shall have to be appointed and nothing is stated in these proceedings which would disqualify him even now. In the circumstances we are of the view that the appeal against the decision in Writ Petition No. 2161 of 1986 will have to be allowed though Civil Appeal No. 2146 of 1984 will have to be dismissed. Accordingly we allow Civil Appeal No. 2166 of 1987 set aside the judgment of the Division Bench in Writ Petition No. 2161 of 1986. Civil Appeal No. 2146 of 1984 is however dismissed. There will be no order as to costs. G.N. CA No. 2166/87 allowed. and CA No. 2146/85 dismissed.

The appellant joined the Agricultural Department in 1963 with B.Sc. (Geology). Later, in 1979 he was promoted as Senior Geologist. In 1982 he passed his M.Sc. (Geology) and stood first in the University. Sometime in 1982 he was also holding additional charge as Deputy Director. In 1983, the State Public Service Commission called for applications for direct recruitment of Deputy Director in the Ground Water Survey and Development Agency. The appel lant applied in response to the said advertisement, but was not called for interview, on the ground that he did not possess the necessary qualification of 10 years practical experience after acquiring the post graduate degree. Ag grieved, the appellant filed a Writ Petition before the High Court contending that educational qualification and experi ence are two independent requirements and have to be read disjunctively and the experience required need not be after possessing basic educational qualification. However, the High Court did not agree with the contention and dismissed the Writ Petition. Against the said dismissal, the appellant preferred an appeal by special leave which was granted, by this Court in 1984, with an observation that the petitioner should not be reverted. However, he was reverted to the post of Senior Geologist but subsequently promoted as Deputy Director in a new post created. The appellant 's promotion was challenged by one of his colleagues by way of a Writ Petition contend ing that even for promotion, 10 years experience posterior to acquisition of post graduate degree was essential. The High Court quashed the promotion of the appellant. The appellant appealed against the said order after obtaining special leave of this Court in 1987. 522 During the pendency of these two appeals the State Government amended Rule 3(1)(a) whereby the requirement of 10 years experience mentioned in sub clause (iii) was delet ed in respect of appointment by promotion. According to the State Government since the said requirement was redundant, it was deleted. Allowing the 1987 appeal, and dismissing the 1984 ap peal, this Court, HELD: 1.1. On the interpretation of Rule 3 of Maharash tra Ground Water Service, Class I (Recruitment) Rules, 1976 prior to its amendment, the view taken by the High Court on the Writ Petition filed by the appellant, does not call for any interference. Normally when one talks of experience, unless the context otherwise demands, it should be taken as experience after acquiring the minimum qualifications re quired and, therefore, necessarily will have to posterior to the acquisition of the qualification. However, in the case of promotion the same interpretation may not be just or warranted. It would depend on the relevant provisions as also the particular type of experience which is required. [336C D] 1.2. The requirement of experience has been omitted by an amendment made on 16th February, 1988 and published in the Gazette on 24.3.1988. Though the Rule does not say anything about its retrospective operation there could be no doubt that it is retroactive. This amendment shall be deemed to apply to the present case as well especially when the matter is pending in this Court and the appointment in question is by promotion. It is true that at the time when the appellant was promoted, the Rule had not been amended. However, the appellant is the senior most among the Senior Geologists and even if he is to be considered again under the amended rules he shall have to be appointed and nothing is stated in these proceedings which would disqualify him even now. [336E F]

(Civil) No. 960 of 1987. (Under Article 32 of the Constitution of India). G.L. Sanghi, B.A. Masodkar, Sunil Dogra and P.H. Parekh for the Petitioner. V.C. Mahajan, K. Swami and Ms. A. Subhashini for the Respondent. The Judgment of the Court was delivered by VERMA, J. This writ petition under Article 32 of the Constitution by a Judicial Member of the Central Administra tive Tribunal purports to be a sequal of this Court 's deci sion in S.P. Sampath Kumar vs Union of India, and Ors., ; The petitioner contends that the decision in Sampath Kumar 's case (supra) equates the Central Adminis trative Tribunal with the High Court and therefore, its Chairman has to be equated with the Chief Justice of a High Court and the Vice Chairman and Members must be equated with the sitting Judges of the High Court in all respects. It is contended that while the Vice Chairman have been equated with sitting Judges of the High Court, the Members have not been so equated in their pay and other conditions of serv ice. It is further contended that a distinction has been made in the conditions of service, particularly the pay and age of superannuation between the Vice Chairmen and the Members, which is arbitrary and therefore, the Members also should be given the same pay as the Vice Chairmen and their age of superannuation should also be the same i.e. 65 years as that of the Vice Chairmen. It is urged that the judicial functions discharged by the Vice Chairmen and the 949 Members of the Central Administrative Tribunal are the same and therefore, the principle of "equal pay for equal work" applies. Violation of Article 14 of the Constitution is alleged on this basis. Part XIV A containing Articles 323 A and 323 B were inserted in the Constitution of India by the Constitution (Forty second Amendment) Act, 1976 enabling the setting up of Administrative Tribunals and Tribunals for other matters by legislative enactments. The Central Administrative Tribunal has been constituted under Section 4 of the (hereinafter referred to as 'the Act ') with a Chairman, Vice Chairmen and Members judicial and administrative. The qualifications for appointment of Chairman, Vice Chairmen or other Members are prescribed by Section 6 of the Act. Sec tion 7 provides that the Vice Chairman or, as the case may be such one of the Vice Chairman as the appropriate Govern ment may, by notification, authorise in this behalf, shall act as the Chairman in the event of any vacancy in the office of the Chairman for any reason whatsoever, or when the Chairman is unable to discharge his functions for any reason. Section 8 prescribes the term of office of the Chairman, Vice Chairman or other Members as five years from the date on which he enters upon his office with eligibility for re appointment for another term of five years provided that no Chairman or Vice Chairman shall hold the office after he has attained the age of 65 years and any other Member, the age of 62 years. Section 10 of the Act provides for the salaries and allowances and other terms and condi tions of service of Chairman, Vice Chairman and other Mem bers to be such as may be prescribed by the Central Govern ment. Section 17 confers on the Tribunal the same jurisdic tion, powers and authority in respect of contempt of itself as a High Court has under the . But for this specific provision, the Tribunal would not have the power of the High Court in this behalf. Section 18 provides for distribution of business amongst the Benches of the Tribunal. Section 28 excludes the jurisdiction of courts except the Supreme Court or any Industrial Tribunal, Labour Court or other authority, constituted under the or any other corresponding law for the time being in force in relation to matters over which the Tribunal has been conferred jurisdiction. Section 35 con tains the rule making power of the Central Government while Section 36 gives power to the appropriate Government to make rules to carry out the provisions of the Act and particular ly, for the matters specified therein. The specified pur poses for which the Central Government can make rules speci fied in Section 35(2)(c) include 950 the salaries and allowances payable to, and the other terms and conditions of the Chairman, Vice Chairmen and other Members. The rules framed under the Act are to be laid before the Parliament. It is not necessary to give further details of the , the provisions of which were considered at length in Sampath Kumar 's case (supra) and now stand amended in accordance with the observations of this Court in that decision. The Central Administrative Tribunal (Salaries and Allow ances and Conditions of Service of Chairman, Vice Chairmen and Members) Rules, 1985 (hereinafter referred to as 'the rules ') were framed in exercise of the powers conferred by Section 35(2)(c) of the . Rule 3 therein, as it now exists, specifies Rs.9,000 p.m. as the pay of the Chairman; Rs.8,000 p.m. as the pay of the Vice Chairman; and the pay scale of Rs.7300 100 7600 per mensem for a Member. As earlier indicated, the age of super annuation prescribed in Section 8 of the Act for the Chair man and Vice Chairman is 65 years and for any other Member, 62 years. The petitioner 's grievance is that the pay of any other Member of the Tribunal and his age of superannuation should be Rs. 8,000 p.m. and 65 years respectively as in the case of Vice Chairmen, since the Members and Vice Chairmen discharge identical judicial functions. The question is: Whether the principle of "equal pay for equal work", relied on by the petitioner, is applicable to this situation or there is any hostile discrimination against the Members of the Central Administrative Tribunal, as alleged by the petitioner. If the petitioner 's contention be correct, then would arise the question of relief which can be granted. The prayer made in this petition is to direct an amendment in the and the rules framed thereunder, to prescribe the same pay and age of superannua tion for the Members as in the case of the Vice Chairman. The argument of Shri B.A. Masodkar and Shri G.L. Sanghi in support of the petition is that the Members and the Vice Chairman of the Central Administrative Tribunal belong to the same class since they discharge identical judicial functions and there is no rational nexus of the classifica tion made between them with the object sought to be achieved. It is urged that the Tribunal is one entity com prising of the Chairman, Vice Chairmen and Members which has been substituted for the High Court in respect of the juris diction conferred on the Tribunal and therefore, there is no justification for discriminating between them in the matter of pay and other conditions of service. 951 In the counter affidavit of the respondent, it has been stated that all the functions of the Vice Chairman and the Members are not the same inasmuch as the Vice Chairman, in addition to filling the casual vacancy in the office of the Chairman, also discharges certain administrative functions entrusted to him by the Chairman while no such administra tive function is discharged by any Member. It is stated that the office of the Vice Chairman and any other Member cannot, therefore, be treated as the same or in one class. Shri V.C. Mahajan, learned counsel for the respondent contended that Sampath Kumar 's case (supra) does not lend any support to the petitioner 's contention and in this context the observa tions made therein actually negative the petitioner 's stand. It was also urged that the relief claimed for a direction to amend the aforesaid Act and the rules framed thereunder cannot be granted, which alone is the relief claimed in the writ petition. was rightly not disputed by learned counsel for the petitioner that the relief specifically claimed in the petition of a direction to amend the Administrative Tribu nals Act, 1985 and the rules flamed thereunder to equate the Members of the Tribunal with the Vice Chairman in the matter of pay and age of superannuation cannot be granted For this reason, it was urged on behalf of the petitioner that the relief may be suitably moulded to grant the same benefit for the Members of the Tribunal if the allegation of hostile discrimination is accepted. it is not necessary for us to deal further with this aspect since we have no doubt that the plea of violation of Article 14 of the Constitution, raised by the petitioner, is untenable and must fail. The sheet anchor of petitioner 's case is the decision of this Court in Sampath Kumar 's case (supra). We will present ly show that the decision in Sampath Kumar 's case (supra) does not support the petitioner 's claim in this petition. It is significant to note that the age of superannuation of High Court Judges is 62 years while that of the Chairman and Vice Chairman of the Tribunal is 65 years and of any other Member is 62 years. No attempt has been made on behalf of the petitioner to justify the fixation of age of superannua tion of the Chairman and the Vice Chairman as 65 years if they are to be equated with the Chief Justice and sitting judges of the High Court who retire at the age of 62 years only. In respect of the age of superannuation, the Members of the Tribunal are at par with the Chief Justice and the Judges of the High Court. Obviously, it is for this reason that an attempt was made to claim the equality with the Vice Chairman of the Tribunal who gets Rs.8,000 p.m. as pay like a High Court Judge but retires at the higher age of 65 years. This disparity itself indicates that 952 the Chairman, Vice Chairmen and Members of the Tribunal are not equated with the Chief Justice and Judges of the High Court for all purposes which, in substance, is the founda tion of the petition. The contention of Shri D .A. Masodkar, learned counsel for the petitioner, is that the Administrative Tribunal being a substitute for the High Court for adjudicating disputes relating to service matters the Members of the Tribunal should be equated with the High Court Judges for all purposes including their pay and age of superannuation. He contends that the lower pay and age of superannuation of the Members of the Tribunal is discriminatory and violates Article 14 of the Constitution. His argument is that the Members should be equated in this behalf with the Vice Chairman whose pay is equal to that of a puisne Judge of the High Court. However, no attempt was made to justify on this reasoning the higher age of superannuation of the ViceChair man being 65 years against 62 years of a High Court Judge. Shri G.L. Sanghi supported the petition and contended that the Tribunal being one body, the persons constituting it cannot be bifurcated into separate categories and the pay and age of superannuation of all of them should be the same. He adds that the Members and the ViceChairman should have the same pay and age of superannuation while the slightly higher pay of the Chairman was justified as in the case of the Chief Justce vis a vis the puisne Judges of the High Courts. In substance, the contention of Shri Masodkar is for equating the Members of the Tribunal with puisne Judges of the High Courts in the matter of pay on the assumption that the Tribunal is equated with the High Court and with the Vice Chairman of the Tribunal in the matter of age of super annuation on the basis of equal work. The contention of Shri G.L. Sanghi is slightly different. He argues that the Tribu nal being one entity there is no reason to treat its Members differently when all of them perform the same judicial function, the only difference being that the Chairman has additional administrative functions to discharge. Part XIV A of the Constitution of India containing Articles 323 A and 323 B provides for the constitution of administrative and other tribunals for the purpose of adju dication or trial by these tribunals of disputes relating to matters specified therein. Article 323 A deals with adminis trative tribunals to be constituted for adjudication of disputes with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State or of any local or other specified 953 authority. The law enacted by. the Parliament for this purpose may provide for all matters relating to the consti tution and functions of the Administrative Tribunals as well as for exclusion of jurisdiction of all courts, except the jurisdiction of the Supreme Court of India, with respect to the matters required to be adjudicated by the Administrative Tribunal. It is for this purpose that the has been enacted and Section 28 therein excludes the jurisdiction of all courts except the Supreme Court or any Industrial Tribunal, Labour Court or other authority constituted under the or any other corresponding law for the time being in force in relation to matters which the Administrative Tribu nal is empowered to adjudicate. The Act also provides for transfer of all pending cases as provided in Section 29 of the Act. In the first place, the assumption in the argument on behalf of the petitioner that the Tribunal is equated with the High Court is fallacious. It is not only the service matters required earlier to the adjudicated by the High Court but also those by the subordinate courts which are now to be adjudicated by the Administrative Tribunals. That apart, Article 323 A itself clearly contemplates that the Administrative Tribunals constituted thereunder are distinct from the High Courts and it is the law enacted by the Par liament providing for establishment of an Administrative Tribunal which is to provide for all matters relating to the jurisdiction, powers, procedure and all supplemental, inci dental and consequential matters relating to the Administra tive Tribunal. It is, therefore, the law enacted by the Parliament constituting the Administrative Tribunal which has to be first seen for the purpose of ascertaining the real nature and status of the Tribunal and the persons constituting it. There is no ambiguity in the provisions of the and the exact status and service conditions of the Chairman, Vice Chairman and Members of the Administrative Tribunal together with the qualifications for appointment to these offices have been clearly spelt out in the Act. This Act provides expressly for the term of office of the Chairman, Vice Chairman and Members in Section 8 and for the salaries and allowances and other terms and conditions of service by Section 10 read with Section 35(2)(c) and the rules framed thereunder. The Central Administrative Tribunal (Salaries and allowances and Conditions of Service of Chairman, Vice Chairmen and Mem bers) Rules, 1985 have been framed in exercise of the powers conferred by Section 35(2)(c) to provide for the salaries and allowances etc. The scheme of the Act and the rules framed thereunder is quite clear and their enactment is in the manner laid down in Article 324 A of the Constitution. 954 The term of office and the age of superannuation, pay and allowances and other service conditions of the Chairman, Vice Chairman and Members are specifically provided in this manner and from the scheme it is evident that the Chairman, Vice Chairman and Members are not treated as one class for this purpose by the very enactment which provides for the establishment of the Tribunals. Such elaborate provisions were unnecessary if the Tribunal was equated with the High Courts and its Members with High Court Judges. Similarly, a higher age of superannuation could not have been prescribed for the Chairman and Vice Chairman of the Tribunal. Article 323 A of the Constitution itself envisages different provi sions in this behalf and not the same as. that of the High Courts which is the assumption made in the petitioner 's contention. In fact, the provisions of the Act indicate that there is no intention of equating the Chairman, Vice Chair man and Members of the Tribunal with the Chief Justice and Judges of the High Courts for purposes other than those expressly provided in respect of jurisdiction, power etc. Section 17 of the Act is a significant indication. By Sec tion 17, the Tribunal has been given the power to punish for contempt of itself and it is provided that for this purpose the Tribunal shall have, and exercise, the same jurisdic tion, powers and authority as the High Court and the refer ences in the , tO a High Court shall be construed as including a reference to such Tribu nal. It is obvious that the need for enacting such a provi sion arose only because in the absence of such a provision conferring on the Tribunal the jurisdiction and power of a High Court for the purpose of the provisions of the , 197 1, the Tribunal would not have the same jurisdiction or power while adjudicating those very matters which earlier were to be adjudicated by the High Court. Similarly, Section 30 of the Act provides that all proceed ings before a Tribunal shall be deemed to be judicial pro ceedings within the meaning of Sections 193, 219 and 228 of the Indian Penal Code, 1860. This provision also is unneces sary if the petitioner is right in contending that the Tribunal is equated with the High Court for all purposes and must be treated as a deemed High Court with all the, logical consequences. It is, therefore, not possible for the Administrative Tribunal to shed off or abandon its heritage and substitute its genes with those of its choice of a different heritage. In our opinion, this alone is sufficient to indicate that the petitioner 's assumption is fallacious and his attempt to be treated as a deemed High Court Judge cannot be accepted. Apart from the obvious fallacy already indicated, the peti tioner 's claim, if accepted, would result in appointment of some 955 deemed High Court Judges contrary to the express provision made in the Constitution for appointment of High Court Judges. During the course of heating, it was pointed out that mere substitution of a different forum for adjudication of a dispute does not result in conferring on the new forum the status of the substituted forum for purposes other than the jurisdiction and power to adjudicate that dispute unless their status be otherwise equal. To illustrate, Section 115 CPC by amendment in some states empowers the District Courts instead of the High Court to decide revisions thereunder, but that does not equate the District Court with the High Court. No attempt was made on behalf of the petitioner to answer this. The slightly modified argument of Shri G .L. Sanghi for achieving the same purpose also does not bear close scruti ny. The , itself makes a distinction between the Chairman, Vice Chairman and Members. The age of superannuation of the Chairman and Vice Chairman is 65 years while that of the Members is 62 years. Similar ly, there is difference in their salaries. They are not treated to be in one class for this purpose by the Act itself. It cannot, therefore, be said that all of them constitute one class since the Tribunal is one. The case of the Chairman was distinguished by learned counsel on the basis that his position was akin to that of the Chief Jus tice of the High Court. However, the age of superannuation of the Chief Justice and the puisne Judges of the High Court is the same which pattern is not maintained in the Act. A provision is made in the Act for discharge of certain admin istrative functions of the Chairman by the Vice Chairman and not by the Members and similarly, there is provision only for the Vice Chairman to fill a casual vacancy. The founda tion of initial equality on which the argument of discrimi nation is based, is non existent. The parent statute itself shows that they were not born equals. There is also no merit in the casual argument that there is a proposal for higher pay and age of superannuation for Members of Tribunals for other matters constituted in ac cordance with Article 323 B of the Constitution. The basic fact to be remembered is that Articles 323 A and 323 B themselves require the law constituting these Tribunals to provide for the pay and other conditions of service of its Members and, therefore, the same would be governed in the case of each Tribunal by the provisions of the statute giving birth to the Tribunal. These statutes being differ ent, the provisions therein in this behalf can also be different which has been left to the legislative wisdom to decide. 956 Considerable emphasis was laid on behalf of the peti tioner on S.P. Sam path Kumar 's case (supra) to contend that the Tribunals constituted under Article 323 A have been equated with the High Courts. It is sufficient to say that in Sam path Kumar (supra), the question before us in the present petition did not arise for consideration and the observation therin cannot be torn out of context. On the contrary, certain observations in para 22 of that judgment indicate that the retiring age of 62 years or 65 years, for the Members, Chairman and Vice Chairman was treated to be in accord with the pattern of the enactment on the basis that the Members and Chairman or Vice Chairman were in different categories. Equation of the Tribunal with the High Court therein was only as the forum for adjudication of disputes relating to service matters and not for all purposes such as the one arising for decision in the present case. We are unable to accept that the decision of this Court in S.P. Sampath Kumar (supra) supports the contention before us in this petition. As a result of the aforesaid discussion, we have no hesitation in holding that the equality claimed by the Members of the Administrative Tribunal with the Judges of the High Courts or even the Vice Chairman of the Tribunal in the matter of pay and age of superannuation does not exist being contrary to the pattern and scheme of the parent statute establishing the Tribunal and, therefore, the very foundation for the argument of discrimination being non existent, the petition must fail. Consequently, the petition is dismissed. In the circum stances of the case, the parties will bear their own costs. R.S.S. Petition dismissed.

The petitioner is a Judicial Member of the Central Administrative Tribunal. In this writ petition he claims equality of the Members of the Administrative Tribunal with the Judges of the High Court, or even the Vice Chairman of the Tribunal, in the matter of pay, and age of superannua tion. The Central Administrative Tribunal (Salaries and Allow ances and Conditions of Service of Chairman, Vice Chairman and Members) Rules, 1985 were framed in exercise of the powers conferred by section 35(2)(c) of the . Rule 3 of the Rules specifies Rs.8,000 p.m. as the pay of the Vice Chairman and the pay scale of Rs.7300 100 7600 p.m. for a Member. Rule 8 prescribes the age of superannuation for the Chairman and Vice Chairman at 65, and for any other Member 62 years. It was contended on behalf of the petitioner that an arbitrary distinction had been made in the conditions of service, particularly in regard to pay and age of superannu ation, between the Vice Chairman and the Members; that the judicial functions discharged by the Vice Chairman and the Members of the Central Administrative Tribunal were the same and, therefore, the principle of "equal pay for equal work" applied, and on that basis Article 14 had been violated; and that the Administrative Tribunal being a substitute for the High Court for adjudicating disputes relating to service matters, the Members of the Tribunal should be equated with the High Court Judges for all purposes 947 including their pay and age of Superannuation. S.P. Sampath Kumar vs Union of India, ; , relied upon. On behalf of the respondent it was contended that all the functions of the Vice Chairman and the Members were not the same in as much as the Vice Chairman, in addition to filling the casual vacancy in the office of the Chairman, also discharged certain administrative functions entrusted to him by the Chairman. Dismissing the writ petition, this Court, HELD: (1) It is the law enacted by Parliament constitut ing the Administrative Tribunal which has to be first seen for the purpose of ascertaining the real nature and status of the Tribunal and the persons constituting it. [1953 E] (2) It is not possible for the Administrative Tribunal to shed off or abandon its heritage and substitute its genes with those of its choice of a different heritage. [956G] (3) There is no ambiguity in the provisions of the , and the exact status and service conditions of the Chairman, Vice Chairman and Mem bers of the Administrative Tribunal together with the quali fications for appointment to these offices have been clearly spelt out in the Act. [953F] (4) From the scheme of the Act and the rules flamed thereunder it is quite clear that their enactment is in the manner laid down in Article 323 A of the Constitution. From the scheme it is evident that the Chairman, Vice Chairman and Members are not treated as one class for this purpose by the very enactment which provides for the establishment of the Tribunals. Such elaborate provisions were unnecessary if the Tribunal was to be equated with the High Courts and its members with High Court Judges. 1953D; 954C] (5) Article 323 A and 323 B themselves require the law constituting these Tribunals to provide for the pay and other conditions of service of its Members and, therefore, the same would he governed in the case of each Tribunal by the provisions of the statute giving birth to the Tribunal. These statutes being different, the provisions therein in this behalf can also be different, which has been left to the legislative wisdom to decide. [955G H] 948 (6) Equation of the Tribunal with the High Court was only as the forum for adjudication of disputes relating to service matters and not for all purposes such as the one arising for decision in the present case. [956C] S.P. Sampath Kumar vs Union of India, ; , distinguished & explained. (7) The foundation of initial equality on which the argument of discrimination is based, is non existent. The parent statute itself shows that they were not born equals. [956E]

Civil Appeal No. 123 of 1969 and 2023 of 1972. From the Judgment and order dated the 25th October 1967 of the Punjab and Haryana High Court in Civil Writ No. 525 of 1966 and Civil Appeal No. 2023 of 1972. Appeal by Special Leave from the order dated the 20th May, 1970 of the Punjab and Haryana High Court in L.P.A. No. 231 of 1970. Naunit Lal and R. N. Sachthey for the Appellant in both the appeals. N. N. Goswamy and Arvind Minocha for the Respondent in C.A 123 of 1969. O. P. Sharma for Respondent No. 1 (In C.A. 2023/72). The Judgment of the Court was delivered by KRISHNA IYER, J. These two appeals turn on the construction of section 19B of the Punjab Security of Land Tenures Act, 1953 (Act X of 628 1953) (for short, the Act). This legislation was enacted to bring about an agrarian re ordering so pivotal to the progress of our rural economy. Haryana, happily a granary of our country, is one of the States where land reform laws are likely to generate great changes by banishing big concentration of Natur 's bounty in a few feudal hands, creating an enthusiastic sense of distributive justice and exploiting the productive potential of land by the possessive passion of the landless many. So strategic is land reform that special constitutional concern has been shown for this programme. Naturally the State enacted the Act whereby ceiling on land ownership was set; surplus lands were taken over for settling ejected tenants and others and peasant proprietorship created. The scheme of the Act with which we are concerned is fairly simple and somewhat scientific, although its language, what with frequent amendments dovetailed from time to time, has made for ambiguity, obscurity, marginal inconsistency and a rich crop of litigation. Indeed, the conflict of opinion at the High Court level and the bone of contention before us arise from this drafting deficiency Legal Preface: A thumb nail sketch of the Act is a prefatory necessity. the defines 'small land owner ' [section 2(2)] having in mind the optimum ownership in the given conditions. 'Permissible area ' [section 2(3)] is a cognate concept limiting the maximum permissible extent a person may hold, and so long as he does not have any excess, he is a small landholder. He can evict the tenants from his holding and be in actual enjoyment as provided by the Act. If, however, he has lands beyond the permissible area, he becomes a large land owner and has to cough up the excess. However, he is given the option to choose there best area he desires to keep, called 'reserved area ' [section 2(4)] and then he must make available to the State such excess called surplus area [section 2(5 a)]. This creation of a surplus pool or reservoir is vital to the success of the statutory project since, by distribution of such lands, rehabilitation of ejected tenants and landless persons is to be "accomplished. Maximisation of the surplus pool and suppression of evasion by large holders are of profound legislative, concern. Even if a person is a small holder, it is quite on the cards that, by inheritance or other operation of law, or by voluntary transfer, he may acquire lands in excess of the permissible limit. The law takes care to see that such excess is also made available for re settlement of ejectees and their ilk. In short, the legislative mandate is that every agricultural holder in the State shall hold no more than the permissible area and the surplus in the hands of large holders, whether acquired by voluntary transactions or involuntary operation of law, will go to feed the surplus pool. A semi medieval set up where considerable estates are cornered by a landed gentry, will naturally resist re distributive reform measures and try ingenious methodology to defeat the law. But the legislature has to be astute enough to outwit such devious devices and subtle subterfuges. With this end in view, the Act has been amended to block all escape routes unearthed by the law makers as often as the High 629 Court has upheld certain patterns of alienations and oblique dealings by interpretative process. A study of the history of the Act and the provocation for and frequency of amendments thereto, suggests an unspoken criticism about judicial approach which we will refer to later. Suffice it to say that the law we are construing is a radical agrarian measure; its basic goals are to cut down large holdings and distribute lands to various landless people according to a design and to foster, according to legislative policy, an agrarian community of peasant proprietors. De hoarding and defeating hide outs are essential to make the twin objects successful and so sections 10A and 19B among others, have been written into the Act. To explore the import and ambit of these two provisions, particularly the former, with a view to see whether it strikes at a gift made by, the respondent in. favour of his sons whereby he sought to stow away some of his lands, shed some of his excess lands and look slim on as a small holder before the law Language permiting, the Court as interpretor, must fulfil, not frustrate the legislative mission. Factual Silhouette At this stage it is appropriate to set out the facts in the two appeals which are not in dispute and speak for themselves. C.A. 123 of 1969: One Sampuran Singh who owned 450 bighas and 9 biswas of land, acting with foresight, gifted half of it to his mother in 1951, perhaps with a premonition of coming restrictions by way of ceiling on owner ship. We need not speculate on that point in the light of subsequent happenings. The Act came into force on April 15, 1953 but even before that date the. Owner (who was the petitioner before the High Court under article 226 and respondent before us) executed a mortgage with possession over 12 bighas and 5 biswas. There was also some waste land included in his total holding which fell outside the scope of the Act. So much so, on the date when the Act came into force, he was the owner of about 178 bighas which, admittedly, fell safely short of the permissible area of 30 standard acres [vide section 2(3)]. Having thus dwarfed himself into a small land owner as defined in section 2(2), the 'ceiling ' provision held out no threat to him. Certain small extents of land which were legally deductible from his total holding brought down the area in his possession to 138 odd bighas. Unfortunately for him, his mother passed away in February 1958 and, he being the heir, all that he had gifted to her earlier came back to him as successor. The unhappy consequence was that his holding expanded to 363 odd bighas, far in excess of the permissible area as set out in section 2(3) of the Act. Necessarily, this spill over became surplus area as in section 2(5 a) of the Act. Sensing the imminent peril to his property and manoeuvring to salvage it from the clutches of the legal ceiling the petitioner executed a gift of 182 bighas of land to his son by deed dated February 11, 1959. He also executed three mortgages with possession. The cumulative result of the shedding operations was to shrink the size of his holding to well within the permissible area. The Collector, however, investigat 630 ed into the matter and declared an area of 117 bighas as surplus in his hands. He reached this conclusion by ignoring the tell tale gift of February 1, 1959 in favour of the son and the three possessory mortgages executed in June 1958. The status of 'small land owner ' thus being forfeited, the threat lo the surplus lands revived but was sought lo be warded off by the petitioner moving an unsuccessful appeal Lo the Commissioner, and a further fruitless revision to the Financial Commissioner. Eventually, he challenged the Collector 's order i Writ Petition which, met with success. There was disagreement between the two learned Judges on the Bench and the third learned Judge decided in favour of the petitioner holding that section 19B, read with s 10A. did not affect the petitioner 's transfers. The two Judges, whose opinion upheld the claim of the petitioner, substantially concurred in their reasonings but the scope of the interpretative exercise. is somewhat limited. We, therefore, propose straight to go into a study of the relevant provisions and may perhaps indicate our conclusion in advance. We wholly disagree with the High Court and hold that to accept the construction which has appealed to the learned Judges is to frustrate the agrarian reform scheme of the Act and the alternative reading gives life to the law, teeth to its provisions and fulfilment to its soul. C.A. 2023 of 1972: The facts in this appeal are different but the point of law involved is identical. In both the cases the State of Haryana has come up to this Court in appeal, the former by certificate under article 133(1)(c) and the latter by special leave granted by this Court. Anyway, in C.A. 2023 of 1972, respondent No. 1 owned 86 odd ordinary acres of land on April 15, 1953 when the Act came into force. After the commencement of the Act he inherited nearly 30 ordinary acres and thus he held well above the permissible area and ceased to be a small land owner. Around the year 1957 he transferred 167 bighas of land to respondents nos. 3 to 6 pursuant to a Civil Court decree passed in 1957 in favour of his sons and wife. We may mention here, parenthetically but pathetically, that the weapons in the armoury of large land owners to defeat the land reform law included securing simulactral decrees from civil courts against themselves in favour of their close relations, thus using the judicial process to have. their excess lands secreted in the names of their dear and near. This invited legislative attention and an amendment of the Act was made viz., section 10A whereby decrees and orders of courts were to be ignored in dealing with surplus lands. Thus, the Collector ignoring the transfer of 167 bighas of land by respondent No. 1 (which resulted ill civil court decrees of 1957 in favour of his sons and wife declared 38.41 ordinary acres as surplus with respondent No. 1. The statutory. remedies did not see the first respondent (writ petitioner) safe ashore and so he sought harbourage by moving the High Court under article 26 where he urged that the land inherited by him and later transferred to his sons and wife were not hit by section 10A and section 19B of the Act He succeded in the Court in view of a certain strict construction adopted by the Court and the State has come up in appeal challenging the soundness of the High Court 's approach. 631 Statutory Construction: The key thought that pervades our approach is that if the constitutionally envisioned socio economic revolution is not to be a paper tiger, agrarian laws have to be meaningfully enacted, interpreted and executed and the court is not the anti hero in the drama of limping land reform. Much to the same effect this Court observed in Amar Singh 's Case(1): "We have to 'bear in mind the activist, though inarticulate, major premise of statutory construction that the rule of law must run close to the rule of life and the court must read into an enactment, language permitting, that meaning which promotes the benignant intent of the legislation in preference to the one which perverts the scheme of the statute on imputed legislative presumptions and assumed social values valid in a prior era. An aware court, in formed of this adaptation in the rules of forensic interpretation, hesitates to nullify the plain object of a land reforms law unless compelled by its language, and the crux of this case is just that accent when double possibilities in the chemistry of construction crop up. " While dealing with a somewhat analogous set of provisions under the same Act. The emphatic importance of augmenting the surplus pool for distribution by the State is brought out in Amar Singh (supra) thus: "The triple objects of the agrarian reform projected by the Act appear to be (a) to impart security of tenure (b) to make the tiller the owner, and (c) to trim large land holdings, setting sober ceilings. To convert these political slogans and into legal realities, to combat the evil of mass evictions, to create peasant proprietorships and to ensure even distribution of land ownerships a statutory scheme was fashioned the cornerstone of which was the building up of a reservoir of land carved out of the large landholdings and made available for utilisation by the State for re settling ejected tenants." (p. 998) Unfortunately, judicial decisions construing the language of the law have resulted in stultifying the objectives of the enactment leading to further amendments. We are concerned in the present case with sections 10A and 19B which, in their final form, appeared by an amendment of 1962 (Act XIV of 1962), but retrospective effect was given with effect from the commencement of the Act, viz., April 1953. In this context it is convenient to excerpt the observations of this Court in Amar Singh (supra) at p. 999: (1) ; , 996. 632 "The objects and reasons of Punjab Act 14 of 1962, which brought in certain significant restrictions on alienations and acquisitions of large land holders starts off in the statement of objects thus: "Some of the recent judicial pronouncements have the effect of defeating the objectives with which the Punjab Security of Land Tenures Act, 1953, was enacted and amended from time to time. It was intended that the surplus area of every land owner recorded as such in the revenue records should be made utilisable for the settlement of ejected tenants. " Certain specific decisions and their impact on the legislative operation were mentioned, and then the statement of objects proceeded: "In order to evade the provisions of section 10 A of the Parent Act interested persons, being relations, have obtained decrees of courts for diminishing the surplus area. Clause (43 of the Bill seeks to provide that such decrees should be ignored in computing the surplus area. " The short point which confronts us in both these appeals is as to whether the gifts made by land owners who exceeded their permissible area having come by additional lands by inheritance are to be ignored or taken into account when computing the surplus area in their hands, having regard to the specific provision in section 19B living in fellowship with section 10 A. It is appropriate to read sections 10A and 19B here, before proceeding to the crucial discussion in the case: 10 A. (a) The State Government or any officer em powered by it in this behalf shall be competent to utilize any surplus area for the resettlement of tenants ejected, or to be ejected, under clause (i) of sub section (1) or section 9. (b) Notwithstanding anything contained in any other law for the time being ill force and save in the case of land acquired by the State Government under any law for the time being in force or by an heir by inheritance no transfer or other disposition of land which is comprised in surplus area at the commencement of this Act, shall affect the utilization thereof in clause (a) Explanation. such utilization of any surplus area will not affect the right of the landowner to receive rent from the tenant so settled. (c) For the purposes of determining the surplus area of any person under this section, any judgment, decree or order of a court or other authority, obtained after the commencement of this Act and having the effect of diminishing the area of such person which could have been declared as his surplus area shall be ignored." 633 "19B. Future acquisition of land by inheritance, in excess of permissible area. (1) Subject to the provisions of section 10 A, if after the commencement of this Act, any person, whether as land owner or tenant, acquires any inheritance or by bequest or gift from :. person to whom he is an heir any land, or in after the commencement of this Act and before the 30th of July, 1958, any person acquires by transfer, exchange, lease, agreement or settlement any land, or if, after such commencement, any person acquires in any other manner any land and which with or without the lands already owned or held by him exceeds in the aggregate the permissible area, then he shall within the period prescribed, furnish to the Collector, a return in the prescribed form and manner giving the particulars of all lands and selecting the land not exceeding in the aggregate the permissible area which he desires to retain, and if the land of such person is situated in more than one patwar circle, he shall also furnish a declaration required by section 5 A. (2) If he fails to furnish the return and select his land within the prescribed period, then the Collector many in respect of him obtain the information required to be shown in the return through such agency as he may deem fit and select the laud for him in the manner prescribed in sub section (2) of section 5 B. (3) If such person fails to furnish the declaration the provisions of section 5 C shall apply. (4) The excess land of such person shall be at the disposal of the State Government for utilization as surplus are; under clause (a) of section 10 A or for such other purposes the State Government may by notification direct." Unclouded by case law, we first study section 1953. Forgetting section 10 A for moment, we find that if, after the commencement of the Act, April 15, 1953, any person acquires any land by inheritance or bequest or gift which, with the lands already held by him exceed in the in the permissible area, than he shall furnish to the Collector a return indicating the permissible area he desires to retain. This he shall do within the prescribed period [S 19B(1)]. If he defaults to make the return, the Collector will select the land for him [19B(2). He will suffer a penalty for failure to furnish the declaration [19B(3)]. The excess land, i.e., the surplus area shall be at the disposal of Government for utilization under section 10 A [19B(4)1. The surplus land will be used for re settlement of tenants ejected or to be ejected under cl. (i) sub section (1) of section 9 or other purpose notified by Government. The profound concern of the law to preserve the surplus stock is manifest from the obligation cast by sub sections (1) and (4) of 19B to declare and deliver excess lands. How you came to hold the excess is not the question. Why you should be permitted to keep more than what others can lawfully own is the query. A might have 10 925 Sup CI/75 634 acquired by paying hard cash might have received by gift and by bequest and D by settlement and by partition. The agrarian policy is equitable ownership and the reform philosophy is redistributive justice the rural goal being small peasant proprietorship. What difference does it make as to how you came by a large holding from the standpoint above outlined? The thrust of section 19 B is that even if the source of the excess area is inheritance, bequest of gift, the capacity to own is conditioned by the permissible limit. Section 10 A does not militate against this mandate of section 19 B. Indeed, section 19 B had to be enacted because the High Court took the view that area which became surplus subsequent to April 15, 1953 was not hit by the ceiling set and land acquired by an heir by inheritance is saved from utilisation by the State. Section 10 (a) is wide in its terms and encompasses all surplus area, howsoever obtained. Even section 10A(b) strikes not discordant note. All that it says and means is that lands acquired by an heir by inheritance are saved in so far as dispositions of such lands are concerned. The drafting of the saving clause is cumbersome but the sense is and, having regard to the conspectus, can only be that although in the hands of the propositus, it is surplus land, if among the heirs it is not, then their transfers will not be affected by the interdict of section 10 A(a) the sins of the father shall not set the teeth of the children on edge. If the heirs are otherwise small holders, the fact that their father was a large owner will not deprive the former of their heritage, if it is less than the permissible area. We see no conflict between section 10 A and 19B. Assuming some inconsistency, primacy goes to section 19B which effectuates the primary object. It is settled law that Courts should favour an interpretation that promotes the general purpose of an Act rather than one that does not. Counsel for the respondents adopted the arguments which found favour with the High Court and pressed two points. The scheme of the Act, according to the learned Judges, was to see that no one held in excess of the permissible area and since by the gift to the son or wife the latter had only lands within permissible limits, there was no frustration of the policy of the law This reasoning is repugnant to the basic scheme because the surplus pool will be adversely affected if gifts and other transfers which will skim off surplus were to be allowed. Indeed, the flaw in the High Court 's argument is that if it were allowed to prevail, there will be no surplus land at all, every large holder being free to screen his surplus in the names of his with and kin or servants or reliable friends, by going through alienatory exercises. A legislation which has provided for ignoring decrees diminishing surplus lands and has otherwise prevented the escape of excess area by voluntary transfers, cannot conceivably be intended to permit inherited excesses. The second argument which appealed to the High Court is a little curious, and somewhat difficult to follow. Section 19 B directs the owner who, by inheritance, comes to own an excess area, to make a declaration of his lands within a prescribed time. This does rot mean that the time lag is statutorily given for executing gifts and 635 transfers to defeat the law itself. Such a conclusion would be obviously absurd. What is intended is to give some time to the, heir to ascertain the assets he has inherited, make the choice of his 'reserved area ' which he likes to keep and make the necessary declaration. A processual facility cannot be converted into an opportunity to pervert and to thwart the substantive object of the law. After all, courts, faced with special case situations, have 'creatively ' to interpret legislation. The courts are 'finishers, refiners and polishers of legislation which comes to them in a state requiring varying degrees of further. processing ', said Donaldson J., in Corocraft Ltd. vs Pan American Airways Inc.(1) and indeed it is no secret that courts constantly give their own shape to enactments. We feel that when economic legislation in the implementation of Part lV of the Constitution strikes new ground and takes liberties with old jurisprudence, there looms an interpretation problem of some dimensions which Indian jurists will have to tackle. The genre of agrarian reform laws, with special constitutional status, as it were, warrants interpretative skills which will stifle evasive attempts, specially by way of gifts and bequests and suspect transfers. Here sections 10 A, 19 A and 19B, inter alia, strike at these tactics. Our conclusion, in conformity with the principles of statutory construction we have projected, is that the gifts in both the appeals fail in the face of section 19B. It follows that the appeals have to be allowed, which we hereby do without hesitation, without costs how ever to either party at any stage. P.H.P. Appeals allowed. (1) , 732.

The respondents were small land owners within the meaning of Punjab Securrity of ' Land Tenures Act, 1953. The respondents, later on inherited certain lands which together with the lands already held by them exceeded the ceiling area. The respondents, therefore, ceased to be small land owners. The respondents thereafter divested themselves of the excess lands by executing gift deed, mortgage with possession and pursuant to decrees passed in favour of their near relations. The Collector after investigating into the matter declared the lands in excess of the ceiling area as surplus lands and ignored the subsequent transfers. An appeal filed by the respondents was rejected by the Commissioner. Respondents Revision Applications to the Financial Commissioner were also rejected. The respondents thereafter filed Writ Petitions in the High Court. The High Court allowed the Writ Petitions holding that section 19B read with section 10A did not affect the transfers made by the respondents. According to High Court the transfers affected during the period prescribed for filing returns are valid since they were consistent with the scheme of ' the act which requires that no one should hold land in excess of permissible limits. Section 2(2) of the Act defines small land owner as a person owning less than certain area of land. Permissible area is defined limiting the maximum permissible extent a person may hold land. So long as a person does not hold lands in excess of permissible area he is a small land holder. He can evict his tenants from the holding and be in actual enjoyment as provided by the Act. If any person has lands beyond the permissible area he becomes a large land owner and he has to surrender the excess land after choosing the best area he desires to keep. Such excess land goes to the surplus pool which is distributed for the rehabilitation of ejected tenants and landless persons. The Act was amended by inserting section 10A and Section 19B with retrospective effect. Section 10A provides that for the purpose of determining the surplus area of any person any judgment, decree or order of a Court or authority contained after the commencement of the Act and having the effect of diminishing the area of such person which could have been declared as his surplus area shall be ignored. Section 19B provides that if after the commencement, of the Act any person whether as land owner or tenant acquires by inheritance or by bequest or gift from a person to whom he is an heir or if any person after the commencement of the Act acquires in any other manner any land and which with or without the lands already owned or. held by him exceeds in the aggregate the permissible area such a person is required to file a return with the Collector in the prescribed form giving the necessary particulars and selecting the land not exceeding the permissible area which he desires to retain. The section further provides that the surplus land in excess of the permissible area would be distributed among the tenants who are evicted or landless persons. On an appeal by certificate under Article 133(1)(c) in one appeal and in an appeal by Special Leave in another allowing the appeals held ^ 1. Land reform is so strategic that special constitutional concern has been shown for this programme. The State naturally enacted the Act whereby ceiling on land ownership was set. surplus lands were taken over for settling ejected tenants and others. If constitutionally envisioned socio economic revolution is 627 not to be a paper tiger, agrarian lands have to be meaningfully enacted, interpreted and executed and the Court is not the anti hero of the Drama of limping land reform. The decision of this Court in Amar Singh 's case A.I.R. , 996 followed. [628 B C 631 A] 2. It is settled law that Courts should favour an interpretation that promotes the general purpose of an Act rather than one that does not. [634 E] 3. The agrarian reform laws with special constitutional status, as it were warrant interpretative skills which, will stiffle the evasive attempts, specialty by way of gifts and bequests and suspect transfers. [635 C D] 4. The profound concern of the law to preserve the surplus stock is manifest from the obligation cast by section 19B to declare and deliver excess lands. The agrarian policy is equitable ownership and the reform philosophy is redistributive justice, the rural goal being small peasant proprietorship. What difference does it make as to how you came by a large holding from the standpoint above outline ? The thrust of section 19B is that even if the source of the excess area is inheritance. bequest or gift the capacity to own is conditioned by the permissible limit. Section 10A does not militate against the mandate of section 19B. Section 19B had to be enacted because the High Court took the view that the area which became surplus subsequent to the commencement of the Act was not hit by the ceiling and land acquired by an heir by inheritance is saved from utilisation by the State. [633H 634A C] 5. The reasoning of the High Court that the scheme of the Act was that no one should held land in excess of the permissible area and since after the transfers the land held by the respondent was within permissible limits there was no frustration of the policy of the law is repugnant to the basic scheme because the Surplus pool would be adversely affected if gifts and other transfers which would skim off surplus were to be allowed. A legislation which has provided for ignoring decrees diminishing surplus lands and has otherwise prevented the escape of excess area by voluntary transfers cannot conceivably be intended to permit inherited excesses. [634 F G] 6. The further reasoning of the High Court that since section 19B gives to the owner who by inheritance comes to own an excess area. a certain time for making a declaration, that during this period land owner can effect transfers, is obviously absurd. What is intended to give some time to the heir to ascertain the assets he has inherited, make the choice of his reserved area which he likes to keep and make the necessary declaration. The processual facility cannot be converted into an opportunity to prevert and thwart the substantive object of the law. After all courts faced with special case situations, have creatively to interpret legislation [634 H; 635 A B]

Appeal No. 431 of 1963. Appeal from the judgment and decree dated May 21, 1958 of the Punjab High Court in Civil Regular Second Appeal No. 263 P of 1952. Tarachand Brijmohanlal, for the appellants. B.R.L. lyengar, S.K. Mehta and K.L. Mehta, for the respondents. The Judgment of the Court was delivered by Mudholkar, J. The only question for consideration in this appeal by certificate from the High Court of Punjab is whether the suit for possession instituted by the respondents Lal Singh and Pratap Singh is within time. According to the appellants the suit is governed not by article 141 of the Limitation Act, 1908 (9 of 1908) as held by the High Court but either by article 142 or by article 144 and is on that basis barred by time. While it is conceded on behalf of the respondents that the suit is not governed by article 141 it is contended that it is governed by article 144 and not by article 142 and is within time. In order to appreciate the contentions it is necessary to set out the relevant facts which are no longer in dispute. Raj Kaur was in possession of 851 kanals 18 marlas of land situate in village Dhaipai in the former State of Faridkot. Out of this land 481 kanals 7 marlas was in her possession as occupancy tenant, the landlord being the Raja of Faridkot while the remaining land was held by Smt. Raj Kaur as Adna Malik, the Aala malik again being the said Raja of Faridkot. In Samvat 1953 (A.D.1896) Smt. Raj Kaur who had two daughters Prem Kaur and Mahan Kaur, adopted the former 's son Bakshi Singh and put him in possession of the whole of the land. Bakshi Singh transferred part of the land to Pratap Singh, second son of Mahan Kaur, who is respondent No. 2 in the appeal. Mahan Kaur had one more son Lal Singh and he is respondent No. 1 in this appeal. In the year 1915 the Raja of Faridkot filed a suit against Bakshi Singh and Raj Kaur in the court of Sub Judge, Faridkot for a declaration that the adoption of Bakshi Singh was invalid. This suit was decreed on February 9, 1916. Raj Kaur died on August 14, 1930. On February 19, 1934 the Raja filed two suits against Bakshi Singh and Pratap Singh for possession of the aforementioned lands, one pertaining to the land of which Raj Kaur was occupancy tenant and the other for that of the land of which she was Adna malik. These suits were decreed on March 12, 1938 and in execution of the decrees obtained in these suits the Raja 65 took possession of the entire land in October 1938. On April 7, 1948 he sold the entire land along with some other land to one Kehar Singh for Rs. 84,357 5 0. Thereupon Gurbinder Singh and Balbinder Singh. who are the appellants before us, filed a suit for pre emption of the land against Kehar Singh and obtained a decree in their favour. In execution of that decree they got possession of the land on June 22, 1950. On October 20, 1948 Mst. Prem Kaur instituted a suit for possession of the entire land on the ground that she was the legal heir of Raj Kaur against Kehar Singh and the Raja of Faridkot. Later she impleaded the appellants as defendants to that suit and discharged the Raja of Faridkot. On February 17, 1950, Lal Singh, respondent No. 1, filed a suit for possession of the entire land against the Raja of Faridkot and Kehar Singh. To that suit he joined Prem Kaur and Pratap Singh as defendants. Later, however, Pratap Singh was transposed as a plaintiff. Both the suits were consolidated and were tried together. The suit of Prem Kaur was dismissed by the trial court but that of the respondents was decreed to the extent of half share in the property. Prem Kaur and the appellants preferred appeals before the District Court but that court dismissed both the appeals. A second appeal was taken by the appellants as well as by Prem Kaur to the High Court and cross objections were preferred by the respondents. The High Court dismissed these appeals as well as the cross objections. In the absence of any appeal by Prem Kaur against the decision of the High Court confirming the dismissal of her suit we have only to consider the claim of the respondents to half the property left by Raj Kaur. Their claim was resisted by the appellants on several grounds in the courts below. Before us, however, only one ground is pressed and that is, the suit is barred by limitation. As already stated, according to the appellants, the suit is governed either by article 142 or by article 144 of the Limitation Act and not by article 141. Mr. lyengar for the respondents. does not rely upon article 141 at all. He also contends that article 142 has no application and that the suit is governed by article 144 only. Mr. Tarachand Brijmohanlal for the appellants also relied on article 144 in the alternative. In order that article 142 is attracted the plaintiff must initially have been in possession of the property and should have been dispossessed by the defendant or someone through whom the defendants claim or alternatively the plaintiff should have discontinued possession. It is no one 's case that Lal Singh ever was in possession of the property. It is true that Pratap Singh was in possession of part of the property which particular part we do not know by reason of a transfer thereof in his favour by Bakshi Singh. In the present suit both Lal Singh and Pratap Singh assert their claim to property by success on in accordance with the rules contained in the dastur ul amal whereas the possession of Pratap Singh for some 66 time was under a different title altogether. So far as the present suit is concerned it must, therefore, be said that the plaintiffs respondents were never in possession as heirs of Raj Kaur and consequently article 142 would not be attracted to their suit. It is in these circumstances that we have to consider whether under article 144 the suit is barred by time. The starting point of limitation set out in col. 3 of article 144 is as follows: "When the possession of the defendant becomes adverse to the plaintiff". To recapitulate the events. Raj Kaur died on August 14, 1930 whereupon under dastur ul amal her daughters Prem Kaur and Mahan Kaur became entitled to the possession of the land. According to the appellants the daughters succeeding their mother took an absolute estate. Assuming that is so, what would be the position? As already stated, Bakshi Singh and Pratap Singh were in possession of the entire land belonging to Raj Kaur. Ignoring for the time being their relationship with Raj Kaur, what can be said is that they were adversely in possession to the true owners, that is, Prem Kaur and Mahan Kaur, daughters of Raj Kaur as from August 14, 1930. Before, however, they could perfect their title against Prem Kaur and Mahan Kaur the Raja instituted a suit for possession, obtained a decree thereunder and actually entered into possession to the entire land in October, 1938. Though the Raja obtained possession under a decree of the court he was in the eye of law nothing but a trespasser in so far as the heirs of Raj Kaur, her daughters Prem Kaur and Mahan Kaur were concerned. Mahan Kaur had in fact died on July 13, 1938, i.e. before the Raja obtained possession. Therefore, it is more accurate to say that the possession of the Raja became adverse to Prem Kaur and to the respondents Lal Singh and Pratap Singh as from October, 1938. Kehar Singh who was a transferee from the Raja stood in the Raja 's position and got the benefit of the Raja 's adverse possession. Similarly the appellants who had preempted these lands under the decree obtained against Kehar Singh got advantage not only of the Raja 's adverse possession but also of Kehar Singh 'section The sum total of the adverse possession of these three persons at the date of the respondent 's suit would, however, be less than 12 years and so the respondents ' suit could not be said to be barred by article 144 if the starting point of limitation is taken to be some day in October, 1938. Mr. Tarachand Brijmohanlal, however, advanced an interesting argument to the effect that if persons entitled to immediate possession of land are somehow kept out of possession may be by different trespassers for a period of 12 years or over, their suit will be barred by time. He points out that as from the death of Raj Kaur her daughters, through one of whom the respondents claim. were kept out of possession by trespassers and that from the date of Raj Kaur 's death right up to the date of the respondents 67 suit, that is, for a period of nearly 20 years trespassers were in possession of Mahan Kaur 's, and after her death, the respondents share in the land, their suit must therefore be regarded ' as barred by time. In other words the learned counsel wants to tack on the adverse possession of Bakshi Singh and Pratap Singh to the adverse possession of the Raja and those who claim through him. In support of the contention reliance is placed by learned counsel on the decision in Ramayya vs Kotamma(1). In order to appreciate what was decided in that case a brief resume of the facts of that case is necessary. Mallabattudu, the last male holder of the properties to which the suit related, died in the 'year 1889 leaving two daughters Ramamma and Govindamma. The former died in 1914. The latter surrendered her estate to her two sons. The plaintiff who was a transferee from the sons of Govindamma instituted a suit for recovery of possession of Mallabattudu 's property against Punnayya, the son of Ramamma to whom Mallabattudu had made an oral gift of his properties two years before his death. Punnayya was minor at the date of gift and his eider brother Subbarayudu was managing the property on his behalf. Punnayya, however, died in 1894 while still a minor and thereafter his brothers Subbarayudu and two others were in possession of the property. It would seem that the other brothers died and Subbarayudu was the last surviving member of Punnayya 's family. Upon Subbarayudu 's death the properties were sold by his daughters to the third defendant. The plaintiffs appellants suit failed on the ground of limitation. It was argued on his behalf in the second appeal before the High Court that as the gift to Punnayya was oral it was invalid, that consequently Punnayya was in possession as trespasser, that on Punnayya 's death his heir would be his mother, that as Subbarayudu continued in possession Subbarayudu 's possession was also that of a trespasser, that as neither Subbarayudu nor Punnayya completed possession for 12 years they could not tack on one to the other and that the plaintiff claiming through the nearest reversioner is not barred. The contention for the respondents was that there was no break in possession so as to retest the properties in the original owners, that Punnayya and Subbarayudu cannot be treated as successive trespassers and that in any event the real owner having been out of possession for over 12 years the suit was barred by limitation. The High Court following the decision of Mookerjee J. in Mohendra Nath vs Shamsunnessa(3)held that time begins to run against the last full owner if he himself was dispossessed and the operation of the law of limitation would not :be arrested by the fact that on his death he was succeeded by his widow, daughter or mother, as the cause of action cannot be prolonged by the mere transfer of title. It may be mentioned that as Mallabattudu had given up possession to Punnayya under an invalid gift article 142 of the Limitation Act was clearly attracted. The (1) Mad. 370. (2) , 164. 68 sons of Govindamma from whom the appellant had purchased the suit properties claimed through Mallabattudu and since time began to run against him from 1887 when he discontinued possession it did not cease to run by the mere fact of his death. In a suit to which that article applies the plaintiff has to prove his possession within 12 years of his suit. Therefore, so long as the total period of the plaintiff 's exclusion from possession is, at the date of the plaintiff 's suit, for a period of 12 years or over, the fact that this exclusion was by different trespassers will not help the plaintiff provided there was a continuity in the period of exclusion. That decision is not applicable to the facts of the case before us. This is a suit to which article 144 is attracted and the burden is on the defendant to establish that he was in adverse possession for 12 years before the date of suit and for computation of this period he can avail of the adverse possession of any person or persons through whom he claims but not the adverse possession of independent trespassers. In so far as the adverse possession of Bakshi Singh and Pratap Singh is concerned it began upon the death of Raj Kaur and not during her life time. That being so, article 142 cannot possibly be attracted whereas the Madras decision turns upon a case to which article 142 applied. No doubt, there, on behalf of the plaintiff appellant it was argued on the authority of Agency Co. vs Short( ') that in cases of successive trespassers limitation ceases to run against the lawful owner of the land after an intruder has relinquished his possession; that on the death of Punnayya it must be taken that there was an interruption in the possession and that there was an interval between Punnayya 's death and Subbarayudu 's taking possession in his own right however minute the interval may be and that except in the case of succession or revolution all other cases would fall within the principle enunciated in Agency Co 's case(1). The learned Judges did not accept the contention but relying upon the decision in Willis vs Earl Howe(2) and a passage 'in Dart on Vendors and Purchasers, Vol. 17th ed. p. 474 held that the suit was barred by time. It may be pointed out that on Punnayya 's death his mother would be the heir and that it was established in that case that she was living with his brother Subbarayudu and his other brothers. Subbarayudu would therefore, be a presumptive reversioner on the death of his mother and there was evidence to show that she was a consenting party to Subbaryudu 's enjoying the properties after Punnayya 's death. It is under these circumstances that the High Court found it difficult to hold that there was a fresh trespass by Subbarayudu after the death of Punnayya. On the other hand, according to them, there was a continuity of possession because the person who continued to hold possession was the presumptive heir of the deceased. From the facts of the case it will be clear that what was tacked on was not the possession of independent trespassers at all. In the case before us what (1)[1888] 13 A.C. 793. (2) 69 is being sought to be tacked on to the possession of the Raja and those who claim through him is the possession of Bakshi Singh and Pratap Singh. The Raja in his suit against Bakshi Singh challenged the right of Bakshi Singh and Pratap Singh to possession on the ground that they were trespassers. As it has turned out, the possession of the Raja, though obtained under the decree of a civil court, was in itself a trespass on the rights of the persons who were in law entitled to possession of property. Thus this is a case of one trespasser trespassing against another trespasser. There is no connection between the two and, therefore, in law their possession cannot be tacked on to one another. As pointed out by Varadachariar J., in Rajagopala Naidu vs Ramasubramania Ayyar(1). "Further the doctrine of independent trespassers will come in only when the second man trespasses upon the possession of the first or the first man abandons possession. " Where it applies the principle laid down in Agency Co 's(1) case would apply and preclude the tacking of possession of successive trespassers. The following observations of Lord Macnaghten in that case are pertinent and run thus: "They are of opinion that if a person enters upon the land of another and holds possession for a time, and then, without having acquired title under the statute, abandons possession, the rightful owner, on the abandonment, is in the same position in all respects as he was before the intrusion took place. There is no one against whom he can bring an action. He cannot make any entry upon himself. There is no positive enactment, nor is there any principle of law. which requires him to do any act. to issue any notice or to perform ,my 'ceremony in order to rehabilitate himself. No new departure is necessary. The possession of the intruder, ineffectual for the purpose or transferring title, ceases upon its abandonment to be effectual for any purpose. It does not leave behind it any cloud on the title of the rightful owner, or any secret process at work for the possible benefit in time to come of some casual interloper or lucky vagrant. There is not, in their Lord ships ' opinion, any analogy between the case supposed and the case of successive disabilities mentioned in the statute. There the statute 'continues to run ' because there is a person in possession in whose favour it is running. " This view has not been departed from in any case. At any rate none was brought to our notice where it has not been followed. Apart from that what we are concerned with is the language used by the legislature in the third column of article 144. The starting point of limitation there stated is the date when the possession of (1) A.LR. 70 the defendant becomes adverse to the plaintiff. The word "defendant" is defined in section 2(4) of the Limitation Act thus: " 'defendant ' includes any person from or through whom a defendant derives his liability to be used". No doubt, this is an inclusive definition but the gist of it is the existence of a jural relationship between different persons. There can be no jural relationship between two independent trespassers. Therefore, where a defendant in possession of property is sued by a person who has title to it but is out of possession what he has to show in defence is that he or anyone through whom he claims has been in possession for more than the statutory period. An independent trespasser not being such a person the defendant is not entitled to tack on the previous possession of that person to his own possession. In our opinion, therefore, the respondents ' suit is within time and has been rightly decreed by the courts below. We dismiss this appeal with costs. Appeal dismissed.

One Mst. Raj Kaur was holding certain lands on different tenures under the Raja of Faridkot. She had two daughters. She adopted the son of one of them and put him in possession of all the lands. He transferred a part of the lands to the second respondent who was son of the other daughter of Raj Kaur. After Raj Kaur 's dearth the Raja filed suits for possession of the land, and in execution of the decree he obtained in those suits, took possession of the entire land, in October, 1938. He then transferred the land, but the transferee was dispossessed by the appellants in June 1950, in execution of a decree they obtained, in a suit for preemption filed by them against the transferee. The second respondent 's mother had died in 1938 and her sons the first and second respondents, filed a suit for possession of the entire land in February 1950, as heirs of Raj Kaur, but it was decreed only to the extent of their half share, and the decree was affirmed by the High Court. In the appeal to this Court it was contended that the suit was governed either by article 142 or article 144 of the Indian Limitation Act, 1908, and on either basis, was barred by time. HELD: (i) Article 142 would not be attracted to the suit. In order that the article may be attracted the plaintiff must initially have been in possession of the property and should have been dispossessed by the defendant or some one through whom the defendant claims or alternatively, the plaintiff should have discontinued possession. It was no one 's case that the first respondent was ever in possession of the property. As regards the second respondent 's possession at one time of a part of the property, it was by reason of a transfer by the adopted son. The claim in the instant case, however, was by succession, under a different title altogether, and so it must be held that the plaintiffs respondents, as heirs of Raj Kaur, were never in possession of the land. [65H] (ii) Article 144 was applicable to the suit, but the suit was not barred by time. Adverse possession against the respondents started in October. 1938, when the Raja took possession of the land. To that adverse possession could be added that of his transferee and that of the appellants who had preempted the lands under the decree obtained by them against the transferee. But, the sum total of the adverse possession of all those persons at the date of the respondent 's suit would be less than 12 years. The adverse possession of the adopted son could not be tacked on to the adverse possession of the Raja and those who claim through him, because, in a suit to which Art 144 is attracted, the burden is on the defendant to establish that he was in adverse possession for 12 years before the date of suit, and for computation of that period, he can avail himself of the adverse possession of any person or persons through whom he claims but not the adverse possession of independent tres 64 passers. The starting point of limitation in article 144 is the date when the possession of the defendant becomes adverse to the plaintiff. The gist of the definition of the word "defendant" in section 2(4) of the Act is the existence of a jural relationship between the different persons referred to in the definition, and there can be no jural relationship between two independent trespassers. [66 F H; 68C; 70B]. Ramayya vs Kotamma, Mad. 370, explained.

Appeal No. 125 of 1955. Appeal from the judgment and decree dated November 20, 1951, of the former Court of Judicial Commissioner, Vindhya Pradesh, in Civil First Appeal No. 47 of 1951, arising out of the judgment and decree dated June 4, 1951, of the Court of Additional District Judge, Umaria, in Civil Original Suit No. 17/19/17 of 1950. Sardar Bahadur, for the appellants. Achhru Ram, B. C. Misra and P. K. Chakravarty, for the respondents. December 9. The Judgment of the Court was delivered by S.K. DAS, J. This is an appeal on a certificate granted by the erstwhile Judicial Commissioner of Vindhya Pradesh, which is now part of the State of Madhya Pradesh. On behalf of respondent No. 1, Nagar Mal, who was defendant No. 1 in the suit, a preliminary objection has been taken to the effect that the suit was not maintainable by reason of the provisions of section 4 of the Rewa State Companies Act, 1935, and the appeal filed by the plaintiffs must, therefore, be dismissed. As this preliminary objection was not taken in any of the two courts below, learned counsel for the appellants wanted time to consider the point. Accordingly, on October 28, 1958, we adjourned the hearing of the appeal for about a month. The appeal was then heard on November 27, 1958. As we are of the opinion that the preliminary objection must succeed, it is necessary to state the facts only in so far as they have a bearing on it. When cloth control came into force in Rewa State, the cloth dealers of Budhar a town in that State, formed themselves into an Association to collect the quota of cloth to be allotted to them and sell it on profit wholesale and retail. The, Association at Budhar consisted of 25 members who made contributions to the initial 771 capital of the association which was one lac of rupees. No formal Articles of Association were written; nor Se was it registered. The Association functioned through a President and a pioneer worker; they kept accounts and distributed the profits. Respondent No. 1, Nagar Mal, was the President of the said Association from January 1946 to June 26, 1946. Before that, Seth Badri Prasad, one of the plaintiffs appellants before us, was the President. Nagar Mal ceased to be President after June 26, 1946, and Seth Badri Prasad again became President. The Association worked till Febr uary 1948 ; then cloth was decontrolled and the work of the Association came to an end. On June 25, 1949, thirteen members of the Association out of the twenty five brought a suit, and in the plaint they alleged that respondent No. 1, who was President of the Association, from January 1946 to June 1946, had given an account of income and expenditure for the months of January, February and March, 1946, but had given no accounts for the months of April, May and June, 1946. They, therefore, prayed (a)that defendant No. 1 (Nagar Mal) be ordered to give the accounts of the Cloth Association, Budhar, from the beginning of the month of April 1946 to June 26, 1946; (b)that defendant No. 1 be ordered to pay the amount, whatever is found due to the plaintiffs on account being done, along with interest at the rate of annas 12 per cent. per month; and (c)that interest for the period of the suit and till the realisation of the dues be allowed. Besides Nagar Mal the other eleven businessmen, who were members of the Association, were joined as proforma defendants, some of whom later filed an application to be joined as plaintiffs. Though the plaint did not mention any particular transaction of the Association during the period when Nagar Mal was its President, the judgments of the courts below show that the real dispute between the parties related to the sale of cloth of a consignment known as the Gwalior consignment. It appears that in April 1946 a consignment of 666 bales of cloth had come from Gwalior 772 and an order was passed by the Cloth Control Officer that the consignment would be allotted to Nagar Mal who would give the Association an option of taking over the consignment; if the Association did not exercise the option, the consignment would be taken over by Nagar Mal. It appears that there was some dispute as to whether the other members of the Association were willing to take over the consignment of Gwalior cloth. We are not concerned now with the details of that dispute because we are not deciding the appeal on merits. It is enough if we say that ultimately there was an order to the effect that only 390 bales should be allotted to the Association out of which Nagar Mal had given the Association benefit of the sales of 106 bales, and the dispute related to the share of profits made on the remaining 284 bales. Respondent No. 1, Nagar Mal, raised various points by way of defence, his main defence being that none of the members of the Association were entitled to any share in the profits on the sales of 284 bales of Gwalior cloth. The learned District Judge, who dealt with the suit in the first instance, passed a preliminary decree in favour of the plaintiff appellants. The decree directed Nagar Mal to render accounts of the Cloth Association at Budhar from April 1, 1946 to June 26, 1946, and it further directed that leaving out 106 bales of Gwalior cloth which Nagar Mal gave to the Association, an account should be rendered of the rest of the 390 bales and the profits on the sale thereof shall be according to the capital shares of the members of the Association. Nagar Mal preferred an appeal to the learned Judicial Commissioner of Vindhya Pradesh, who reversed the finding of the learned District Judge and came to the conclusion that the other members of the Association were not entitled to participate in the profits made on the sale of 284 bales of the Gwalior cloth and inasmuch as Nagar Mal had rendered accounts with regard to all other transactions, the suit for accounts must fail. He accordingly allowed the appeal and dismissed the suit. The preliminary point taken before us is founded on 773 the provisions of section 4 of the Rewa State Companies Act, 1935. Sub section (1) of section 4 relates to banking business. We are concerned with sub section (2) of section 4 which is in these terms: " 4(2). No company, association or partnership, consisting of more than twenty persons shall be formed for the purpose of carrying on any other, business that has for its object the acquisition of gain by the company, association or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of a Charter from the Durbar." Mr. Sardar Bahadur, who has appeared on behalf of the appellants and who took time to consider the point, has now conceded before us that the aforesaid provision was in force in the Rewa State at the relevant time when the Association was formed at Budhar and he, has further conceded that the said provision was in force till the Indian Companies Act came into force in the said area in 1950. We must, therefore, decide the preliminary point on the basis of the provision in section 4(2) of the Rewa State Companies Act, 1935. Now, the preliminary point taken on behalf of respondent no.1 is this. It is contended that by reason of section 4(2) aforesaid, the Cloth Association at Budhar was not a legal Association, because it was formed for the purpose of carrying on a business which had for its object the acquisition of gain by the individual members thereof and further because it was not registered as a Company under the Rewa State Companies Act, 1935; nor was it formed in pursuance of a charter from the Durbar. It has been contended before us on behalf of respondent no.1 that by reason of the illegality in the contract of partnership the members of the partnership have no remedy against each other for contribution or apportionment in respect of the partnership dealings and transactions. Therefore, no suit for accounts lay at the instance of the plaintiffs appellants, who were also members of the said illegal Association. We consider that this contention is sound and must be upheld. On behalf of the appellants, Mr. Sardar 774 Bahadur has urged the following points in answer to the preliminary objection: firstly, he has contended that we should not allow the preliminary objection to be raised at this late stage; secondly, he has contended that even though the Association was in contravention of section 4(2) of the Rewa State Companies Act, 1935, the purpose of the Association was not illegal and a suit was maintainable for recovery of the contributions made by the appellants and also for accounts; thirdly, he has contended that on the analogy of section 69(3)(a) of the , it should be held that the appellants had a right to bring a suit for accounts of the Association which was dissolved in February 1948. We proceed now to consider these contentions of learned counsel for the appellants. The first contention that respondent No. 1 should not be allowed to raise an objection of the kind which he has now raised at this late stage can be disposed of very easily. The objection taken rests on the provisions of a public statute which no court can exclude from its consideration. The question is a pure question of law and does not require the investigation of any facts. Admittedly, more than twenty persons formed the Association in question and it is not disputed that it was formed in contravention of section 4(2) of the Rewa State Companies Act, 1935. A similar question arose for consideration in Surajmull Nargoremull vs Triton Insurance Company Ltd. (1). In that case sub section (1) of section 7 of the Indian Stamp Act (11 of 1899) was pleaded as a bar before their Lordships of the Privy Council, the section not having been pleaded earlier and having passed unnoticed in the judgments of the courts below. At p. 128 of the report Lord Sumner said:,, The suggestion may be at once dismissed that it is too late now to raise the section as an answer to the claim. No court can enforce as valid that which competent enactments have declared shall not be valid, nor is obedience to such an enactment a thing from which a court can be dispensed by the consent of the parties, or by a failure to plead or to argue the (1)(1924) L.R. 52 I.A. 126, 128. 775 point at the outset: Nixon vs Alibion Marine Insurance Co., (1867) L. R. ; The enactment is prohibitory. It is not confined to affording a party a protection, of which he may avail himself or not as he pleases ". In Sri Sri Shiba Prasad Singh vs Maharaja Srish Chandra Nandi (1), the provisions of section 72 of the Indian Contract Act were overlooked by the High Court; the section was only mentioned in passing by the Subordinate Judge and it appears that the bar of section 72 of the Indian Contract Act was not argued or only faintly argued before the Subordinate Judge or in the High Court. In these circumstances, their Lordships of the Privy Council held that they were unable to exclude from their consideration the provisions of a public statute. In our view, the same principle applies in the present case and section 4(2) of the Rewa State Companies Act, 1935, being prohibitory in nature cannot be excluded from consideration even though the bar of that provision has been raised at this late stage. On his second contention learned counsel for the appellants has relied on U. Sein Po vs U. Phyu (2). That was a case in which three members of an association formed for carrying on a rice business claimed a decree (1) declaring the respective shares of the subscribers to that association and (ii) directing that the plaintiffs be repaid their shares after reconverting the property of the association into cash and after payment of all debts and liabilities. The association, it was found, consisted of twenty seven members; it was not registered and its formation was in contravention of sub section (2) of section 4 of the Indian Companies Act. The lower court granted the decree asked for and this was affirmed in appeal by the High Court. The learned Judges referred to the decision in Sheppard vs Oxenford(3) and Butt vs Monteaux (4), and rested their decision on the following passage of " Lindley on Partnership " (the learned Judges quoted the passage at p. 145 of the 9th edition but the same passage will be found at pp. 148 149 of the 11th edition): (1) (1949) L.R. 76 I.A. 244. (2) Ran. 540. (3) ; ; (4) ; ; 69 E.R. 345. 776 Although, therefore, the subscribers to an illegal company have not a right to an account of the dealings and transactions of the company and of the profits made thereby, they have a right to have their subscriptions returned; and the necessary account taken; and even though the moneys subscribed have been laid out in the purchase of land and other things for the purpose of the company the subscribers are entitled to have that land and those things reconverted into money, and to have it applied as far as it will go in payment of the debts and liabilities of the concern, and then in repayment of the subscriptions. In such cases no illegal contract is sought to be enforced; on the contrary, the continuance of what is illegal is sought to be prevented. " We do not think that the decision aforesaid, be it correct or otherwise, is of any help to the appellants in the present case. The appellants herein have not asked for a return or refund of their subscriptions; on the contrary, they have asked for a rendition of accounts in enforcement of an illegal contract of partnership. The reliefs they have asked for necessarily imply a recognition by the court that an association exists of which accounts ought to be taken. When the association is itself illegal, a court cannot assist the plaintiffs in getting accounts made so that they may have their full share of the profits made by the illegal association. The principles which must apply in the present case are those referred to in the following passage at p. 145 of Lindley on Partnership (11th edition): " The most important consequence, however, of illegality in a contract of partnership is that the members of the partnership have no remedy against each other for contribution or apportionment in respect of the partnership dealings and transactions. However ungracious and morally reprehensible it may be for a person who has been engaged with another in various dealings and transactions to set up their illegality as a defence to a claim by that other for an account and payment of his share of the profits made thereby, such a defence must be allowed to prevail in 777 a court of justice. Were it not so, those who ex hypothesi have been guilty of a breach of the law, would obtain the aid of the law in enforcing demands arising out of that very breach; and not only would all laws be infringed with impunity, but, what is worse, their very infringement would become a ground for obtaining relief from those whose business it is to enforce them. For these reasons, therefore, and not from any greater favour to one party to an illegal transaction than to his companions, if proceedings are instituted by one member of an illegal partnership against another in respect of the partnership transactions, it is competent to the defendant to resist the proceedings on the ground of illegality It is true that in order that illegality may be a defence, it must affect the contract on which the plaintiff is compelled to rely so as to make out his right to what he asks. It by no means follows that whenever money has been obtained in breach of some law, the person in possession of such money is entitled to keep it in his pocket. If money is paid by A to B to be applied by him for some illegal purpose, it is competent for A to require B to hand back the money if B has not already parted with it and the illegal purpose has not been carried out: see Greenberg vs Cooperstein (1). The case before us stands on a different footing. It is a claim by some members of an illegal association against another member on the footing that the association should be treated as legal in order to give rise to a liability to render accounts in respect of the transac tions of the association. Such a claim is clearly unten able. Where a plaintiff comes to court on allegations which on the face of them show that the contract of partnership on which he sues is illegal, the only course for the courts to pursue is to say that he is not entitled to any relief on the allegations made as the courts cannot adjudicate in respect of contracts which the law declares to be illegal (Senaji Kapurchand vs Pannaji Devichand(2)). The same view, which we (1) (2)A.I.R. 98 778 think is correct, was expressed in Kumaraswami vs Chinnathambi (1). As to the last contention of learned counsel for the appellants, based on the analogy of section 69(3)(a) of the Partnership Act, it is enough to point out that under the , an unregistered firm is not illegal; there is no direct compulsion that a partnership firm must be registered, though the disabilities consequent on non registration may be extremely inconvenient. Moreover, the suit before us was not one for accounts of a dissolved firm, but for accounts of an illegal association which was in existence at the relevant period for which accounts were asked. We do not think that the argument by analogy is of any help to the appellants; in our opinion, the analogy does not really apply. For the reasons given above, we hold that the preliminary objection succeeds. The appeal is accordingly dismissed. As the preliminary objection was taken at a very late stage, we direct that the parties must bear their own costs of the hearing in this Court. Appeal dismissed. (1) I.L.R. [1951] Mad 593.

When cloth control was introduced in Rewa State, 25 cloth dealers of Budhar, including the thirteen appellants, formed themselves into an Association to collect the quota of cloth to be allotted to them and to sell it on profit. The Association functioned through a President and a pioneer worker; they kept accounts and distributed profits. After cloth had been decontrolled and the work of the Association had come to an end, the appellants filed a suit against the first respondent for rendition of accounts for a portion of the period that he had been President of the Association and for realisation of the amount found due with interest. The suit was decreed by the trial Court but was, on appeal, dismissed by the judicial Commissioner. In appeal before the Supreme Court, the first respondent raised, for the first time, a preliminary objection that the suit was not maintainable as the Association consisting of more than 20 persons was not registered as required by section 4(2) Of the Rewa State Companies Act, 1935, and that consequently the members of the Association had no remedy against each other in respect of its dealings and transactions. The appellants objected to the raising of the new plea and contended that, nevertheless, the suit was maintainable Held, that the suit was not maintainable. In view of section 4(2) of the Act the Association was illegal. The reliefs claimed for rendition of accounts in enforcement of the illegal contract of partnership necessarily implied recognition by the Court that the Association existed of which accounts were to be taken. The Court could not assist the plaintiffs in obtaining their share of the profits made by the illegal Association. U.Sein Po vs U. Phyu, Rang. 540, not applicable. Held further, that the new point ought to be allowed to be raised. The question was a pure question of law and did not require the investigation of any facts. The objection rested on the provisions of a public statute which no court could exclude from its consideration. Surajmull Nargoremull vs Triton Insurance Company Ltd., (1924) L.R. 52 I.A. 126; Sri Sri Shiba Prasad Singh vs Maharaja Srish Chandra Nandi, (1949) L.R. 76 I.A. 244, followed. The analogy of section 69(3)(a) of the , did not apply, an under that Act an unregistered firm was 97 770 not illegal. Besides, the suit was not one for accounts of a dissolved firm but of an illegal Association which was in existence id at the relevant time.

t Petition (Civil) No. 1244 of 1986. (Under Article 32 of the Constitution of India). WITH S.L.P. (Civil) No. 8948 of 1986. From the Judgment and Order dated 1().4. i986 of the Delhi High Court in C.W.P. No. 795 of 1986. Jitender Sharma for the Petitioners. T.U. Mehta and G.K. Bansal for the Respondents. The Judgment of the Court was delivered by OZA, J. This special leave petition is filed against the judgment of the Delhi High Court rejecting a petition filed by the petitioners. A separate writ petition for the same relief is also filed in this Court. The two matters raise a simple question about the age of retirement of the employees in the Delhi Transport Corporation, who were originally employed in the erstwhile Gwalior and Northern India Transport Company ( 'GNIT Company ' for short) in 1946 or before that. PG NO 1005 It is not in dispute that before 1948 these petitioners were employed in the GNIT Company which was a company owned by the Rulers of Gwalior in the erstwhile native State of Gwalior. The said company was operating the transport services in Delhi and areas around upto 13th May, 1948. On 14th May, 1948 the transport services in Delhi were taken over by the Government of India, the Ministry of Transport and it was named as "Delhi Transport Service". The services of all the employees of the erstwhile GNIT company were taken over by the Government of India but they were continued to be governed by the rules which were in force before taking over. Subsequently it was taken over by the Delhi Municipal Corporation. Later on by the Delhi Transport Undertaking which came to be termed as Delhi Transport Corporation". Clause 7 of the agreement by which the GNIT services in Delhi were taken over by the Government of India provided that the services of the employees who were employed prior to 28th October, 1946 and were in continuous service till i4th May, 1948 shall not be taken over on the terms not less liberal than those they were governed and therefore the employees who were in employment prior to 28th October, 1946 were treated as protected employees. These facts are not in dispute. According to the petitioners, before they were taken over, the service conditions of the employees of GNIT Company were governed by the Gwalior State Civil Service Rules. But the respondent denied that and said that they were governed by the Madhya Bharat Civil Service Rules. Admittedly, Madhya Bharat came into existence in 1948 only. Before that there was no State of Madhya Bharat. Repeatedly opportunity was given to the respondent counsel to find out as to what rules were applicable to the employees of the GNIT company before Madhya Bharat was formed. Ultimately they pleaded their inability to place any rule. So far as Gwalior State Civil Service Rules are concerned, a copy of it in Hindi has been filed by the petitioners with the English translation thereof. It is not disputed that these were the rules governing the civil servants in the Gwalior State. It is also not disputed that GNIT Company was originally a Company incorporated in India where it was owned by the rules of the erstwhile Gwalior State. According to petitioners Civil Service Rules of Gwalior were made applicable to these people. In addition to what has been stated in the petition and which has not been controverted, they have also filed a judgment of the Industrial Court in Madhya Pradesh where this question about the conditions of service about retirement came into dispute after the formation of PG NO 1006 Madhya Bharat and the part of GNIT Company which was operating in the territories of the erstwhile State of Madhya Bharat was taken over by the State of Madhya Bharat Road Transport Corporation. There too, a similar agreement was reached and the question arose as to whether the persons who were in employment before the taking over, were governed by the Rules of the Gwalior State Civil servants. It was held that those were the rules and in those rules the normal age of retirement was 60 years. In view of these circumstances it appears beyond doubt that these people who were employed in the GNIT Company before taking over in Delhi by the Government of India were governed by the Gwalior State Civil Service Rules. The Gwalior Civil Service Rules provided: "CHAPTER l A 7(a)(1) Every employee has a right to seek retirement from service after attaining the age of 55 years. (2) The Government also has authority not to allow any employee to continue in employment after attaining the age of 55 years and order his retirement. (3) In case an employee does not seek retirement from service after attaining the age of 55 years of the government also does not order his retirement form service, than he shall continue in service till he attains the age of 60 years. (4) Every employee shall compulsory retire after attaining the age of 60 years provided his services are not ordered to be terminated earlier. (5) An employee who retires under these rules shall be entitled for pension or Gratuity to which he is entitled according to the rules. Note (1): These Rules will not apply to the Police Personnels. Note (2): The concerned Departments shall initiate retirement proceeding against those employees who have PG NO 1007 attained the age of 60 years at the time of enforcement of the rules but immediate action shall be taken for release of Pension or Gratuity in case of those who have become entitled for Gratuity or Pension and till pension or gratuity is not sanctioned they shall not be retired. In future this procedure shall be followed that action for pension or Gratuity shall be initiated one year in advance to which he is entitled at the age of 60 years in case of an employee who retire at the age of 60 years so that there shall be no delay in retiring him after attaining the age of 60 years. " The above rules it indicates clearly an employee who does not seek retirement from service after attaining the age of 55 years or if the Government does not order his retirement at that age, shall continue in service till he attains the age of 60 years. It is also indicated with unmistakably terms that every employee shall compulsorily retire after attaining the age of 60 years provided his services are not ordered to be terminated earlier. In other words the age of retirement was 60 years. Option however was there for the employee to seek voluntary retirement at 55 years and for the Government to compulsorily retire him at 55. Counsel for the respondent does not dispute the above provisions. He, however, argued that the age of 55 years at which an employee could be asked to retire has been retired by the corporation from 55 to 58 and if an employee has been retired at 58 it was not prejudicial to him since he could have been retired at in his erstwhile. company only at 55. Our attention was invited to Service Regulation of the Corporation providing for these matters. The argument is attractive but on a deeper consideration we find little merit in it. If the Delhi Transport Corporation had exercised its right to retire the petitioners on attaining the age of 58 years, the argument would have been tenable. But that was not done by the Corporation. The Corporation retired the petitioners on the ground that they attained the age of superannuation at 58 years. It is so stated by the notice (Annex. E) dated January 2, 1986 issued by the Deputy Personnel Officer I to Hari Shankar Gaur petitioner in W.P. No. ]244/86. The notice reads: DELHI TRANSPORT CORPORATION A GOVERNMENT OF INDIA UNDERTAKING l. P. ESTATE: NEW DELHl No. PLD IX(PF)/85/128 Dt. 2.1.1986 PG NO 1008 Shri Hari Shankar Gaur s/o Shri M.L. Gaur, Office Supdt. will attain the age of superannuation i.e. 58 years on 31.1.1986. He shall, therefore, retire from the service of this Corporation with effect from 31.1.1986 in accordance with clause l0 of the D.R.T. Act (Conditions of AppointMent & Service) Regulations, 1952 read with office order No. PLD/2479 dated 7.3.1974. He may avail earned leave due to him prior to 31.1. 1986, if he so desires. " We are told similar notices were issued to other employees as well. l hat means the Corporation was under the impression that the petitioners have no right to continue beyond the age of 58 years. We are, therefore, of the opinion that the persons who originally were in the employment of GNIT and were employed prior to October 28, 1946 and who continued in service till May 14, 1948 and onwards will have the right to remain in service up to 60 years unless the option to retire was exercised by the person or by the Corporation at 55 years. In the result the writ petition and the SLP are allowed to the extent indicated above. No order as to costs. G.N. Petitions allowed.

The Gwalior and Northern India Transport Company (GNIT Company) was operating transport services in and around Delhi. It was taken over on May 14, 1948 by the Government of India, Ministry of Transport and named as Delhi Transport Service. The services of all employees of the (IT company were taken over by the Government of India, but they continued to be governed by the rules in force before the take over. Subsequently it was taken over by the Delhi Municipal Corporation and later on by the Delhi Transport Undertaking and came to be known as Delhi Transport Corporation. All employees of GNIT Company employed before 28.10.46 and were in continuous service at the time it was taken over by the Government of India were treated as protected employees as per clause 7 of the take over agreement. Prior to the take over they were governed by the Gwalior State Civil Service Rules which stipulate the age of retirement at 60. Option however was there for the employee to seek voluntary retirement at 55 years and for the Government to compulsorily retire an employee at 55. The Delhi Transport Corporation retired the petitioners on the ground that they attained the age of superannuation at 58 years. It was challenged in a writ petition before the Delhi High Court and the petitioners contended that option was there both for the Corporation as also the employees to retire at 55, but superannuation could be only on reaching 60, and not at 58 as claimed by the Corporation. The Delhi High Court rejected the petition. Against this, the petitioners have come to this Court by way of a special leave petition. A writ petition has also been filed claiming the same relief. Allowing the special leave petition as also the writ petition, this Court, PG NO 1003 PG NO 1004 HELD: The persons who were originally in the employment of GNIT Company and were employed prior to October 28, l946 and continued in service till May 14, l948 and onwards will have the right to remain in service upto 60 years unless the option to retire was exercised by the person or the Corporation at 55 years. The argument that the age of 55 years at which an employee could be asked to retire has been raised by the Corporation to 58 years and if an employee has been retired at 58, it was not prejudicial to him since he could have been retired in his erstwhile Company only at 55, has little merit in it. If the Delhi Transport Corporation had exercised its right to retire the petitioners on attaining the age of 58 years, the argument would have been tenable. But that was not done by the Corporation. The Corporation retired the petitioners on the ground that they attained the age of superannuation at 58 years. That meant the Corporation was under the wrong impression that the petitioners had no right to continue beyond the age of 58 years. [1008C D; 1007E G; 1008C]

Special LeaVe Petition (Civil) No. 6765 of 1985. From the Judgment and Order dated 11.12. 1984 of the Andhra Pradesh High Court in C.M.A. No. 244 of 1981. D .N. Gupta and Vijay Kumar Verma for the Petitioner. The Order of the Court was delivered by VENKATARAMIAH, J. This petition is filed under Arti cle 136 of the Constitution for special leave to appeal against the judgment of the High Court of Andhra Pradesh dated 11.12.84 allowing an appeal filed against the judgment dated 31.12.80 in E.I. case No. 4 of 1980 on the file of the Employees ' Insurance Court at Hyderabad. The petitioner is a limited company carrying on busi ness at Secunderabad and at some other places in India. The petitioner is engaged in the business of importing fertiliz ers. It represents some foreign principals for the sale of their products in India. The petitioner imports fertilizers into India which is an item purchased by the Central Government through the State Trading Corporation/Minerals and Metals Trading 'Corporation of India. In the course of its business the petitioner obtains the tenders from the State Trading Corporation Minerals and Metals Trading Corporation of India and passes them on to its principals abroad. Thereafter negotiations are carried on directly between the State Trading Corporation/Minerals Metals and Trading Corporation of India and the foreign principals. After the deal is completed and the fertilizers arrive at the Indian ports the fertilizers are delivered to the Cen tral Government at the ports. Before delivering the goods to the Central Government the petitioner supervises the 984 unloading of the goods and conducts the survey of the goods imported to ascertain the condition of the goods and to find out whether there are any shortages in the consignments so that there may be no disputes later on about the quality and quantity of the goods delivered. The petitioner company has its branch offices in Bombay, Calcutta and Madras for super vising its work at the ports and to attend to other matters relating to clearing of shipments and in Delhi for securing payments of bills. Its central office is at Secunderabad. The Government of Andhra Pradesh after giving six months notice vide its gazette notification No. 788 Health dated 25.9.74 as required under section 1(5) of the (hereinafter referred to as 'the Act ') extended the provisions of the Act with effect from 30.3.75 among others to the establishments mentioned therein in which 20 or more persons were employed for wages on any day of the preceding 12 months by Notification G.O.M. section No. 297, Health dated 25th March, 1975 published in the Andhra Pradesh Gazette dated March 26, 1975. Item 3(iii) in the list of establishments in that notification to which the Act was so extended by the State Government was "shops". On inspection by the Insurance Inspector of the premises in which the petitioner was carrying on its business at Secun derabad it was found on 28.4.75 that the petitioner had employed persons ranging from 27 to 29 for wages within the relevant period and was carrying on the business of import of fertilizers. On being asked by the Employees ' State Insurance Corporation to comply with the provisions of the Act the petitioner agreed that its business was covered by the Act in view of the notification issued by the State Government as it happened to be a "shop" and submitted contribution forms of its employees to the office of the Employees ' State Insurance Corporation. After complying with the provisions of the Act for a period of four years the petitioner raised a dispute about its liability to pay the contributions payable under the Act and instituted under section 75 of the Act the case out of which this petition arises before the Employees ' Insurance Court at Hyderabad for a declaration that the establishment in which the peti tioner was carrying on its business was not a "shop" and therefore it was not covered by the notification issued by the State Government and that the petitioner was not liable to comply with the provisions of the Act. The above petition was resisted by the Regional Director, Employees ' State Insurance Corporation. It was pleaded on his behalf that the establishment which was being run by the petitioner was a "shop" and therefore it was liable to comply with the provi sions of the Act. The Employees ' Insurance Court upheld the plea of the petitioner and 985 declared that the establishment of the petitioner was not covered by the Act. Aggrieved by the decision of the Employ ees ' Insurance Court, the Regional Director of the Employ ees ' State Insurance Corporation filed an appeal before the High Court under section 82 of the Act. The High Court allowed the appeal, reversed the decision of the Employees ' Insurance Court and dismissed the petition filed by the petitioner under section 75 of the Act. The High Court was of the view that the establishment of the petitioner at Secunderabad was a "shop" to which the Act was applicable by virtue of the notification issued by the State Government. Aggrieved by the decision of the High Court the petitioner has filed this petition under Article 136 of the Constitu tion requesting this Court to grant special leave to appeal against the decision of the High Court. On behalf of the petitioner it is urged before us that since no goods were actually being delivered in the premises in which the petitioner was having its establishment the said establishment could not be treated as a shop which is referred to in item 3(iii) of the Government 's notification. The word "shop" is not defined in the Act or in the notifi cation issued by the State Government. According to the Shorter Oxford English Dictionary the expression "shop" means "a house or building where goods are made Or prepared for sale and sold". It also means a "place of business" or "place where one 's ordinary occupation is carried on". In ordinary parlance a "shop" is a place where the activities connected with the buying and selling of goods are carried on. The evidence produced in the case shows that the peti tioner is carrying on its business at its business premises in Secunderabad. At that place the petitioner carries on the commercial activity facilitating the emergence of contracts of sale of goods between its foreign principals and the State Trading Corporation ' Minerals and Metals Trading Corporation of India. It arranges for the unloading of the goods under its supervision and for the survey of the goods despatched by its foreign principals at the ports on behalf of its foreign principals and on the goods being delivered to the Central Government it collects the price payable by the Government and remits it to its foreign principals. All these activities are directed and controlled from its prem ises at Secunderabad. It is thus clear that the activities carried on by the petitioner constitute trading activities although the goods imported from abroad are not actually brought to the said premises and delivered to the purchaser there. In our opinion it is not actually necessary that the delivery of the goods to the purchaser should take place at the premises in which the business of buying or selling is carried on to constitute the said premises into a "shop". 986 The delivery 0f the goods sold to the purchaser is only one aspect of trading activities. Negotiation of the terms of sale, carrying on of the survey of the goods imported, arranging for the delivery of the goods sold, collection of the price of the goods sold etc. are all trading activities. The premises where business is carried on by the petitioner is undoubtedly a shop as the activities that are carried on there relate only to the sale of goods which are imported into India. The petitioner acts as the agent of its foreign principals who are the sellers. The petitioner directs and controls all its activities from the premises in question. If orders are received at a place which ultimately fructify into sales and the resulting trading activity is directed from there that place comes to be known as a "shop". In our view the Employees ' Insurance Court placed a very narrow interpretation on the expression "shop" white upholding the contention of the petitioner by confining "shop" to a place where goods are actually stored and delivered pursuant to a sale. We agree with the decision of the High Court that while construing a welfare legislation like the Act and the notification issued thereunder a liberal construction should be placed on their provisions so that the purpose of the legislation may be allowed to be achieved rather than frus trated or stultified. There is no doubt that the establish ment of the petitioner at Secunderabad is a "shop" where selling activity is carried on and by virtue of the notifi cation issued by the State Government the Act became ap plicable to it. The petitioner is bound to comply with the provisions of the Act as admittedly at all relevant times the petitioner had engaged more than 20 persons for wages at its place of business. There is no ground to interfere with the judgment of the High Court. In the result this petition fails and is dismissed. N.P.V. Petition dis missed.

The petitioner, a limited company, having central office at Secunderabad was carrying on business of importing ferti lizers and represented some foreign principals for the sale of their products in India. The Government of Andhra Pradesh after giving six months notice, vide its gazette notification No. 788 Health dated 25 9 74 as required under section 1(5) of the extended the provisions of the Act with effect from 30 3 75 to the establishments mentioned therein in which 20 or more persons were employed for wages on any day of the preceding 12 months by Notification G.O.M.S. No. 297, Health, dated 25th March, 1975. Item 3(iii) in the list of establishments in that notification to which the Act was so extended by the State Government was "shops". On inspection of the premises of the petitioner company at Secunderabad on 28 4 75, the Employees ' State Insurance Inspector found that the petitioner had employed persons ranging from 27 to 29 for wages and was carrying on the business of import of fertilizers, and the petitioner was asked to comply with the provisions of the . The petitioner agreed and submitted contribu tion forms of its employees to the office of the Corpora tion. After complying with the provisions of the Act for a period of four years the petitioner instituted a case under Section 75 of the Act before the Employees ' Insurance Court for a declaration that the establish 982 ment in which the petitioner was carrying on its business was not a "shop", and, therefore, it was not covered by the aforesaid notification and that the petitioner was not liable to comply with the provisions of the Act. On behalf of the Corporation it was submitted that the establishment being run by the petitioner was a "shop" and, therefore, liable to comply with the provisions of the Act. The Employ ees ' Insurance Court upheld the plea of the petitioner and declared that the establishment was not covered by the Act. The High Court allowed the appeal of the Corporation and held that the establishment was a "shop" to which the Act was applicable by virtue of the State Government 's notifica tion. In the Special Leave Petition, on behalf of the peti tioner it was urged that since no goods were actually being delivered in the premises in which the petitioner was having its establishment, the said establishment could not be treated as a 'shop ' which was referred to in item 3(iii) of the Government 's notification. Dismissing the Special Leave Petition, this Court, HELD: 1. The petitioner company is bound to comply with the provisions of the Act as, at all relevant times, the company had engaged more than 20 persons for wages at its place of business. [986E] 2.1 The word "shop" is not defined in the Act or in the notification issued by the Government. [985D] 2.2 In ordinary parlance a "shop" is a place where the activities connected with the buying and selling of goods are carried on. [985E] 2.3 It is not actually necessary that the delivery of the goods to the purchaser should take place at the premises in which the business of buying or selling is carried on to constitute the said premises into a "shop". The delivery of the goods sold to the purchaser is only one aspect of trad ing activities. Negotiation of the terms of sale, carrying on of the survey of the goods imported, arranging for the delivery.of the goods sold, collection of the price of the goods sold etc. are all trading activities. [985H, A] In the instant case, the premises where business is carried on by the petitioner is undoubtedly a "shop" as the activities that are carried on there relate only to the sale of goods which are imported into India. 983 The petitioner acts as the agent of its foreign principals who are the sellers. The petitioner directs and controls all its activities from the premises in question. If orders are received at a place which ultimately fructify into sales and the resulting trading activity is directed from there, that place comes to be known as a "shop". [986B C] 3. The High Court was right in holding that while construing a welfare legislation like the Act and the noti fication issued thereunder a liberal construction should be placed on their provisions so that the purpose of the legis lation may be allowed to be achieved rather than frustrated or stultified. [986D]

iminal Appeal No.397 of 1993. From the Judgment and Order dated 11.7.90 of the Calcutta High Court in Crl. Revision No. 1453 of 1987. D.N. Mukherjee, D. Sinha and J.R. Das for the Appellant. Sukumar Guha and A.K. Sengupta for the Respondents. The Judgment of the Court was delivered by AHMADI, J. Special leave granted. In this appeal by special leave two questions arise for our consideration, namely, (i) whether a Special Court constituted under Section 12A of the (hereinafter called 'the Act ') is empowered to exercise powers under sub section (5) of Section 167 of Code of Criminal Procedure, 1973 ( 'the Code ' for short) in relation to an accused person forwarded to it under clause (b) of sub section (1) of section 12AA of the Act? and (ii) whether a Special Court can, notwithstanding the fact that the charge sheet has been filed after the expiry of the period of six months from the date of arrest of the accused person or the extended period, take cognizance of the offence and proceed to try and punish the accused person? These two questions arise in the backdrop of the following facts. A police party headed by an Inspector of Police raided the business premise 574 and godown of the respondents on March 16, 1984 and in the presence of respondent Faguni Dutta seized certain essential commodities stored in contravention of certain orders issued under section 3 read with section 5 of the Act. The accused Falguni Dutta was arrested on the same day for the commission of an offence punishable under section 7(1) (a) (ii) of the Act but the charge sheet was submitted after the expiry of the period of six months from the date of arrest on September 30, 1986. The learned Judge presiding over the Special Court Constitute of under section 12A of the Act took cognizance of the offence on March 13, 1987 on the basis of the charge sheet submitted under section 173 of the Code. Thereupon the accused persons moved an application before the learned Special Judge for quashing the proceedings on the ground that since the case was triable as a summons case in view of section 12AA(1) (f) of the Act, clause (5) of section 167 of the Code was attracted which enjoined that the proceedings be dropped. The learned Special Judge relying on a decision of a learned Single Judge of the High Court in Kanta Dev vs The State of West Bengal (1986) Calcutta Criminal Law Reporter 158 = (1986) 1 CHN 267 rejected the application on July 24, 1987 holding that the provision of section 167 (5) of the Code had no application to a case initiated for the commission of an offence punishable under section 7 (1) (a) (ii) of the Act. We may incidentally point out that the same view was expressed in Babulal Agarwal vs State (1987) 1 CHN 218. Being aggrieved by the rejection of the application the accused preferred a Revision Application to the High Court challenging the legality of the said order. A learned single Judge of the High Court placing reliance on a Division Bench decision of the High Court of Andhra Pradesh in the case of Public Prosecutor, High Court of Hyderabad & etc. vs Anjaneyulu and etc. held that sub section (5) of section 167 of the Code stood attracted and the learned Special Judge ought to have stopped the further investigation on the expiry of six months and ought to have discharged the accused. He, therefore, set aside the order of the learned Special Judge and also quashed the prosecution and discharged the accused. It is against this order of the High Court that the present appeal is preferred. We may incidently mention that when the learned Single Judge was disinclined to follow the earlier two decisions of other learned single Judges of the High Court the proper course was to refer the matter to a Division Bench for decision. however, has now lost significance in view of the subsequent decision of the Division Bench in Jnan Prakash Agarwala vs State of WestBengal (1992) 1 CHN 213 taking a contrary view. In the said case the Division Bench has taken the view which the learned Single Judge has taken in the present case. We will deal with these decisions in some detail hereafter. At the outset we deem it appropriate to notice the relevant provisions of the 575 concerned statutes. The Act was enacted to provide, in the interest of the general public for the control of production, supply and distribution of, and trade and commerce in, certain commodities. Section 3, inter alia, lays down that if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may, by order, provide for regulating and prohibiting the production, supply and distribution thereof and trade and commerce therein. By section 4 it is provided that an order made under section 3, may, confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government and may contain directions any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties. The Central Government is empowered by section 5 to direct that the power to make orders or issue notifications under section 3, shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable, inter alia, by such State Government, as may be specified in the direction. In exercise of the power so conferred certain orders were issued by the State Government in regard to certain essential commodities from time to time. Section 7 prescribes the penalties for the contravention of any order made under section 3. The relevant portion of section 7 with which we are concerned reads as under: "7 (1) If any person contravenes any order made under section 3, (a) he shall be punishable, (i) in the case of an order made with reference to clause (i) of subsection (2) of that section, with imprisonment for a term which may extend to one year and shall also be liable to fine, and (ii)in the case of any other order, with imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine. In the present case the accused came to be charged under section 7 (1) (a) (ii) of the Act. Having regard to the fact that the punishment prescribed for the said offence extends to seven years and fine, the case would fall within the definition of warrant case under section 2(x) of the Code. This becomes evident if we read the definitions of 'summons case ' and ' warrant case ' together. They are as under: 576 2 (w) Summons case means a case relating to an offence, and not being a warrant case. 2(x) Warrant case means a case relating to an offence, punishable with death, imprisonment for life or imprisonment for a term exceeding two years. " However, by Amending Act 18 of 1981 the Legislature, for dealing more effectively with persons indulging in antisocial activities like hoarding and blackmarketing and for combating the evil of inflationary prices, considered it necessary to make special provisions for a temporary period of five years (extended by another five years),namely, to provide: (i) for the control, in a summary way of all offences under the Act; and (ii)for the constitution. for the purposes of such trial, of Special Courts, consisting of a Single Judge. To achieve this objective section 12A was amended with a view to empowering the State Government for the purpose of providing speedy trial of the offences under the Act to constitute as many Special Courts as may be necessary for such area or areas to be to be specified in the notification. Section 12AA which too was inserted by the said Amending Act begins with a non obstance clause and provides that all offences under the Act shall be triable only by the Special Court constituted for the area in which the offence was committed or where there are more Special Courts than one in such area by one of them as may be specified in this behalf by the High Court. Clause (b) of sub section (1) of section 12AA next provides that where a person accused of or suspected of the commission of an offence under this Act is forwarded to a Magistrate under sub section (2) or subsection (2A) of Section 167 of the Code, such Magistrate may authorise the detention of such person such custody as he thinks fit for a period. not exceeding 15 days in the whole where such Magistrate is a Judicial Magistrate and 7 days in the whole where such Magistrate is an Executive Magistrate unless his detention for such period is unnecessary. Clause (c) of that sub section is relevant for our purpose and may be extracted: "(c) The Special Court, may, subject to the provisions of clause (d) of this Section, exercise, in relation to person forwarded to it under clause (b), the said power which a Magistrate having jurisdic 577 tion to try a case may exercise under section 167 of the Code in relation to an accused person in such case who has been forwarded to him under this section. " Sub clause (d)provides that no court other than the Special Court or the High Court shall release an accused on bail. Sub clause (f) of this sub section is also relevant and reads as under: "(f) All offences under this Act shall be tried in a summary way and the provisions of sections 262 to 265 (both inclusive) of the Code shall. as far as may be. apply to such trioal; Provided that in the case of any conviction in a summary trial under this section it shall be lawful for the Special Court to pass such sentence of imprisonment for a term not exceeding two years. " It will thus be seen that while the penalty provided for an offence under section 7(1) (a) (ii) extends to seven years and fine, by virtue of clause (f) of subsection (1) of section 12AA if the offence is tried in a summary way applying the provisions of sections 262 to 265 of the Code the penalty would be restricted by the proviso to a maximum of two years, which would, it is argued, bring the case within the meaning of a 'summons case ' as defined in section 2(w) of the Code, thereby attracting sub section (5) of section 167 of the Code. It would be advantageous to reproduce sub section (5) of section 167 of the Code. It reads as under: "If in any case triable by a Magistrate as a summons case, the investigation is not concluded within a period of six months from the date on which the accused was arrested, the Magistrate shall make an order stopping further investigation into the offence unless the officer making the investigation satisfies the Magistrate that for special reasons and in the interest of justice the continuation of the investigation beyond the period of six months is necessary. " To complete reference to the provisions of the Act we may also state that section 10A posits that notwithstanding anything contained in the Code, every offence punishable under the Act shall be cognizable and non bailable. Section 11 provides that cognizance of an offence under the Act shall be taken only on a written report. Section 12AC makes the provisions of the Code applicable to proceedings be fore a Special Court unless otherwise provided. These, in brief are 578 the relevant provisions of the Act and the Code with which we are concerned. It may here be mentioned that section 12A was first inserted by Amendment Act of 1964. It then empowered the Central Government to specify any order under section 3 to be a special order the contravention whereof may be tried summarily to which the provisions of sections 262 to 265 of the Code were made applicable. The proviso stipulated that in the case of conviction in a summary trial it shall be lawful for the Magistrate to pass a sentence of imprisonment not exceeding one year, Subsequently by Amendment Act 18 of 198 1. section 12A was substituted by the present provisions and new sections 12AA to 12AC were inserted. The avowed object of these legislative changes was expeditious disposal of offences under the Act by Special Courts employing summary procedure and applying the provisions of the Code to such trials save as otherwise provided. This enabled the Special Courts to take cognizance of the offences under the Act without a formal order of commitment. It thus becomes clear from the plain language of the provisions introduced by Act 18 of 1981 that the legislature desired to ensure that all offences under the Act were tried by the Special Court Constituted under Section 12A in a summary manner applying the provisions of sections 262 to 265 of the Code and further provided that in case of conviction the sentence shall not exceed two years, bringing the offence within the definition of a summons case under the Code. But for the insertion of section 12A in its present form and section 12AA, the offence under section 7 (1) (a) (ii) of the Act would have attracted the definition of a warrant case. It is, therefore, obvious that the Amending Act 18 of 1981 has brought about a substantial change. The position in law as emerging after the amendment of the Act by Act 18 of 1981 is crystal clear, namely, that on the constitution of special Courts all offences under the Act are triable only by the Special Court for the Area in which the offence has been committed. Section 12AA (1) (b) provides that where a person accused of an offence under the Act is forwarded to a Magistrate under subsection (2) or sub section (2A) of section 167 of the Code, such Magistrate is empowered to authorise the detention of such person in such custody as he thinks fit for a period not exceeding 15 days in the whole where such Magistrate is a Judicial Magistrate and 7 days in the whole where he is Executive Magistrate. Clause (c) of that sub section provides that the Special Court may exercise in relation to the person forwarded to it under clause (b), the same power which a Magistrate having jurisdiction to try a case may exercise under section 167 of the Code in relation to an accused person in such case who has been forwarded to him under that section. Section 12AC says that the provisions of the Code shall apply to proceedings before a Special Court save as otherwise provided in the Act. A conjoint reading of these provisions makes it clear, that after the constitution of 579 Special Courts all offences under the Act have to be tried by that court in a summary way by applying the provisions of sections 262 to 265 (both inclusive) of the Code. The proviso places a fetter on the power of the Court in the matter of passing a sentence on conviction, namely, that notwithstanding the fact that section 7 (1) (a) (ii) prescribes a punishment extending upto seven years and fine, Special Court shall not pass a sentence of imprisonment for a term exceeding two years. It is this proviso which attracts the definition of a summons case, the trial whereof must be undertaken in accordance with the procedure out lined in Chapter XX of the Code. Chapter XXI of the Code deals with Summary Trials. Section 262 of the Code which outlines the procedure for summary trials in terms states that the procedure specified in the Code for the trial of summons case shall be followed, except otherwise provided. Section 16.7 (5) says that if in any case triable as a summons case, the investigation is not concluded within a period of six months from the date on which the accused came to be arrested. the Magistrate shall make an order stopping further investigation into the offence unless the Magistrate, for special reasons and in the interests of justice considers it necessary to permit continuation of the investigation. The prosecution in question being a summons case triable in a summary manner as per procedure outlined in sections 262 to 265 of the Code, which in turn attracts the procedure meant for summons case, it is obvious that the power conferred by sub section (5) of section 167 can be invoked by the Special Court by virtue of clause (c) of section 12AA (1) of the Act which in terms states that the Special Court may exercise the same powers which a Magistrate may exercise under section 167 of the Code. Thus a special Court is expressly empowered by clause (c) of section 12AA (1) to exercise the same powers which a Magistrate having jurisdiction to try a case may exercise under section 167 of the Code in relation to an accused person who has been forwarded to him under that provision. We have, therefore, no manner of doubt that the High Court was right in concluding that section 167 (5) of the Code was attracted in the present case and the Special Court was entitled to exercise the power conferred by that sub section. That being so the view taken by the Division Bench of the Calcutta High Court in the case of Jnan Prakash (supra) insofar as it relates to the application of section 167 (5) to an offence under section 7 (1) (a) (ii) of the Act triable by the Special Court constituted under section 12A of the Act cannot be doubted. That is also the view of the High Court of Andhra Pradesh in the case of Public Prosecutor, High Court of Hyderabad (supra). Therefore, the Special Court can stop further investigation into the offence if the investigation is not concluded within a period of six month from the day of arrest of the accused person unless for special reasons and in the interest of justice the continuation of the investigation beyond that period is necessary. In the present case the officer making the investigation had not sought the permission of the Special Court to continue with the investigation even after the expiry of six months. The object of 580 this sub section clearly is to ensure prompt investigation into an offence triable as summons case to avoid hardship and harassment to the accused person. Both the High Courts of Calcutta and Andhra Pradesh have taken the view that after the amendment of the Act by Act 18 of 1981 and the introduction of section 12AA the power conferred on the Magistrate under section 167 (5) of the code is exercisable by the Special Court constituted under section 12A of the Act. We also concur with the High Court of Calcutta that the two decisions rendered by the learned Single Judges of that Court earlier in point of time did not lay down the correct law. Similarly the Division Bench of the High Court of Andhra Pradesh was also right in holding that sub section (5) of section 167 of the Code would be applicable to prosecutions under the Act triable by the Special Court. The taxes us to the question whether the Special Court can,beside directing stoppage of investigation, entertain and act on a charge sheet or a police report submitted under section 173 (2) of the Code in such cases. The expression 1 police report ' has been defined under the Code to mean a report forwarded by a police officer to a Magistrate under sub section (2) of section 173 [section 21. Section 173 lays down that every investigation under Chapter XII shall be completed without unnecessary delay and as soon as it is completed, the officer incharge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government. It will thus be seen that the police report under section 173(2) has to be submitted as soon as the investigation is completed. Now, if the investigation has been stopped on the expiry of six months or the extended period, if any by the Magistrate in exercise of power conferred by sub section (5) of section 167 of the Code, the investigation comes to an end and, therefore, on the completion of the investigation section 173(2) enjoins upon the officer in charge of the police station to forward a report in the prescribed form. There is nothing in sub section (5) of section 167 to suggest that if the investigation has not been completed within the period allowed by that sub section, the officer in charge of the police station will be absolved from the responsibility of filing the police report under section 173(2) of the Code on the stoppage of the investigation, The High Court of Andhra Pradesh rightly observed in paragraph 13 of the Judgment as under: "Under the new Code in addition to definition for investigation ' in section 2(h), a separate definition for 'police report ' is given by section 2(r). This coupled with the newly introduced sub section (5) of section 167 brings out the distinction between investigation by the police and the police report on which a court is to take cognizance. The report cannot now be said to be an integral part of 581 investigation. The introduction of section 167 (5) in the Code, cannot have the effect of invalidating the investigation done within the period of six months or enabling the court to stopping the filing of police report under section 173 (2). If the investigation done during the period of six months discloses an offence, a police report may be founded on it and the court can take cognizance of the same." in Hussainara Khantoon & Ors. vs Home Secretary State of Bihar, Patna 1 9791 3 SCR 760 this Court held that the investigation done within the period of six months is not rendered invalid merely because the investigation is not completed and further investigation is stopped. The exact words used are: ". . in such a case the Magistrate is bound to make an order stopping furthe r investigation in that event, only two courses would be open: either the police must immediately proceed to file a chargesheet, if the in vestigation conducted till then warrants such a course, or if no case for proceeding against the under trial prisoner is disclosed by the investigation, the undertrial must be released forthwith from detention. " We, therefore ,concur with the view taken by the Andhra Pradesh High Court in this regard. In the result we partly allow this appeal. While we agree with the view taken by the High Court of Calcutta that in the case of an offence punishable under section 7(1) (a) (ii) of the Act which is tried by a Special Court constituted under section 12A, the provision of sub section (5) of section 167 of the Code gets attracted if the investigation has not been completed within the period allowed by that sub section but we find it difficult to sustain that part of the order of the High Court by which the order of the Special Court taking cognizance of the offence on the police report, i.e., charge sheet submitted under section 173 (2) of the Code came to be quashed. We set aside that latter part of the order and hold that the Special Court was competent to entertain the police report restricted to six months investigation and take cognizance on the basis thereof. We, therefore, direct that the Special Court will proceed with the trial from that stage onwards and complete the same as early as possible in accordance with law. Appeal partly allowed.

On 16.3.1984, the police raided the business premise and godown of the respondents and sized certain essential commodities which were stored there in contravention of certain orders issued under section 3 read with section 5 of the . On the same day the respondents were arrested for the commission of an offence punishable under section 7(1) (a) (ii) of the Act. But chargesheet was submitted under section 173, Code of Criminal Procedure on 30.9.1986, after expiry of the period of six months. The Special Court constituted under section 12A took cognizance of the offence on 13.3.1987 on the basis of the charge sheet. The respondent No. 1 moved an application before the Special Court to quash the proceeding since the case was triable as a summon case in view of section 12AA (1) (f) of the , sub section (5) of Section 167 of Code of Criminal Procedure was attracted. Relying on the decision in Kanta Dey vs The State of West Bengal (1986) Calcutta Criminal Law Reporter 158, the Special Court rejected the application holding that the provision of section 167 (5) of the Code had no application to a case initiated for the commission of an offence punishable under section 7(1) (a) (ii) of the Act. 571 Respondents ' revision application against the order of Special Court was allowed by single judge of the high Court. The High Court relying on the decision in public Prosecutor, High Court of Hyderabad vs Anjaneyulu, , held that sub section (5) of section 167 of the Code stood attracted. On the High court quashing the prosecution, the respondents were discharged. The present appeal by special leave was filed by the State against the order of the High Court. On the questions, 1 whether a Special Court constituted under "Section 12A of the is empowered to exercise powers under section 167 (5) of the Code of Criminal Procedure, 1973 in relation to an accused person forwarded to it under section 12AA (1) (b) of the Act and (ii) whether a Special Court can take cognizance of the offence and proceed to try and punish the accused person, notwithstanding the fact that the charge sheet is filed after expiry of the period of six months from the date of arrest of the accused person?", partly allowing the appeal, this Court, HELD: 1.1. From the plain language of the provisions, introduced by Act 18 of 1981 the legislature desired to ensure that all offences under the Act were tried by the Special Court constituted under section 12A in a summary manner applying the provisions of sections 262 to 265 of the Code and further provided that in case of conviction the sentence shall not exceed two years, bringing the offence within the definition of a summons case under the Code. But for the insertion of section 12A in its present form and section 12AA, the offence under section 7 (1) (a) (ii) of the Act would have attracted the definition of a warrant case. (578 D) 1.2. The avowed object of these legislative changes was expeditious disposal of offences under the Act by Special Courts employing summary procedure and applying the provisions of the Code to such trials save as otherwise provided. This enabled the special Courts to take cognizance of the offences under the Act without a formal order of commitment. (578 C) 1.3. After the constitution of Special Courts all offences under the Act have to he tried by that court in a summary ways by applying the provision,% of section. . 262 to 265 (both inclusive) of the Code. The proviso places a fetter on the power of the Court in the matter of passing a sentence on conviction, namely, notwithstanding the fact that section 7(1) (a ) (ii) prescribes a punishment extending upto seven years and fine, Special Court shall not pass a sentence of imprisonment for a term exceeding two years . It is this proviso which attracts the definition of a summon case, the trial whereof must he 572 undertaken in accordance with the procedure outlined in Chapter XX of the Code. (579 A B) 1.4.Section 167 (5)says that if in any case triable as a summons case,the investigation is wit concluded within a period of six months from the date on which tile accused came to he arrested, the Magistrate shall make an order stopping further investigation into the offence unless the Magistrate for special reasons and in the interest of justice considers it necessary. to permit continuation of the investigation. (579 C) 1.5. The object of sub section clearly (5) of Section 167 is to ensure prompt investigation into all offence triable as summons case to avoid hardship and harassment to the accused person. (646 C) 1.6. The prosecution in question being a summons case triable in a summary manner as per procedure outlined in sections 262 to 265 of the Code which in turn attracts tile procedure meant for summons case, it is obvious that the power conferred by sub section (5) of section 167 can be invoked by the Special Court by virtue or clause (c) of section 12AA (1) of the Act which in terms states that the Special Court may exercise the same powers which a Magistrate may exercise under section 167 of the Code. Thus a special Court is expressly empowered by clause (c) of section 12AA (1) to exercise the same powers which a Megistrate having jurisdiction to try a cast may exercise under section 167 of the Code in relation to an accused person who has been forwarded to him under that provision. (579 1)) 1.7. The High Court was right in concluding that section 167(5) of the Code was attracted in the present case and the Special Court was entitled to exercise the power conferred by that sub section. (579 F) 1.8. In the case of an offence punishable under section 7(i) (a) (ii) of the Act which is tried by a Special Court constituted under section 12A, the provision (of sub section (5) of section 167 of the Code get attracted if tile investigation has not been completed within the period allowed by that sub.section. (582 F) 1.9. The Special Court was competent to entertain the police report restricted to six months investigation and take cognizance on the basis thereof Therefore the Special Court is directed to proceed with the trial from that stage on wards and complete the same as early as possible in accordance 573 with law. (582 G) Kanta Dev vs The State of west Bengal, (1986) Calcutta Criminal Law Reporter 158 (1986) 1 CHN 267 and Babulal Agarwal vs State, (1987) 1 CHN 218, overruled. (639 B C) Jnan Prakesh Agarwala vs State of West Bengal, (1992) 1 CHN 218 and Public Prosecution High Court of Hyderabad & etc. vs Ajnaneyulu and etc. , , approved. Hussainara Khantoon & Ors. vs Home Secretary State of Bihar, Patna, ; , referred to. (639 H, 647 F)

Appeal No. 355 of 1981. From the Judgment and Order dated 27.10.1980 of the Delhi High Court in S.A.O. No. 241 of 1979. G.L. Sanghi and S.L. Aneja for the Appellant. K. Parasaran, Gopal Subramanium, Arvind Verma and Mukul Mudgal for the Respondent. The Judgment of the Court was delivered by PUNCHHI, J. For the view we take in this appeal by special leave and leaning as we would be on our discretion ary power under Article 136 of the Constitution, no elabo rate details are necessary of the facts involved therein and for its disposal by a brief order. The appellant, Subhash Mehta, more than two decades ago obtained a residential lease of the first floor in premises bearing No. D 32, South Extension, Part II, New Delhi from Dr. S.P. Choudhary (now dead) the landlord who was himself residing on the ground floor thereof. The settled rent was Rs.800 per mensem. The landlord on 508 November 27, 1972 served a notice on the tenant demanding arrears of rent from September 1, 1972 onwards. The demand having not been met he instituted an eviction petition before the Rent Controller, Delhi on March 13, 1973 on grounds of non payment of rent as also on other grounds. On June 1, 1973 the Rent Controller passed an order under section 15(1) of the Delhi Rent Control Act, 1958 (hereinaf ter referred to as the 'Act ') directing the tenant to depos it arrears of rent within one month from the date of the order and further to pay month to month rent by the 15th of every calendar month. The appellant, within the period allowed, deposited Rs. 10,000 to cover arrears of rent as well as to cover future rent uptill September 15, 1973. Thereafter neither on October 15, 1973 nor on November 15, 1973, did the tenant deposit monthly rent as required by the aforesaid order of the Rent Controller. He was alleged to have defaulted on that count. Yet on December 1, 1973 he made a deposit of Rs.2,800 partly covering the default of the previous period. The landlord took objection to the late deposit and after much debate the Rent Controller struck off the defence of the appellant. The Rent Appellate Tribunal, Delhi set aside the order of the Rent Controller striking out the defence of the tenant on appeal by the tenant and remitted the case back to the Rent Controller for further proceedings. Second appeal to the High Court of Delhi by the landlord was dismissed. The Additional Rent Controller who became seisin of the matter on remand went into all the grounds as originally raised in the eviction petition; the other grounds, besides the tenant being in arrears of rent, being sub letting, conversion of the user of premises from residential to commercial, the tenant having acquired vacant possession of a residential house in M 18, Green Park Extension, New Delhi and for bona fide requirement of the daughter of the land lord who being a student of M.B.B.S, was expected to set up medical practice. The Additional Rent Controller by his order dated December 12, 1978 ordered eviction of the tenant on the sole ground of non payment of future rent in terms of his order passed under section 15(1) of the Act, granting the tenant two months ' time to vacate the premises. The other grounds of eviction were rejected. The tenant 's appeal before the Rent Control Tribunal centered round the sole question of delayed payment of arrears of rent and of the scope and rigour of section 15(1) of the Act. In assailing the order of the Additional Rent Controller, reliance was placed by the tenant on a judgment of this Court in Hem Chand vs Delhi Cloth Mills, to contend that even if the tenant had not strictly complied 509 the terms of the order made under section 15(1) of the Act in as much as depositing future rent late it was not impera tive in all events of the defence of the tenant being struck off and a fair amount of discretion had been left with the Rent Controller under section 15(7) which should have been exercised in his favour and before his defence was to be struck off the Rent Controller had to come to the view that his conduct was wilful or contumacious in disobeying the order made under section 15(1) of the Act, and which in the instant case he had failed to record. Even being aware of these principles the Rent Control Tribunal on August 18, 1979 dismissed the appeal observing that no infirmity in the order of the Additional Rent Controller could be found. On the same lines and reasoning second appeal of the tenant was dismissed by the High Court of Delhi on October 27, 1980 keeping maintained the ejectment of the tenant for non compliance of the order made under section 15(1) of the Act. This has led to the instant appeal on the grant of special leave. The landlord Dr. S.P. Choudhary as hinted earlier died in the year 1981 during the pendency of this appeal leaving behind a widow and a daughter; the latter now being a divor cee rearing a minor son. This is the uncontroversial asser tion of the successor landlords. The eviction order in their favour has been assailed by Mr. Sanghi, learned counsel for the tenant appellant on the strength of the decision of this Court in Ram Murti vs Bhola Nath and Another, stressing the point that the words 'as required by section 15(1) of the Act ' occurring in sub section (7) of section 15 must be construed in a reasonable manner and that the said provision confers a wide discretion on the Rent Controller not to strike off the defence of the tenant which indicates that defences could still be open to the tenant under the Act to claim plain protection under section 14(2) thereof. In that case this Court ruled that the Rent Con troller necessarily by legal implication has power to con done the default on the part of the tenant for deposit of future rent or to extend time for such deposit. On the said plea advanced on behalf of the tenant the result sought to be achieved is that the delay in making deposit of future rent be excused saving him from eviction. The tenant had before the Rent Controller while explaining cause for late deposit of future rent put up the plea that the counsel present at the time of the passing of the order under sec tion 15(1) in place of his engaged counsel had only intimat ed to him about the payment of arrears of rent and not about the deposit of future rent by the 15th of every calendar month. On that basis the order of eviction was sought to be upset by accepting such plea of the tenant. On the other hand, learned counsel for the successor landlords 510 tactically took shelter behind the other grounds of eviction which were rejected by the Additional Rent Controller and besides raising them vehemently before us projected that in the facts and circumstances of this case and the subsequent events which have come by, this Court should refrain from interfering in the matter under Article 136 of the Constitu tion. On such stance adopted it is plain that the ground on which eviction has been maintained before the Tribunal and the High Court concurrently the successor landlords seeming ly had an uphill task to have it maintained in view of Ram Murti 's case (supra). Yet, without conceding on that score other grounds of eviction were pressed despite opposition by learned counsel for the tenant that these grounds were neither pressed in the court of the Rent Control Tribunal nor in the High Court while supporting the order of eviction and no cross appeals in these two forums were filed by the landlord, which if serious he legitimately could. It is true that the Tribunal and the High Court are both silent on the point. The order of the Additional Rent Controller suggests that the tenant is an industrialist. His finding is that within the years 1971 to 1974 he was active in incorporating three companies and that he was a proprietor of M/s. Globe Marketing and Management Limited, a Director of M/s. Sports Equipment Private Limited and again a Director in M/s. Indian Consultants Private Limited. His further finding is that while living in the demised premises he had floated these companies and later taken in other directors. In so far as the latter two companies were concerned, this act of the tenant was not sub letting, assigning or parting with the possession of the disputed premises as held by the Rent Controller. Sequelly the finding further recorded was that there was no misuser of the disputed premises inasmuch as the respective offices run by the companies therein had caused no damage to the premises. With regard to the fact that the tenant had acquired another premises at M 18, Green Park Extension, New Delhi the Rent Controller took the view that factually the father of the tenant had acquired the same and the tenant could not live in that premises with his father as a matter of right. Lastly with regard to the bona fide requirement of the landlord the Rent Controller took the view that the landlord 's family comprising of himself, his wife and daughter had sufficient accommodation in their possession even though his daughter had to estab lish practice as a doctor. The additional plea of the suc cessor landlords as given out in their counter affidavits now is that the telephone connections standing in the name of afore referred three companies, with which the tenant is intimately connected, are at the demised premises as per the Mahanagar Telephone Nigam Directory 511 and that the tenant is a rich and well:connected industrial ist deserving no protection of the rent laws, misplacedly sought by him. We have pondered over the matter and have weighed every aspect of the case. The facts and circumstances now emerging are that the successor landlords are two ladies; one a widow and the other a divorcee. If we were to allow the appeal by releasing and relaxing the rigour of the order of eviction relying on Ram Murti 's case, we unhesitatingly then would take the step to have the matter remitted back at an appro priate stage where the successor landlords could convenient ly have the other grounds of eviction adjudicated upon and overrule the objection that the landlord could have filed an appeal before the Rent Appellate Tribunal and the High Court seeking eviction of the tenant on grounds other than the ground on which the eviction was ordered. This course, however, appears to us to be not only unfair and unreasona ble in the facts and circumstances of this case but time consuming and inequitous as well to the successor landlords who, as said before, are two ladies brought in the fray by operation of law. Now since almost eighteen years have passed by, we feel there should be an end to the dispute and this course is in the interest of all concerned as well as the State. Instead of putting the parties to a fresh bout of litigation we would in these circumstances prefer and opt to let remain the order of eviction sustained however on slen der ground, and consequently order dismissal of this appeal but without any order as to costs. Still we do not wish to dislocate the appellant abruptly, concerned as we are for him also, and for that purpose grant him sufficient time ending on March 31, 1991 for vacating the premises subject to his giving an undertaking before this Court for vacation on or before the said date but on payment of rent to the landlords as has fallen due for the period uptill and by March 31, 1990 and future monthly rent by the tenth of each calendar month. Let the undertaking be filed by March 10, 1990 in the Registry in the usual manner. P.S.S. Appeal dismissed.

In the proceedings for eviction under the Delhi Rent Control Act, 1958 for arrears of rent, subletting, conver sion of user from residential to commercial and bona fide need, the appellant tenant committed breach of the Control ler 's directions under section 15(1) of the Act in the matter of payment of monthly rent. Consequently, his defence was struck off and the suit decreed on the sole ground of de layed payment of future rent. All the other grounds were rejected. The tenant assailed the order before the Rent Control Tribunal relying on Hem Chand vs Delhi Cloth Mills, on the rigour of section 15(1) of the Act. The Tribunal found that there was no infirmity in the order. The High Court maintained the ejectment. In the appeal by special leave, it was contended for the appellant on the strength of the decision in Ram Murti vs Bhola Nath, that section 15(7) of the Act con fers a discretion on the Rent Controller not to strike off the defence of the tenant and consequently the delay by him in making deposit of future rent should have been excused, and that since no cross appeals were filed by the landlord against the rejection of other grounds in the court of the Rent Control Tribunal or in the High Court nor those grounds were pressed in these two forums by the landlord, those grounds were no more available to him. The landlord died during the pendency of the appeal and his widow and divorced daughter respondent succeeded to him as landlords. It was contended for them that the tenant was a rich and well connected industrialist deserving no protection of the rent laws. Dismissing the appeal, the Court, HELD: 1. If the appeals were to be allowed by releasing and relaxing the rigour of the order of eviction, the matter then would have to be 507 remitted back at an appropriate stage where the successor landlords could conveniently have the other grounds of eviction adjudicated upon, by overruling the objection that the landlord could have filed an appeal before the Rent Control Tribunal and the High Court seeking eviction of the tenant on grounds other than the ground on which the evic tion was ordered. [51 lB C] 2. The successor landlords are two ladies, one a widow and the other a divorcee, brought in the fray by operation of law. Remitting the case back would not only be unfair and unreasonable but time consuming and inequitous as well to them. Since almost eighteen years have passed by there should be an end to the dispute. This course is in the interest of all concerned as well as the State. Instead of putting the parties to a fresh bout of litigation the order of eviction should, therefore, be sustained. ]51 IC E] 3. The appellant is granted time ending on March 31, 1991 for vacating the premises subject to his giving an undertaking for vacation on or before the said date and payment of rent to the landlords. [511E F]

Civil Appeal No. 225 of 1960. Appeal from the judgment and decree dated April 19, 1957, of the Madhya Pradesh High court (Indore Bench) at Indore in Civil Reference No. 1 of 1952. B. Sen, B.K.B. Naidu and I.N. Shroff, for the appellant. A. V. Viswanatha Sastri, K. A. Chitale, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for the respondents. 1961, December, 20 The Judgment of the Court was delivered by AYYANGAR, J. This appeal comes before us by virtue of a certificate of fitness granted by the High Court of Madhya Pradesh under section 47(2) of the 245 Gwalior War Profits ordinance, Samvat 2001 (hereafter called the Ordinance) on the ground that the appeal involves a substantial question of law. The question of law which arises in the appeal relates to the proper construction of r. 3(1) of the Schedule of the ordinance. The respondent M/s. Binodiram Balchand is the name under which a Hindu undivided family which wag resident in the State of Gwalior carried on various businesses in that State. Profits derived from business carried in the State were charged to War Profits Tax under the ordinance. Among the businesses carried on by the respondent was its employment as the Secretary Treasurer and Managing agent of a textile mill which was a limited company bearing the name of Binod Mills Company Limited, Ujjain. The appeal is concerned with the computation of the profits of the respondent to War Profits Tax under the ordinance, which it might be stated at the outset, was on lines very similar to the Indian Excess Profits Tax Act, 1940. The chargeable accounting period with which the appeal is concerned, is the period commencing from July 1, 1944, to. October 16, 1944. The respondent assessee submitted its return and thereafter the War Profits Tax officer by his assessment order dated July 9, 1951, determined the taxable income of the assessee for this chargeable accounting period at Rs. 12,16,145/ and assessed it to tax in the sum of Rs. 2,02,691/ . Several points were raised in relation to this assessment order by the respondent, and one of them related to the inclusion in its assessable profits of a sum of Rs. 11,09,332/ which was received by the respondent on July 5, 1944, being the dividend declared and paid by the Binod Mills Ltd" for 1943 on the shares held by the respondent. It was the contention of the respondent that this sum was its income from an investment pure and simple and was not 246 "profits" from business, and so could not be included in its taxable profits on a proper construction of the relevant provisions of the ordinance. From the assessment order the respondent filed an appeal to the appellate authority which however was unsuccessful. A revision to the Commissioner of War Profits Tax met with the same fate and thereafter the respondent prayed for a reference to the High Court under section 46(1) of the ordinance which ran thus: `46(1) If, in the course of any assessment under this ordinance or any proceeding in connection therewith, a question of law arises, The Commissioner, may; either on his own motion or on reference from any War Profits Tax authority subordinate to him, draw up statement of the case and refer it with his own opinion thereon to the High Court. " The Commissioner acceded to this request and referred for the opinion of the High Court three questions:, "(1) Whether the dividend income of Rs. 11,09,332/ received from the Binod Mills was chargeable under the War Profits Tax ordinance ? (2) Whether certain bad debts written off by the assessees could be allowed as deductions in computing profits for war tax purpose? (3) Whether the expenses of assessees ' branch at Gwalior which was defunct, could be allowed as admissible expenses ?" The High Court answered questions 2 and 3 in favour of the department, but the first question was answered in the negative and in favour of the assessee. There is now no dispute as regards questions 2 & 3 and the appeal is confined to the correctness of the answer to the first question. 247 Before setting out the grounds upon which the High court decided the reference in favour of the respondent it is necessary to read a few of the provisions of the relevant law which bear upon the point arising for consideration. The preamble to the ordinance recites that it was enacted to impose a tax on "excess profits arising out of certain businesses" and this intention is carried out by section 4(1) which is the charging section which enacts: "4(1) Subject to the provisions of this ordinance, there shall, in respect of any business to which this ordinance applies, be charged, levied and paid on the amount by which the profits during any chargeable period exceed the standard profits, an excess profit tax (in this ordinance referred to as the War Profits Tax ') which shall be equal to 60 per cent. of the aforesaid amount. " The expression `business ', the profits derived from which are thus brought to charge is defined by section 2(5) in these terms: "2(5) `business ' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacturer or any profession or vocation, but does not include a profession carried on by an individual or by individuals in partnership, if the profits of the profession depend wholly or mainly on his or their personal qualifications, unless such profession consists wholly or mainly in the making of contracts on behalf of other persons or the giving to other persons of advice of a commercial nature in connection with the making of contracts: Provided that where the functions of a company or of a society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property or both, the holding thereof shall be 248 deemed for the purpose of this definition to be a business carried on by such company or society; Provided further that all businesses to which this ordinance applies carried on by the same person shall be treated as one business for the purposes of this ordinance;" There are two further definitions which are of some relevance to the arguments addressed to us and might therefore be set out at this stage. Section 2(14) defines the expression `prescribed ' as meaning "prescribed by Rules made under the ordinance;" section 50 being the provision empowering the Government make rules and this section ran: "50(1) Subject to the provisions of this ordinance, Government may make rules for carrying out the purposes of this ordinance. (2) Rules made under this section shall be published in the official Gazette and shall thereupon have effect as if enacted in this ordinance. " The other relevant definition is of the expression profits ' which is defined in section 2 (16) as: "profits as determined in accordance with the provisions of this Ordinance and its first schedule;" There is a First Schedule which follows the ordinance and which is headed 'Rules for the computation of profits for the purposes of War Profits Tax ', and of these the one pertinent to the matter in controversy in the appeal is r. 3 of which sub rs. (1) and (2) have been relied on in the course of arguments. They run: "3(1)Income received from investments shall be included in the profits of a business liable to the War Profits Tax, unless it is proved to satisfaction of the War Profits 249 Tax Officer that the investments have no connection whatever with the business. (2) In the case of a business which consists wholly or mainly in the dealing in or holding of investments, income received from investments shall be deemed to be profits of that business, and in the case of a business, a specific part only of which consists in dealing in investments, the income received from investments held for the purpose of that part of the business shall be deemed to be profits of that part of the business. Explanation: 'The income from investments to be included in the profits of the business under the provisions of this rule shall be computed exclusive of all income received by way of dividends or distribution of profits from a company carrying on a business, to the whole of which the Section of the Ordinance imposing the War Profits Tax applies". Pausing here, it is necessary to mention that in relation to the first question regarding the inclusion of the dividend income in the taxable profits of the assessee three contentions were raised on behalf of the respondent which are thus set out in the judgment under appeal: "(1) The assessees did not deal in shares and their holdings in the Binod Mills Limited, were purely in the nature of investments, having no connections with their business as defined in Section 2(5) read with Rule 1 of Sch. I of the Gwalior War Profits Tax Ordinance. The business of the Secretaries, Treasurers and Agents of the Binod Mills Limited, which was carried on by them did not require any holding of the shares of the company and 250 was not dependent on their investment in the said company. (2) The dividend income accrued or arose from the profits of the Binod Mills Limited, and as the Ordinance applied to the business carried on by this company, the dividends were excluded under the explanation to Rule 3(1) of Schedule I. (3) The dividend income should be considered as income of the full accounting period, i.e. from Diwali of 1943 to Diwali of 1944 and should be apportioned on that basis. " The learned Judges of the High Court dealt only with the first of the above contentions, and having accepted it, considered it unnecessary to express any opinion on the other two. We may now proceed to state the grounds upon which the learned Judges of the High Court answered this contention in favour of the respondent. It was urged before them by the respondent that though the provisions headed 'Rules for the computation of business ' purported to be part of the Ordinance itself as forming the Schedule to the Ordinance, they were in reality rules made by government under the rule making power conferred on it by section 50 of the Ordinance, This argument was accepted apparently being aided by the fact that immediately after the title "Schedule I" occur the words "See Section 2(14)". Proceeding on this basis the reasoning of the learned Judges was on these lines. The charge under section 4(1) was on the profits of a business and unless an activity which resulted in any income derived was one in the nature of trade, the mere fact that income was derived therefrom would not make it assessable to tax under the ordinance. This they deduced from an interpretation of the words used in the charging section read in conjunction with the definition of "profits" in section 2(16). The next question was whether 251 the dividend which the respondent obtained from the shares held by it in the Binod Mills Ltd., of which it was the Secretary, Treasurer and Managing agent were profits derived by any business activity. Unless the acquisition of the shares was an adventure in the nature of trade or the respondent was a dealer in shares, such that the shares held by it were part of its stock in trade, the income derived therefrom by way of dividends could not be characterised as profits from business. If this was the result on a proper construction of the Act the question the learned Judges addressed themselves to next was, whether r. 3(1), which according to them was a piece of subordinate legislation, could validly bring to charge an item of income which was not within the scope of the Ordinance itself, and this had necessarily to be answered in the negative. They consequently held that r. 3(1) of the 1st Schedule was beyond the power of the rule making authority under section 50 of the Ordinance and answered the first question referred to them in favour of the assesssee. Mr. Sen, learned Counsel for the appellant has however placed before us material to show that Sch. I containing the rules for the computation of profits were not rules made by the Government under section 50 of the Ordinance but was really part of the Ordinance itself. In the first place, it has to be noted that section 2(16) speaks of Sch. I to the Ordinance, and admittedly besides the one now produced before us there was no other Schedule attached to the Ordinance. It is impossible to hold that with section 2(16) in the form in which we now find it, the rules for the computation of the business did not form part of the Ordinance having been enacted simultaneously as part and parcel thereof. In this connection it might be pointed out that the Excess Profits Tax Act, 1940, which formed the basis or model upon which the Ordinance was fashioned has 252 a similar Schedule headed "Rules" for the computation of profits" and the Schedule formed part of that Act. The only ground for even a suspicion that Sch. I was not a part of the Ordinance itself is the reference to section 2 (14) in the heading of these rules just below the words Schedule I, but very little assistance can be sought from this reference, because section 2(14) in not itself the source of power for making rules which is section 50 of the Ordinance and, in fact, rules have been made under the power conferred by section 50 of the Ordinance; vide War Profits Tax Rules Samvat 2001, No. 65 dated December 26, 1944, which carries the recital in the following terms: "In exercise of the powers conferred by section 50 of the War Profits Tax Ordinance the Government of Gwalior are pleased to make the following rules. " It is obvious therefore "section 2(14) in Sch. I is a mistake or a misprint for "section 2(16)" and it might be noted that in the corresponding Schedule to the Indian Excess Profits Tax Act, 1940, immediately after the title "Schedule I" occur the words "See section 2(19)" which in that enactment corresponds to section 2(16) of the Ordinance. There are other circumstances to which Mr. Sen has drawn our attention which also point to the Schedule being part of the Ordinance and not rules made under section 50. The Schedule was the subject of amendments more than once and each time this was done it is significant that this was done not by virtue of the exercise of the rule making power under section 50 of the Ordinance but by further ordinances showing clearly that the Schedule was part of the Ordinance itself. To give just a few example, the Explanation to r. 3(2) which we have extracted earlier was not in the Schedule as originally enacted but was introduced as 253 an amendment by Ordinance No. 42 dated February 28, 1946. The short title of this Ordinance runs: "This Ordinance might be called the Gwalior War Profits Tax (Amendment) Act, Samvat 2002". Further it would be noticed that in the Explanation there is a comma after the words "carrying on a business". That comma was not there when the schedule was amended by the Amending ordinance of February 28. 1946, but was introduced by Ordinance 5 of Samvat 2004 and the short title of this second Ordinance reads: "This Ordinance might be called the Gwalior War Profits Tax (Amendment) Ordinance Samvat 2004". We do not consider it necessary to dilate on the point as we are clearly of the opinion that the Schedule was part of the Ordinance and has therefore to be read not as subordinate legislation under r. 50 but as part and parcel of the Ordinance itself. The whole basis therefore of the reasoning upon which the learned Judges of the High Court proceeded falls to the ground and the only question is whether accepting the respondent 's case that the shares held by it in the Binod Mills Ltd. were really part of its investments, these investments have "any connection" with its business. It is common ground that the respondent was the Secretary, Treasurer and Managing agent of the Binod Mills and what we are now concerned with are the shares held by it in that company. In the case of every assessee who carries on a business activity and is in receipt of profits from that business, on the terms of r. 3(1) income from every investment held by him is liable to be included in the profits assessable to tax unless such person was able to satisfy the 254 revenue authorities that the investments had "no connection whatever" with his business. Mr. Viswanatha Sastri, learned Counsel for the respondent sought to overcome this position by submitting that the "connection" contemplated by the rule was a direct "connection" and not a remote or fanciful one and that in the present case there was really no connection between the respondents ownership of these shares and the office of managing agent which it held. His contention was that except the fact that the recipient of the profits from the "business" of managing agency and of the dividend income was the same, there was no other connection between the one and the other. In further elaboration of his point, he invited us to hold that the "connections would be direct only where the investment was related to a business activity as cause and effect or as a sine qua non. Thus if it was a requirement either of the Articles of Association of the company or of the Managing Agency Agreement, that the managing agent should be a shareholder, or the holder of specified number of shares, then alone, learned Counsel contended, the managing agent being dependent on the shareholding, there would be that connection which would bring the dividend income with in the expanded definition of profits from business under r. 3(1). In all other cases where shares were held, without the assessee being obliged to hold them for the purpose of his business activity, no distinction, Counsel submitted, could be drawn between the investment in the shares of a company with which he had nothing to do, and a company which he managed under an agreement. Learned Counsel further stressed that the case of the respondent was stronger because the Managing Agency Agreement with the respondent was to last so long as the respondent firm existed and carried on business in that name and could not be terminated by the company "save and except when the agent being 255 found guilty of fraud in the Management or in the discharge of their duties." and having regard to this security of tenure which the respondent enjoyed, the holding of these shares had no connection whatever with the business of managing agency. We find ourselves unable to accept this interpretation of r. 3(1). The relevant words in the rule being "any connection whatever" it would not be giving proper effect to the meaning of the words "any" and "whatever" to restrict it to cases of "direct connection" in the sense suggested on behalf of the respondent. But this apart, by the number of shares which the respondent owned in the mills it is admitted that it obtained a controlling interest it held the majority of the shares in the company. The respondent was therefore enabled by reason of this investment to control the action of the company which was the other party under the Managing agency Agreement. This control was capable of being used to further the interests of the Managing agent in its relations with the company and whether or not this was used for obtaining advantages, it would certainly be available for avoiding any disadvantages arising from misunderstandings with the company. It could not be denied that the control would certainly be useful to keep the relations between the company and the Managing agent smooth so as to enable the Managing agent to earn his commission etc. without differences or disputes. Even if therefore the word "connection" in r. 3(1) meant a "direct" connection a construction which we do not adopt it appears to us that the present case satisfied even that test. In any event the "connection" is not anything remote, fanciful or imaginary, but on the other hand real and capable of being turned to good account. It certainly cannot be equated with the holding of shares by the respondent in a company with which he had no connection other than as a shareholder. 256 We are therefore of the opinion that the dividend received by the respondent from the Binod Mills Ltd., was properly included by the assessing authorities in the computation of the taxable profit of there respondent under the Ordinance and that the High Court erred in answering the reference in favour of the assessee. We have already pointed out that the High Court did not deal with or express any opinion on the two subsidiary contentions urged by the respondent with reference to the first question. Those points were also naturally not argued before us and we do not express any opinion on them. It is obvious that the reference cannot be disposed of without deciding these contentions and the case would have to be remanded to the High Court for dealing with these subsidiary points. The appeal will accordingly be allowed, the judgment of the High Court set aside and the first contention in relation to question No. 1 answered against the assessee and in favour of the appellant and the case remanded to the High Court for the consideration of the other contentions with reference to that question. The appellant will be entitled to his costs here. The costs in the High Court will be provided in its final order. Appeal allowed.

Rule 3 (1) of such. I of the Gwalior War Profits Tax ordinance, Samvat 2001 provided: "Income received from investments shall be included in the profits of a business liable to the war Profits Tax, unless it is proved to satisfaction of the War Profits Tax officer that the investments have no connection whatever with the business." The respondent, a Hindu undivided family, was carrying on various businesses in the erstwhile State of Gwalior, and one of them was its employment as the Secretary, Treasurer and Managing Agent of, a limited company. The respondent held a majority of the issued shares in the company. For the accounting period July 1, 1944, to October 16, 1944, the War Profits Tax officer by his assessment order dated July 9, 1951, included in its assessable profits the sum received by the respondent on July s, 1944, as the dividend declare and paid by the company on its shares. The respondent claimed that the said sum could not be included in its taxable profits on the ground that it did not deal in shares and that its holdings in the company were purely in the nature of investments having no connection with its business as defined section 2(5) of the ordinance Gwalior War Profits ordinance and that the business of the Secretaries, Treasurers and Managing Agent of the company which was carried on by it did not require any holding of the shares of the company and was not dependent on its investment in the said company. The High Court of Madhya Pradesh took the view (1) that on a proper construction of the provisions of the ordinance, unless the acquisition of the shares was an adventure in the nature of trade or the respondent was a dealer in shares such that the shares held by it were part of its stock in trade, the income derived therefrom by way of dividends could not be characterised as profits from business, and (2) that Sch. I of the Ordinance which 244 was headed "Rules for the computation of business", though it purported to be part of the Ordinance, in reality comprised rules made by Government under the rule making power conferred on it by section 50 of the ordinance and that r. 3 (I) of the Schedule, being subordinate legislation could not validly bring to charge an item of income which was not within the scope of the ordinance itself. ^ Held that : Schedule I of the Gwalior War Profits Tax Ordinance was part and parcel of the ordinance itself and, therefore, could not be considered to be subordinate legislation as rules framed under section 50 of the ordinance (2) the word "connection" in r. 3 (1) of Sch. I of the Ordinance was not restricted to cases of "direct connection", in view of the expression "no connection whatever" in that rule; and (3) the respondent as the holder of the majority of the shares in the company, was enabled by reason of this investment to control the action of the company which was true other party under the Managing Agency Agreement, and therefore, the investment was connected with the business carried on by it within the meaning of r. 3(1) of Sch. I of the ordinance. Accordingly, the dividend received by the respondent from the company was properly included by the assessing authorities in the computation of its taxable profits under the ordinance.

Appeal No. 545 of 1965. 167 Appeal by special leave from the judgment and order dated, December 18, 1961 of the Madhya Pradesh High Court in Misc. Petition No. 247 of 1961. M. section Gupta and Yashpal Singh, for the appellant. section K. Mehta and K. L. Mehta, for the respondents. The Judgment of the Court was delivered by Shelat, J. The appellant Municipal Committee is for the vil lage Khurari, a notified area under the Central Provinces and Berar Municipalities Act, 1922. The Committee is entitled to levy and collect under the said Act and under the Rules made thereunder octroi duty inter alia on foodgrains brought into the municipal limits for sale. On March 8, 1954, respondents 1 and 2 applied for refund of octroi duty on the ground that they had exported from the municipal area foodgrains of which particulars were given in the schedule attached thereto. The appellant Committee replied that they would not be entitled to the refund unless they filed with their application the receipts of duty is sued by the Committee at the time when it was paid on the importation of the said foodgrains. It may be mentioned that it was not the case of the Committee in the said reply that the said goods were not exported by respondents 1 and 2 by rail or that they were not the same goods which were imported into the area and which were purchased by respondents 1 and 2 and on which duty would be payable by the cultivators from whom respondents 1 and 2 had purchased the said foodgrains. The Committee simply refused to pay the refund as the respondents failed to produce the said receipts. In the appeal filed by respondents 1 and 2 before the Additional Deputy Commissioner, that officer held, on a construction of rr. 27 and 34, that it would be the. person who had paid the duty when the goods were brought into the municipal area who alone could claim the refund if the goods exported by him were the same on which the duty was paid. The Board of Revenue before whom respondents 1 and 2 filed a revision application against the Deputy Commissioner 's said order held that the word 'refund ' in r. 27 meant that the person who had paid the duty could alone be entitled to claim the refund and that respondents 1 and 2 not being such persons could not apply for it. On that ground alone the Board rejected the revision application. Respondents 1 and 2 thereupon filed a writ petition in the High Court of Madhya Pradesh for quashing the said orders of the Deputy Commissioner and the Board of Revenue. The admitted facts before the High Court were, (1) that res pondents 1 and 2 had purchased the said foodgrains from certain cultivators; and (2) that those cultivators had in fact paid octroi 168 duty when they brought the said foodgrains for sale within the municipal area. The contention of respondents 1 and 2 before the High Court was that as persons who had exported the said goods they were entitled to the refund of the duty paid by their vendors, the said cultivators, ' and that the Board misconstrued the rules and was in error in refusing the refund to them. A learned Single Judge of the High Court held that under r. 9(c) a declaration had to be made if the goods were intended for consumption or use within the municipal area or if they were intended for immediate export. He observed that r. 9, however, did not 'provide for any such declaration if the goods brought into the municipal area were intended for sale. He then observed that section 27 dealt with refund of octroi on the exportation of dutiable goods outside the municipal limits and the exporter thereunder was entitled to a refund of 7/8th of the duty paid on such goods. He held that the duty having admittedly been paid on such goods by the said cultivators and respondents 1 and 2 having purchased and exported those very goods, they were entitled to the refund. On this basis he quashed the orders of the Deputy Commissioner and the Board and allowed the writ petition. In the Letters Patent appeal filed by the appellant Committee, a division bench of that High Court agreed with the Single Judge on his construction of r. 27 but as the Board had considered only one question, namely, whether respondents 1 and 2 not having themselves paid the duty were not entitled to claim the refund, remanded the case for dealing with the rest of the questions. On remand to the Board, the Committee contended, (1) that respondents 1 and 2 had to establish that duty was paid on the said goods when they, were imported into the municipal area; and (2) that they 'had also to produce the receipts of payment of such duty and that without doing so they were not entitled to the refund. The Board rejected the contention and held on the strength of rr. 42 and 43 of the said Rules that except in the case of cloth or goods produced or manufactured within the municipal area, no proof by the person claiming refund of duty paid on importation was required and that such payment would be presumed in the case of goods other than the two aforesaid kinds of goods. The Board further held that r. 27 also did not lay down that the person who has exported the goods had to prove payment of octroi on those goods when they entered the area. The Board on this interpretation allowed the revision application of respondents 1 and 2 and set aside the orders of the Committee and the Deputy Commissioner and directed payment of the refund. The Municipal Committee thereupon filed a writ petition in the High Court for quashing the Board 's order contending once again that no octroi duty had been paid on the said foodgrains. The High Court rejected this contention in view of the admission made by 169 the Committee before the Deputy Commissioner, the Board and the High Court in earlier proceedings that the goods exported by respondents 1 and 2 were duty paid. The High Court held that in view of those admissions the Committee could not require respondents 1 and 2 to produce the receipts to prove payment of the duty, apart from the fact that the rules did not require a claimant who had exported dutiable goods to produce receipts of payment of duty. The High Court further held that it was clear from rr. 28 and 29 that the amount of refund is to be determined from the quantity of foodgrains exported or from their value and, therefore, even for determining the amount of refund production of receipts by such a claimant was not necessary nor was such production required by rr. 42 and 43 except, as aforesaid, in the case of two categories of goods, viz., cloth and articles produced or manufactured within the municipal area. The High Court held that that being the position and there being no dispute as to the fact that the goods in question were duty paid and those very goods had been exported,, there was nothing in the rules which barred respondents 1 and 2 from recovering 7/8th of the duty paid on those goods. The High Court dismissed the writ petition. The Committee then filed a review petition before the High Court on the ground that it had not considered in its judgment its contention based on rr. 35 to 38 urged before it, The contention was that compliance of those rules by respondents 1 and 2 was a condition precedent to their being entitled to the refund. The High Court conceded in its judgment on the review petition that the said point was urged before it but observed that it did not deal with it as during the hearing of the writ petition it was pointed out to the counsel for the Committee that there was no substance in it. According to the High Court, rr. 35 to 37 did not require any compliance by respondents 1 and 2 as they dealt with matters to be done by the Octroi Superintendent and the Muharrir at the exit post when an application for refund is made by a person exporting the goods out of municipal limits and that the fact that respondents 1 and 2 did not present the challan at such exit post, did not debar them under the 'rules from claiming the refund. The review petition on this ground was, therefore, rejected. Aggrieved by the dismissal of its writ petition, the appellant Committee obtained special leave from this Court and filed this appeal. In view of the aforesaid decision of the Board and the High Court in the earlier stages of this litigation, most of the contentions raised by the Committee justifying its refusal to refund have by now been concluded. It cannot now be disputed (1) that respondents 1 and 2 had purchased foodgrains from the cultivators who had imported them into the municipal area for sale; (2) that those cultivators had at that time paid the duty on those food;up. C. I./68 12 170 gains; and (3) that respondents 1 and 2 had exported the identical goods by rail. Counsel for the Committee, however, urged that the view taken by the High Court was erroneous and that if the rules regarding refund were read together, it would be clear that a person claiming refund would not be entitled to it unless he has followed the procedure thereunder prescribed. To appreciate this contention it would be necessary to turn to those rules. The rules dealing with refund of octroi are rr. 27 to 43. Rule 27 provides that on exportation of dutiable goods outside the municipal limits an exporter shall be entitled to a refund equal to 7/8th of the duty paid on them at the time of their import. We do not detain ourselves on the proviso to this rule as it is not relevant for the purposes of this appeal. The object of r. 27 is clear, viz., that in case of dutiable goods, the Committee has to refund to the person who has exported them 7/8th of the duty paid thereon at the time when they were brought into the municipal limits. The rule does not require such an exporter to produce receipts of payment of duty levied at the time of their entry. Obviously, the Committee was wrong in insisting upon respondents 1 and 2 to produce receipts before they could be granted the refund, nor could it justify its demand that respondents 1 and 2 should prove that duty had been paid on the said goods at the time of their entry as the rule does not lay down any such obligation on the exporter. Rules 28 to 33 are not relevant and need not, therefore, be set out. Rule 34 provides that an application for refund is to be made in the prescribed form and that.the exporter after filling in the particulars has to present his application at the office appointed for that purpose. Rules 35 to 39 provide an elaborate procedure to be followed at the time of exportation. Rule 35 provides that on receipt of an application for refund, the Octroi Officer must, satisfy himself that the goods brought for export agree with those mentioned in the application and if satisfied, he must prepare a challan showing the amount of refund and hand it over to the exporter who then shall take the goods beyond the municipal limits. Under r. 36, the exporter has to present the challan in which the refund amount is calculated at the exit post within the time prescribed which shall not exceed twelve hours from the examination of the goods under r. 35 to their exportation. Under r. 37, the Muharrir has to check the goods at the exit post and ascertain that the goods agreed with those mentioned in the chalIan and then issue a certificate to the exporter on which the refund would be paid to him. Rule 38 provides that where the goods are not presented at the out post as provided by r. 35, the exporter may get them verified by the officer who would then make an endorsement on the application and on such endorsement made the exporter would get the refund '. Under r. 39 when goods are 171 exported by rail, the exporter has to produce the railway receipt as well as the refund challan bearing the certificate of the Muharrir at the exit post. It is clear from rr. 35 to 39 that they lay down the procedure for claiming refund. Counsel for the Committee, therefore, appears to be right in his contention that an exporter desiring to claim refund has to make his application at the time of exportation of the goods and in the manner prescribed in these rules. It appears also that there is considerable force in his contention ,that rr. 42 and 43 deal with only two categories of goods, viz., cloth and articles locally produced or manufactured and that r. 43 is confined to those two kinds of goods only and, therefore, when it provides that no further proof of duty having been paid on them is required, it means that no proof of such payment other than the one mentioned in r. 42 would be needed in respect of the said two categories of goods. In our view, r. 43 has to be read in the context of r. 42 and must, therefore, be read to mean that no further proof of payment other than the one mentioned in r. 42 would be required to respect of those two classes of goods and, therefore, r. 43 does not apply to other kinds of goods. The reason is that if r. 43 is read in the manner in which the High Court has read it, it would render rr. 35 to 39 totally nugatory, a construction which a court having to construe these rules, would be loath to adopt. It would seem, therefore, that these rules do provide a procedure which an exporter wishing to claim refund has to follow. But the question is whether in a case where an exporter has not done so, is he disentitled from claiming the refund ? The real difficulty in the way of the appellant Committee is that though the rules lay down a procedure which such an applicant has to follow, they do not provide at the same time that an applicant for refund who has failed to follow the procedure laid down in rr. 35 to 39 would be disentitled to claim the refund. In the. absence of such a provision coupled with the categorical language of r. 27 giving a right to an exporter of dutiable goods to claim 7/8th of the duty paid on such goods on their import, it becomes difficult to uphold the denial by the appellant Committee of the right of respondents 1 and 2 to such a refund. We are, therefore, of the opinion that in the present state of the rules, the appeal must fail though for reasons different from those given by the Board of Revenue and the High Court. The appeal is dismissed with costs.

The first and the second respondents purchased a quantity of foodgrains from certain cultivators who had imported them into the municipal area of the appellant Committee and, at the time of importation, had paid octroi duty on those foodgrains. The first and the second respondents exported the identical goods out of the municipal areas and there upon applied for refund of octroi duty paid on the foodgrains. The appellant Committee refused to pay the refund mainly on the ground that the respondents had failed to produce the: receipts of duty paid on the importation of the foodgrains. An appeal to the Additional Deputy Commissioner as well as the revision application to the Board of Revenue were both dismissed, but a writ petition against these orders was allowed by the High Court which held that an, exporter was entitled under r. 27 to the refund of 7/8th of the, duty paid on the goods exported. Subsequently a Division Bench, in appeal, remanded ' the case to the Board for dealing with certain other contentions raised by the appellant and after considering these, the Board get aside, the orders of the Committee and the Deputy Commissioner and directed payment of the refund. The appellant Committee then filed a writ petition challenging the ,order of the Board but this was dismissed, the High Court holding, inter alia, that the Rules did not require a claimant who had exported dutiable goods to produce receipts of payment of duty and that the amount of refund is to be determined from the quantity of foodgrains exported or from their value. The Committee appealed by special leave to this Court. It was urged on its behalf that a person claiming refund would not be entitled to it unless he had followed the procedure prescribed by rr. 27 to 43, and that this had not been done in the present case. HELD : Dismissing the appeal Though the rules lay down a procedure which an appellant seeking refund has to follow, they do not provide at the game time that an applicant for refund who has failed do follow the procedure laid down in rr. 35 to 39 would be disentitled to claim the refund. In the absence of such a provision, coupled with the categorical language of r. 27 giving a right to an exporter of dutiable goods to claim 7/8th of the duty paid on such goods on their import, it becomes difficult to uphold the denial by the appellant Committee of the right of the first ' and the second respondents to such a refund. [171 E G]

(Crl.) No. 116 of 1990. (Under Article 32 of the Constitution of India). R.K. Garg, N.D. Garg, Rajiv Kr. Garg and P.C. Choudhary for the Petitioner. U.R. Lalit and Ms. Kamini Jaiswal for the Respondents. The Judgment of the Court was delivered by VERMA, J. The short question arising for decision by us is the true meaning of Sub section (2) of Section 427 of the Code of Criminal Procedure, 1973 and its effect. For an Offence of murder committed on 17.9.1978 the petitioner, Ranjit Singh, was convicted under Section 302 I.P.C. by the Sessions Judge on 6. 3.1979 and sentenced to life imprisonment which was confirmed by the High Court of Punjab & Haryana. While the petitioner was on parole after his conviction and sentence for first murder, he was tried for the second murder committed On October 25, 1980 and convicted under Section 303 I.P.C. This conviction was altered to one under Section 302 I.P.C. and for the second murder, also the petitioner was sentenced by this Court on 30.9. 1983 to life imprisonment instead of death sentence. This Court while disposing of the. petitioner 's appeal, in this manner, directed as under: 746 "We feel that life imprisonment would be the proper sentence that should be imposed upon the appellant. We accordingly reduce the sentence of death imposed upon him and, sen tence him to suffer rigorous imprisonment for life. However, since the present murder was committed by him within a span of one year of his earlier conviction and that too when he was released .on parole we are clearly of the view that the instant sentence of imprisonment for life awarded to him should not run concur rently with his earlier sentence Of life imprisonment. We therefore, direct that in case any remission or commutation in respect of his earlier sentence is granted to him the present sentence should .commence thereafter. " The petitioner has now filed this Writ Petition under Arti cle 32 of the Constitution for issuance of a suitable writ or direction to correct,the above direction given in the 0order dated September 30, 1983 to bring it in consonance with Section 427(2) Cr. P.C. and consequently for his re lease on the ground that both life sentences had to run concurrently in accordance with Section 427(2) Cr. P.C. and he is entitled to relief because he has undergone fourteen years sentence of imprisonment with remissions at the time of filing the Writ Petition on February 19, 1990. This is how the question of construction of Section 427(2) Cr. P.C. arises in the present case. Section 427 of the Code of Criminal Procedure, 1973 is as under: "427. Sentence on offender already sentenced for another offence (1) When a person already undergoing a sentence of im prisonment is sentenced on a subsequent con viction to imprisonment or imprisonment for life, such imprisonment ' or imprisonment for life shall commence at the expiration of the imprisonment to which he has been previously sentenced, unless the Court directs that the subsequent sentence shall run concurrently with such previous sentence: Provided that where a person, who has, been sentenced to imprisonment by an order under Section 122 in default of furnishing security is, whilst undergoing such sentence, sentenced to imprisonment for an offence committed prior to the making of such order, the latter sen tence shall commence immediately. 747 (2) When a person already undergoing a sentence of imprisonment for life is sen tenced on a subsequent conviction to. impris onment for a term or imprisonment for life, the subsequent sentence shall run concurrently with such previous Sentence . ' ' Shri R.K. Garg, learned counsel for the petitioner strenu ously urged that this Court 's above quoted direction in the judgment dated 30.9.1983 passed in Criminal Appeal No. 418 of 1982 while affirming the conviction under Section 302 I.P.C. for the second murder and imposing the punishment of life imprisonment for it 'also amounts to directing that the two sentences of life imprisonment are tO run consecutively and not concurrently which is in direct conflict with Sub section (2) of Section 427 Cr. P.C. He ,urged that the life 'span of a person Could be only one and therefore ,any subsequent life sentence must run concurrently and not consecutively which is the clear mandate :of Section 427(2). On this basis, it was, urged that this Court 's direction in the above manner on the petitioner 'S conviction for the second offence of murder is contrary to Section 427(2) of the Code 01 Criminal Procedure, 1973. This is the basis of the reliefs claimed on behalf of the .petitioner. In reply, Shri U.R. Lalit. appearing. on behalf of respondents, con tended that the direction of this Court properly construed is not contrary to Section 427(2) Cr. P.C. and, therefore, the question of issuing any writ or directions claimed by the petitioner does not arise. We may straightaway mention that the question of grant of relief under Article 32 of the Constitution does not arise on the above facts. The petitioner 's incarceration is the result of a valid judicial order and, therefore, ' there can be no valid claim to the infringement of any fundamental right which alone can be the foundation for a writ under Article 32 of the COnstitution. The only question, it ap pears, therefore, is about the correct construction of the direction given by this Court in its judgment dated 30.9.1983 in Criminal Appeal No. 418 of 1982 in the fight of the true meaning of Section427(2) Cr. The meaning of a sentence of imprisonment for life is no longer res integra; It was held by a Constitution Bench in Gopal Vinayak Godse vs The State of Maharashtra and Others, ; that a sentence of transportation for life or imprisonment for life must prima facie be treated as transportation Or imprisonment for the whole of the remain ing period of the convicted person 's natural life. It was further held: 748 "Unless the said sentence is commut ed or remitted by appropriate authority under the relevant provisions of the Indian Penal Code or the Code of Criminal Procedure, a prisoner sentenced to life imprisonment is bound in law to serve the life term in prison. " The contention that a sentence of life imprisonment was to be treated as a sentence of imprisonment for a fixed term was expressly rejected. This view was followed and reiterat ed in Maru Ram vs Union of India & Ant., [1981] 1 S.C.R. 1196 while considering the effect of Section 433A introduced in the Code of Criminal Procedure, 1973 with effect from 18.12.1978. The Constitution Bench in Maru Ram summarised one of its conclusions as under: "We follow Godse 's case (supra) to hold that imprisonment for life lasts until the last breath, and whatever the length of remissions earned, the prisoner can claim release only if the remaining sentence is remitted by Govern ment. " Another conclusion in Maru Ram was that the mandatory mini mum of 14 years ' actual imprisonment prescribed by Section 433A which has supremacy over the Remission Rules and short sentencing statutes made by the various States will not operate against those whose cases were decided by the trial court before the 18th December, 1978 when Section 433A came 'into force but Section 433A would apply to those sentenced 'by the trial court after 18.12.1978 even though the offence was committed prior to that date. From these decisions it is obvious that the mandatory minimum of 14 years '. actual imprisonment prescribed by Section 433A is applicable to petitioner in respect of both sentences of life imprisonment since the conviction by the trial court even for the first murder was after 18.12.1.978, the second offence itself being committed after '18.12.1978. There is no dispute that the mandatory minimum of 14 years ' actual imprisonment, as required by Section 433A even for the first sentence of life imprisonment, has not been served out by the petitioner and, therefore, irrespective of the points raised in this petition on the basis of Section 427(2) Cr. P.C. the petitioner cannot claim relief much less a writ under Article 32 of the Constitution in the absence of the remaining sentence being remitted by the Government. This alone is sufficient to refuse any relief under Article 32 of the Constitution. The question now is of the meaning of Section 472(2) Cr. P.C, and its effect, in the present case, in view of the above quoted direc 749 tion Of this Court in its judgment dated 30.9.1983. Sub section (1) of Section 427Cr. P.C. provides for the situation when a person already undergoing a sentence of imprisonment is sentenced on a subsequent conviction to imprisonment or life imprisonment. In other words, Sub section (1) of Section 427 Cr. P.C. deals with an offender who while undergoing sentence for a fixed term is ' subse quently convicted to imprisonment for a fixed term or for life. In such a situation, the first sentence, being for a fixed term, expires on a definite date which is known when the subsequent conviction is made. , Sub section (1) says that in ' such a situation, the date of expiry of the first sentence which the offender is undergoing being known, ordinarily the subsequent sentence would commence at the expiration of the first term of imprisonment unless the Court .directs the subsequent sentence to run concurrently with the previous sentence. Obviously, in cases ' covered by Sub section (1)where the sentence is for a fixed ' term, the subsequent sentence Can be consecutive unless directed to run concurrently. Sub section (2), on the other hand, pro vides for an offender "alreadly undergoing sentence of imprisonment for life" who is sentenced on a subsequent conviction to imprisonment for a term or for life. It is well settled since the decision of this Court in Gopal Vinayaka Godse and reiterated in Maru Ram that imprisonment for life is a sentence for the remainder or the life of the offender unless the remaining sentence is commuted or remit ted by the appropriate authority. This being so at the.stage of sentencing by the Court On a subsequent conviction, the earlier sentence of imprisonment for life must be understood in this manner and, therefore, there can be no question of a subsequent sentence of. impriosnment for a term or for life running consecutively which is the general rule laid down in Sub . section (1) of Section 427. As rightly contended 'by Shri Garg, and not disputed by Shri Lalit, the earlier sentence of imprisonment for life being understood to mean as sentence to serve the remainder of life in prison unless commuted or remitted by the appropriate authority and a person having only one life ' span, the sentence on a subse quent conviction of imprisonment for a term or imprisonment for life can only be superimposed to the earlier life sen tence and certainly not added to it since extending the life span of the offender or for that 'matter anyone is beyond .human might. It is this obvious situation which is stated in sub section (2) of Section 427 since the general ' rule enunciated in sub section (1) thereof is that without the Court 's direction the subse . quent sentence will. not run concurrently, but consecutively. The only situation in which no direction of the Court is needed to make the subse quent sentence run concurrently with the previous sentence is 750 provided for in Sub section (2) which has been enacted to avoid any possible controversy based on Sub section. (1) if there be no express direction of the Court to that effect. Sub section (2) is in the nature of anexCeption to the general rule enacted in Sub section (1) of Section 427 that 'a sentence on subsequent conviction commences on expiry of the first sentence unless the Court directs it to run concurrently. The meaning and purpose of Sub sections (1) & (2)of Section 427 and the object of en,acting Sub section ?)is, therefore, Clear. We are not required to say anything regarding the practical. effect of remission or commutation of the sentences since that question does not arise in the present case. The limited controversy before us has been indicated. The only question now is of 'the meaning and effect of the above quoted direction in this Court 's judgment dated 30.9.1983 It is obvious that the direction .of this Court must be con strued to harmonise with Section 427(2) Cr. P.C. which is the statutory mandate apart from being the obvious truth. The subsequent sentence of imprisonment for life has, there fore, to run concurrently with the read as sentenceof imprisonment for life awarded to the petitioner. Thed exercise is to construe the last sentence in the direction which re under: "We, therefore, direct that in case any remission or commutation .in respect of his earlier sentence is grant ed to him the present sentence should commence thereafter. " It is in the background of this ultimate direction that the proceeding portion has to be read. This last sentence in the direction means that in case, any remission or commutation is granted in respect of the earlier. sentence. of life imprisonment alone then the benefit of that remission or .commutation will not ipso facto be available in respect of the sub. sequent sentence of life imprisonment which would continue to be unaffected by the remission or commuta tion in respect of the earlier sentence alone. In other WordS, the operation of the superimposed subsequent sen tence, of life imprisonment shall not be wiped out .merely because in respect of the corresponding earlier sentence of life imprisonment any remission or commutation has been granted by the appropriate authority. The consequence is that the petitioner would not 'get any practical 'benefit of any remission or commutation respect of his earlier sentence because of the superimposed subsequent life sen tence unless the same corresponding benefit in respect of the subsequent sentence. is also .granted tO the petitioner. It is in this manner that the direction is given for the, two Sentences of life impri 751 sonment not to run concurrently. The ultimate direction contained in the last sentence is obviously for this purpose. So construed the direction of this Court in the judgment dated 30.9.1983 in Criminal Appeal No. 418 of 1982 fully harmonises with Section 427(2) Cr. P.C. This is the clarification we make of this Court 's judgment dated 30.9. 1983 in Criminal Appeal No. 4 18 of 1982. We have already stated that this petition 'for the issuance of a writ Under Article 32 of the Constitution is untenable. We have, there ' fore, treated it as a petition for clarification of the judgment dated 30.9.1983 in Criminal Appeal No. 418 of 1982. Accordingly, the petition is disposed of with this clarifi cation. R.P. Petition disposed of.

The petitioner who was convicted under section 302 IPC on 6.3.1979 and sentenced to life imprisonment; was also tried for a second murder committed while he was on parole after his conviction and sentence for the first murder, and was convicted under section '303 IPC. Altering the conviction to one under section 302 IPC, for the second murder this Court sentenced him to life imprisonment instead of death sentence and by its judgment dated 30.9.1983 directed that in case any remission and commutation in respect of his earlier sentence 'was granted, the latter sentence should commence thereafter. The petitioner filed a writ petition under Article 32 of the Constitution. praying for his release on the ground that both the life sentences had to run concurrently in accord ance with section 1427(2) Cr. P.C., and as he had undergone 14 years sentence of imprisonment with remissions at the time of filing the writ petition on .February 19, 1990, he was entitled to be released. 'It was contended that this Court 's direc, tion dated 30.9.83 was .contrary to section 427(2) of the Code of Criminal 743 Procedure, 1973 since it amounted to directing that the two sentences of life imprisonment were to run consecutively and not concurrently. On behalf of the respondents it was contended that the direction of this Court, properly construed, was not contrary to.s. 427(2) Cr. P.C. and, therefore, the question of issuing any writ or directions as claimed by the peti tioners did not arise. Disposing of the petition treating it as one for clari fication of the judgment dated 30.9.1983 this Court, HELD: 1.1 A sentence of transportation for life or imprisonment for life must prima facie be treated as trans portation or imprisonment for the whole of the remaining period of the convicted person 's natural life unless the remaining sentence is 'commuted or remitted by the appropri ate authority. This being so at the stage of sentencing by the Court on a subsequent conviction, the earlier sentence of imprisonment for life must be understood in this manner and, therefore, there can b no question of a subsequent sentence of imprisonment for a term or for life running consecutively which is the general rule laid down in sub s (1) ors. 427, Cr. P.C. [747G; 749D E] 1.2 The earlier sentence of imprisonment for life being under stood to mean as sentence to serve the remainder of life in prison unless commuted or remitted by the appropri ate authority and a person having only one life span, the sentence on a subsequent conviction of imprisonment for a term or imprisonment for life as envisaged by section 427(2) of the Cr. P.C., can only be superimposed to the earlier life sentence and certainly not added to it since extending the life span of the offender or for that matter anyone is beyond human might. [749F G] It cannot be said that a sentence of life imprisonment is to b treated asasentence of imprisonment for a fixed term. [748B] Gopal Vinayak Godse vs The Stateof Maharashtra & Ors., ; and MaruRam vs Union of India & Anr., ; , followed. 2.1 The operation of the superimposed subsequent sen tence of Iife imprisonment should not be wiped out merely because in respect of to correspondingI earlier sentence of life imprisonment any remission or commutation was granted by the appropriate.authority. [75lF G] 744 2.2 In the instant case, the last sentence in the direc tion meant that in case, any remission or commutation was granted in. respect. of the earlier sentence of life impris onment alone then the benefit of that remission or commuta tion would not ipso facto be available in respect of the subsequent sentence of life imprisonment which would contin ue to be unaffected by the remission or commutation in respect of the earlier sentence alone. The consequence would be that the petitioner would not get any practical benefit of any remission or commutation in respect of his earlier sentence because of the superimposed subsequent life sen tence unless the same corresponding benefit in respect of the subsequent sentence was also granted to the petitioner. It was in this manner that the direction 'was given for the two sentences of life imprisonment not to run concurrently. [750E H; 751A] The subsequent sentence of imprisonment for life had, therefore, to run concurrently with the earlier sentence of imprisonment for life awarded to the petitioner. [750C D] 3. The general rule enunciated in sub,section (1) of section 427 Cr. P.C. is that without the Court 's direction the subsequent sentence will not run concurrently but consecu tively. [749G] The only situation in which no direction of the Court is needed to make the subsequent sentence run concurrently with the previous sentence iS provided for in sub,section (2) which has been enacted to avoid any possible controversy based on sub,section (1) if there being no express direction of the Court to that effect. [749G H; 750A] Sub,section (2) is in the nature of an exception to the general rule enacted under sub section (1) of section 427 0Cr. P.C. [T50A] 4.1 The mandatory minimum of 14 years ' actual imprison ment prescribed by section 433A Cr. P.C. which has supremacy over the Remission Rules and short sentencing statutes made by the various States would not operate against those whose cases were decided by the trial court before the 18th Decem ber, 1978 when section 433A Cr. P.C. 'came into force but the section would apply to those sentenced by the trial court after 18.12.1978 even though the offence was committed prior to that date. [748D E] Maru Ram vs Union of India & Anr., ; , followed. 745 4.2 In the instant case, section 433A Cr. P.C. was applicable to petitioner in respect of both sentences of life imprison ment since the conviction by the trial court even for the first murder was after 18.12.1978, the second offence itself being committed after 18.12.1978. The mandatory minimum of 14years ' actual imprisonment as required by section 433A even for the first sentence of life imprisonment was not served out by the petitioner, and, therefore, irrespective of the points raised in the instant petition on the basis of section 427(2) Cr. P.C. the petitioner could not claim relief much less a writ under Article 32 of the Constitution in the absence of the remaining sentence being remitted by the Government. [748E G] 5. The petitioner 's incarceration was the result of a valid judicial order and, therefore, there could be no valid claim to the infringement of any fundamental right which alone could be the foundation for a writ under Article 32 of the Constitution. [747E F]

Civil Appeal No. 559 of 1960. Appeal by special leave from the judgment and order dated May 1/14, 1957, of the Income Tax Appellate Tribunal of India (Delhi Bench) in I.T.A. No. 2070 of 1956 57. K.N. Rajagopal Sastri and D. Gupta, for the appellant. Radhey Lal Agarwal and P.C. Agarwal for the respondents. 867 1962. January 29. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal against the order of the Income tax Appellate Tribunal, Delhi Bench, dated May 1/14, 1957, by which the tribunal, reversing the order of the Appellate Assistant Commissioner, held that a loss arising from the sale of certain shares by the respondent Company was a capital loss. Subsequent to the order of the Tribunal impugned here, the Commissioner of Income tax, New Delhi, who is the appellant before us, had moved the Tribunal for a reference to the High Court on certain questions of law said to arise out of the order of the Appellate Tribunal. That application was found to be barred by one day, and since, under the law, the Tribunal had no jurisdiction to extend the time, the application was dismissed. Against the decision of the Tribunal, an application was filed in the High Court under section 66(3) of the Income tax Act; but the High Court dismissed the application, agreeing with the Tribunal that the application to the Tribunal for a reference was barred by time. The Commissioner of Income tax then applied for special leave against the order passed by the Tribunal in the appeal before it, and the present appeal, with special leave, has been filed. Before we examine the merits of the case, we shall deal with a preliminary objection raised on behalf of the respondent that the appeal is incomepetent, in view of the decision of this Court in Chandi Prasad Chokhani vs State of Bihar (1) where it was held that this Court would not entertain an appeal directly from an order of the Tribunal by passing the decision of the High Court, except in very exceptional circumstances. The appellant relies upon the decision of this Court in Baldev Singh vs Commissioner of Income tax (2), and contends 868 that the exceptional circumstances existing in the latter case and adverted to in the former, govern the present case. The facts relating to the filing of the application for reference together with the relevant dates are these: The Tribunal 's order was passed by two learned Members, who signed their respective orders on different dates. The Accountant Member signed his order on May 1, 1957, and the Judicial Member, on May 14, 1957. The notice of the order was sent to the Commissioner of Income tax, New Delhi, and reached his office by registered post on July 15, 1957. It was received by one Motilal Pathak, a clerk in the office of the Commissioner. Motilal 's affidavit shows that, he suddenly fell ill, and had to take casual leave for the day. He returned to the office the next day, and dealt with the notice received from the Tribunal. By a mischance, which is easy to appreciate, the date stamp of the receipt of the papers was affixed on the 16th, and bore that date instead of the real date, viz., the 15th, on which the papers had actually been received. Relying upon the date stamp, everybody took it for granted that limitation would expire on the 60th day, counting time from July 16, 1957. The application was filed on the last day of limitation on that supposition. Actually, the application was barred by a day. The Income tax Tribunal, therefore, dismissed the application on December 4, 1957. The decision of the Tribunal was unsuccessfully challenged before the High Court. It is evident that the decision of the Tribunal was quite correct, and the Tribunal had no option but to dismiss the application, since the law gives no jurisdiction to the Tribunal to extend limitation, as is done under section 5 of the Indian Limitation Act. This Court then granted special leave against the order of the Tribunal passed in the appeal 869 before it, and the question is whether the appeal should be heard or the leave revoked, in view of the decision in Chokhani 's case (1). In Chokhani 's case (1), the attempt was to bypass the decision of the High Court on a question referred to the High Court for decision and also another decision of the High Court that no other point of law arose from the order of the Tribunal. It was held that this Court would not allow the High Court to be by passed, and that an appeal from the decision of the Tribunal in the circumstances was incompetent. A similar view was again expressed in two other cases, viz., Indian Aluminium Co. Ltd. vs Commissioner of Income tax (2) and Kanhaiyalal Lohia vs The Commissioner of Income tax (3). In all the three cases, reliance was placed by the appellants therein upon the decisions of this Court in Dhakeswari Cotton Mills, Ltd. vs Commissioner of Income tax (4) and Baldev Singh vs Commissioner of Income tax (5) It was pointed out in the judgments of this Court that the two cases relied upon were decided on the special circumstances existing there. In the first, there was a question of breach of the principles of natural justice, which could not be raised otherwise than by an appeal with the special leave of this Court. In the second case, it was pointed out that limitation was lost by the party through no fault of his, inasmuch as a letter was unduly delayed in post. In our opinion, in the present case also, special circumstances which justified the grant of special leave in Baldev Singh 's case (5), exist. There was a combination of circumstances which led to the filing of the application a day late, but in circumstances showing that the default was not due to any negligence on the part of the Commissioner of Income tax. The receipt of the notice on July 15 is admitted; but the affixing of the date stamp on the 16th was due to the failure of the 870 clerk to deal with the notice on the 15th because he fell ill and had to leave the office. It is common knowledge that date stamps are altered every day in the office, and this is done mostly by a very junior employee. The affixing of the date stamp on the 16th and the notice consequently bearing that date went unnoticed, and relying upon the date stamp, the appeal was filed, though on the last day of limitation but within time. In these circumstances, it is difficult to say that the Commissioner of Income tax was negligent and the negligence, if any, on the part of the clerk in affixing a wrong date stamp is excusable, if one considers his illness and his absence from the office on the 15th. In our opinion, this case comes within the rule of Baldev Singh 's case (1) and an appeal direct to this Court from the Tribunal 's order is justified by the special circumstances. By this appeal, no decision of the High Court can be said to be bypassed, because the decision of the High Court related to the correctness of the decision of the Tribunal on the question of limitation, which is not a question which is sought to be raised in an indirect way by the present appeal. We, therefore, overrule the preliminary objection. The assessee Company is the National Finance Ltd., New Delhi. It is a public limited Company which was incorporated in 1943. It deals in shares and securities and also as financiers. The present case arises from a deal in 3,000 shares of the Madhusudan Mills Ltd., Bombay, by the assessee Company. In the year of account, May 1, 1949, to April 30, 1950, corresponding to the assessment year, 1951 52, the assessee Company sold these shares suffering a loss of Rs. 5,48,712 8 0, which it claimed as one on the sale of its stock in trade. The Income tax Officer and the Appellate Assistant Commissioner held it to be a capital loss. The 871 Appellate Tribunal, Delhi Bench, reversed the decision, and held in favour of the assessee Company. The only question in this appeal is whether the decision of the Tribunal is right. The assessee Company belongs to a group of Companies controlled by one Lala Yodh Raj Bhalla and certain persons associated with him. It is convenient to describe these persons as the 'Yodh Raj Bhalla group '. These Companies are (1) Jaswant Sugar Mills Ltd., (2) Jaswant Straw Boards Ltd., (3) National Finance Ltd., (4) National Construction and Development Corporation Ltd., (5) Ganesh Finance Corporation Ltd., and (6) Raghunath Investment Trust Ltd. The interrelation of these. Companies is very intimate, and they are practically owned by the 'Yodh Raj Bhalla group '. To understand this, the following analysis of the shareholdings of these Companies must be sufficient: (1) Jaswant Sugar Mills Ltd. 2,00,000 shares (i) Jaswant Straw Board Ltd. 44,845 (ii) National Finance Ltd. 67,390 (iii)National Construction and Development Corporation Ltd. 47,800 _______ 1,60, 035 (i.e. over 80 per cent) (2) Jaswant Straw Board Ltd. 6,176 shares. (i) National Finance Ltd. 4,783 (ii) National Construction and Development Corporation Ltd. 500 _____ __ 5,200 odd (or nearly 84 per cent) 872 (3) National Finance Ltd. (assessee Company) 50,000 shares. Ganesh Finance Corporation Ltd. 48,000 (or over 96 per cent) (4) National Construction and Develop ment Corporation Ltd. 1,30,504 shares. Ganesh Finance Corporation Ltd. 1,30,500 (almost all) (5) Ganesh Finance Corporation Ltd. 50,000 shares. Raghunath Investment Trust Ltd. 49,795 (99.6 per cent of the capital) (6) Raghunath Investment Trust Ltd. 10,000 shares. (i) Mr. Yodh Raj Bhalla 1,500 (ii) Mrs. Bhalla 1,000 (iii) Mr. N. C. Malhotra (brother in law) 1,000 (iv) Mr. Ram Prasad (father in law) 1,000 (v) Mr. Dina Nath (Secretary) 1,000 (vi) National Finance Ltd. 3,499 (vii) Mr. Piyare Lal Saha 1 9,000 (90 per cent). The resulting position may be stated thus: Ganesh Fiance Corporation Ltd. practically owns the assessee Company and National Construction and Development Corporation Ltd., Raghunath Investment Trust Ltd. practically owns the Ganesh Finance Corporation Ltd., and 'Yodh Raj Bhalla group ' practically owns Raghunath Investment Trust Ltd. 873 Jaswant Sugar Mills Ltd. is practically owned by Jaswant Straw Board Ltd., National Finance Ltd., and National Construction and Development Corporation Ltd., and Jaswant Straw Board Ltd., is practically owned by National Finance Ltd., and National Construction and Development Corporation Ltd. Thus, the entire group is owned by a consortium, and there is no doubt about it. The shares of Madhusudan Mills Ltd. were acquired in the following circumstances: In July 1948, Mr. Yodh Raj Bhalla, who was in a position by reason of his holdings in these six Companies to influence decisions of the Board of Directors, arranged to purchase 26,547 shares of the Mills from Messrs. Bhadani Brothers, Ltd., who were the managing agents of the Mills. This block of shares represented about 80 per cent of the total issued capital of the Mills, The purchase was made at Rs. 400 per share, when the price in the market, was about Rs. 250 per share. Out of the remaining shares which were on the market 200 shares were purchased at Rs. 252 8 0 per share, which was then the quoted price. Now, these shares were purchased by Jaswant Sugar Mills Ltd., but the money for the purchase of the shares was obtained by borrowing it from some of the other concerns. These Companies, as has been shown above, were completely under the control of 'Yodh Raj Bhalla group '. The arrangement for the money was as follows: Rs. 14,75,000 borrowed from the assesee Company. Rs. 5,00,000 from National Construction and Development Corporation Ltd. Rs. 55,00,000 from the assessee Company but advanced by Ganesh Finance Corporation Ltd. 874 The shares were registered as follows: 10,500 shares registered in the name of the assessee Company. 5,400 shares in the name of the National Construction and Development Corporation Ltd., and the balance in the names of the nominees of Jaswant Sugar Mills Ltd., which meant, largely, persons belonging to the 'Yodh Raj Bhalla group '. On October 9, 1949, the assessee Company purchased 15,547 shares at Rs. 400 per share from Jaswant Sugar Mills Ltd., and the amount paid by the assessee Company was adjusted towards the purchase price and the balance was paid. On the same day, the remaining 11,000 shares were sold by Jaswant Sugar Mills Ltd. to National Construction and Development Corporation Ltd., at Rs. 400 per share. Thus, on that date Jaswant Sugar Mills Ltd. ceased to have any connection with the present matter. It may be pointed out that on the date on which the two transactions took place, the priceruling in the market was about Rs. 217 8 0. Before Jaswant Sugar Mills Ltd. parted with the shares, they. had appointed a new Board of Directors of the Madhusudan Mills Ltd., and these new Directors also belonged to the same group. The managing agency of Messrs. Bhadani Brothers Ltd. was terminated, and on the same day on which the shares were purchased from these managing agents, the assessee Company was appointed as the purchasing and selling agent of the Mills. The assessee Company made enormous profit from the acquisition of these shares by way of dividend and commission as the purchasing and selling agent. In October and November, 1948 they, however, sold 6,525 shares to Dalmia Cement and Marketing Company Ltd. at Rs. 400 per share. These shares subsequently came back to the same group; but 875 that is not a matter with which we are immediately concerned. On April 7, 1949, 4,500 shares were sold by the assessee Company to the National Investment Trust Ltd. at Rs. 181 per share resulting in a loss of Rs. 8,80,000, and on June 1, 1949, another block of 3,000 shares was sold to the National Investment Trust Ltd., at Rs. 180 per share, resulting in a loss of Rs. 5,86,312. We are not concerned with the loss arising from the first sale which was considered in the assessment year, 1950 51, and in respect of which a reference is pending in the High Court of Punjab. We are concerned with the loss in the second year relating to the assessment year, 1951 52. In that year, the loss on the sale of the shares was sought to be set off against the profits made, and the loss practically cancelled the profits. The shares which were sold by the assessee Company on the two occasioning were sold to one Amrit Bhushan (a relative of Mr. Yodh Raj Bhalla) who sold then the same day to Messrs. National Investment Trust Ltd., at the slender profits of 8 annas per share, which was brokerage. Thus, at the beginning and at the end, though numerous transactions had taken place, the shares continued to be the property of the 'Yodh Raj Bhalla group '. The question is whether the loss on the sale of the shares be set off against the profits in the year in which the sales and profits were respectively made. The assessee Company was assessed for the assessment year, 1950 51, by the Income tax Officer, Meerut. In that year, the loss of Rs. 8,78,062 8 0 arising from the sale of Rs. 4,520 shares of Madhusudan Mills Ltd. was set off against the profits of the assessee Company. The case of the assessee Company for the assessment year, 1951 52, was considered by the Income tax Officer, Central Circle V, New Delhi, to whom the cases of the other Companies above named were also transferred. By looking into the 876 affairs of these Companies, he came to learn, that the shares of the Madhusudan Mills Ltd. were purchased at a price, which was almost double the current market price, by the 'Yodh Raj Bhalla group, and were transferred at the same price to the assessee Company. He found that this was done with a view to removing Messrs. Bhadani Brothers, Ltd. from their managing agency and to securing for the assessee Company the purchasing and selling agency of the Mills. On the date of the purchase from Messrs. Bhadani Brothers, Ltd., Jaswant Sugar Mills Ltd. achieved this purpose in view of their controlling interest. Bhadani Brothers, Ltd. ceased to be the managing agents from that date, and the purchasing and selling agency of the Madhusudan Mills, Ltd. was given to the assessee Company, though it had, on that day, done no more than give a loan to Jaswant Sugar Mills Ltd. In the assessment year, 1951 52, the loss of Rs. 5,86,312 8 0 on the sale of 3,000 shares was, therefore, disallowed holding it to be a capital loss. The order of the Income tax Officer, Central Circle V, New Delhi was confirmed on appeal by the Appellate Assistant Commissioner. On further appeal by the assessee Company, the Income tax Appellate Tribunal, Delhi, reversed the order of the Appellate Assistant Commissioner, and held that the loss was a trading loss. Whether a particular loss is a trading loss or a loss on the capital side undoubtedly depends upon the facts of each case. But it has been held, over and over again, that the question is not one of pure fact, and that a mixed question of fact and law is always involved. The cases to which we shall make a reference presently, have laid down this proposition, and those cases have also indicated how the matter is to be viewed in the context of facts. In Commissioner of Income tax vs Ramnarain Sons Ltd. (1), the Company was a dealer in shares 877 and also carried on the business of acquiring managing agencies of other Companies. The Company the acquired the managing agency of a Textile Mill from Messrs. Sassoon J. David and Co. Ltd., and also agreed as part of the same transaction to buy 2,507 shares of the Mills. 1,507 shares were purchased at Rs. 2,321 8 0 per share, and the remaining 4,000 shares were purchased at Rs. 1,500 per share. These shares were quoted on the market at Rs. 1,610. Later,4,000 shares were sold at a loss of Rs. 1,78,000 This was shown in the books of the Company as a busines loss but was disallowed, as the shares were not held to be the stock in trade of the business of the Company as share dealers. On a reference to the High Court of Bombay, a Divisional Bench upheld the view of the Tribunal. Chagla,C. J., in delivering the judgment of the Court, observed that a managing agency being an asset of an enduring nature, the way to look at the matter was to enquire what was, the primary intention in acquiring the shares. The learned Chief Justice then referred to a judgment of this Court reported in Kishan Prasad & Co. Ltd. vs Commissioner of Income tax (1), where it was observed: "It seems that the object of the assessee Company in buying shares was purely to obtain the managing agency of the third mill which no doubt would have been an asset of an enduring nature and would have brought them profits but there was from the inception no intention whatever on the part of the assessee Company to re sell the shares either at a profit or otherwise deal in them." The learned Chief Justice then considered the argument that a block of shares might have to be bought, if at all, at a higher price, and observed as follows: "A dealer in shares may succeed in getting a large number of shares at a price less than 878 the market price if the seller is in difficulties and wants to get rid of his shares and to get liquid assets. But we have not heard of a dealer in shares purchasing a large number of shares at a higher value than the market value. The other circumstance which is equally strong in this case is that the shares were purchased for the acquisition of the managing agency. Therefore the real object of the assessee company was not to do business in these shares, not to make profit out of these shares, but to acquire a capital asset out of which it would earn managing agency commission and make profit." Messrs. Ramnarain and Sons. Ltd. then appealed to this Court, and the decision of the Bombay High Court was upheld. The Judgment of this Court is reported in Ramnarain Sons (Pr.) Ltd. vs Commissioner of Income tax (1). It was laid down by this Court that in considering whether a transaction was or was not an adventure in the nature of trade, the problem must be approached in the light of the intention of the assessee, having regard to the "legal requirements which are associated with the concept of trade or business". Dealing with the price above the market price which was paid in that case, it was observed: "Even assuming that the appellants acquired the entire block of 2,507 shares from M/s. Sassoon J. David & Co. Ltd. the shares transferred to the names of the directors being held by them merely as nominees of the appellants the price per share was considerably in excess of the prevailing market rate. The only reason for entering into the transaction, which could not otherwise be regarded as a prudent business transaction, was the acquisition of the 879 managing agency. If the purpose of the acquisition of a large block of shares at a price which exceeded the current market price by a million rupees was the acquisition of the managing agency, the inference is inevitable that the intention in purchasing the shares was not to acquire them as part of the trade of the appellants in shares. " The above two decisions are merely the application of a principle of long standing, which has been stated over and over again in the past. In Oriental Investment Co. Ltd. vs Commissioner of Income tax (1), that principle was reiterated, and it was that the object for which a company was formed did not invest the deal with the characteristics of a trade in shares, but that other circumstances along with that fact must be considered to find out the real object of a particular venture. Before we deal with the present case, one other case of this Court may be noticed. In Rajputana Textiles vs Commissioner of Income tax (2), the converse conclusion was reached. There, on the facts and circumstances of the case, it was held that a particular deal in shares was a commercial venture and had all the attributes of an adventure in the nature of trade. In that case, the transaction was not a single or an undivided one with a slump payment, because for the managing agency, Rs. 12,50,000 were paid separately and for the shares, a sum of Rs. 83,98,000 was paid. The two acquisitions being different, the profit on the sale of some of the shares was considered to be a gain on the revenue side. There is no doubt, whatever, that the shares of the Madhusudan Mills Ltd. were acquired at a price considerably higher than the market price. In fact, that the price paid was almost double. Such a deal, from the business point of view, was not prudent, unless the purchaser stood to gain in some 880 other way. It was contended before us that this was a speculative deal in the hope that the price of the shares would firm up when the textile industries would revive. If this was the intention, then it might possibly be argued that the purchasers miscarried in their calculations, and suffered a loss in a business transaction. But, was this the intention of the Directors of Jaswant Sugar Mills Ltd. ? Those who sold the shares were not only in possession of the shares but also of the managing agency of the Madhusudan Mills Ltd., and the intention of the Directors of Jaswant Sugar Mills Ltd. was to remove the sellers from their position as managing agents and to get the entire benefit of such or other agencies for themselves. The assessee Company has urged that might have been the intention of they Jaswant Sugar Mills Ltd. but not of the assessee Company which had, on that day, merely given a loan to Jaswant Sugar Mills Ltd. Curiously enough, however, the immediate benefit of the deal was the acquisition of the selling and purchasing agency of the Mills, and that was obtained not in favour of Jaswant Sugar Mills Ltd. but of the assessee Company, even though on July 15, 1948 (the date of purchase) the assessee Company had obtained registration of 10,5000 shares by way of security in its own name. Why the assessee Company was favoured in this way is not far to seek. It mattered not whether Jaswant Sugar Mills Ltd. acquired that agency or the assessee Company; the benefit thereof went to the same group of persons. The transaction of sale of the shares was also made within three months of their purchase, and the assessee Company not only bought the 10,500 shares which stood in its name but 15,547 shares, which gave the assessee Company a controlling voice in the affairs of the Mills. The assessee Company continued to retain the selling and purchasing agency, which was very profitable. Indeed, on its investment in the first year of Rs. 14 lakhs odd, it 881 made a profit of about Rs. 7 lakhs. The question, therefore, would be whether the assessee company in purchasing the shares merely wished to deal in shares as stock in trade, or was acquiring a capital asset of an enduring nature. This question is not one of fact, pure and simple, hut one of an inference in law from the proved circumstances of the case. The Income tax Officer, in deciding this question against the assessee Company, pointed out numerous circumstances, which showed clearly that this was not a mere purchase of shares as shares by a speculator, who, buying a big block, sometimes pays slightly more than the market rate. Bhadani Brothers Ltd., owned not only the shares but also the managing agency, and it is obvious that they would not part with the shares without charging for the managing agency. The price of Rs. 400 per share was so out of proportion to the market price that it indicated, by itself, the acquisition of something more than the mere shares. According to the Income tax officer, the real intention was to acquire lucrative agencies of the Mills, and this intention, whether it was held by Jaswant Sugar Mills Ltd. Or the assessed Company or both, was of the same body of persons. The Appellate Assistant Commissioner endorsed the view of the Income tax officer; but the Tribunal made a distinction between one Company and another, and that distinction has been pressed upon us by the assessee Company. Relying upon the well known case of Salomon vs Salomon & Co. Ltd.(1), it was argued before us that each company must be viewed as a separate entity, and that the intention of one company could not be attributed to another company, even though the proprietorship of the companies might be same. As a proposition affecting companies, it cannot be gainsaid; but we are not concerned with a theoretical question as to the assesee Company being a separate legal entity, but with the 882 question whether a particular loss made by the assessee Company is a capital or a revenue loss. The two Companies, i. e., jaswant Sugar Mills Ltd. and the assessee Company, were directed by the same set of persons, and the facts show that even though Jaswant Sugar Mills Ltd. temporarily acquire the shares, they conferred all the benefits of the acquisition upon the assessee Company from the very first day. The assessee Company also ultimately came into possession of all the shares along with another Company, which was also directed by the same persons, and Jaswant Sugar Mills Ltd. went out of the picture within three months. In these circumstances, it is easy to see that the interposition of Jaswant Sugar Mills Ltd. was merely a device to secure the benefit of the English case, to which we have referred. It was never intended that Jaswant Sugar Mills Ltd. would hold the shares or the benefits arising from the acquisition of a block of shares, giving to the holder a decisive voice in the affairs of Madhusudan Mills Ltd. That controlling interest was acquired by the `Yodh Raj Bhalla group ' for the benefit of the assessee Company, and it was an acquisition of an interest of an enduring nature. Reference was made, in this connection, to the transactions with the Dalmia Cement and Marketing Co. Ltd. in which the latter paid the same price namely, Rs. 400 per share. Perhaps, the Dalmia Company was after the controlling interest in its own way, and it is significant to note that within a short time, those shares again found their way in the hands of the same group. Similarly, the shares changed hands even within this group through the agency of Amrit Bhushan, no doubt a broker but also a relative of Mr. Yodh Raj Bhalla, who profited only to the extent of 8 annas per share, and bought and sold the shares from one Company to mother on the same day. All this show that the affairs of there Companies were centrally arranged, and the 883 intention was to benefit the assessee Company by the acquisition of a large block of shares at a very much later prices than obtaining in the market, to acquire certain agencies of a profitable character. In our opinion, this transaction must be regarded as one on the capital side. Shares were never treated as part of the stock in trade. They were not sold in the market, but were sold at a loss to another Company belonging to the same group, with the obvious intention of setting off the losses against the profits, thus cancelling the profits, and saving them from taxation. In the result, the appeal is allowed, with costs on the respondent. Appeal allowed.

The respondent was a company dealing in shares and securities and belonged to a group of companies all controlled by the same persons. In the year of account, corresponding to the assessment year 1951 52, the respondent sold the shares relating to Madhusudan Mills Ltd., which it had acquired sometime earlier, suffering a loss for which it claimed a set off against the profits in that year. The Income tax Officer found that the shares in question had been purchased by J, a company belonging to the group, at a price which was almost double the current market price, that it was so done with a view to removing the sellers from their managing agency and to securing for the respondent the purchasing and selling agency of the Mills, and that after the purchase J achieved the purpose in view of its controlling interest and the purchasing and selling agency of the Mills was given to the respondent, though the latter had done no more than give a loan to J. It was also found that soon after the purchase the shares in question came into the possession of the respondent and that when the shares were sold it was not in the market but at a loss to another company belonging to the same group. The Income tax Officer came to the conclusion that in getting the shares the respondent did not deal with them as stock in trade but was acquiring a capital asset of an enduring nature. Accordingly, he disallowed the claim holding the loss to be a a capital loss. The Appellate Tribunal, however, held in favour of the respondent on the view that a distinction must be made between the respondent company and J. The Commissioner of Income tax moved the Tribunal for a reference to the High Court, but it was dismissed on the ground that though it was barred only by one day and there was no negligence on the part of the Commissioner, the Tribunal had no power to extend time. An application to the High Court was also dismissed. The Commissioner of Income tax then applied for and got special leave to appeal against 866 the order passed by the Tribunal. When the appeal came on for hearing in due course the respondent raised an objection that the appeal was not maintainable because no appeal was filed against the order of the High Court, and relied on the decision in Chandi Prasad Chokani vs State of Bihar, ; ^ Held, that the appeal was maintainable because there was no question of by passing the order of the High Court which only related to the correctness of the decision of the Tribunal on the question of limitation which was not the subject of the present appeal. Held, further, that there were special circumstances which justified the grant of special leave. Baldev Singh vs Commissioner of Income tax , applied. Chandi Prasad Chokhani vs State of Bihar ; , distinghuished. Held, also, that, on the facts, the object was to purchase a large block of shares at a much larger price than the market value to acquire certain agencies of a profitable character, that the purchase of the shares by J was merely a device but the controlling interest was acquired by the respondent, and that the transaction must be regarded as one on the capital side. Ramanarain Sons (P.) Ltd. vs Commissioner of Income tax, ; and Oriental Investment Co. Ltd. vs Commissioner of Income tax, ; , applied. Salomon vs Salomon & Co. Ltd. ; , distinguished.

Civil Appeal No. 822 of 1966. Appeal by special leave from the judgment and order, dated April 27, 1965 of the Punjab High Court in Civil Revision No. 841 of 1964. Sarjoo Prasad, D.N. Mishra and Ravinder Narain, for the appellants. A.K. Sen, S.V. Gupte, B.P. Maheshwari and R.K. Maheshwari, for respondent No. 1 The Judgment of S.M. SIKRI and R.S. BACHAWAT was delivered by SIKRI, J.K.S. HEGDE, J., delivered a separate Opinion. Sikri, J. This appeal by special leave is directed against the judgment, dated April 27, 1965, of the High Court of Punjab at Chandigarh (section B. Capoor, J.) dismissing Civil Revision No. 841 of 1964. The Civil Revision arose out of the following facts. The following pedigree table shows the relationship between the parties: Sohan Lal (Decd.) Husband of Gujri Harbans Lal (D) Sudarshan L(D) husband of Kamla Wati husband of Lachmi Devi (Resp.6) Satish Rakeah Jatindar Kaka Chand Surinder Kumar Kumar Kumar Kumar (Minor) Rani (Resp. 6) App. 1 App. 2 App. 3 App. 4 (Minor) Smt. Smt Nirmal Kanda Lajya Devi Devi Devi Reap. 3 Reap.4 Reap.5 On the death of Sohan Lal, Behari Lal was appointed as arbitrator by Harbans Lal, Surinder Kumar (then a minor through his mother Smt. Lachmi Devi) and Smt. Gujri, widow of Sohan Lal, for partition of the joint property. Behari Lal, by his award dated October 21, 1956, divided the property into two equal 246 shares, between Harbans Lal and Surinder Kumar. Harbans Lal and Surinder Kumar signed the award. Harbans Lal died on May 20, 1960, upon which Surinder Kumar filed a suit for partition of the properties, the subject matter of the award. This suit was dismissed as withdrawn on March 13, 1962. On March 11, 1962, Behari Lal, arbitrator, filed an application under section 14 of the Indian (X of 1940) hereinafter referred to as the Act for filing the award in Court and for making the same a rule of the Court. Surinder Kumar entered appearance and filed objections under section 30 of the Act. One of the objections was that the award dated October 21, 1956, was not admissible in evidence for want of proper stamp and registration and could not, 'therefore, be made a rule of the Court. On January 31, 1963, the objections were dismissed by Miss Harmohinder Kaur, Subordinate Judge, First Class, Ludhiana, as time barred, but she did not make the award a rule of the Court as there was a further objection to the effect that the award not having been executed on a properly stamped paper and not having been registered, was not admissible in evidence. This objection was dealt with by Shri Om Parkash Saini, Subordinate Judge, First Class, Ludhiana, who, by his order, dated June 5, 1963, held that the award in question was not admissible in evidence as it was executed on deficiently stamped paper and was not registered. He accordingly dismissed the application. An appeal was taken to the District Judge, and the Additional District Judge by his order, dated November 23, 1964, upheld the order of the Subordinate Judge. A revision was then taken to the High Court. Capoor, J., held that the award actually effected a partition and required registration under section 17(1)(b) of the Indian . The learned Judge dissented from the decision of & Full Bench of the Patna High Court in Seonarain Lal vs Prabhu Chand(1), and preferred to follow the view expressed by the Bombay High Court in Chimanlal Girdhar Ghanchi vs Dahyabhai Nathubhai Ghandhi,(2) by the Nagpur High Court in M .A. M. Salamullah Khan vs M. Noorullah Khan,(3) by the Rangoon High Court in U. Keltaha vs U. Pannawa,(4) and by the Calcutta High Court in Nani Bela Saha vs Ram Gopal Saha(5). He accordingly dismissed the revision petition. The decision of the Patna High Court was, however, later followed by a Full Bench of the Punjab and Haryana High Court in Sardool Singh vs Hari Singh(6), judgment, dated November 8, 1966. (1) I.L.R. 37 Pat. (2) A.I.R. 1938 Bom. (3) A.I.R. 1939 Nag. 233, 235. (4) A.I.R. 1940 Rang. (5) A.I.R. 1945 Cal. 19, 21 22. (6) I.L.R. [1967] 1 Pun. & Hat. 247 The question which arises before us is whether an award given under the Act on a private reference requires registration under section 17(1) (b) of the Indian , if the award effects partition of immovable property exceeding the value of Rs. 100. The main reason given by Sinha, J. speaking for the Patna Full Bench in Seonarain Lal vs Prabhu Chand(1), for holding that such an award does. not require registration is that under the scheme of the Act a private award, unless a decree is passed in terms of the award, has no legal effect. this, according to him, follows from the conclusion that once a matter has been referred to arbitration, it comes within the immediate control of the Court under the Act, and no other authority has any jurisdiction to deal with the matter except as provided for in section 35 of the Act. He thought that what distinguishes the provisions in the from the provisions in the Second Schedule in the Code of Civil Procedure is that the Act bars jurisdiction of all Courts to Pronounce upon the validity, effect or existence of an award or arbitration agreement except the Court under the Act itself. Sinha, J., looking at it from another point. of view, namely, that an award is only effective when a decree follows the judgment upon the award, observed that such an award may be covered by the exception mentioned in section 17(2)(vi) (any decree or order of a Court) of the . The Punjab Full Bench has followed this reasoning, and indeed reproduced paras 5 to 15 of the Patna Full Bench judgment in its own judgment. Mahajan, J., with whom the two other Judges agreed, observed: "I am in respectful agreement with the entire line of reasoning in the Patna case barring the underlined observations : ". an award is only effective when a decree follows the judgment on the award such an award may be covered by the exception mentioned in section 17(2) (vi) (any decree or order of a Court) of the ." If these. observations are meant to convey that award as such is covered by the exception (vi) of section 17 (2) of the , I am unable to agree. But the decree that follows the award when it is made a rule of the Court, no exception can be taken to the view that such a decree is covered by the exception. " The Punjab Full Bench gave two additional reasons: "(1) If an award is registered, it is still a waste paper unless it is made a rule of the Court. Thus registration does not, in any manner, add to its efficacy or give it any added competence. Section 32 of the (1) I.L.R. 37 Pat.252. 248 is specific for no right can be rounded on an award as such after coming into force of the 1940 ; (2) It is not disputed and indeed it could not be that the Court has the power, under section 16, to remit the award from time to time. If registration of an award is an essential pre requisite before it could be made a rule of the Court under section 17, every time an award is remitted and a new award is made, the new award will require registration. The result would be that, in the same controversy, there can be not only one registration but a number of registrations regarding the same title, a situation which is not even envisaged by the . " It seems to us that the main reason given by the two. Full Benches for their conclusion is contrary to. what was held by this Court in its unreported decision in M,Is. Uttam Singh Dugal & Co. vs The Union of India(1). The facts in this case, shortly stated, were that M/s. Uttam Singh Dugal & Co. filed an application under section 33 of the Act in the Court of the Subordinate Judge,Hazaribag. The Union of India, respondent No. 1, called upon respondent No. 2, Col. S.K. Bose, to adjudicate upon the matter in dispute between respondent No. 1 and the appellant company. The case of M/s. Uttam Singh Dugal & Co. was that this purported reference to respondent No. 2 for adjudication on the matters alleged to be in dispute between them and respondent No. 1 was not competent because by an award passed by respondent No. 2 on April 23, 1952, all the. relevant disputes between them had been decided. The High Court held inter alia that the first award did not create any bar against the competence of the second reference. On appeal this Court after holding that the application under section 33 was competent observed as follows: "The true legal position in regard to the effect of an award is not in dispute. It is well settled that as a general rule, all claims which are the subject matter of a reference to arbitration merge in the award which is pronounced in the proceedings before the arbitrator and that after an award has been pronounced, the rights and liabilities of the parties in respect of the said claims. can be determined only on the basis of the said award. After an award is pronounced, no action can be started on the original claim which had been the subject matter of the reference. As has been observed by Mookerjee, J. in the case of Bhajahari Saha Banikya vs Behary Lal Basak(2) "the award is, in fact, a final (1) Civil Appeal No. 162 of 1962 judgment delivered on October 11, 1962. (2) at p. 898. 249 adjudication of a Court of the 'parties ' own choice, and until impeached upon sufficient grounds in an appropriate proceeding, an award, which is on the fact of it regular, is conclusive upon the merits of the controversy submitted, unless possibly the parties have intended that the award shall not be final and conclusive. in reality, an award possesses all the elements of vitality, even though it has not been formally enforced, and it may be relied upon in a litigation between the parties relating to the same subjectmatter. " This conclusion, according to the learned Judge, is based upon the elementary principle that, as between the parties and their privies, an award is entitled to that respect which is due to the judgment of a court of last resort. Therefore, if the award which has been pronounced between the parties has, in fact, or can, in law, be deemed to have dealt with the present dispute, the second reference would be incompetent. This position a lso has not been and cannot be seriously disputed." ' This Court then held on the merits "that the dispute in regard to overpayments which are sought to be. referred to the arbitration of respondent No. 2 by the second reference are not new disputes; they are disputes in regard to. claims which the Chief Engineer should have made before the arbitration under the first reference. " This Court accordingly allowed the appeal and set aside the order passed by the High Court. This judgment is binding on us. In our opinion this judgment lays down that the position under the Act is in no way different from what it was before the Act came into force, and that an award has some legal force and is not a mere waste paper. If the award in question is not a mere waste paper but has some legal effect it plainly purports to or affects property within the meaning of section 17(1)(b) of the . We may mention that an appeal was filed in this Court against the decision of the Division Bench of the Patna High Court, which had referred the case of Sheonarain Lal vs Prabhu Chand(1) to the Full Bench for opinion on certain questions and which decided the case in accordance with that opinion, and the same was dismissed by this Court in Sheonarain Lal vs Rameshwari Devi(2) in which the judgment was delivered by the same Bench which decided the case of M/s. Uttam Singh Dugal vs The Union of India(a). It is true that this Court in Sheonarain Lal vs Rameshwari Devi(2) did not expressly rule on the validity (1) I.L.R. 37 Pat. (2) Civil appeal No. 296 of 1960 judgment delivered on December 6, 1962. (3) Civil Appeal No. 162 of 1962 judgment delivered on October 11, 1962. C1/69 17 250 of the answer given by the Patna Full Bench in Sheonarain Lal vs Prabhu Chand(1) that such awards did not require registration, but decided the case on the point whether the award in dispute in that case in fact purported or operated to create a right, title or interest of the value of more than Rs. 100 in immovable properties. But, after holding that the document did not operate to create or extinguish any right in immovable property, this Court observed: "The position would have been otherwise if the arbitrators had directed by t he award itself that tiffs shop would go to Prabhu Chand without any further document. In that case the award itself would have created in Prabhuchand a right to these properties. That is not, however, the provision in the award. In the absence of a registered document, Prabhu Chand would get no title on the award and Sheonarain 's title would remain in the shop. " In this connection we may mention two other decisions of this Court. In Champalal vs Mst. Samarath Bai(2), Kapur, 1., speaking for the Court, observed as follows: "The second question that the award required registration and would not be filed by the arbitrators before it was registered is equally without substance. The filing of an unregistered award under section 49 of the is not prohibited; what is prohibited is that it cannot be taken into evidence so as to affect immovable property falling under section 17 of the Act. That the award required registration was. rightly admitted by both parties. " Again in Kashtinathsa Yamosa Kabadi vs Narsingsa BhctsKarsa Kabadi(3) Shah J., speaking for the Court observed: "The records made by the Panchas about the division of the properties, it is true, were not stamped nor were they registered. It is however clear that if the record made by the Panchas in so far as it deals with immovable properties is regarded as a non 'testamentary instrument purporting or operating to create, .declare, assign, limit or extinguish any right, title or interest in immovable property, it was compulsorily registerable under section 17 of the , and .would not in the absence of registration be admissible in evidence." (1) I.L,R. 37 Pat. 252. (2) ; , 816 (3) ; , 806. 251 In view of the above decisions it is not necessary to refute the other reasons given by both the Full Benches, but out of respect for the learned Judges we will deal with them. We may mention that no comment was made in these cases on the provisions of para 7 of Schedule 1 to the Act. This para provides: "7. The award shall be final and binding on the parties and persons claiming under them respectively. " If the award is final and binding on the parties it can hardly be said that it is. a waste paper unless. it is made a rule of the Court. We are unable to. appreciate why the conferment of exclusive jurisdiction on a court under the Act makes an award any the less binding than it was under the provisions of the Second Schedule of the Code of Civil Procedure. The Punjab Full Bench held that the registration does not in any manner add to its efficacy or give it any added competence. We cannot concur with these observations. If an award affects immovable property over the value of Rs. 100, its registration does get rid of the disability created by section 49 of the . Regarding the difficulty pointed out by the Punjab Full Bench that there may be many registrations we are not called upon to decide whether these difficulties would arise because the language of section 17 of the is plain. It may be that no such difficulties will arise because under section 16(2) of the Act what the arbitrator submits to the Court is his decision and it may be that the decision may not be registerable under section 17 of the . But as we have said before we are not called upon to decide this point. In our opinion, Capoor, J., was right in dissenting from the Patna Full Bench in Sheonarain Lal vs Prabhu Chand(1) and holding that the award in dispute required registration. In the result the appeal fails and is. dismissed with costs. We may make it clear that we are dealing only with an award made on a reference by the parties without the intervention of court. Hegde, J. I agree. But I would like to add few words. Arbitration proceedings, broadly speaking may be divided into two stages. The first stage commences with arbitration agreement and ends with the making of the award. And the second stage relates to the enforcement of the award. Paragraph 7 of the First Schedule to the lays down that, "the award shall be final and binding on the parties and persons claiming under them respectively". Therefore it is not possible to agree with the Full Bench decisions of the Patna High Court (1) I.L.R. 37 Part. 252. 252 and that of the Punjab and Haryana High Court that an award Which is not made a decree of the Court has no existence in law. The learned Judges ' who decided those cases appear to have proceeded on the basis that an award which cannot be enforced is not a valid award and the same does not create any rights in the property which is the subject matter of the award. This in my opinion is not a correct approach. The award does create rights in that property but those rights cannot be enforced until the award is made a decree of the Court. It is one thing to say that a right is not created, it is an entirely different thing to say that the right created cannot be enforced without further steps. For the purpose of section 17(1)(b) of the , all that we have to see is whether the award in question purport or operate to create or declare, assign, limit or extinguish whether in present or future any right, title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immovable property. If it does, it is compulsorily registerable. In the aforementioned Full Bench decisions sufficient attention has not been given to section 17 of the . The focus was entirely on the provisions of the and there again on the enforcement of the award and not in the making of the award. A document may validly create rights but those rights may not be enforceable for various reasons. Section 17 does not concern itself with the enforcement of rights. That Section is attracted as soon as its requirements are satisfied There is no gainsaying the fact that the award with which we are concerned in this case, at any rate, purported to creat rights in immovable property of the value of rupees more than one hundred. Hence it is compulsorily registerable. Y.P. Appeal dismissed.

An arbitrator appointed by the appellants and respondent partitioned their immovable property exceeding the value of Rs. 100. The arbitrator applied under section 14 of the Indian to the Court for making the award a rule of the court. On the question whether the award was admissible in evidence as it was not registered, HELD:(per Full Court.) The award required registration. (Per Sikri and Bachawat, JJ.) All claims which are the subject matter of a reference to arbitration merge in the award which is pronounced In the proceedings before the arbitrator and after an award has been pronounced, the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said award. After an award is pronounced, no action can be started on the original claim which had been the subject matter of the reference. The position under the Act is in no way different from what it was before the Act came into force. Therefore. the conferment of exclusive jurisdiction on 'a court under the does not make 'an award any less binding than it was under the provisions of the Second Schedule of the Code of Civil Procedure. The filing of an unregistered award under section 49 of the Registration Act is not prohibited: what is prohibited is that it cannot be taken into evidence so as to affect immovable property falling under section 17 of the Registration Act. It cannot be said that the registration does not in any manner add to its efficacy or give it added competence. If an award affects immovable property order the value of Rs. 100 its registration does get rid of the disability created by section 49 of the Registration Act. The award in question was not a mere waste paper but had some legal effect and it plainly purports to affect or affects property within the meaning of section 17(1)(b) of the Registration Act [248 F H; E] M/s. Uttam Singh Dugal & Co. vs Union of India, C.A. No. 162 of 1962 dated 11 10 1962, Champalal vs Mst. Samarath Bai; , 816 and Kashinathsa Yamosa Kabadi vs Narsingsa Baskarsa Kabadi, [1961] 3 S.C.R. 792, 806, followed. Sheonarain Lal vs Prabhu Chand, I.L.R. 37 Pat. 252 and Sardooll Singh vs Hari Singh I.L.R. [1967] 1 Punj. & Har. 622 disapproved. Chamanlal Girdhat Ghanchi vs Dhayabhai Nathubhai Ghandi A.I.R. 1938 Bom. 422, M.A. M. Salamullah Khan vs M. Noorullah Khan, A.I.R. 1939 Nag. 233, Keltaha vs U. Pannawa A.I.R. 1940 Rang. 228, Nani Bela Saha vs Ram Gopal Saha. A.I.R. 1945 Cal. 19 and Bhajahari Saha Banikya vs Behary Lal Basak, , approved. (Per Hegde. J. concurring): It is one thing to say that a right is not created. it is an entirely different thing to. say that the right created can 245 not be enforced without further steps. An award does create rights in that property but those rights cannot be enforced until the award is made a decree of the Court. For the purpose of section 17(1)(b) of the Registration Act, all that had to be seen is whether the award in question purport or operate to create or declare, assign, limit or extinguish whether in present or future any right, title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immovable property. Since it does, it is compulsorily registerable. [252 B D]

Civil Appeal No. 2752 of 1972. Appeal by Certificate from the Judgment and Order dated the 5th November, 1970 of the Punjab and Haryana High Court in Income Tax Reference No. 38 of 1969. G. A. Shah & Miss A. Subhashini for the appellant. Naunit Lal & Mr. Kailash Yasudev for respondent. The Judgment of the Court was delivered by PATHAK, J. Is a smuggler, who is taxed on his income from smuggling under the Income Tax Act, 1922, entitled to a deduction under Section 10(1) of the Act on account of the confiscation of currency notes employed in the smuggling activity? The respondent, Piara Singh, was apprehended in September, 1958 by the Indian Police while crossing the Indo Pakistan border into Pakistan. A sum of Rs. 65,500/ in currency notes was recovered from his person. On interrogation he stated that he was taking the currency notes to Pakistan to enable him to purchase gold in that country with a view to smuggling it into India. The Collector of Central Excise and Land Customs ordered the confiscation of the currency notes. The Income Tax Officer now took proceedings under the Indian Income Tax Act, 1922 for assessing the assessee 's income and determining his tax liability. He came to the finding that out of Rs. 65,500/ an amount of Rs. 60,500/ constituted the income of the assessee from undisclosed sources. An appeal by the assessee was dismissed by the Appellate Assistant Commissioner. In second appeal before the Income Tax Appellate Tribunal the assessee represented that if he was regarded as engaged in the business of smuggling gold he was entitled to a deduction under Section 10(1) of the Income Tax Act of the entire sum of Rs. 65,500/ as a loss incurred in the business on the confiscation of the currency notes. The Appellate Tribunal upheld the 1124 claim to deduction. It proceeded on the basis that the assessee was carrying on a regular smuggling activity which consisted of taking currency notes out of India and exchanging them for gold in Pakistan which was later smuggled into India. At the instance of the Revenue, a reference was made to the High Court of Punjab and Haryana on the following question: "Whether on the facts and in the circumstances of the case the loss of Rs. 65,500/ arising from the confiscation of the currency notes was an allowable deduction under section 10(1) of the Income tax Act, 1922?" The High Court answered the question in the affirmative. And now this appeal by the Revenue. In our Judgment, the High Court is right. The Income Tax authorities found that the assessee was carrying on the business of smuggling They held that he was, therefore, liable to income tax on income from that business. On the basis that such income was taxable, the question is whether the confiscation of the currency notes entitles the assessee to the deduction claimed. The currency notes carried by the assessee across the border constituted the means for acquiring gold in Pakistan, which gold he subsequently sold in India at a profit. The currency notes were necessary for acquiring the gold. The carriage of currency notes across the border was an essential part of the smuggling operation. If the activity of smuggling can be regarded as a business, those who are carrying on that business must be deemed to be aware that a necessary incident involved in the business is detection by the Custom authorities and the consequent confiscation of the currency notes. It is an incident as predictable in the course of carrying on the activity as any other feature of it. Having regard to the nature of the activity possible detection by the Customs authorities constitutes a normal feature integrated into all that is implied and involved in it. The confiscation of the currency notes is a loss occasioned in pursuing the business, it is a loss in much the same way as if the currency notes had been stolen or dropped on the way while carrying on the business. It is a loss which springs directly from the carrying on of the business and is incidental to it. Applying the principle laid down by this Court in Badridas Daga vs Commissioner of Income tax the deduction must be allowed. In Commissioner of Income tax, Gujarat vs S.C. Kothari this Court held that for the purpose of Section 10(1) of the Income Tax Act, 1922 a loss incurred in carrying on an illegal business must be 1125 deducted before the true figure of profits brought to tax can be computed. Grover, J., speaking for the Court, observed: If the business is illegal, neither the profits earned nor the losses incurred would be enforceable in law. But, that does not take the profits out of the taxing statute. Similarly, the taint of illegality of the business cannot detract from the losses being taken into account for computation of the amount which can be subjected to tax as "profits" under Section 10(1) of the Act of 1922. The tax collector cannot be heard to say that he will bring the gross receipts to tax. He can only tax profits of a trade or business. That cannot be done without deducting the losses and the legitimate expenses of the business. " Reliance was placed by the Revenue on Haji Aziz and Abdul Shakoor Bros. vs Commissioner of Income tax, Bombay City II. In that case, however, the assessee carried on the lawful business of importing dates from abroad and selling them in India. The import of dates by steamer was prohibited. Nonetheless he imported dates from Iraq by steamer, and the consignments were confiscated by the customs authorities. But the dates were released subsequently on payment of fine. The assessee 's claim to deduction under section 10(2) (xv) of the Income Tax Act was rejected on the ground that the amount was paid by way of penalty for a breach of the law. An infraction of the law was not a normal incident of business carried on by the assessee, and the penalty was rightly held to fall on the assessee in some character other than that of a trader. Reference was made by the Revenue to Soni Hinduji Kushalji & Co. vs Commissioner of Income tax, A.P. The assessee 's claim to the deduction of the value of gold confiscated by the customs authorities was found unsustainable by the court. The decision in that case can be explained on the ground that the assessee was carrying on a lawful business in gold, silver and jewellery and committed an infraction of the law in smuggling gold into the country. Our attention has also been invited to J. section Parkar vs V. B. Palekar and Others where on a difference of opinion between two learned Judges of the Bombay High Court a third learned Judge agreed with the view that the value of gold confiscated by the customs authorities in smuggling operations was not entitled to deduction against the estimated and assessed income from an undisclosed source. It was observed that the loss arose by reason of an infraction 1126 of the law and as it had not fallen on the assessee as a trader or business man a deduction could not be allowed. Apparently, the true significance of the distinction between an infraction of the law committed in the carrying on of a lawful business and an infraction of the law committed in a business inherently unlawful and constituting a normal incident of it was not pointedly placed before the High Court in that case. We hold that the assessee is entitled to the deduction of Rs. 65,500/ , and accordingly we affirm the view taken by the High Court on the question of law referred to it. The appeal fails and is dismissed with costs. S.R. Appeal dismissed.

The respondent Piara Singh was apprehended in September 1958 by the Indian Police while crossing the Indo Pakistan border into Pakistan. A sum of Rs. 65,500/ in currency notes was recovered from his person. On interrogation he stated that he was taking the currency notes to Pakistan to enable him to purchase gold in that country with a view to smuggling it into India. The Collector of Central Excise and Land Customs ordered the confiscation of the currency notes. In the proceedings initiated by the Income Tax Officer, he found that Rs. 60,500/ constituted the income of the assessee from undisclosed sources. An appeal by the assessee was dismissed by the Appellate Assistant Commissioner. In second appeal before the Income Tax Appellate Tribunal, the assessee represented that if he was regarded as engaged in the business of smuggling gold he was entitled to a deduction under section 10(1) of the Income Tax Act, 1922 of the entire sum of Rs. 65,500/ as a loss incurred in the business on the confiscation of the currency notes. The Tribunal upheld the claim to deduction. It proceeded on the basis that the assessee was carrying on a regular smuggling activity which consisted of taking currency notes out of India and exchanging them with gold in Pakistan which was later smuggled into India. The High Court on a reference at the instance of the Revenue answered the reference against the Revenue. Hence the appeal. Allowing the appeal, the Court. ^ HELD: 1. The assessee is entitled to the deduction of Rs. 65,500/ under section 10(1) of the Income Tax Act, 1922. [1124 C, 1126 B] 2. The assessee was carrying on the business of smuggling and, therefore, was liable to income tax on income from that business. The currency notes carried by the assessee across the border was an essential part of the smuggling operation. If the activity of smuggling can be regarded as a business, those who are carrying on that business must be deemed to be aware that a necessary incident involved in the business is detection by the Customs authorities and the consequent confiscation of the currency notes. It is an incident as predictable in the course of carrying on the activity as any other feature of it. Having regard to the nature of the activity possible detection by the Customs authorities constitutes a normal feature integrated into all that is implied and involved in it. The confiscation of the currency notes is a loss occasioned in pursuing the business; it is a loss in much the same way as if the currency 1123 notes had been stolen or dropped on the way while carrying on the business. It is a loss which springs directly from the carrying on of the business and is incidental to it. Applying the principle laid down by this Court in Badridas Daga vs Commissioner of Income Tax the deduction must be allowed. [1124 D E] Badridas Daga vs Commissioner of Income Tax, ; Commissioner of Income Tax, Gujarat vs section C. Kothari ; applied. Haji Aziz and Abdul Shakoor Bros. vs Commissioner of Income Tax, Bombay City II, , Sari Hinduji Khushalji 7 Co. vs Commr. of Income Tax, A.P. ; J. section Parkar vs V. B. Palekar and Ors. ; distinguished and explained.

ivil Appeal No. 4053 of 1985. From the Judgment and Order dated 25.1.1985 of the Madhya Pradesh High Court in Civil Revision No. 378 of 1984. U.R. Lalit, S.S. Khanduja, Y.P. Dhingra and Mrs. Madhu Kapoor for the Appellants. T.C. Sharma and S.K. Gambhir for the Respondents. The Judgment of the Court was delivered by DUTT, J. This appeal by special leave is directed against the judgment of the Madhya Pradesh High Court, whereby the High Court affirmed the order of the District Judge, Bhopal, dismissing the counter claim by the appel lants on the ground that it was barred by section 14 of the , hereinafter referred to as 'the Act '. The High Court also held that the counter claim was not maintainable under sub rule (1) of Rule 6A of Order VIII of the Code of Civil Procedure, as the same was filed by the appellants after the filing of the written statement. The predecessor in interest of the appellants, namely, Babulal, purchased a house in Bhopal in the year 1947 from the sons of one Mannulal. The appellants and the respondents Nos. 6 to 8 are the sons of the other three brothers of Mannulal. In the year 1976, the respondents Nos. 2 to 5, who were the heirs and legal representatives of the said Babu lal, started reconstructing or renovating the house and for that purpose they commenced digging the plinth. In the course of digging, a treasure consisting of gold and silver ornaments and also Government currency notes amounting to Rs.2,900 was found. The respondents Nos. 2 to 5 intimated the discovery of the treasure to the Collector of the Dis trict, who issued a notification under section 5 of 159 the Act requiting all persons claiming the treasure,. or any part thereof, to appear personally or by agent before him on the day and place mentioned in the notification. Pursuant to the said notification, the respondents Nos. 2 to 5, and the appellants and the respondents Nos. 6 to 8 filed claims before the Collector. It has been held by the Collector that the respondents Nos. 2 to 5, the finders of the treasure, are the owners of the house from where the treasure was found during excavation undertaken by them with a view to starting reconstruction, and he permitted them under section 8 of the Act to institute a suit in the Civil Court to establish their right before February 22, 1979. The respondents Nos. 2 to 5 instituted a suit being Civil Suit No.1 A of 1979, in the Court of the District Judge, Bhopal, for a declaration of their title to the treasure found by them. The respondents Nos. 2 to 5 did not, however, make the other claimants before the Collector including the appellants, parties to the suit. The appel lants and the respondents Nos. 6 to 8 made an application for their addition as parties to the suit under the provi sion of Order I, Rule 10 of the Code of Civil Procedure. The learned District Judge allowed the said application and, accordingly, they were made defendants in the suit. Thereafter, the appellants and the respondents Nos. 6 to 8 filed their written statement, inter alia, denying the claim of the respondents Nos. 2 to 5 to the treasure. They claimed title to the treasure. After the filing of the written statement, the appel lants filed a counter claim claiming title to the treasure. It is not necessary for us to state the basis of the claims of the parties to the treasure. The respondents Nos. 2 to 5 filed an application praying that the counter claim should be dismissed contending that it was barred by limitation as prescribed under section 14 of the Act and that it was also not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure. The learned District Judge came to the finding that the counter claim was barred by section 14 of the Act and, in that view of the matter, dismissed the counter claim. Being aggrieved by the said order of the learned District Judge, the appellants and the said respond ents Nos. 6 to 8 moved the High Court in revision against the same. The High Court upheld the order of the learned District Judge that the counterclaim was barred by limita tion as prescribed by section 14 of the Act. The High Court further held that the counter claim having been filed after the filing of the written statement, it was not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure. Hence this appeal by special leave. 160 At this stage, it is necessary to refer to some of the provisions of the Act. Section 4 of the Act provides, inter alia, for the giving of notice by the finder of treasure to the Collector containing the details of the treasure. The treasure may be deposited in the nearest Government Treasury or the finder may give the Collector such security as the Collector thinks fit to produce the treasure at such time and place, as he may, from time to time, require. Under section 5, the Collector shall, after making such enquiry, if any, as he thinks fit, issue a notification requiting the claimants to the treasure to appear before him on a day and at a place mentioned in the notification, such day not being earlier than four days or later than six months, after the date of the publication of such notification. Section 6 provides that any person having claimed any fight to such treasure or any part thereof, as owner of the place in which it was found or otherwise, and not appearing as required by the notification issued under section 5, shall forfeit such right. Sections 7, 8, 9, 13 and 14 which are relevant for our purpose are extracted below: "section 7 On the day notified under section 5, the Collector shall cause the treasure to be produced before him, and shall enquire as to and determine (a) the person by whom, the place in which, and the circumstances under which, such treasure was found; and (b) as far as is possible, the person by whom, and the circumstances under which, such treasure was hidden. If, upon an enquiry made under section 7, the Collector sees reason to believe that the treasure was hidden within one hundred years before the date of the finding, by a person appearing as required by the said notification and claiming such treasure, or by some other person under whom such person claims, the Collector shall make an order adjourning the hearing of the case for such period as he deems sufficient, to allow of a suit being instituted in the Civil Court by the claimant, to establish his right. If upon such enquiry the Collector sees no reason to believe that the treasure was so hidden; or If, where a period is fixed under section 8, no suit is 161 instituted as aforesaid within such period to the knowledge of the Collector; or if such suit is instituted within such period, and the plaintiff 's claim is finally rejected; the Collector may declare the treasure to be ownerless. Any person aggrieved by a declaration made under this section may appeal against the same within two months from the date thereof to the Chief Controlling Revenueauthority. Subject to such appeal, every such declaration shall be final and conclusive." "section 13. When a declaration has been made as aforesaid in respect of any treasure, and two or more persons have appeared as aforesaid and each of them claimed as owner of the place where such treasure was found, or the right of any person who has so appeared and claimed is disputed by the finder of such treasure, the Collector shall retain such treasure and shall make an order staying his proceedings with a view to the matter being enquired into and determined by a Civil Court. section 14. Any person who has so appeared and claimed may, within one month from the date of such order, institute a suit in the Civil Court to obtain a decree declaring his right and in every such suit the finder of the treasure and all persons disputing such claim before the Collector shall be made defendants. " Under the scheme of the Act, two kinds of suits can be filed at two stages, namely, one under section 8 and the other under section 14 of the Act. Section 8 provides that if the Collector has reason to believe that the treasure was hidden by any person appearing before the Collector within one hundred years or by some other person under whom such person claims, the Collector shall adjourn the hearing for such period as he deems sufficient to allow the claimant to institute a suit to establish his right to the treasure. So under section 8, the suit has to be filed by the claimant within the period for which the hearing 162 of the case is adjourned for the establishment of his right to the treasure. On the other hand, the question of filing a suit under section 14 will not arise unless the Collector makes a declaration under section 9 that the treasure is ownerless. Such a declaration under section 9 will be made by the Collector if he sees no reason to believe that the treasure was not hidden within one hundred years or if no suit is instituted under section 8 within the period for which the hearing adjourned by the Collector or if the plaintiffs claim is rejected. An appeal lies against a declaration by the Collector to the Chief Controlling Revenue Authority and subject to the appeal, such declaration shall be final and conclusive. If, however, no such contingencies as mentioned in section 9 take place, the Collector will have no juris diction to make a declaration that the treasure is owner less. If however, any of such contingencies happens and the Collector makes a declaration under section 9 and two or more persons have appeared before the Collector each claim ing the ownership of the place where such treasure was found or the finder of the treasure disputes the fight of any person who has so appeared and claimed, the Collector shall make an order under section 13 staying the proceedings with a view to the matter being enquired into by a Civil Court. It may be noticed here that the claim made under section 13 by the rival claimants relate to the ownership of the place and not to the ownership of the treasure for, it has been already noticed that the declaration by the Collector under section 9 that the treasure is ownerless shall, subject to the appeal to the Chief Controlling Revenue Authority, be final and conclusive. The object of an enquiry as to the ownership of the place by the Civil Court is necessary is as much as section 10 of the Act provides inter alia that when a declaration has been made in respect of any treasure under section 9, such treasure shall either be delivered to the finder or be divided between him and the owner of the place in which it has been found. Thus it is manifestly clear that if no declaration is made under section 9, there is no question of filing a suit under section 14 of the Act. While a suit under section 8 relates to the establishment of the right of the claimant to the treasure, a suit under section 14 relates to the estab lishment of the ownership of the place where the treasure was found for the purpose of division of the treasure be tween the finder and the owner of the place. Section 14 lays down that such a suit has to be filed within one 163 month from the date of such order to obtain a decree declar ing his right. It is manifestly clear from section 14 that the suit referred to therein is a suit to be filed by a person for the establishment of his right after the Collector had declared the treasure to be ownerless under section 9 after making a claim before the Collector under section 13. The words "such order" in section 14, in our view, refer to the order passed by the Collector under section 13. Further, the placement of section 14 after section 13 of the Act points only to the filing of the suit by a person after the Collec tor had made an order staying the proceedings under section 13. The suit contemplated by section 8 of the Act has to be filed by the claimant within the period for which the hear ing of the case is adjourned. Such period for which the hearing under section 8 is adjourned by the Collector, may be more than a month. It is absurd to think that although section 8 provides that the suit has to be filed within the period for which the hearing is adjourned, yet it has to be filed within one month under section 14. Section 8 and sections 13 and 14 contemplate two different situations. While under section 8 the suit has to be filed within the period during which the hearing stands adourned, the suit under section 14 has to be filed within one month of the order of the Collector under section 13 of the Act. To hold that suits under section 8 and section 13, are both governed by.the limitation prescribed by section 14, will be to do violence to the provisions of the Act and the clear inten tion of the Legislature as indicated in the provisions. Another aspect in this regard may be considered. It may be argued that as the Collector had not allowed the appel lants and the respondents Nos. 6 to 8 to file a counter claim or a suit, the suit was not maintainable. In our opinion, the question of filing a counter claim arises after a suit is filed by the claimant under section 8. It may be that there is no substantial difference between a counter claim and a suit, but nonetheless a defendant cannot be prevented from filing a counter claim under the Code of Civil Procedure. In the instant case, as the respondents Nos. 2 to 5 have instituted the suit within the period during which the hearing before the Collector stands adjourned under section 8, the question of making a declaration by the Collector under section 9 of the Act does not arise and, consequently, there is no scope for filing any suit under section 14 of the Act for the establishment of the right to ownership of the place where the treasure was found by the respondents Nos. 2 to 5. Thus 164 section 14 has no manner of application to a suit filed under section 8 of the Act. The next point that remains to be considered is whether Rule 6A(1) of Order VIII of the Code of Civil Procedure bars the filing of a counter claim after the filing of a written statement. This point need not detain us long, for Rule 6A(1) does not, on the face of it, bar the filing of a counter claim by the defendant after he had filed the writ ten statement. What is laid down under Rule 6A(1) is that a counter claim can be filed, provided the cause of action had accrued to the defendant before the defendant had delivered his defence or before the time limited for delivering his defence has expired, whether such counterclaim is in the nature of a claim for damages or not. The High Court, in our opinion, has misread and misunderstood the provision of Rule 6A(1) in holding that as the appellants had filed the coun ter claim after the filing, of the written statement, the counter claim was not maintainable. The finding of the High Court does not get any support from Rule 6A(1) of the Code of Civil Procedure. As the cause of action for the counter claim had arisen before the filing of the written statement, the counter claim was, therefore, quite maintainable. Under Article 113 of the , the period of limitation of three years from the date the right to sue accrues, has been provided for any suit for which no period of limitation is provided elsewhere in the Schedule. It is not disputed that a counter claim, which is treated as a suit under section 3(2)(b) of the has been filed by the appellants within three years from the date of accrual to them of the fight to sue. The learned District Judge and the High Court were wrong in dismissing the coun ter claim. For the reasons aforesaid, the appeal is allowed. The order of the learned District Judge and the judgment of the High Court are set aside. The learned District Judge is directed to proceed with the hearing of the suit and the counter claim in accordance with law. The appellants shall pay court fee on the counter claim, if not already paid, within such time as may be fixed by the learned District Judge. A.P.J. Appeal allowed.

The predecessor in interest of the appellants, namely, Babulal, purchased a house in the year 1947 from the sons of one Mannulal. The appellants and the respondents No. 6 to 8 are the sons of the other three brothers of Mannulal. In the year 1976 the respondents Nos. 2 to 5 started reconstructing or renovating their house and in the course of digging the plinth a treasure consisting of gold and silver ornaments and currency notes was found. They intimated the discovery of the treasure to the Collector, who issued a notification under section 5 of the Indian Treasure Trove Act, 1878. Respond ents Nos. 2 to 5, the appellants and the respondents Nos. 6 to 8 flied claims before the Collector. The Collector held that the respondents Nos. 2 to 5, the finders of the treas ure, are the owners of the house from where the treasure was found and permitted them under section 8 to institute a suit to establish their right before February 22, 1979. The respondents Nos. 2 to 5 instituted a suit for decla ration of their title to the treasure without making the other claimants before the Collector parties to the suit. On an application filed under Order I, Rule 10 of the Code of Civil Procedure by the appellants and respondents Nos. 6 to 8, the District Judge made them defendants in the suit. Thereafter, they filed their written statement, denying the claim 01 ' the respondents Nos. 2 to 5 to the treasure and claimed the title thereof to them. After the filing of the written statement, the appel lants flied a counter claim claiming title to the treasure. The respondents Nos. 2 to 5 156 filed an application praying that the counter claim should be dismissed contending that it was barred by limitation as prescribed in section 14 of the Act and that it was also not maintainable under Order VIII, Rule 6A(1) of the Code 01 ' Civil Procedure. The District Judge dismissed the counter claim holding that it was barred by section 14 of the Act. In the Revision, the High Court upheld the order of the District Judge and further held that the counter claim having been filed after the filing of the written statement, was not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure. Allowing the Appeal to this Court, HELD: 1. The order of the District Judge and the Judg ment of the High Court are set aside. The District Judge is directed to proceed with the hearing of the suit and the counter claim in accordance with law. [164F G] 2. Under the scheme of the Indian Treasure Trove Act, 1878 two kinds of suits can be filed at two stages, namely, one under section 8 and the other under section 14. Section 8 provides that if the Collector has reason to believe that the treas ure was hidden by any person appearing before the Collector within one hundred years or by some other person under whom such person claims, the Collector shall adjourn the hearing for such period as he deems sufficient to allow the claimant to institute a suit to establish his right to the treasure. [161G H; 162A] 3. On the other hand, the question of filing a suit under section 14 will not arise unless the Collector makes a declaration under section 9 that the treasure is ownerless. Such a declaration under section 9 will be made by the Collector if he sees no reason to believe that the treasure was not hidden within one hundred years or if no suit is instituted under section 8 within the period for which the hearing is adjourned by the Collector or if the plaintiff 's claim is rejected. [162B] 4. If no such contingencies as mentioned in section 9 take place, the Collector will have no jurisdiction to make a declaration that the treasure is ownerless. If, however, any of such contingencies happens and the Collector makes a declaration under section 9 and two or more persons have appeared before the Collector each claiming the ownership of the place where such treasure was found or the finder of the treasure disputes the right of any person who has so ap peared and claimed, the Collector shall make an order under section 13 staying the proceedings with a view to the matter being enquired into by a Civil Court. 157 5. The object of an enquiry as to the ownership of the place by the Civil Court is necessary inasmuch as section 10 of the Act provides that when a declaration has been made in respect of any treasure under section 9, such treasure shall either be delivered to the finder or be divided between him and the owner of the place in which it has been round. [162F] 6. A suit under section 14 relates to the establishment of the ownership of the place where the treasure was found for the purpose of division of the treasure between the finder and the owner of the place and that such a suit has to be filed within one month from the date of such order to obtain a decree declaring his right after the Collector had de clared the treasure to be ownerless under section 9 after making a claim before the Collector under section 13. The words "such order" in section 14, refer to the order passed by the Collector under section 13. [163B] 7. Section 8 and section 13 and section 14 contemplate two differ ent situations. While under section 8 the suit has to be filed within the period during which the hearing stands adjourned, the suit under section 14 has to be filed within one month of the order of the Collector under section 13 of the Act. [163C D] 8. To hold that suits under section 8 and section 13 are both governed by the limitation prescribed by section 14, will be to do violence to the provisions of the Act and the clear intention of the Legislature as indicated in the provisions. [163E] 9. In the instant case, as the respondents Nos. 2 to 5 have instituted the suit within the period during which the hearing before the Collector stood adjourned under section 8, the question of making a declaration by the Collector under section 9 of the Act does not arise and, consequently, there is no scope for filing any suit under section 14 of the Act. Thus section 14 has no manner of application to a suit filed under section 8 of the Act. [163G H; 164A] 10. Rule 6A(1) of Order VIII of Code of Civil Procedure does not bar the filing of a counter claim by the defendant after he had filed the written statement. What is laid down under Rule 6A(1) is that a counter claim can be filed, provided the cause of action had accrued to the defendant before the defendant had delivered his defence or before the time limited for delivering his defence has expired, whether such counter claim is in the nature of the claim for damages or not. [164B C] 11. The High Court has misread and misunderstood the provision of Rule 6A(1) in holding that as the appellants had filed the counter 158 claim after the filing of the written statement, the coun ter claim was not maintainable. Under Article 113 of the , the period limitation of three years from the date the right to sue accrues, has been provided for any suit for which no period of limitation is provided elsewhere in the Schedule. in the instant case, the counter claim has been filed by the appellants within three years and as the cause of action for the counter claim had arisen before the filing of the written statement, the counter claim was, therefore quite maintainable. [164C E]

Civil Appeal No. 1309 of 1986. From the Judgment and Order dated 8.8.1985 of the Punjab and Haryana High Court in Regular Second Appeal No. 307 of 1985. A.B. Rohtagi, Ranbir Singh Yadav and H.M. Singh for the Appellant. 75 A.G. Prasad and Mahabir Singh for the Respondents. The Judgment of the Court was delivered by RAY, J. This appeal on special leave is against the judgment and order passed by the High Court of Punjab & Haryana in Regular Second Appeal No. 307 of 1985 whereby the High Court upheld the order of termination of services of services of the appellant made on November 17, 1980 passed by the respondent No. 2, the Directer of Food and Supplies and Deputy Secretary to Government of Haryana, Chandigarh. The salient facts that gave rise to the instant appeal are as follows: The appellant we appointed as Sub Inspector, Food and Supplies in the Department of Food and Supplies by the Respondent No.2 by order dated April 13, 1975 on and hoc basis against the ex servicemen quota. As per the service rules the terms and conditions of the said appointment are as hereunder: "(i) The post is purely temporary. Your appointment is purely on ad hoc basis and shall not exceed six months. Your services are liable to be terminated at any time during this period without any notice and without assigning any reason. Your services are also liable to be terminated at any time without notice on arrival of regular candidates from the Haryana Subordinate Services Selection Board. " The appellant had been continuing in the said post of Sub Inspector without any break till November 17, 1980 i.e. the date of termination of his services. The appellant, however, was served with an order of suspension made by the Respondent No. 2 on April 15, 1980 in view of the criminal proceedings pending against the appellant u/s 420 of the Indian Penal Code during the pendency of which the order of termination was made on November 17, 1980. The said criminal proceeding being Criminal Case No. 1413 of 1981 was decided on October 21, 1981 wherein he has been acquitted of the said charge. The Additional Chief Judicial Magistrate, Narnual had found that: ". . Babu Ram accused was not present at the spot and he had no role to play in the distribution of the cement. The Appellant could not point out even a single factor from the file by which the participation of this accused can be said to 76 have been proved by the prosecution. As such, accused, Babu Ram cannot be held guilty of the offence charged and he is acquitted of the same. " The plaintiff appellant immediately on receiving the order of termination after giving the requisite notice brought an action being Civil Suit No.453 of 1981 in the court of Senior Sub Judge, Narnual praying for a declaration to the effect that the order of suspension dated 15.4.1980 and the order of termination dated 17.11.1980 passed by the respondent No.2 were illegal, wrong, arbitrary and without jurisdiction and the appellant is entitled to reinstatement with effect from the date of his suspension and so further entitled to be regularised and to all the benefits of the service. It had been stated in the pleadings of the appellant that a notification dated 1st January, 1980 issued by the Chief Secretary to the Government of Haryana addressed to all the Head of the Departments vide memo No. G.S.R./Const./ article 309/80 stating that such ad hoc employees who hold the class III posts for a minimum period of two years on 31.12.1979 are to be regularised if they fulfill the following conditions: (a) Only such ad hoc employees as have completed a minimum of two years service on 31.12.1979 should be made regular. However, break in service rendered on ad hoc basis upto a period of one month may be condoned but break accruing because the concerned employee had left service of his own volition or where the ad hoc appointment was against a post/vacancy for which no regular recruitment was required/intended to be made, i.e. leave arrangements or filling up of other short time vacancies, may not be condoned. (b) Only such ad hoc employees as have been recruited through the Employment Exchange should be made regular. (c) The work and conduct of the ad hoc employees proposed to be regularised should be of an overall good category. The plaintiff appellant pleaded that he having put in the minimum period of two years of service on 31.12.1979 became entitled to have his service regularised in view of the said Notification. He further pleaded that the alleged order of termination was in fact an order of dismissal and so it amounts to punishment and the same being penal in nature is null and void because it contravened the provisions of Constitution of India. The Senior Sub Judge, Narnaul after hearing the 77 parties held that as the petitioner appellant was acquitted of the said offence, the authorities should have revoked the suspension order and have paid the pay for the period for which the appellant remained under suspension. The Court further held that the appellant will be entitled to all the benefits of his service. Against this judgement and decree, an appeal was filed being C.A. No. 129 of 1983 in the Court of Addl. District Judge, Narnaul by the State. The Addl. District Judge by his judgement dated 18.10.1984 affirmed the judgement and decree of the learned Sub Judge holding that no enquiry was conducted before termination of the service of the appellant. The Addl. District Judge also held that: ". the plaintiff had completed two years of service and according to executive instructions his services were bound to be regularised. Reasonable opportunity to defend was not given to the plaintiff before termination of his services. Order of termination of services was merely a camouflage for an order of dismissal for misconduct. He was still under suspension when he was terminated. All these facts lead only to one conclusion that the impugned order of termination of the services of the plaintiff is bad in law . " Against this judgement and order R.S.A. No. 307 of 1985 was filed by the said respondents in the High Court of Punjab and Haryana at Chandigarh. The High Curt allowed the appeal on setting aside the judgement and decree of the courts below holding that the appellant was not entitled to be regularised automatically unless he fulfilled all the conditions given in the Notification. It was further held that when the case of the appellant came up for regularisation the Department found that the appellant 's work and conduct was not of the required standard so as to justify his regularisation and consequently his services were not regularised. It was further held that since the appellant was ad hoc employee therefore, the Department instead of waiting for the result of the criminal proceedings thought it fit under the circumstances to dispense with the services of the appellant in accordance with the terms of his appointment. This judgement is under challenge in this appeal. The pivotal question that poses itself for consideration before this Court is firstly whether during the period of suspension in view of the criminal proceeding which ultimately ended with the acquittal, an order of termi 78 nation can be made against the appellant by the respondent No.2 terminating his ad hoc services without reinstating him as he was acquitted from the charge u/s 420 I.P.C. and secondly whether the impugned order of termination from his service can be made straight away without reinstating him in the service after he earned acquittal in the criminal case and thereafter without initiating any proceeding for termination of his service as the impugned order of termination was of penal nature having civil consequences. It has also to be considered in this connection that the respondent No.2 has also not considered the case of the appellant for regularisation of his services even though he had completed two years of service as on 31.12.1979 fulfilling all the requisite terms and conditions mentioned in the said Notification. The order of suspension made by the respondent No.2 is admittedly on the sole ground that criminal proceeding was pending against the appellant. The order of termination had been made illegally during the pendency of the order of suspension and also during the pendency of the criminal proceeding which ultimately ended with the acquittal of the appellant. It is the settled position in law that the appellant who was suspended on the ground of pendency of criminal proceeding against him, on being acquitted of the criminal charge is entitled to be reinstated in service. His acquittal from the criminal charge does not debar the disciplinary authorities to initiate disciplinary proceedings and after giving an opportunity of hearing to the appellant pass an order of termination on the basis of the terms and conditions of the order of his appointment. Furthermore as the appellant whose name was sent through Employment Exchange and who was appointed and has completed two years service on 31.12.1979 is entitled to be considered for regularisation in the post Sub Inspector, Food and Supplies. The High Court had observed that: ". . In these circumstances, when his case came up for regularisation, the Department found that the plaintiff 's work and conduct was not of the required standard so as to justify his regularisation and consequently his services were not regularised. " This finding of the High Court is totally baseless in as much as the counsel for the said respondent could not produce any order or documentary evidence to show that the respondents considered the case of the appellant for the purpose of regularisation in accordance with the Notification dated 1st January, 1980. As such the finding of the High Court is wholly bad and illegal. The other finding of the High Court that the acquittal of the appellant by the criminal court was of no consequence as his services were terminated before the order of acquittal was made because the appellant was no more in service is also 79 against the well settled legal position. It has also to be borne in mind that under the Notification dated 1st January, 1980 issued by the Government, the appellant having fulfilled the condition of two years of service is entitled to be considered by the Government for regularisation of his service in accordance with the said executive instructions issued by the Government. As we have said herein before that there is nothing on record to show that the Government has ever considered the case of the appellant for regularisation of his service in the light of the instructions contained in the said Notification dated 1st January, 1980, the impugned order of termination of service made by the Government is illegal and arbitrary and so it is liable to be quashed and set aside. Moreover, from the sequences of facts of his case the inference is irresistible that the impugned order of termination of the service of the appellant is of penal nature having civil consequence. It is well settled by several decisions of this Court that though the order is innocuous on the face of it still then the Court that though the order is innocuous on the face of it still then the Court if necessary, for the ends of fair play and justice can lift the veil and find out the real nature of the order and if it is found that the impugned order is penal in nature even though it is couched with the order of termination in accordance with the terms and conditions of the order of appointment, the order will be set aside. Reference may be made in this connection to the decision of this Court in Smt. Rajinder Kaur vs State of Punjab and Another, in which one of us is a party. It has been held that: "The impugned order of discharge though stated to be made in accordance with the provisions of Rule 12.21 of the Punjab Police Rules, 1934, was really made on the basis of the misconduct as found on enquiry into the allegation behind her back. Though couched in innocuous terms, the order was merely a camouflage for an order of dismissal from service on the ground of misconduct. This order had been made without serving the appellant any charge sheet, without asking for any explanation from her and without giving any opportunity to show cause against the purported order f dismissal from service and without giving any opportunity to show cause against the purported order of dismissal from service and without giving any opportunity to cross examine the witness examined. The order was thus, made in total contravention of the provisions of Article 311(2) and was therefore, liable to be quashed and set aside. " This case relied on the observations made by this Court in the case of Anoop Jaiswal vs Government of India, ; 80 wherein it has been observed that: ". Where the form of order is merely a camouflage for an order of dismissal for misconduct it is always open to the court before which the order is challenged to go behind the form and ascertain the true character of the order. If the court holds that the order though in the form is merely a determination of employment is in reality a cloak for an order of punishment, the court would not be debarred, merely because of the form of the order, in giving effect to the rights conferred by law upon the employee". Similar observation has been made by this Court in the case of Hardeep Singh vs State of Haryana and Ors. , It has been held in this case as under: "In the instant case, it is clear and evident from the averments made in paragraph 3, sub para (i) to (iii) and paragraph (v) of the counter affidavit that the impugned order of removal/dismissal from service was in substance and in effect an order made by way of punishment after considering the service conduct of petitioner. There is no doubt the impugned order casts a stigma on the service career of the petitioner and the order being made by way of punishment, the petitioner is entitled to the protection afforded by the provisions of Article 311(2) of the Constitution as well as by the provisions of Rule 16.24 (Ix)(b) of the Punjab Police Rules, 1984. " In the premises aforesaid, we are constrained to hold that the judgement rendered by the High Court is wholly illegal and unwarranted and as such we quash and set aside the same and affirm the judgement of the courts below. We direct that the appellant be reinstated in the service immediately and be paid all his emoluments i.e. pay and allowances from the date of the order of his suspension i.e. 15.4.1980 till the date of reinstatement into service minus the suspension allowance that had been received by the appellant during the period of his suspension (if any). The respondents are at liberty to consider the case of the appellant for regularisation in the light of the norms laid down in the executive instructions issued on 1st January,1980 by Notification No. G.S.R./Const./Art. 309/80. The appeal is allowed. There will be no order as to costs in the facts the circumstances of the case. Y.Lal Appeal allowed.

The appellant was appointed an Sub Inspector, food & Supplies by respondent No. 2 on 13.4.1975 on ad hoc basis against service man quota; the post being purely temporary liable to be terminated without notice and without assigning any reasons or on arrival of a regular candidate. The appellant continued in service on that post till November 17, 1980, when his services were terminated. Prior to the termination of his services he was placed under suspension on April 15, 1980 in view of the criminal proceedings under Section 420, IPC pending against him and before the culmination of criminal proceedings, his services were terminated by order dated November 17, 1980, as aforesaid. Criminal case against the appellant was decided on October 21, 1981 wherein he was acquitted of the charge. The appellant on receiving the order of termination of his services filed Civil Suit 453 of 1981 in the court of Senior Sub Judge, narnaul praying for a declaration that the orders of suspension as also termination were illegal, wrong, arbitrary and without jurisdiction and that the appellant was entitled to reinstatement and regularisation of his service under the Government notification dated 1.1.1980 issued by the Chief Secretary to the Government of Haryana authorising regularisation of such ad hoc employees who held the Class III posts for a minimum period of two years. According to the appellant his case was covered by the said notification and as such he was entitled to all the benefits of service. The Senior Sub Judge held that as the appellant was acquitted of the offence, the authorities should have revoked the suspension order and have paid the pay for the period for which the appellant remained under suspension and thus allowed to the appellant all the benefits. An appeal was taken by the respondents to the Addl. District Judge who affirmed the order of the trial court holding that no enquiry was conducted before termination of the service of the appellant. Against the order of the Addl. District Judge, the respondents preferred an appeal 74 before the High Court and the High Court allowed the appeal holding that the appellant was not entitled to be regularised automatically unless he fulfilled all the conditions given in the notification. It was also held that the case of the appellant was considered for regularisation by the Department but the same was not found suitable; the services of the appellant were terminated in accordance with the terms of his appointment. The appellant has filed this appeal against that order in this court after obtaining special leave. Allowing the appeal, this Court, HELD: The order of suspension made by the respondent No. 2 is admittedly on the sole ground that criminal proceeding was pending against the appellant. The order of termination had been made illegally during the pendency of the order of suspension and also during the pendency of the criminal proceeding which ultimately ended with the acquittal of the appellant. The settle position in law is that the appellant who was suspended on the ground of pendency of criminal proceeding against him, on being acquitted of the criminal charge is entitled to be reinstated in service. His acquittal from the criminal charge does not debar the disciplinary authorities to initiate disciplinary proceedings and after giving an opportunity of hearing to the appellant pass an order of termination on the basis of the terms and conditions of the order of his appointment. [78C E] As the appellant whose name was sent through Employment Exchange and who was appointed and has completed two years service on 31.12.1979, he is entitled to be considered for regularisation in the post of Sub Inspector, Food and Supplies. [78E] Smt. Rajinder Kaur vs State of Punjab and Anr. , ; ; Anoop Jaiswal vs Government of India, ; ; Hardeep Singh vs State of Haryana and Ors.,[1987] 4 S.L.R. 576, referred to.

ION: Civil Appeal No. 824 of 1986 From the Judgement and order dated 10. 1.1986 of the Bombay High Court in W.P. No. 5327 of 1985. S.N. Kacker. Rani Chhabra and Swatanter Kumar for the Appellant. V.S. Desai, C.V. Subba Rao, A.S. Bhasme and A.M. Khanwilkar for the Respondents. The Judgment of the Court was delivered by R.B. MISRA, J. The present appeal by special leave is directed against the judgment and order dated January 10, 1986 of the High Court of Judicature at Bombay dismissing the petition under Article 226 of the Constitution filed by the appellant. The appellant is carrying on the business of bulk supply of milk, 66 products and milk cream etc. The appellant is well known in the said field and has a plant of pasteurization in Pune and has been carrying on the said business for more than twenty years. The appellant installed a plant for pasteurization at a heavy cost to the tune of rupees three lakhs. The appellant has been supplying large quantities of milk and milk products pasteurized or otherwise to various companies, Government Departments including respondents Nos. 2 and 3. The appellant as a registered contractor has been supplying fresh buffaloes and cows milk to respondent Nos. 2 and 3 as per the requirements for the last twenty years. The appellant is on their approved list for the same period and his supplies and work were always appreciated and accepted by the respondents for all these periods. The appellant is also capable of supplying any quantity of pasteurized milk and, indeed, he had been supplying to various organisations the milk and milk products and also pasteurized milk. Later on Respondent No. 2, the officer incharge of the Military Farms, Pimpri, directed that the local purchase of milk be stopped and regular supply under a contract by inviting tenders be effected. Accordingly, the appellant 's contract for supply of fresh buffalo and cow milk ended in 1984 The Military Farm had its own plant for pasteurization and for all these years respondents Nos. 2 and 3 had been making purchases of only fresh buffalo milk and used to pasteurize the milk for their own purposes in their own plant. The plant of respondents 2 and 3 is very much in operation till to day and also on the date of inviting tenders in question . Respondent No. 2 issued on or about July 16, 1985 tender notices for the supply of fresh buffalo or cow milk. The said tender notice was published in the Indian Express on July 29, 1985. The tender notice was also sent to the appellant by Respondent No. 2 by registered post acknowledgement due which was received by the appellant in July 1985. By the said tender notice, the respondent had invited tenders for supply of fresh buffalo or cow milk at Military Farms of Pimpri, Pune. The appellant being eligible and already on the approved list of the respondents submitted a tender for supply of fresh buffalo milk to respondents 2 and 3 as per the requirements stated in the tender notice. The appellant had offered the milk at the rate of Rs.4.21 per litre having 6 per cent fat and specific gravity of 1.030 as required in the tender notice, thus, giving a rate of Rs.421 for each 100 litres. 67 Respondent No. 4, General Manager, Government Milk Scheme, A Pune, also submitted a tender but the tender of respondent No. 4 related not to the item asked for in the tender notice viz. fresh buffalo or cow milk but related to the supply of pasteurized milk. While the cow milk asked for in the tender provided for 4 per cent fat with a specific gravity of 1.029, respondent No. 4 agreed to supply pasteurized milk for Rs.4 per litre, that is Rs.400 per 100 litres. It appears that after the submission of the tender, the appellant received a notice dated October 30, 1985 from respondent Nos. 2 and 3 requesting the appellant to extend the validity period of tender up to November 30, 1985 on the same terms and conditions as mentioned in the tender submitted by the appellant. The appellant acceded to the request and extended the validity period till November 30, 1985 in view of the long standing business and his good relations with respondents 2 and 3. During this period respondents 2 and 3 kept on receiving sup plies of fresh buffalo milk to the satisfaction till the appellant was asked to stop the supply from November 20, 1985 vide letter dated October 30, 1985, although the appellant had been requested earlier to continue the supply at least up to December 1, 1985 vide letter dated October 30, 1985. The appellant thus had to suffer a huge loss on account of the abrupt stoppage of the supply. Tenders were opened on August 23, 1985. The appellant was the lowest bidder. The rates given by the appellant in the tender for supply of fresh buffalo milk was lower and tender of respondent No. 4 could be of no consequence as it was for a different item not contemplated by the tender notice. The tender given by Respondent No. 4 was however accepted on November 19 20, 1985 and the tender of the appellant was rejected although it was lower than that of respondent No. 4. The concerned officer had made a report to the higher authorities about the two tenders, one from the appellant and the other from respondent No. 4, vide letter dated August 23, 1985. It will be appreciated at this stage to refer to the advice given by the officer concerned which is as follow: "CONCLUSION OF CONTRACT FOR SUPPLY OF MILK AT PR MF KIRKEE / PIMPRI. Reference discussion DDME and ADMP of date. The information required is given below: (a) The cost of blended milk and standard milk taking the buff milk rate of Rs.421 for 100 litres works out to: i) Blended Milk (Taking Rs.3.59per lit of BMP Rs.28 per kg.) 10% price preference Rs.0.36 ii) Standard Milk (Taking cost of Rs.3.48 per litre separated milk Rs.2.30 per litre) 10% price preference Rs.0.35 Rs.3.83 (b) If contract for purchase of cow milk is concluded, farm will lose 41 paise per litre on blended milk and 52 paise on standard milk per litre. Taking a daily purchase of 3000 litres of cows milk for which tender has been called for it will amount to a loss of Rs.4.48 lakhs in terms of blended milk and Rs.5.69 lakhs in terms of standard milk during the period of contract of one year. In so far as pasteurization is concerned, milk has to be repasteurized as delivery timings of units in the station are different. Moreover, even if Milk Scheme delivers the milk just before one hour of sending out the delivery rounds, it will only save on electricity charges which will be negligible. The 7,500 litres of cows milk being produced daily at Pimpri has to be pasteurized for which the daily section will continue to work as it is at present. The collection charges under farm arrangement works out to Rs.0.10 per litres. The details are enclosed at Appendix 'A '. Though collection charges will be less by 10 paise but it will cause lot of inconvenience to the dairy staff because milk is already being collected three times a day from Pimpri and lot of difficulties are being experienced in route. If Milk Scheme delivers the Milk at MP Dairy that arrangement will be the best. " From the above report it is obvious that the respondents will be put to substantial loss to the tune of about Rupees ten lakhs by accept 69 ing the tender of respondent No. 4 but all the same the tender of respondent No. 4 was accepted in preference to the tender made by the appellant. Respondents 2 and 3 would have gained by accepting the tender of the appellant which is strictly in terms of the tender notice because the respondent could further increase the quantity of milk by diluting the same to bring to fat and gravity standard. From the terms and conditions inviting the tender, the Government suppliers were given exemption from depositing the earnest money and tender form fee but no other concession to the Government supplies was indicated in the tender notice yet 10 per cent price preference was given to respondent No. 4 without any basis and in violation of the terms of notice inviting the tender. All the same the price of the appellant quoted in the tender was lower than that of respondent No. 4 and there was absolutely no justification whatsoever for not accepting the tender of the appellant. To start with the appellant had made an offer of Rupees four hundred fifty per hundred litres but para 16 of the tender notice provided for negotiations by respondents 2 and 3 with the contractors on rates or otherwise. As a result of subsequent negotiations between the appellant and the respondents, the offer of Rs.450 was reduced to Rs.421 per hundred litres. If the tender notice had indicated for the supply of pasteurized milk there was no difficulty for the appellant to have done so. But in the absence of any such indication in the tender notice and in the absence of any subsequent negotiations between the appellant and the respondents under para 16 of the tender notice, the appellant offered to supply the buffaloes or cows fresh milk. Feeling aggrieved by the rejection of his tender, the appellant challenged the order of the authority concerned by a Writ Petition in the High Court. The Writ Petition was, however, dismissed in limine by a cryptic order as under: "Heard both sides. The Writ Petition involves Questions relating to contractual obligations. Even otherwise, we do not find that there is anything wrong or unfair in accepting the milk from the Government Milk Scheme. The policy decision cannot be termed as unfair or arbitrary. Hence W.P. rejected. " The appellant has now come to challenge the judgment and order of the High Court dated 10.1.1986 by special leave. Shri S.N. Kacker, learned counsel appearing for the appellant has reiterated the same contentions as had been raised before the High Court. 70 The main contention is that the authorities concerned had acted contrary to the principles of law, unfairly, arbitrarily and discriminately. The appellant being the lowest bidder his tender ought to have been accepted by the Panel officers and there was absolutely no reason or justification for the respondents to reject the same. It was further contended that the tender submitted by respondent No. 4 was not in consonance with the requirements of the tender form and, therefore, that should have been ignored. The tender notice demanded supply of fresh buffaloes or cows milk hut respondent No. 4 had submitted for pasteurized milk. In any case, if the respondents wished to alter the invitation of the tender it was obligatory and mandatory for the respondents to call the appellant for negotiations before rejecting his tender and accepting the tender of respondent No. 4. There was a clear provision for negotiation in the tender notice and it was open to respondent No. 4 to have negotiated with appellant and asked him to tender for the supplying pasteurized milk. In any case, on the own admission of the respondents, that the pasteurized milk supplied by respondent No. 4 would have to be re pasteurized and secondly the cost of 5() paise had to be added even to the price of respondent No. 4 as the same was being added to the price given by the appellant. The action of the respondent is completely arbitrary and discriminatory inasmuch as respondent No. 4 merely being the Government organisation had been given preference over the appellant while respondent No. 4 had no better quality or standard for effecting the supplies asked for under the contract and even tor the pasteurized milk. Even in the matter of contract, the Government has to act fairly and justly and the failure of the Government to do so given a right to the citizen to approach the court for justice. The respondents have made a wrongful exercise of their power in rejecting the tender of the appellant. It was contended for the appellant that he being the lowest bid der, the authorities concerned acted arbitrarily in accepting the bid of respondent No. 4 which was higher than that of the appellant. We find considerable force in this contention. In Ramana Dayaram Shetty vs The International Airport Authority of India and Ors., ; , this Court laid down the law in this respect in the following words: "Where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet 71 will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess must be confined and structured by rational, relevant and non discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down unless it can be shown by the Government that the departure was not arbitrary but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. " On August 23, 1985, the officer of the Military Department submitted a report to the Higher Authority stating therein that the appellant was not only the lowest bidder but also the purchase of milk from the appellant could be profitable while the purchase of milk from respondent No. 4 would result in serious losses to the extent of Rupees ten lakhs or so. The report further indicates that respondents would have to re pasteurize the milk for its supply to its various units without any profit because the minimum fat standard of 4 per cent with the gravity of 1.029 has to be maintained. As such the entire labour would be deployed without any fruitful result or benefit to the respondent while on the other hand, if the respondent wished, by pasteurizing the fresh milk supply of the appellant they could otherwise earn profits extracting fat while maintaining the fat and the gravity standard. In spite of the report of the Military Officer, the higher bid of respondent No. 4 in preference to the lower bid of the appellant was accepted. It clearly indicates that the action of the respondent authority was arbitrary and fanciful. The terms contained in the tender notice have been detailed in the notice itself and it is not necessary to refer to all the terms but we would refer to paras 2, 16 and 19. Para 2 of the tender notice provides that tenders will be invited for the supply of pure fresh buffaloes milk testing not less than 6.0% butter fat and 1.030 specific gravity or pure fresh cows milk testing not less than 4% butter fat and 1.029 specific gravity daily at Military farms/depots as mentioned in Appendix `A '. Para 16 provides that as per orders of Army Headquarters, Military Farms contracts are to be concluded through a panel of officers which may hold negotiations with the contractor where necessary and recommend the reasonable rates to the higher authorities. 72 Para 19 provides that the Central Government/State Governments are purely governments concerns need not pay tender form fees and earnest money. They are, however, requested to inimate the period of supply for which they desire to tender their rates to enable the undersigned to send them the required tender form. It is contended for the appellant that the tender submitted by respondent No. 4 did not satisfy the requirement of para 2 of the tender notice. The tenders had been invited for the supply of pure fresh buffaloes milk or fresh cows milk but the respondent had submitted tender for supplying pasteurized milk, and therefore, the tender submitted by respondent No. 4 being not in conformity with the tender notice should not have been accepted by the authorities. In any case, if the tender of respondent No. 4 regarding supply of pasteurized milk was accepted and the original terms of the tender notice were changed, the appellant should have been given an opportunity to submit his tender in conformity with the changed terms but this was not done which has caused serious prejudice to the appellant. If the tender forms submitted by any party is not in conformity with the conditions of the tender notice the same should not have been accepted but the authorities concerned arbitrarily and in a fanciful manner accepted the tender of respondent No. 4. The State of its instrumentality has to act in accordance with the conditions laid down in the tender notice. In any case if the authorities chose to accept the tender of respondent No. 4 for supplying pasteurized milk, the appellant should also have been given an opportunity to change its tender. The authorities have, however, given preference to the tender of respondent No. 4 for offering to supply pasteurized milk contrary to the terms contained in para 2 of the tender notice. We find considerable force in this contention of the appellant. It was next contended that the conditions contained in the tender notice did not contemplate of giving 10 per cent price preference to Government undertakings yet 10 per cent price preference was given to the Government illegally and the policy of the Government to give 10 per cent price preference to Government undertaking was discriminatory and violative of Articles 14 and 16 of the constitution. The State policy places respondent No. 4 above the appellant without any basis or reasonable classification. In the absence of any such stipulation in the contract such price preference was unjustified. If the terms and conditions of the tender have been incorporated 73 in the tender notice itself and that did not indicate any preference to the Government undertakings of giving 10 per cent price preference to Government undertaking, the authority concerned acted arbitrarily in allowing 10% price preference to respondent No. 4. The only facility provided to the Government undertakings was provided in paragraph 19 which contemplates that the Central or State Government Departments are purely Government concerns need not pay tender forms fees and earnest money. This was the only concession available to the Central/State Government or to the purely Government concerns, and no other concession or benefit was contemplated under the terms of the tender notice. If the appellant had known that 10 per cent price preferene to Government undertaking was to be given to respondent No. 4 the appellant would have taken every precaution while submitting the tender. In support of his contentions, Shri S.N. Kacker, appearing for the appellant strongly relied upon Ramana Dayaram Shetty vs The International Airport Authority of India and Ors. (supra). In that case, the first respondent by a public notice invited tenders for putting up and running a Second Class Restaurant and Two Snack Bars at the International Airport at Bombay. The notice, inter alia, stated in paragraph 1 that sealed tenders in the prescribed form were invited from Registered Second Class Hoteliers having at least five years experience for putting up and running a Second Class Restaurant and two Snack Bars at the Bombay Airport for a period of three years. Paragraph 8 stated that the acceptance of the tender would rest with the Airport Director who does not bind himself to accept any tender and reserve to himself the right to accept or reject any tender received without assigning any reason therefor. Out of the six tenders received only the tender of the 4th Respondent was complete and offered the highest amount as licence fee. All the other tenders were rejected because they were incomplete. As the 4th respondent did not satisfy the description of a Registered Second Class Hotelier having at least five years experience prescirbed in paragraph (1) of the tender notice, the first respondent called upon the 4th respondent to produce documentary evidence whether they were registered second class hoteliers having at least five years experience. The Fourth Respondent stated once again that they had considerable experience of catering for various reputed commercial houses, clubs, messes and banks and that they held on Eating House Catering Establishment (Centeen) Licence. On being satisfied by the information given by the 4th respondent, the first respondent accepted the tender on the terms and conditions set out in its letter. 74 The appellant challenged the decision of the first respondent in accepting the tender of the 4th respondent. This Court held that the action of the first Respondent in accepting the tender of the 4th respondent who did not satisfy the standard or norms was clearly discriminatory since it exlcuded other persons similarly situated from tendering for the contract and it was arbitrary and without reason. The acceptance of tender was invalid as being violative of the equality clause of the Constitution as also the administrative law for its arbitrary actions. This Court also did not justify the action of the first respondent on the ground that it could have achieved the same result by rejecting all the tenders and entering into direct negotiations with the 4th respondent. This Court observed: "It is true that there was no statutory or administrative rule requiring the 1st respondent to give a contract only by inviting tenders and hence the 1st respondent was entitled to reject all the tenders and, subject to the constitutional norm laid down in Article 14, negotiate directly for entering into a contract. Paragraph (8) of the notice also made it clear that the 1st respondent was not bound to accept any tender and could reject all the tenders received by it. But here the 1st respondent did not reject the tenders outright and enter into direct negotiations with the 4th respondents for awarding the contract. The process of awarding a contract by inviting tenders was not terminated or abandoned by the 1st respondent by rejecting all the tenders but in furtherance of the process, the tender of the 4th respondents was accepted by the 1st respondent. The contract was not given to the 4th respondents as a result of direct negotiations. Tenders were invited and out of the tenders received, the one submitted by the 4th respondents was accepted and the contract was given to them." This Court quoted with approval the following observations of Mathew J., in V. Punnan Thomas vs State of Kerala, AIR 1969 Kerala 81: "The Government is not and should not be as free as an individual in selecting the recipients for its largess. Whatever its activity, the Government is still the Government and will be subject to restraints, inherent in its position in a democratic society. A democratic Government cannot lay 75 down arbitrary and capricious standards for the choice of persons with whom alone it will deal." Shri Anil Dev Singh, appearing for the respondents, has contended that respondent No. 4 being the State Government agency was rightly awarded the contract as per the policy of the Government of India as laid down in Letter No. 12(1)/1/85/D/(QS) dated August 13, 1985. The policy adopted by said letter dated August 13, 1985 came in after the 16th July, 1985 when respondent No. 2 issued tender notice for the supply of fresh buffalo or cow milk. As such the notification dated August 13, 1985 is of no avail to the respondent in so far as the acceptance of the tender of respondent No. 4 is concerned. Acceptance or rejection of tender made by the appellant or the respondent No. 4 will depend upon the compliance of the terms of tender notice. It is true that the Government may enter into a contract with any person but in so doing the State or its instrumentalities cannot act arbitrarily. In the instant case, tenders were invited and the appellant and respondent No. 4 submitted their tenders. The tenders were to be adjudged on their own intrinsic merits in accordnace with the terms and conditions of the tender notice. The learned counsel, however, placed reliance on C.K. Achuthan vs State of Kerala, [1959] Suppl. 1 SCR 787 where Hidayathullah, J., as he then was, held that a contract which is held from Government stands on no different footing from the contract held by a private party and when one person is chosen rather than another, the aggrieved party cannot claim protection of Article 14. The wide observation made by Hidayatullah, J., was explained in Ramana Dayaram Shetty (Supra). Bhagwati J. as he then was, speaking for the Court observed: "Though the language in which this observation is couched is rather wide, we do not think that in making this observation, the Court intended to lay down any absolute proposition permitting the State to act arbitrarily in the matter of entering into contract with third parties. We have no doubt that the Court could not have intended to lay down such a proposition because Hidayatullah J. who delivered the judgment of the Court in this case was also a party to the judgment in Rashbihari Panda v State of Orissa (Supra) which was also a decision of the Constitution Bench, where it was held in so many terms that the State cannot act arbitrarily in selecting persons with whom to enter into 76 contracts. Obviously what the Court meant to say was that merely because one person is chosen in preference to another, it does not follow that there is a violation of Article 14, because the Government must necessarily be entitled to make a choice. But that does not mean that the choice be arbitrary or fanciful. The choice must be dictated by public interest and must not be unreasoned or unprincipled. " Next reliance was placed on Viklad Coal Merchants, Patiala, etc. etc. vs Union of India & others, AIR 1984 SC 95. In that case this Court had to construe section 27A and 28 of the Railways Act and the Court observed: "Section 28 forbids discrimination by giving undue or unreasonable preference or advantage in respect of any particular traffic to any particular person or any railway administration but this general prohibition against discrmination is subject to the overriding power conferred on Central Government under section 27A. If while giving effect to the orders of the Central Government issued under Section 27A, priority is accorded in the matter of transport of goods consigned to Central or State Government or class of goods specified in the general or special order issued in this behalf, the action of the railway administration in complying with such special or general order could not be said as tentamounting to giving undue or unreasonable preference or advantage to or in favour of any particular person or railway administration. What section 28 forbids is discrimination in the matter of transport of goods against a class but this is subject to the permissible classification that would be introduced by a special or general order issued by the Central Government in exercise of the power conferred by Section 27A. It may be recalled that the Preferential Traffic Schedule according to Priority `C ' to transport of coal by those mentioned therein has been issued in exercise of the power conferred by Section 27A. Therefore, the submission that petitioners in the matter of transport of coal are similarly situated with the Central or State Government or transporters given priority by general or special order issued under Section 27A cannot be entertained. " 77 This case is not of much help in the present case. The facts were materially different in that case. In that case, the railway authority had to comply with the directions given by the Central Government which was in the public interest. Lastly, the counsel relied upon Madhya Pradesh Ration Vikareta Sangh Society & Ors. etc etc. vs State of Madhya Pradesh & Anr. ; In that case the question for consideration was whether the Fair Price Shops in the State under the Government Scheme should be directly run by the Government through the instrumentalities of the Consumers Co operative Societies as its agents or by retail dealers to be appointed by the Collector. This Court took the view that essentially this was a matter of policy to which the Court is not concerned. This case also is not of much help in the present case. In the instant case, the instrumentalities of the State invited tenders for the supply of fresh buffaloes and cows milk and, therefore, this case has to be decided on the basis of bid by the tenderers. There was no question of any policy in this case. It is open to the State to adpot a policy different from the one in question. But if the authority or the State Government chooses to invite tenders then it must abide by the result of the tender and cannot arbitrarily and capriciously accept the bid of respondent No. 4 although it was much higher and to the detriment of the State. The High Court, in our opinion, was not justified in dismissing the writ petition in limine by saying that the question relates to the contractual obligation and the policy decision cannot be termed as unfair or arbitrary. There was no question of any policy decision in the instant case. The contract of supply of milk was to be given to the lowest bidder under the terms of the tender notice and the appellant being the lowest bidder he should have been granted the contract to supply, especially, when he has been doing so for the last so many years. In the result, the appeal must succeed. It is accordingly allowed and the judgment and order of the High Court dated January 10, 1986 is set aside and the Writ Petition is allowed and the order of the authorities rejecting the tender of the appellant and accepting the tender of respondent No. 4 is quashed. The respondents authorities are directed to accept the tender of the appellant. There is, however, no order as to costs. P.S.S. Appeal allowed.

The appellant is carrying on the business of bulk supply of milk and milk products for the last twenty years. He has a plant for pasteurization at Pune. On July 16, 1985 the officer in charge of the Military Farms respondent No. 2, issued tender notice for the supply of pure fresh buffalo and cow milk. The appellant being eligible and already on the approved list of the respondent authority, submitted a tender offering fresh buffalo milk of the specified fat content and gravity giving a rate of R.S. 421 per 100 litres. The General Manager, Government Milk Scheme, Pune respondent No. 4, also submitted a tender for the supply of pasteurized milk, an item not contemplated by the tender notice, at Rs.400 per 100 litres. Tenders were opened on August 23, 1985 and the appellant was found the lowest bidder. The Military officer concerned submitted a report to the higher authority stating that the appellant was not only the lowest 'bidder but also that the purchase of milk from him would be profitable, while the purchase of milk from respondent No. 4 would result in serious loss to the extent of rupees ten lakhs or so. But all the same, the respondent authority accepted the higher bid of respondent No. 4, in preference to the lower bid of the appellant contrary to the terms of the notice inviting tender. Feeling aggrieved by the rejection of his tender, the appellant challenged the order by filing a writ petition in the High Court which was dismissed in limine. In this appeal by special leave on behalf of the appellant it was 64 contended that even in the matter of contracts, the Government has to act fairly and justly and the failure of the Government to do so gives a right to the citizen to approach the court for justice, that the authority concerned in rejecting his tender had acted contrary to the principles of law, unfairly, arbitrarily and discriminately, that the tender submitted by respondent No. 4 was not in consonance with the tender notice and it should have been ignored, and that if the authority wished to alter the conditions of the tender notice it was obligatory and mandatory for it to call him for negotiation. It was further contended that the 10 per cent price preference given to respondent No. 4 contrary to the terms of the tender notice was illegal and discriminatory. On behalf of the respondents it was contended that respondent No. 4 being the Government agency was rightly awarded the contract as per the policy of the Government of India laid down in notification dated August 13, 1385. Allowing the appeal, the Court, ^ HELD: 1. The Government may enter into a contract with any person but in so doing the State or its instrumentalities cannot act arbitrarily. It is open to the State to adopt a policy different from the one in question, but once the authority or the State Government chooses to invite tenders then it must abide by the result of the tender. [75 C D; 77 D E] 2. The High Court was not justified in dismissing the writ petition in limine by saying that the question relates to the contractual obligation and the policy decision cannot be termed as unfair or arbitrary. [77 E] There was no question of any policy decision in the instant case. The notification dated August 13, 1985 laying down the policy came in after July 16, 1985 when respondent No. 2 issued tender notice. The instrumentalities of the State having invited tenders for the supply of fresh buffalo and cow milk, these were to be adjudged on their intrinsic merits in accordance with the terms and conditions of the tender notice. The contract for the supply of milk was to be given to the lowest bidder under the terms of the tender notice and the appellant being the lowest bidder, it should have been granted to him. The authority acted capriciously in accepting a bid which was much higher and to the detriment of the State. [75 B D; 77 D F] 3. Where the tender form submitted by any party is not in con 65 formity with the conditions of the tender notice the same should not be A accepted. So also, where the original terms of the tender notice are changed the parties should be given an opportunity to submit their tenders in conformity with the changed terms. [72 C E] 4. The authority acted arbitrarily in allowing 10 per cent price preference to respondent No. 4. The terms and conditions of the tender had been incorporated in the tender notice itself and that did not indicate any such price preference to government undertakings. The only concession available to Central/State Government or to the purely government concerns was under para 13 of the notice, that is, that they need not pay tender form fee and earnest money. No other concession or benefit was contemplated under the terms of the tender notice. [73 A C ] Ramana Dayaram Shetty vs The International Airport Authority of India & Ors., ; ; V. Punnan Thomas vs State of Kerala, AIR 1969 Kerala 81; C.K. Achuthan vs State of Kerala [1359] Suppl. 1 SCR 787; Viklad Coal Merchants, Patiala etc. vs Union of India & Ors. AIR 1984 SC 95; and Madhya Pradesh Ration Vikreta Sangh Society SCR 750, referred to.

N: Criminal Appeal No. 658 of 1983. 840 Appeal by Special leave from the Judgment and Order dated the 21st October, 1983 of the Gujarat High Court in Criminal Misc. Application No. 1724 of 1983. Vimal Dave for the Appellant. M. N. Phadke, R. N. Poddar, Girish Chandra and C. V. Subba Rao for the Respondent. The Judgment of the Court was delivered by DESAI, J. Special Leave granted. Ordinarily this Court is not inclined to interfere with the orders either granting or refusing to grant bail to an accused person either facing a criminal trial or whose case after conviction is pending in appeal. However, this is not a case where bail is granted or refused but the order granting the bail by the learned Sessions Judge was set aside by the High Court adopting an approach which does not commend to us. It is alleged that the appellant gave blows with a knife to one Popatlal Sorathia, who had come to visit an indoor patient Navalsinh Bhatti on August 17, 1983 around 9.45 A.M. Appellant was accosted by the policemen on duty. An offence under Sec. 307 I.P.C. was registered against him and the appellant was taken into custody and was subsequently remanded to judicial custody. An application for releasing him on bail was made on August 22, 1983 to the Chief Judicial Magistrate, Rajkot. The Chief Judicial Magistrate, Rajkot was pleased to dismiss the same by his order dated August 29, 1983. On the same day, an application for releasing the appellant on bail was moved before the learned Sessions Judge. A notice was issued to the learned Public Prosecutor. After hearing both the sides, the learned Sessions Judge by a well reasoned order directed that the appellant be released on bail on his furnishing security in the amount of Rs. 5000 and personal bond of the like amount. It appears that the State of Gujarat filed Miscellaneous Criminal Application No. 1724 of 1983 in the High Court of Gujarat seeking cancellation of the order granting bail to the appellant. A learned Single Judge of the High Court held that once a prima facie case is 841 established, the learned Sessions Judge ought to have taken into consideration the nature and gravity of the circumstances in which the offence is committed. The charge against the appellant is that he has committed an offence punishable under Sec. 307 I.P.C. and Sec. 135 of the Bombay Police Act and even on the date of hearing of this appeal before us on November 18, 1983, the Court was informed that the victim is alive and at present there is no danger to his life. Nearly 3 months have rolled by from the date of the offence. We fail to understand what the learned Judge of the High Court desires to convey when he says that once a prima facie case is established, it is necessary for the court to examine the nature and gravity of the circumstances in which the offence was committed. If there is no prima facie case there is no question of considering other circumstances But even where a prima facie case is established, the approach of the court in the matter of bail is not that the accused should be detained by way of punishment but whether the presence of the accused would be readily available for trial or that he is likely to abuse the discretion grained in his favour by tampering with evidence. We would have certainly overlooked this aspect of the matter if the approach of the learned judge was otherwise one which would commend to us. It however appears that the learned judge was impressed by some of the most irrelevant considerations which prima facie emerge from the following observations of the learned judge which permits his whole order running into about 13 pages. Says the learned judge: "The learned Judge ought to have seen the fact that the helpless victim had gone to the hospital for pre operation check up. He was a leading social and political worker. He was an active worker and Secretary of "Gundagiri Nivaran Samiti" which had raised a campaign against the atrocities allegedly having been committed by the Rajputs of Girasiya community. Admittedly the respondent is Girasiya and the complainant who was an active worker and Secretary of Gundagiri Nivaran Samiti had become a victim at the hands of the respondent. The learned Judge ought to have taken into consideration the material fact that the incident had taken place in the premises of the Hospital which may terrorize a number of sick persons who might be getting treatment in the hospital." 842 At another place, the learned Judge has observed that the learned Sessions Judge has ignored, the fact that a social and political worker was attacked in the hospital premises with a knife having 9" blade and as many as 1 l injuries were caused to a helpless victim. In our opinion, the learned Judge appears to have misdirected himself while examining the question of directing cancellation of bail by interfering with a discretionary order made by the learned Sessions Judge. One could have appreciated the anxiety of the learned Judge of the High Court that in the circumstances found by him that the victim attacked was a social and political worker and therefore the accused should not be, granted bail but we fail to appreciate how that circumstance should be considered so overriding as to permit interference with a discretionary order of the learned Sessions Judge granting bail. The High Court completely overlooked the fact that it was not for it to decide whether the bail should be granted but the application before it was for cancellation of the bail. Very cogent and overwhelming circumstances all necessary for an order seeking cancellation of the bail. And the trend today is towards granting bail because it is now well settled by a catena of decisions of this Court that the power to grant bail is not to be exercised as if the punishment before trial is being imposed. The only material considerations in such a situation are whether the accused would be readily available for his trial and whether he is likely to abuse the discretion granted ill his favour by tampering with evidence. The order made by the High Court is conspicuous by its silence on these two relevant considerations. It is for these reasons that we consider in the interest of justice a compelling necessity to interfere with the order made by the High Court. We accordingly allow this appeal and set aside the order made by the learned High Court Judge and restore the one made by the learned Sessions Judge with following modifications: (i) The appellant shall be released or if he is on bail continue 'to be on bail on his furnishing two fresh bail bonds each in the amount of Rs.5000 supported by a solvent security. (ii) The 'appellant shall report on first Monday every month before the Chief Judicial Magistrate, Rajkot at 11.00 A.M. till his trial commences. Thereafter 843 he would be subject to the further orders that may be made in this behalf by the court which would try him. (iii) Other conditions imposed by the learned Sessions Judge remain unaltered. Order accordingly. H.S.K. Appeal allowed.

The appellant, against whom an offence under sec. 307 I.P.C. had been registered for giving knife blows to a person was granted bail by the Sessions Judge. On application by the State, a Single Judge of the High Court cancelled the bail. Hence this appeal by special leave. Allowing the appeal, ^ HELD: Very cogent and overwhelming circumstances are necessary for an order seeking cancellation of the bail and the trend today is towards granting bail because it is now well settled that the power to grant bail is not to be exercised as if the punishment before trail is being imposed. The only material considerations in such a situation are whether the accused would be readily available for his trial and whether he is likely to abuse the discretion granted in his favour by tampering with evidence. [842 D E] In the instant case the order made by the High Court is conspicuous by its silence on these two relevant considerations. The learned Judge was impressed by some of the most irrelevant considerations and misdirected himself. The circumstances found by him that the victim attacked was a social and political worker could not be considered so overriding as to permit interference by the High Court with the discretionary order of the Sessions Judge granting bail. The High Court completely overlooked the fact that it was not for it to decide whether the bail should be granted but the application before it was for cancellation on the bail. [842 B C]

N: Criminal Appeal No. 539 of 1984 From the judgment and order dated 17.11.82 of the High Court of Delhi in Criminal Appeal No. 268/82. 466 D K Sen, G.D. Gupta and R.N. Poddar for the Appellant. D.B. Vohra for the Respondent. The following Judgments were delivered VARADARAJAN, J. This appeal by special leave is by the Delhi Administration and directed against the judgment of a learned Single Judge of the Delhi High Court dismissing Criminal Revision No. 268 of 1982 in limine. That criminal revision was filed against the acquittal of the respondent by the learned Metropolitan Magistrate, Delhi in Case No. 11 of 1982, in which the respondent was tried for an offence under section 7 read with section 16 of the (hereinafter referred to as 'the Act '). The Food Inspector, P.W. 4 took a sample of lal mirchi powder from the grocery shop of the respondent. On analysis by the Public Analyst it was found in exhibit PW 1/C that the sample contained nine living meal worms. There was no other evidence in support of the case of the prosecution that the lal mirchi powder was adulterated. It was contended before the learned Magistrate that the evidence by way of the Public Analyst 's report does not satisfy the requirement of the definition of 'adulterated article ' of food contained in section 2 (1) (f) of the Act. The learned Magistrate accepted this contention and found that the prosecution has failed to prove that the lal mirchi powder was adulterated and he accordingly acquitted the respondent. The Calcutta High Court in M/s Narkeklange Roller Flour Mills and another vs The Corporation of Calcutta(1) has observed: ". Clause (f) of Section 2 defines the word 'adulterated ' and an article of food is said to be adulterated if it is insect infested. By physical examination the Public Analyst found blackish worms and the sample there is at best worm infested. Is the word worm synonymous with 'insect ' ? Did the legislature intend to condemn wheat products due to presence of seasonal worms ? The word 'insect ' is defined in the Oxford Dictionary as "small invertebrate segmented animal having head, thorax, abdomen, and three pairs of thoracic legs, usually with one or two pairs of thoracic (1) 1973 (Prevention of Food Adulteration Cases) 257. 467 wings. "The word "worm" in the same dictionary is defined as "kinds of invertebrate limbless or apparently limbless creeping animal, such as are segmented in rings or are parasite in the intestines or tissues. " There is, therefore, a good deal of difference between worms and insects and a sample of food becomes adulterated only when it is insect infested. In the present sample, however, worms were found to be present and that in our view, does not satisfy the requirements of the definition "adulterated" under Section 2 of the Act. " According to the Webster 's New World Dictionary (1962 edition), 'worm ' means "any of many long, slender, soft bodied creeping animals, some segmented, that live by burrowing underground or as parasites, as the earth worm, tapeworm". According to Webster 's New World Dictionary 'infest ' means "to overrun or inhabit in large numbers, usually so as to be harmful or bother some swarm in or about." According to that dictionary an 'insect ' means any "of a large group of small invertebrate animals characterized, in the adult state, by division of the body into head, thorax, and abdomen, three pairs of membranous wings: beetles, bees, flies, wasps, mosquitoes, etc. are insects. " According to the Shorter Oxford English Dictionary, 'worm means "a slender, creeping, naked, limbless animal usually brown or reddish with a soft body divided into a series of segments; an earthworm." According to that dictionary an 'insect ' means "a small invertebrate animal, usually having a body divided into segments, and several pairs of legs, and often winged." Therefore it is not possible to hold that a worm and an insect are the same. Even if worms and insects are the same the appellant is not out of difficulty in this case. As already stated the Public Analyst has found in the sample only nine living meal worms and he has neither stated that it is insect infested nor that it is unfit for human consumption on account of the presence of the meal worms nor that it is otherwise unfit for human consumption. According to Webster 's Illustrated Contemporary Dictionary (Encyclopedic Edition), 'infest ' means "to overrun or spread in large numbers so as to be unpleasant or unsafe". 468 In Municipal Corporation of Delhi vs Kacheroo Mal, (1) the Public Analyst had reported: " Date of Analysis: 10 1 1969, Insect infested pieces of Kajus: 21.9% and I am of the opinion that the same is adulterated due to insect infested pieces of Kajus to the extent of 21.9%" Sarkaria, J. speaking for himself and Gupta, J. has observed in that case: " In view of the construction that the expression 'insect infested ', includes infestation even by dead insects, the further point to be considered is, whether mere insect infestation, without more, would be sufficient to hold the article to be 'adulterated ' within the meaning of sub clause (f) of clause (I) of section 2 of the Act . The point sought to be made out is that in this case, the prosecution, the defence and the High Court all felt that the report of the Public Analyst was vague, inadequate and deficient, and in the absence of clear proof of the sample being unfit for human consumption, it could not constitute a valid basis for holding the article to be adulterated within the meaning of sec. 2(1)(f). As against the above, Mr. F.S. Nariman, the learned; Counsel for the appellant Corporation submits that in the case of food articles for which no minimum standard or purity is prescribed, the moment it is proved that a proportion of percentage of the article not being a proportion or percentage as would be covered by the rule, de minimis non curat lex is putrid, filthy, disgusting, decomposed or insect infested, it would be deemed to be unfit for human consumption and therefore adulterated within the contemplation of section 2(1)(f). In any case, proceeds the argument, it is implicit in the report of the Public Analyst that the article in question was found unfit for human consumption. This implication according to the learned Counsel flows ' from the Analyst 's conclusion that the article was "adulterated". Counsel has criticised the view taken by the Bench in Dhanraj 's case that if for an article of food, no (1) ; 469 standard of quality or purity has been prescribed or no limits have been prescribed for the validity or its constituents, then sub clause (I) of clause (f) of sec. 2 will not apply and that the Public Analyst is not competent to say as to what extent of insect infestation would make the article "adulterated ' The relevant part of Section 2 reads as under: "(1) "adulterated" an article of food shall be deemed to be adulterated (a) to (e) . . . (f) If the article consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or is insect infested or is otherwise unfit for human consumption". The phrase "or is otherwise unfit for human consumption" can be read conjunctively as well as disjunctively. If it is read conjunctively, that is, in association with what precedes it, sub clause (f) with slight consequent rearrangement and parenthesis would read like this: "If the article, is unfit for human consumption on account of (a) its consisting wholly or in part of any filthy, putrid, disgusting rotten, decomposed or diseased animal or vegetable sub stance or being insect infested, (b) or on account of any other cause '. In this view of the sub clause, proof of unfitness of the article for human consumption is a must for bringing the case within its purview. F If the phrase is to be read disjunctively the mere proof of whole or any part of the article being "filthy, putrid, disgusting, rotten . or insect infested" would be conclusive to bring the case within the mischief of this sub clause, and it would not be necessary in such a case to prove further that the article was unfit for human consumption. We would prefer the first construction as it comports best with reason, common sense, realities, the tenor of this provision and the main purpose and scheme of the Act. The adjectives "filthy", "putrid ', "disgusting", "decomposed", 470 "rotten". "insect infested" refer to the quality of the article and furnish the indicia for presuming the article to be unfit for human consumption. But the presumption may not be conclusive in a cases, irrespective of the character of the article, and the nature and extent of the vice afflicting it. ." In Dhanraj 's case (I.L.R. 1970 Delhi 681) the High Court construed this sub clause (f) thus: "The word 'otherwise ' in sub clause (f) of cl. (I) of sec. 2 does suggest that all the adjectives used earlier refer to the quality of the article being unfit for human consumption. To fall under that sub clause an article of food must be unfit for human consumption because it consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or because it is insect infested or on account of any other cause". On the basis of that decision it is stated as follows in the , published by the Eastern Book Company, seventh edition, with reference to section 2 (1) (f) of that Act thus: " The phrase "or otherwise unfit for human consumption" should be read conjunctively and not disjunctively, that is, in association with what precedes it. This sub clause would read like this: If the article is unfit for human consumption on account of (a) its consisting wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or being insect infested, (b) or on account of any other cause. In this view of the sub clause proof of the unfitness of the article for human consumption is a must for bringing the case within its purview. Municipal Corporation, Delhi vs Kacheroo Mal(l) (1) [1976] 2 S.C.R. I 471 All the adjectives used in this sub clause are presumptive and not an absolute test of the quality of the article being unfit for human consumption. To be more precise, in the case of an article in respect of which the Rules do not prescribe any minimum standard of purity or any minimum proportion of insect infestation that would exclude in from the definition of "adulterated article" it will be a mixed question of law and fact whether the insect infestation is of such a nature, degree and extent as renders the article unfit for human consumption. The opinion of the public analyst who examines and analyses the sample would constitute legal evidence. As an expert in the science he is competent to opine and testify about this fact. Municipal Corporation, Delhi vs Kacheroo Mal[(1976) 2 SCR 1]". An equally strong ' Bench of this Court l has taken a different view in regard to section 2(1)(f) of the Act in Municipal Corporation of Delhi vs Tek Chand Bhatia(l), where A.P. Sen, J. speaking for himself and Murtaza Fazal Ali, J. has observed: " In Dhanraj 's case (supra) the High Court construed sub cl. (f) thus: "The word 'otherwise ' in sub clause (f) of cl. (l) of sec. 2 does suggest that all the adjectives used earlier refer to the quality of the article being unfit for human consumption. To fall under that sub clause an article of food must be unfit for human consumption because it consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or because it is insect infested or on account of any other cause," We are of the opinion that the High Court was clearly wrong in its inter pretation of section 2(1)(f). On the plain language of the definition section it is quite apparent that the words 'or is otherwise unfit for human consumption ' are disjunctive of the rest of the words preceding them. It relates to a distinct and separate cclass altogether, It seems to us (1) [1980] I S.C.R., 910 472 that the last clause 'or is otherwise unfit for human consumption ' is residuary provision which would apply to a case not covered by or falling squarely within the clauses preceding it. If the phrase is to be read disjunctively the mere proof of the article of food being 'filthy, putrid, rotten, decomposed . Or insect infested ' would be per se sufficient to bring the case within the purview of the word 'adulterated ' as defined in sub cl. (f) and it would not be necessary in such a case to prove further that the article of food was unfit for human consumption. It is, however, pointed out that the construction placed by the High Court in Dhanraj 's case upon section 2(1)(f) of the Act has been received with approval by this Court in Municipal Corporation of Delhi vs Kacheroo Mal [(1976) 2 S.C.R.1] where it is observed that 'the construction placed by the High Court in Dhanraj 's case is the correct exposition of the law embodied in section 2(1)(f) '. It is added for the sake of elucidation that the adjectives which precede the phrase 'or is otherwise unfit for human consumption ' indicate presumptive but not absolute criteria as to the quality of the article of food. If we may say so with respect, we have reservations about the correctness of this decision, but it is not necessary to refer the case to a larger Bench. In Kacheroo Mal 's case it is observed: "The phrase "or is otherwise unfit for human consumption" can be read conjunctively as well as disjunctively. If it is read conjunctively, that is, in association with what precedes it, sub clause (f) with slight consequent rearrangement and parenthesis would read like this; "If the article is unfit for human consumption on account of (a) its consisting wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or being insect infested, (b) or on account of any other cause ' In this view of the sub clause, proof of 'unfitness of the article for human consumption ' is a must for bringing the case within its purview. If the phrase is to be read disjunctively, the more proof of the whole or any part of the article being "filthy, putrid, disgusting, rotten. . or insect infested" would be conclu 473 sive to bring the case within the mischief of this sub clause, and it would not be necessary in such a case to prove further that the article was unfit for human consumption. We would prefer the first construction as it comports best with reason, common sense, realities, the tenor of this provision and the main purpose and scheme of the Act. The adjectives "filthy", "putrid", "disgusting", "decomposed", "rotten". "insect infested" refer to the quality of the article and furnish the indicia for presuming the article to be unfit for human consumption. But the presumption may not be conclusive in all cases, irrespective of the character of the article, and the nature and extent of the vice afflicting it. This is particularly so, where an article is found to be "insect infested. " With utmost respect, we are not able to share this view and would hold that the observations made in the Judgment should be confined to the particular facts of that case. The decision in Kacheroo Mal 's case (supra) was largely based on the circumstances that the standard of quality and purity was not prescribed in respect of cashew nuts. Now that r. 48 B of the Prevention of Food Adulteration Rules; 1955 has been framed, the decision in Kacheroo Mal 's case (Supra) is rendered inapplicable. " We also constitute a Bench of equal strength. Therefore, I refrain from expressing any opinion as to which of the two aforesaid views is correct. Nor is it necessary for me to do so having regard to the facts of this case. Even if the nine worms found by the Public Analyst in the sample are considered to be insects, the certificate of the Public Analyst does not support the case of the prosecution that the lal mirchi powder was adulterated, for the Public Analyst ha not expressed his opinion that the lal mirchi powder was either worm. infested or insect infested or that on account of the presence of the meal worms the sample was unfit for human consumption. 'Therefore, I am of the opinion that the prosecution has not established by any satisfactory evidence the requirement of section 2(1)(f) of the Act. Consequently, no interference is called for with the judgment of the 474 High Court which, as stated above, has dismissed the criminal revision in limine. The appeal is accordingly dismissed. In my opinion, the true meaning of Section 2(ia) (f) has been brought out in Municipal Corporation of Delhi vs Tek Chand Bhatia (supra) and the conclusion that 'it would not be necessary in such a case to prove further that the article of food was unfit for human consumption ' is a correct statement of the law. I agree with my learned brother that the evidence led by the prosecution is inadequate to warrant interference with the judgment of acquittal passed by the trying Magistrate and upheld by the High Court. I, therefore, agree that the appeal has to be dismissed.

Section 2(1) (f) of the Provides that an article of food shall be deemed to be adulterated if the article consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or is insect infested or is otherwise unfit for human consumption. The respondent was prosecuted for an offence under section 7 read with section 16 of the Act. The prosecution case was that a sample of lal mirchi powder was taken from the grocery shop of the respondent. On an analysis by the Public Analyst it was found that the sample contained nine living meal worms. Thor was no other evidence in support of the case of the prosecution that the lal mirch powder was adulterated. The learned Magistrate found that the prosecution had failed to prove that the lal mirchi powder was adulterated and acquitted the respondent. The High Court dismissed the Criminal Revision Petition filed by the appellant State in limine. Dismissing the appeal by the State, ^ HELD: (I) The words 'worm ', 'infest ' and 'insect ' are defined in Webster 's New World Dictionary (1962 Edition). 'Worm ' means "any of many long, slender, soft bodied Creeping animals, some segmented, that live by burrowing underground or as parasites, as the earth worm, tapeworm," 'Infest ' means "to overrun or inhabit in large numbers, usually so as to be harmful or 465 bothersome, swarm in or about. 'Insect ' means "any of a large group of small invertebrate animals characterized, in the adult state, by division of the body into head, thorax, and abdomen, three pairs of membranes wings: beetles, bees, flies, wasps, mosquitoes, etc. are insects. " The same meaning is given of the above three words in the Shorter Oxford Dictionary. Therefore, it is not possible to hold that a worm and an insect are the same. [467C E] M/S Narkeklange Roller Flour Mills and another vs The Corporation of Calcutta 1973 (Prevention of Food Adulteration Cases) 257, referred to. (2) Even if the nine worms found by the Public Analyst in the sample are considered to be insects, the certificate of the Public Analyst does not support the case of the prosecution that the lal mirchi powder was adulterated, for the Public Analyst has not expressed his opinion that the lal mirchi powder was either worm infested or insect infested or that on account of the presence of the meal worms the sample was unfit for human consumption. Therefore, the prosecution has not established by any satisfactory evidence the requirement of Section 2(1) (f) of the Act. Consequently no interference is called for with the Judgement of the High Court. [473G H] Municipal Corporation of Delhi vs Kacheroo Mal ; , Municipal Corporation of Delhi vs Tek Chand Bhatia ; , held inapplicable. Per Varadarajan J. No opinion is expressed as to which of the two views expressed in Municipal Corporation of Delhi vs Kacheroo Mal, ; , and Municipal Corporation of Delhi vs Tek Chand Bhatia [1980] I S.C.R.910 is correct, Since this Bench also is of equal strength. Moreover, it is not necessary to do so having regard to the facts of the present case. [473F ] Per Ranganath Misra 1. (concurring in the conclusion) The true meaning of section 2(1) (f) has been brought out in Municipal Corporation of Delhi vs Tek Chand Bhatia, 11980] I SCR 910 and the conclusion that 'it would not be necessary in such a case to prove further that the article of food was unfit for human consumption ' is a correct statement of the law. In the instant case, the prosecution evidence is inadequate to warrant interference. [474B C]

Appeal No. 1452 of 1987. From the Judgment and Order dated 10.7.1986 of the Kamataka High Court in I.T.R.C. No. 198 of 1987. WITH C.A. Nos. 4462/89, 1822, 1902, 1465/87, 675, 658, 4461/89, 6093/90, 6204/ 90, 6092. and 6092 A of 1990. H. Salve, P.H. Parekh, Ms. Meenakshi Grover, R. Nariman, Ms. R. Gill and Ms. Simi Kr. for the Appellants. B.B. Ahuja, Ranbir Chandra and Ms. A. Subhasini for the Respondent. The Judgment of the Court was delivered by B.P. JEEVAN REDDY J. These appeals are preferred against the judgment of the Karnataka High Court answering the question referred to it, at the instance of the revenue, in favour of the revenue and against the assessee. The question referred under section 256 of the Income Tax Act, 196 1, read as follows: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 1, 79, 742 could not be disallowed under section 40 (c) of the Income Tax Act, 1961." (The above question related to Assessment Year 1974 75. The question referred for A.Y. 1975 76 was identical except in the matter of amount). Since the facts in all the appeals are identical it would be sufficient to notice the facts in C.A. Nos. 6092 and 6092A/90 (Prakash Beedies (P) Lid. vs Commr. of Income Tax. Karnataka, Bangalore). Prior to 15.7.1992, a partnership firm called K.M. Anand Prabhu & Sons, Mangalore, consisting of three partners K.M. Vishnudas Prabhu, K.M. Ramdas Prabhu and K.M. Shankar Prabhu was engaged inter alia in the business of manufacturing and sale of beedies under the brand name 'Mangalore Prakash Beedies '. On May 20, 1972 a Private limited company called Prakash Beedies 609 Limited (the assessee appellant herein), was incorporated with its registered off ice at Manoalore. One of its objects was to take over business of the aforesaid firm. Under an agreement dated July 15, 1972 between the firm and the company, the firm sold its rights and assets to the company on the terms and conditions set out therein. Clause 4(a) of the agreement, which alone is material for the purposes of these appeals reads: "(a) For the use of the trade name the Company shall pay royalty to the Vendor at the rate of 10ps. for every thousand beedies sold by the Company by using the trade name of the Vendor. The royalty shall be worked out at the end of each quarter ending on March, June, September and December, on the sales made during each quarter. The royalty fixed hereby shall not be varied for a period of one year and may be reviewed and/or revised thereafter wards from time to time". The assessee was making payments to the firm every year on account of royalty in terms of said clause. The three partners aforesaid of the firm were also the directors of the assessee company. For the assessment years 1974 75 and 1975 76, the assessee claimed deduction of the amount paid by it to the firm on account of royalty in terms of clause 4(a) of the agreement. The amounts paid during the accounting years relevant to the said assessment years were Rs. 3, 16, 526 and Rs. 3, 95, 742 respectively. The I.T.O. allowed the deductions as claimed. In exercise of the powers conferred on him by Section 263, the Commissioner of Income Tax initiated (suo moto) proceedings for revising the said assessments in so far as the aforesaid deductions were concerned. After hearing the assessee, he passed orders on September 16, 1976 whereunder he disallowed payments to the firm over and above the ceiling prescribed in Section 40(c). The assessee preferred appeals to the Tribunal against the orders of the I.T.O, The appeals were allowed and the orders of the I.T.O. restored. On reference, the High Court answered to question in the negative i.e., in favour of the revenue and against the assessee, on the following reasoning : the three directors of the assessee company were also the partners in the firm to which royalty payments were made. In law, a firm has no separate legal existence; it is not a juristic person or a distinct legal entity. It is merely a collection or association of the individuals for carrying 610 on a business. Merely because the firm is an assessable entity under the Income Tax Act it does not follow that it is a juristic or legal entity. It must, therefore, be held that the payments made to the firm are in reality payments made to the directors. Such payments clearly attract and fall within the mischief of Section 40(c). The Commissioner was right in saying so and the opinion of the Tribunal to the contrary is unsustainable in law. In these appeals, S/Shri Harish N.Salve and Rohinton Nariman assailed the correctness of the view taken by the High Court. They submitted firstly that the payments were made not to the directors of the assessee but to a firm which was a separate entity. A payment to a firm is not ipso facto a payment to the partners, directly or indirectly. In a firm there may be other partners besides the directors of the assessee company. It may also happen that the firm has no income to distribute because of the losses incurred by it which are set off against the income so received. The High Court was in error in holding that payment to a firm is a payment to the partners. Assuming that a partnership firm is not a separate juristic entity distinct from its partners, even so the payments were made to the said three persons not in their capacity as directors (qua directors) but in consideration of a valuable right parted by them in favour of the assessee company. Such payments do not and cannot fall within the mischief of Section4O(c). Section 40(c) was never intended to take in such payments. A company may take on lease the house of its directors for its legitimate business purposes and pay rent which is reasonable having regard to the market conditions, or it may pay even less than the market rate of rent. Whether the rent paid by the company to its director in such a case falls within Section 40(c), ask the counsel. Another illustration given by the counsel is where a director supplies raw material to the assessee company for a price which is the appropriate market price. Would such payment also fall under section 40(c), they ask. The Budget speech of the Finance Minister in the Parliament, while introducing the said provision, is relied upon in support of their contention. It is also argued that the words "remuneration, benefit or amenity" occurring in Section 40(c) must be read having regard to the context in which they occur applying the principle NOSCITORA SPCOOS (recognition of associated words). If so read, the payments in question can never fall within the ambit of the said words. Shri Ahuja, the learned counsel for the Revenue justified the reasoning and approach of the High Court having regard to the clear language employed in clause (c). The genuineness or validity of the agreement between the assessee company and the firm is not disputed. The factum of payments made on account of royalty in terms of clause 4(a) of the said agreement is also not disputed. It is also 611 not disputed that in the beedi trade, brand name carries significant business value. It is necessary to keep this factual context in mind while examining the question at issue. Section 40(c) read as follows during the relevant assessment years "40. Notwithstanding anything to the contrary in sections 30 to 39, the following amounts shall not be deducted in computing the income charge able under the head" profits and gains of business or profession", (a). . (b). . (c) in the case of any company (i) any expenditure which results directly or indirectly in the provision of any remuneration of benefit or amenity to director or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be, (ii) any expenditure or allowance in respect of any assets of the company used by any person referred to in sub clause (i) either wholly or partly for his own purposes of benefit, if in the opinion of the Income tax Officer any such expenditure or allowance as is mentioned in sub clause (i) and (ii) is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom, so, however, that the deduction in respect of the aggregate of such expenditure and allowance in respect of any one person referred to in sub clause (i) shall, in no case, exceed (A) where such expenditure or allowance relates to a period exceeding eleven months comprised in the previous year, the amount of seventy two thousand rupees; (B) where such expenditure of allowance relates to a period not exceeding eleven months comprised in the previous year, an amount calculated at the rate of six thousand rupees for each month or part thereof comprised in that period: 612 Provided that in case where such person is also and employee of the company for any period comprised in the previous year, expenditure of the nature referred to in clauses (i), (ii), (iii) and (iv) of the second proviso to clause (a) of sub section (5) of section 40A shall not be taken into account for the purposes of sub clause (A) or subclause (B), as the case may be; (iii) * * * * Explanation. The provisions of this clause shall apply notwithstanding that any amount not to be allowed under this clause is included in the total income of any person referred to in sub clause (i);" The Budget speech of the Finance Minister, in so far as it mentions the reasons for introduction of clause (c) of Section 40, reads as follows: "I am firmly of the view that the fiscal instrument must be deployed to discourage payment of high salaries and remunerations which go ill with the norms of egalitarian society. I accordingly propose to impose a calling on the remuneration of company employees which would be deductible in the computation of taxable profits. The ceiling is being set at Rs. 5,000 per month. Together with the existing ceiling of Rs. 1,000 per month in the case of perquisites, the allowable overall ceiling on remuneration and perquisites, for purposes of taxation, will be at Rs. 6,000 per month. . . " The object behind the provision undoubtedly was to discourage and disallow "payment of high salaries and remunerations which go ill with the norms of egalitarian society". The provision was, of course, not confined to the directors. ' It took in relatives of directors, persons having substantial interest in the company and their relatives. The clause vested in the I.T.O. the power to determine whether any such expenditure or allowances as is mentioned in the said clause was excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom. In addition to it, a ceiling was also prescribed beyond which such expenditure or allowance could not go in any event. At this juncture, it would be appropriate to notice the provision contained in sub section (2) of Sec 40A. Clause, A provides that where the assessee incurs any expenditure in respect of which payment has been made or is to be made to any 613 person referred to in clause (b) of the sub section, and the Income tax Officer is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction. Clause (b) mentions the categories of persons to whom the provision in clause (a) applies. It includes directors of the company and their relatives among others. Clause b) also takes in any payment to any company, firm, association of persons or Hindu undivided family of which a director, partner or member, as the case may be, has substantial, interest in the business or profession of the assessee. In short, the net is cast very wide to ensure that excessive or unreasonable payments are not made to the persons in control of the affairs of the assessee in the name of paying for the goods, services and facilities rendered, supplied or extended by them, as the case may be. That the payments made by the assessee company to the firm on account of royalty in terms of clause (4) (a) of the agreement fall within the meaning of the expression 'expenditure ' in sub clause (i) of clause (c) is not disputed. The observations in CIT, Bombay. vs M/s. Indian Engineering and Commercial Corporation Private Uinited (Civil Appeal Nos. 1583 and 1584 (NT) of 1977 decided on 13.4.1993 by us reported in ; do not say otherwise. That case arose under Section 40(A) (5). The payments in question were made to the directors by way of commission on sales. The question was whether the said payments fell within sub clause (ii) of clause (a) of sub section (5) of section 40(A). It was held that they did not. While holding so it was observed that it is difficult to say that payment of certain cash amount by way of commission on sales, directly to an employee, can be said to fall within the words 'where the assessee incurs any expenditure which results directly or indirectly '. " The said observations were made in response to the Revenue 's argument that the said payment constituted 'perquisites ' within the meaning of sub clause (ii) of clause (a) of Section 40(A) (5). The observations are clearly confined to the said sub clause and have no relevance to any other provision in the Act. The observations cannot be read dissociated from their context. Coming back to the provisions of Section 4O(c) and the facts of the case before us the only question is whether the royalty payments to the firm fell within clause (c). We assume for the purpose of this argument that in this case, payments to firm were payments to partners. Even so, we think that the said payments did not fall within clause (C). The payments were made in consideration of a valuable right parted by the partners/ directors of the assessee company in favour of the assessee. SO long a,, the agreement whereunder the said payments were made is not held to be a mere 614 device or a mere screen, the said payments cannot be treated as payments made to the directors as directors (qua directors). The payments were made by way of consideration for allowing the assessee to use a valuable right belonging to them viz., the brand name. Such a payment may be liable to be scrutinised under subsection (2) of Section 40(A), but it certainly did not fall within the four corners of Section 40(c). In T. T Ltd. vs LTO., Bangalore 1, a Bench of Karnataka High Court comprising D.M. Chandrashekhar, CJ. and E.S. Venkataramiah,J. has taken a view which accords with the one taken by us. Speaking for the Bench, E.S. Venkataramiah, J. (as he then was) observed: "A close reading of the above provision shows that section 40(c) refers to an expenditure in curred by making periodical payments to person mentioned in that clause apparently for any personal service that may be rendered by him. It cannot have any reference to payments made by the assessee for all kinds of "services or facilities" referred to in section 4OA(2) (a). It is argued that the proviso thereto suggests that any expenditure incurred for any kind of service which is referred to in the main part of section 40A (2) (a) and the expenditure referred to in section 40(c) belong to the same category. This contention is not correct. The expression "services" in section 40A (2) (a) is an expression of wider import. . . If the remuneration, benefit or amenity referred to in section 40(c) is treated as the same as what is paid in return for "the goods, services or facilities" then irrespective of the fair market value of the goods, services and facilities provided by a person who may be a director or a person who has a substantial interest in the company or a relative of the director or of such person, as the case may be, only a maximum of Rs. 72,000 can be allowed to be deducted in computing the income of the company in any one year. We do not think that Parliament ever intended that such a result should follow. The goods, services and facilities referred to in section 40A (2) (a) are those which have a market value and which are commercial in character. Many of the services and facilities referred to above are those which are nowadays provided by independent organisations. ' The said decision has been followed by the Punjab and Haryana High Court in Commissioner of Income Tax, Patiala vs Avon Cycles (P) Ltd. , The Calcutta High Court has also taken a similar view in India Jute Co. Ltd vs 615 Commr of Income Tax Mr. Ahuja, learned counsel for the Revenue submitted that the argument of the assessee that only the payments made to directors as directors fall within clause (c) and not the other payments, becomes inapt when the payments are made to the relative,,, of the directors or to persons holding substantial interest in the assessee company or their relatives. The ceilinG prescribed in clause (c) cannot also be applied to such persons says the counsel. The answer perhaps lies in the clause itself in the power vested in the I.T.O. to determine whether any expenditure or allowance is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by the assessee or accruing therefrom. Any payment to a relative of a director or other persons mentioned in clause (c) will necessarily be examined applying the above test and if it is found that they are unwarranted, unreasonable or excessive, they will be disallowed. Since such a situation does not arise herein, we need not pursue the argument further. For the above reasons, we are of the opinion that the judgment under appeal cannot be sustained. It must he held that the payments in question did not fall within section 40(c). Accordingly, the appeals are allowed, the judgment of the High Court is set aside and the question referred to the High Court is answered in the affirmative, i.e., in favour of the assessee and against the revenue. No costs. U.J. R. Appeal allowed.

A partnership firm consisting of three partners was engaged inter alia in the business of manufacturing and sale of beedies under the brand name "Mangalore Prakash Beedies". On May 20,1972 a private limited company called prakash beedies Ltd. the assessee appellant was incorporated. One of its objects was to take over the business of the aforesaid firms which it did under an agreement dated 15 July 1972 whereby the firms sold its rights and assets to the company. For the use of the trade name, a royalty at 10p. for every 1000 beedies was to be paid by the company to the firm. This payment was made ever year by the assesse on account of royalty. The three partners of the firms were also directors of the company. The relevant assessment years were 1974 75 and 1975 76. The facts in the other appeals are similar. The assessee claimed deduction of the amount paid by it as royalty. The ITO allowed the deductions as claimed. The CIT in stio motu proceedings disallow the aforesaid deductions. On appeal, the tribunal restored the order of the ITO. On reference, the High Court answered in fan,our of the revenue as the three directors of the assessee company were also partners in the firm. It held that in law, a firm is merely a collection or association of individuals for carrying on a business. Merely because the firm is an assessable entity, under the Income Tax Act, it does not follow that it is a juristic or legal entity. It must therefore be held that the payments to the firm were in reality made to the 607 directors, thus attracting section 40 (c). Before this Court, it was contended for the assessee that payment to a firm is not ipso fact payment to the partners, directly or indirectly. In any event, the payments were made to the three persons not in their capacity of directors (qua directors). but in consideration of a valuable right parted by them in favour of the assessee company. section 40(c) was never intended to take in such payments. They relied on the budget speech of the Finance Minister and argued that the principle of interpretation noscitor a sociis must be applied to the words "remuneration, benefit or amenity". The genuineness or validity of the agreement, the factum of payments as royalty, and that the brand name carries significant business value was not disputed. The question before this Court was whether the royalty payments fail within section 40(c). Allowing the appeal, this Court, HELD : 1. Even assuming that the payments to firm were payments to partners, the said payments did not fall within section 40(c). The payment, . were made In consideration of a valuable right parted by the firm/partners/ directors of the assessee company in favour of the assessee. So long as the agreement whereunder the said payments were made is not held to be a mere device or a mere screen, the said payments cannot be treated as payments made to the directors (qua directors). (613 H, 614 A) The payments were made by way of consideration for allowing the to use a valuable right belonging to them viz. the brand name. Such a payment may be liable to be scrutinised under sub section. (2) of section 40 (A), but it certainly did not fall within the four corners of section 40(c). (614 A) T.T. (Pvt.) Ltd. vs ITO Bangalore , approved. CIT Patiale vs Avon Cycles (p) Ltd. and India Jute Co. Ltd. vs CIT , referred to. 2. The power vested in the ITO is to determine whether any expenditure of allowance is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by the assessee or 608 accruing therefrom. Any payment to a relative of a director or other persons mentioned in clause (c) will necessarily be examined applying the above test and if it is found that they are unwarranted, unreasonable or excessive, they will be disallowed. Such a situation does not arise herein. (615 C) CIT, Bombay vs M/s. Indian Engineering and Commercial Corporation (p) Ltd. [1983] distinguished. JT 683.

ivil Appeal No. 1259 of 1990. From the Judgment and Order dated 6.10.1989 of the Andhra Pradesh Administrative Tribunal in R.P. No. 2403 of 1987. Dr. L.M. Singhvi and Y.P.Rao for the Appellants. P.P. Rao, K. Madhava Reddy, Ms. Rani Chhabra, T.V.S.N. Chari and B. Rajeshwar Rao for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. 1. Special leave granted. This appeal under Article 136 is against the order dated October 6, 1989 made in R.P. No. 2403 of 1987. The facts are as under: 2. The respondents Nos. 4 & 5, B. Kumara Swamy and G. Amarender, in this appeal filed R.P. No. 1615 of 1984 before the Andhra Pradesh Administrative Tribunal, Hyderabad, contending for promotion from Senior Assistant to Assistant Commercial Taxes Officer, zonal seniority of Warangal local area comprising of Warangal, Khammam, Karimnagar and Adila bad is the criteria. The Adilabad division consisting of Adilabad and Karimnagar Districts of the Commercial Taxes Division cannot be treated to be a zone and the divisional seniority prepared by the department is bad in law. It was held by the Tribunal by order dated February 18, 1986, that the zonal seniority is the criteria. Though, for the admin istrative convenience a division consisting of the revenue districts of Adilabad and Karimnagar may be treated as one division and Warangal and Khammam as Warangal division may be carved out, for the purpose of promotion zonal seniority has to be maintained. Accordingly, the Tribunal allowed the Representation Petition. The Government of Andhra Pradesh in exercising its power under cl. (5) of article 371 D annulled that order which had given rise to filing of W.P. No. 998 of 1986 in this Court under article 32 of the Constitution. This Court declared cl. (5) of article 371 D of the Constitution as ultra vires violating the basic structure. The State Govern ment filed S.L.P. No. 8868 of 1987 against order in R.P. No. 1615 of 1984 which was dismissed by this Court on December 7, 1987. Subsequently, the petitioners impleading the 566 respondents Nos. 4 and 5 and the 6th respondent, G. Satya Rao, filed R.P. No. 2403 of 1987, which was dismissed by the Tribunal. The appellants filed Civil Appeal No. 3203 of 1989 which was allowed by this Court and remitted to the Tribunal and directed, "to examine the legal effect of the Government order in G.O.Ms. No. 1648 dated November 20, 1982 after again hearing the parties. " Thereafter, the Tribunal after considering the effects of the G.O. held that in the im pugned order that G.O.Ms. No. 1648 was issued under Para 5(2)(c) of the Andhra Pradesh Public Employment (Organisa tion of Local Cadres and Regulation of Direct Recruitment) Order 1975 for that "the 'order ' no allotment of cadre in terms of para 4 of the order was issued. The G.O.Ms. No. 1648 and G.O.Ms. No. 1900 do not mention the constitution of new local cadre for Adilabad Division and no order was issued constituting a separate cadre in terms of 'the or der '. Accordingly, it reiterated the original order dated April 29, 1988. The Constitution (Thirtysecond Amendment) Act, 1973 through section 3 thereof brought into the Constitution article 371 D with effect from July 1, 1974. This is a special provision in respect of the State of Andhra Pradesh empower ing the President, having regard to the requirements of the State as a whole for equitable opportunities and facilities for the people belonging to different parts of the State, in the matter of public employment and in the matter of educa tion, and different provisions may be made for various parts of the State to make an order, in particular (a) require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accord ance with such principles and procedure as may be specified in the order the persons holding such posts to the local cadres so organised; (b) specify any part or parts of the State which shall be regarded as the local area (i) for direct recruitment to posts in any local cadre (whether organised in pursuance of an order under this article or constituted otherwise) under the State Government . . (Other clauses are not relevant for the purpose of this case, Hence omitted.) 567 4. In exercise of the power under cl. (1) & cl. (2) of article 371 D the President issued 'the order ' in G.S.R. No. 524 E dated October 18, 1975 which was notified through G.O.Ms. No. 674 dated October 20, 1975. Para 2(1)(c) inter pretation clause defines 'local area ' in relation to local cadre thus: " 'local area ', in relation to any local cadre, means the local area specified in paragraph 6 for direct recruitment to posts in such local cadre, and includes, in respect of posts belonging to the category of Civil Assistant Surgeons, the local area specified in sub paragraph (5) of paragraph 8 of this Order. " Para 2(1)(e) defines 'local cadre ': " 'local cadre ' means any local cadre of posts under the State Government organised in pursuance of paragraph 3, or constituted otherwise, for any part of the State. " Para 2(1)(m) defines 'zone ': " 'zone ' means a zone specified in the Second Schedule com prising the territories mentioned therein. " Para 3(1) provides organisation of local cadres: "The State Government shall, within a period of twelve months from the commencement of this Order, organise classes of posts in the civil services of, and classes of civil posts under, the State into different local cadres for different parts of the State to the extent, and in the manner, hereinafter provided. " The proviso thereto was added and was published through G.O.Ms. No. 34G.A.(SPF. A.) Deptt. dated January 24, 1981, which reads thus: "Provided that, notwithstanding the expiration of the said period, the President may by order, require the State Gov ernment, whenever he considers it expedient so to do, to organise any classes of posts in the civil services of, and classes of civil posts under, the State into different local cadres for different parts of the State. " (emphasis supplied) 568 Sub paragraph (2) provides that the posts belonging to the category of lower division clerk, (now redesignated as Junior Assistant), and to each of the other categories equivalent to, or lower than that of a lower division clerk, in each department in each district shall be organised into a separate cadre. Sub paragraph (3) provides the posts belonging to each non gazetted category, other than those referred to in sub paragraph (2), in each zone shall be organised into a separate cadre. Sub paragraph (4) provides, the post belonging to each specified gazetted category in each department in each zone shall be organised into a separate cadre. Paragraph 3(5) with a non obstanti clause provides that: "Notwithstanding anything contained in sub paragraphs (3) and (4), the State Government may where it considers it expedient so to do and with the approval of the Central Government organise the posts belonging to any of the cate gories referred to therein, in any department, or any estab lishment thereof, in two or more contiguous zones into a single cadre. " Sub paragraph (6) is not material. Hence omitted. Sub paragraph (7) provides: "In organising a separate cadre in respect of any category of posts in any department for any part of the State, noth ing in this Order shall be deemed to prevent the State Government from organising or continuing more than one cadre in respect of such category in such department for such part of the State." Paragraph 3(8) is also not necessary. Hence omitted. (emphas is supplied) Paragraph 4 provides mode of allotment of persons, holding posts required to be organised into local cadres in accordance with the principles and procedure laid down therein, the details of which are not material. Hence omit ted. Paragraph 5 declares that: "(1) Each part of the State, for which a local cadre has been organised, in respect of any category of posts, shall be 569 a separate unit for purposes of recruitment, appointment, discharge, seniority, promotion and transfer, and such other matters as may be specified by the State Government, in respect of that category of posts." (Other sub paragraphs relate to transfer of persons and are not relevant for the purpose of this case. Hence omitted.). Paragraph 6 deals with local areas: (1) Each district shall be regarded as a local area (i) for direct recruitment to posts in any local cadre under the State Government comprising all or any of the posts in any department in that district belonging to the category of a lower division clerk or to any other category equivalent to or lower than that of a lower division clerk (Junior Assistant): (ii) for direct recruitment to posts in any local authority within that district, carrying a scale of pay, the minimum of which does not exceed the minimum of the scale of pay of a lower division clerk or a fixed pay not exceeding that amount. (2) Each zone shall be regarded as a local area the details of which are not material. Hence omitted. (emphasis supplied) In the Table 'Local area and the ratio ' in the Schedule, the State of Andhra Pradesh was divided into seven zones and zone V consists of the revenue districts of Adilabad, Karim nagar, Warangal and Khammam. Instructions have been issued for implementation of the order through G.O.Ms. No. 728 dated November 1, 1975, in organising the local cadres. Para 3 thereof postulates, after quoting paragraph 3(1) of the order referred to hereinbefore, thus: "A local cadre is a cadre comprising the posts belonging to a category in a Department and located within a specified part of the State. The concept of the local cadre is thus related to the concept of the unit of appointment under the service rules; the part of the State for which a local cadre is organised in respect of any category will serve as a unit of appointment etc., for that category. The scheme of organ isation of local cadres under,the Presidential Order applies generally to all non gazetted categories, other than those 570 specifically exempted under Government of India Notification G.S.R. No. 529, (E), dated 18th October, 1975 issued under paragraph 3(8) of the Order, as also to the specified gazet ted categories, i.e., the gazetted categories listed in the Third Schedule to the Order and those that may be notified in pursuance of paragraph 2(i)(j) of the Order by the Cen tral Government. Instruction 4(a) says that the lower division clerks or equivalent categories or lower than that were designated as a District Cadre. Posts belonging to other non gazetted categories were designated as zonal cadre and specified gazetted cadres were also designated as zonal cadres. In struction7 provides thus: "More than one Local Cadre permissible within Local Area It should be borne in mind that where the State Government is required to organise a local cadre for any part of the State, there is no objection to organising or continuing more than one local cadre for such part of the State (vide paragraph 3(7) of the order). There is, therefore, no objec tion to having more than one cadre in Revenue District in respect of a post belonging to the category of Lower Divi sion Clerk (Junior Assistant) or below or to having more than one cadre in a zone in respect of a higher category." (emphasis supplied) Instruction 9(e) provides re adjustment of territorial jurisdiction, thus: "In several departments, the unit of appointment in respect of non gazetted categories is linked to the territorial jurisdiction of an authority or officer subordinate to the Head of Department. For instance, the unit of appointment of Upper Division Clerks (Senior Assistants) in the Commercial Taxes Department is the division in charge of Dy. Commis sioner. In the case of such departments if it becomes neces sary to alter the units of appointment in order to bring them into conformity with the Presidential Order, a corre sponding adjustment in the territorial jurisdiction of the departmental authority may also become necessary and will have to be made . " 571 6. Thus, it is seen that pursuant to the power given under cls. (1) & (2) of article 371 D the President had issued the order organising local cadres and zone V consists of Adilabad, Warangal, Karimnagar and Khammam revenue dis tricts. It is the local area for the local cadres. The post of the Junior Assistant is the district cadre post and the post of Senior Assistant and Assistant Commercial Taxes Officers, etc. are the zonal posts. The State Government is empowered under the Presidential Order to organise the local cadres within a period of twelve months from October 20, 1975. In pursuance thereof the State Government in Commer cial Taxes Department issued order G.O.Ms. No. 581 dated May 24, 1976 organising zones for the purpose of Commercial Taxes Department, namely, Visakhapatnam, Kakinada, Krishna, Guntur, Triputhi, Karnool, Warangal, Hyderabad 1 and Hydera bad II. Warangal zone consists of revenue districts of Adilabad, Karimnagar, Warangal and .Khammam. Thus, the Warangal zone of Commercial Taxes Department for the purpose of recruitment, seniority, promotion, transfer, etc. of local cadres is co terminus with the zone V of the Presiden tial Order. The Junior Assistant in each revenue district in Warangal zone is a separate district post, .but for the purpose of promotion to the post of Senior Assistants and Assistant Commercial Taxes Officers, which are zonal posts common seniority of the Junior Assistants, Senior Assistants working in all the four revenue districts shall have to be maintained and promotions made in accordance with Ministeri al Service Rules or the Commercial Taxes Subordinate Service Rules issued under proviso to article 309 of the Constitution as the case may be. It would be subject to rule of reserva tion for local candidates as adumbrated in para 8 of the Order and the general rule of reservation made in Rule 22 in Andhra Pradesh State and Subrodinate Service Rules. It would appear from the record that the Government intended to reorganise, for the purpose of efficient admin istration of the Commercial Taxes Department and create separate divisions within the zones and issued through G.O.Ms. No. 1900 dated December 22, 1981 carving out Adila bad and Karimnagar as Adilabad division and Warangal and Khammam as Warangal division with the administrative control of the concerned Dy. Commissioner of Commercial Taxes at Adilabad and Warangal. As a follow up action options have been called for from the employees and they have been allot ted in G.O.Ms. No. 1648 dated November 22, 1982 to the respective divisions. It is not disputed that the allotment and transfer were not made in terms of Para 4 of the Order. As stated earlier this action had given rise to the above Representation Petitions and the orders passed by the Tribu nal and the results ensued thereunder. 572 8. Dr. L.M. Singhvi, the learned Senior Counsel for the appellants, contends that paragraph 3(7) of the Order empow ers the State Government to create a zone within the Waran gal zone for the purpose of recruitment, seniority and promotion. The State Government has inherent power in that regard. There is no express prohibition in that regard in the order. The phrase 'or constituted otherwise ' engrafted in the definition of local cadre in paragraph 2(e) read with paragraph 3(7) gives ample power to the State Government to organise any local cadre within the zone for the Commercial Taxes Department. The action thus, taken by the State Gov ernment is clearly within its power. The contra finding recorded by the Tribunal is illegal. He placed strong reli ance on a decision of a single member Tribunal made in R.P. No. 101 of 1982 and batch dated April 1, 1982. He further contended that in maintaining harmony in Centre State rela tionship, the State Government shall continue to have its inherent power to organise its local cadre to meet the exigencies of its administrative needs. The prior approval or concurrence of the Central Government is redundant. We find no force in these contentions. It is already seen that in exercise of the power under paragraph 3(1) of the Order the State Government shall, within a period of twelve months from the date of the commencement of the Order, organise class or classes of posts in the civil services of, and class or classes of civil posts, under the State into dif ferent local cadres for different parts of the State in the manner therein provided. It is already seen that through G.O.Ms. No. 581, the State Government in fact had organised the Commercial Taxes Departments by constituting different local cadres and Warangal zone comprised of the four revenue districts, namely, Adilabad, Karimnagar, Khammam and Waran gal was declared as local area for local cadres of the Department. Having done so, the question emerged whether the State Government has further power to reorganise the local cadre within the zone. In our considered view, we have no hesitation to hold that once the State Government has orga nised the class or classes of posts in the civil services of and class or classes of civil posts, under the State as local cadres, it ceases to have any power to bifurcate or reorganise a zone within a zone, cadre or cadres therein. In exercise of the power under proviso to paragraph 3(1), it is for the President notwithstanding the expiry of the period of twelve months prescribed in sub paragraph (1) of para graph 3, by an order require the State Government whenever he considers it expedient so to do to have the power under paragraph 3(1) exercised. Thereby, it is clear that the State Government shall have to place necessary material before the President; the President shall consider that it is expedient to organise any class or classes of 573 posts in the civil services of and class or classes of civil posts, under the State into a further local cadre within the local cadre in the zone already prescribed and to pass an order in that regard requiring the State Government to so organise it. It is made clear that for the purpose of effi cient administration or convenience, the State Government may create division/divisions within the local area or local cadre. But for the purpose of recruitment, seniority, promo tion, discharge, etc. the local cadre once organised under para 3(1) shall be final and continue to be operative until action is taken under proviso to subparagraph (1) of para graph 3 of the Order. When we enquired the learned counsel for the State, Shri Madhava Reddy candidly conceded that no order of the President, as provided under the proviso, was made. Therefore, the action taken by the State Government in issuing G.O.Ms. No. 1648 dated November 20, 1982 is clearly illegal and invalid contravening the proviso to sub para graph (1) of paragraph 3, undoubtedly it contravened para 4 of the Order. It is seen that the order was made pursuant to the power given to the President under article 371 D, which is a special provision made under the Constitution (Thirty second Amendment) Act, 1973 peculiar to the State of Andhra Pradesh due to historical background. Therefore, the State Govern ment have no inherent power in creating a zone or organising local cadre within the zones except in accordance with the provisions made in the Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation for Direct Recruitment) Order. It is true that the clause 'or consti tuted otherwise ' defined in paragraph 2(e) is of wide im port, but is only relatable to the power given by the Presi dent to the State Government to organise local cadre. Para graph 3(1) is the source of that power, but the exercise thereof is hedged with a limitation of twelve months from the date of the commencement of the Order. Therefore, the power to organise class or classes of posts of civil serv ices of, and class or classes of civil posts, under the State into different local cadres should be exercised by the State Government in accordance with para 3(1) before the expiry of the twelve months from October 20, 1975. If the .exercise of the power is not circumscribed within limitation, certainly under General Clauses Act the power could be exercised from time to time in organising local cadres to meet the administrative exigencies. The prescrip tion of limitation is a fetter put on the exercise of power by the State Government. Obviously, realising this reality and the need to organise local cadres, subsequent thereto the amendment was made and was published in G.O.Ms. No. 34 G.A. dated January 24, 1981 introducing proviso to Paragraph 3(1). Thereunder, notwithstanding the expiry of the said period, the President alone has been given power 574 to organise local cadres in respect of class or classes of posts in civil services of and class or classes of civil posts, under the State. That too subject to the conditions precedent laid therein. Thus, it is the President and the President alone has been given power under proviso by an order to require the State Government to organise the local cadres in relation to any class or classes of posts in the civil services of and class or classes of civil posts under the State into different local cadres. It could be consid ered in yet another perspective. Para 2(e) indicates that President himself may create a local cadre instead of re quiring the State Government to organise local cadre. For instance, Para 3(6) empowered the President to create local cadre for the city of Hyderabad. Similarly, under proviso to para 3(1) the President may require the State Government to create a local cadre within a zone. So the phrase 'or con stituted otherwise ' cannot be understood dehorse the scheme of the Presidential order. No doubt in common parlence, the word 'otherwise ' is of 'wide ' amplitude. This Court in Kochuni vs States of Madras & Kerala, ; , Subba Rao, J., as he then was, speaking per majority in paragraph 50 while construing the word 'otherwise ' held that it must be confined to things analogous to right or contract such as lost grant, immemorial user etc. The Word 'other wise ' in the context only means whatever may be the origin of the receipt of maintenance. The ratio thereunder cannot be extended in the contextual circumstances obtainable on the facts in this case. Similarly, in Lilavati Bai vs The State of Bombay, ; at 735, Sinha J., as he then was, speaking for the Constitution Bench interpreting Expla nation (a) to section 6 of Bombay Land Requisition Act, 1948, as amended in 1950 and repelling the application of ejusdem generis doctrine laid the law thus: "The legislature has been cautious and thorough going enough to bar all avenues of escape by using the words 'or other wise '. These words are not words of limitation but of exten sion so as to cover all possible ways in which a vacancy may occur. Generally speaking a tenancy is terminated by acts of parties or by operation of law or by eviction by the land lord or by assignment or transfer of the tenant 's interest. But the legislature, when it used the words 'or otherwise ', apparently intended to cover other cases which may not come within the meaning of the preceding clauses, for example a case where the tenant 's occupation has ceased as a result of trespass by a third party. The legislature, in our opinion, intended to cover all possible cases of vacancy occurring due, to any reasons whatsoever. " 575 Thus, contextual interpretation to the word 'or otherwise ' was given by this Court. Therefore, the phrase 'constituted otherwise ' is to be understood in that context and purpose which article 371 D and the Presidential Order seek to achieve. If the interpretation given by the appellants is given acceptance it amounts to giving blanket power to the State Government to create local cadres at its will tending to defeat the object of article 37 I D and the Presidential Order. Accordingly, we have no hesitation to reject the interpreta tion of wider connotation. The ratio in these decisions does not render any assistance to the appellants. Similarly, the power given to the State Government in subparagraph (7) of paragraph 3 of the Order is only to organise a separate cadre in respect of any category of posts in any department when more than one cadre in respect of such category exists in each department; so that State Government may organise one cadre when more than one cadre in respect of different categories of posts exist in a zone under para 3(1) of the Order. It is clear when we see the language in para 3(7) which says that: "nothing in this order shall be deemed to prevent the State from organising". Take for instance while creating local cadre co terminus with the administrative control of the Dy. Commissioner, Commercial Taxes, local cadre for Senior Assistants may be created. It is also made manifest by Instruction No. 7 and 9(e) of the instructions contained in G.O.Ms. No. 728 G.A.D. dated November 1, 1975. But, as stated earlier, it is only for the purpose of administrative convenience, not for the purpose of recruitment, seniority or promotion etc., as the case may be. Thus, we have no hesitation to hold that the creation of a division and maintaining separate seniority of Junior Assistants and Senior Assistants for Adilabad and Warangal Divisions are illegal, contrary to order issued in G.O.Ms. No. 581 and the Andhra Pradesh Employment (Organisa tion of Local Cadre and Regulation of Direct Recruitment) Order, 1975. The single member of the Tribunal in R.P. No. 101/82 dated April 1, 1982 did not consider the effect of the order in proper perspective and is illegal. Accordingly, the impugned order of the Administra tive Tribunal is not vitiated by any manifest error of law warranting interference. The appeal is accordingly dismissed, but without costs. P.S. S Appeal dismissed.

Article 371 D brought into the Constitution by Thirty second Amendment Act, 1973, with effect from July 1, 1974 empowered the President in respect of the State of Andhra Pradesh by an Order (1) to require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot the persons holding such posts to the local cadres, and (2) to specify any part or parts of the State which shall be regarded as the local area for direct re cruitment to posts in any local cadre. In exercise of the power so conferred the President issued the Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Order, 1975 on October 18, 1975. Para 3(1) of the Order empowered the State Government to organise the local cadre within a period of twelve months. The term 'local cadre ' was defined in para 2(1)(e) to mean any local cadre of posts under the State Government organised in pursuance of para 3, or con stituted otherwise, for any part of the State. The proviso added to para 3(1) subsequently and published through G.O. Ms. No. 34 dated January 24, 1981, empowered the President, notwithstanding the expiration of the period of twelve months, to require the State Government, whenever he consid ered it expedient so to do, to organise local cadres for different parts of the State. Para 3(7) permitted the State Government to organise or to continue more than one cadre in respect of any category of posts in any department for any part of the State. Para 4 provided mode of allotment of employees to local cadres. Para 562 5(1) declared that each part of the State for which a local cadre has been organised, in respect of any category of posts, shall be a separate unit for purposes of recruitment, appointment, discharge, seniority, promotion and transfer. In the table in the schedule thereto the State was divided into seven zones and zone V consisted of the revenue dis tricts of Adilabad, Karimnagar, Warangal and Khammam. In structions were issued for implementation of the Presiden tial Order through G.O.Ms. No. 728 dated November 1, 1975 in organising the local cadres. In pursuance of para 3(1) of the Order the State Govern ment in Commercial Taxes Department issued order G.O.Ms. No. 581 dated May 24, 1976 organising zones and the Warangal Zone consisted of revenue districts of Adilabad, Karimnagar, Warangal and Khammam, which was co terminus with zone V of the Presidential Order. The Junior Assistant in each revenue district in Warangal zone was a separate district post, but for the purpose of promotion to the post of Senior Assist ants and Assistant Commercial Taxes Officers, which were zonal posts, common seniority of the Junior Assistants and Senior Assistants working in all the four revenue districts was being maintained and promotion made in accordance with the rules. Subsequently, however, the State Government created separate divisions within the zones in the Commercial Taxes Department through G.O.Ms. No. 1900 dated December 22, 1981 carving out Adilabad and Karimnagar as Adilabad Division and Warangal and Khammam as Warangal Division. Options were called for and the employees allotted in G.O.Ms. No. 1648 dated November 22, 1982 to the respective divisions. Agrieved by the said order respondent Nos. 4 and 5 filed a petition before the State Administrative Tribunal contend ing that for promotion from Senior Assistant to Assistant Commercial Taxes Officer zonal seniority of Warangal local area comprising of Warangal, Khammam, Karimnagar and Adila bad was the criteria, that the Adilabad division consisting of Adilabad and Karimnagar districts of Commercial Taxes Department could not be treated to be a zone, and that the divisional seniority prepared by the department was bad in law. The Tribunal held that the zonal seniority was the criteria for purposes of promotion, and allowed the peti tion. The State Government in exercise of its power under cl. (5) of article 371 D annulled that order. Thereupon, respondent Nos. 4 and 5 filed a writ petition under article 32 of the Constitution wherein this Court 563 declared cl. (5) of article 371 D as ultra vires. Left with no alternative the State filed special leave petition against the original order of the Tribunal, which was dismissed. Subsequently, the appellants beneficiaries of G.O.Ms. No. 1648 of 1982, filed representative petition before the Tribunal, which was dismissed. In the appeal by special leave it was contended for them that the State Government continues to have its inherent power to organise local cadres to meet the exigencies of administrative needs, as there was no prohibition in that regard in the Order, and that the phrase 'or constituted otherwise ' engrafted in the definition of 'local cadre ' in para 2(1)(e) read with para 3(7) gave ample power to the State Government to create a zone within the Warangal zone for the purpose of recruitment, seniority and promotion in the Commercial Taxes Department. Dismissing the appeal, the Court, HELD: 1. The action taken by the State Government in issuing G.O.Ms. No. 1648 dated November 20, 1982 was illegal and invalid contravening the proviso to para 3(1) and para 4 of the Presidential Order. [573C] 2.1 Once the State Government had organised the Commer cial Taxes Department by constituting different local cadres and Warangal zone comprising of the four revenue districts, namely, Adilabad, Karimnagar, Khammam and Warangal was declared as local area for local cadres of the Department through G.O.Ms. No. 581 dated May 24, 1976 in exercise of the powers under para 3(1), it ceased to have any power to bifurcate or reorganise a zone within a zone, cadre or cadres therein. [572E G] 2.2 In exercise of the power under the proviso to para 3(1), it is for the President and President alone notwith standing the expiry of the period of twelve months pre scribed in para 3(1), by an order require the State Govern ment whenever he considers it expedient so to do to have the power under para 3(1) exercised. Therefore, the State Gov ernment shall have to place necessary material before the President; the President shall consider that it is expedient to organise any class or classes of posts in the civil services of and class or classes of civil posts under, the State into a further local cadre within the local cadre in the zone already prescribed and to pass an order in that regard requiring the State Government to so organise it. [572G; 573A] 564 2.3 However, for the purpose of efficient administration or convenience, the State Government may create division/divisions within the local area or local cadre. But for the purpose of recruitment, seniority, promotion, dis charge, etc. the local cadre once organised under para 3(1) shall be final and continue to be operative until action is taken under the proviso to para 3(1) of the Order. In the instant case, no order of the President, as provided under the proviso, was made. [573A B] 3. The Presidential Order was made pursuant to the power given under article 371 D, which is a special provision made under the Constitution (Thirtysecond Amendment) Act, 1973 peculiar to the State of Andhra Pradesh. Therefore, the State Government had no inherent power in creating a zone or organising local cadres within the zones except in accord ance with the provisions of the said Order. [573D] 4. The phrase 'or constituted otherwise ' defined in para 2(1)(e) is only related to the power given by the President to the State Government to organise local cadre. Para 3(1) is the source of that power. The said phrase is, therefore, to be understood in the context and purpose which article 371 D and the President Order seek to achieve. The State Govern ment cannot create local cadres at its will. [573E; 575A] Kochuni vs States of Madras & Kerala, ; and Lilavati Bai vs The State of Bombay, ; at 735, distinguished. The power given to the State Government in para 3(7) of the Order is only to organise a separate cadre in respect of any category of posts in any department when more than one cadre in respect of such category exists in each depart ment. So, the State Government may organise one cadre when more than one cadre in respect of different categories of posts exist in a zone under para 3(1) of the Order. For instance, while creating local cadre co terminus with the administrative control of the Dy. Commissioner, Commercial Taxes, local cadre for Senior Assistants may be created. It is also made manifest in Instruction No. 7 and 9(e) of the instructions contained in G.O.Ms. No. 728 dated November 1, 1975. But it is only for the purpose of administrative convenience, not for the purpose of recruitment, seniority or promotion etc., as the case may be. [575C E] Thus, the creation of a division and maintaining sepa rate seniority of Junior Assistants and Senior Assistants in the Commercial Taxes Department for adilabad and Warangal Divisions were illegal, contrary 565 to order issued in G.O.Ms. No. 581 and the Presidential Order. [575F]

Appeal No. 999 of 1964. Appeal by special leave from the order dated March 25, 1954 of the Life Insurance Tribunal, Bombay in Case No. 27 of 1962. C. K. Daphtary, Attorney General, section J. Banaji, Atiqutor Rehman and K. L. Hathi, for the appellant. N. A. Palkhivala, section J. Sorabjee, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the respondent. The Judgment of the Court was delivered by Wanchoo J. The only question that arises for determination in this appeal by special leave from the order of the Life Insurance Tribunal, Bombay, is the interpretation of the words "life insurance fund" as used in paragraph 4 of Part B of the First Schedule to the , No. 31 of 1956, (hereinafter referred to as the Act). The question arose in connection with the payment of compensation to the respondent, the Crown Life Insurance Company, which is incorporated in Canada, by the appellant, the Life Insurance Corporation of India on the taking over of the business of the respondent by the appellant under the Act. The respondent claimed Rs. 27,86,658 as compensation while the appellant was prepared to pay Rs. 1, 1 1,466. The respondent claimed that as its life insurance fund was always in deficit before the Act came into force, there was no liability on it under cl.(d) of paragraph 4 of Part B of the First Schedule to the Act. The appellant on the other hand claimed that under that cl. (d), there was a surplus of Rs. 27,86,658 and therefore under cl. (d) a sum of Rs. 26,75,192 was to be debited towards the liabilities of the respondent. That is how the appellant arrived at the compensation of Rs. 1,11,466. The appellant claimed that the words "life insurance fund" in cl. (d) meant the difference between the total assets and the liabilities under cls. (a) and (c) of the said paragraph 4. The respondent on the other hand contended that the words "life insurance fund" in cl. (d) had the same meaning as those words had under the , No. 4 of 1938 (hereinafter referred to as the ). The respondent therefore claimed that as there was always a deficit in its working as shown by form 1 of the Fourth Schedule to the , no amount was to be deducted as liability under cl. (d) of the said paragraph 4. It is this difference in the meaning assigned to the words "life insurance fund" by the parties 477 that is responsible for the large difference in the amount claimed by the respondent and offered by the appellant. The Insurance Tribunal has accepted the contention put for ward on behalf of the respondent and has held that the words "life insurance fund" in cl. (d) of the said paragraph 4 have the same meaning as in the , and that there is only one meaning of these words in the . It has rejected the contention raised on behalf of the appellant and has in consequence awarded compensation at Rs. 27,86,658. Aggrieved by this order, the appellant got special leave from this Court; and that is how the matter has come up before us. The sole question that falls for determination therefore de pends on the interpretation of the words "life insurance fund" and for that purpose we shall have to consider certain provisions of the as well as of the Act. We may at the outset refer to section 2 (10) of the Act, which is as follows: " In this Act, unless context otherwise require (10) all other words and expression used herein but not defined and defined in the shall have the meanings respectively assigned to them in that Act. " It is not in dispute that the words "life insurance fund" appear In the though not in the definition section thereof. Section 2 (10) of the Act however does not refer only to the definitions in the definition section of the ; it lays down generally that any words and expressions used in the Act and defined in the shall have the meanings assigned to them in the (and that means anywhere in the ) unless the context otherwise requires. We have therefore to turn to the first to find out the meaning of the words "life insurance fund" as given therein and then to see whether the context of cl. (d) of the said paragraph 4 requires otherwise. If we come to the conclusion that it does not require otherwise, the words "life insurance fund" in cl. (d) of the said paragraph 4 will have the same meaning as in the . Let us therefore turn to the to see what the words "life insurance fund" mean under that Act. It has been urged in the first place on behalf of the appellant that the words "life insurance fund" under the have not one meaning only and therefore it is not possible to give that meaning to these words in cl. (d) with which we are concerned. In the alternative it is urged that the context requires that even if the words "lift insurance fund" have only one meaning under the , they have a different meaning under cl. We have therefore to find out what the words "life insurance fund" mean under the and whether they have the same meaning throughout the Act. We have already pointed out that the words "life insurance fund" have not been defined in section 2 (N)4SCI 4 478 of the insurance Act, which is the definition section. But there is no doubt that in section 10 of the , these words have been given a specific meaning to which we shall now refer. The was concerned not only with life insurance business but also with insurance business of other kinds, namely, marine, fire and miscellaneous. It was open to an insurance company to carry on either the life insurance business only or life insurance business along with insurance business of other kinds also. Therefore, section 10(1) of the provided that where an insurer carried on business of more than one kind, he was boUnd to keep a separate account of all receipts and payments in respect of each kind of business. Section 10(2) dealt specifically with life insurance and we therefore read the relevant part of that sub section: "Where the insurer carries on the business of life insurance, all receipts due in respect of such business shall be carried to and shall form a separate fund to be called the life insurance fund the assets of which shall. be kept distinct and separate from all other assets of the insurer and the deposit made by the insurer in respect of life insurance business shall be deemed to be part of the assets of such fund and every insurer sHall. furnish to the Controller a statement showing in detail such assets as at the close of every calendar year duly certified by an auditor or by a person qualified to audit under the law of the insurer 's country"; There are three provisos to this section to which it is unnecessary for our purposes to refer. Sub section (3) of section 10 is also material and runs as follow: "The life insurance fund shall be as absolutely the security of the life policy holders as though it belonged to an insurer carrying on no other business s than life insurance business and shall not be liable for any contracts of the insurer for which it,would not have been liable had the business of the insurer been only that of life insurance and shall not be applied directly or indirectly for any purposes other than those of the life insurance business of the insurer. " Section II (c) then provides for keeping a revenue account in form D of the Third Schedule in respect of each insurance business for which separate account was required to be kept under section 10(1). Regulation 1 of of the Third Schedule provides that form D as set out in is appropriate for life insurance business. A perusal of form D shows what items have to be entered on the ,receipts side of the form and these items are: premiums of an kinds, consideration for annuities, interest, dividends and rents (obviously from assets of the life insurance fund); regulation fees and other income. It is thus clear that the revenue account on the receipt side mainly has income from premiums and income arising 479 out of 'Investments from life fund and this forms the main basis of the life insurance fund. On the expenditure side of form D there is provision for claims under policies, annuities, surrenders, bonuses in cash, bonuses in reduction of premiums, expenses of management (i.e. salaries etc., travelling expenses, directors ' fees, auditors ' fees, and charges for advertisements, printing and stationary, other expenses of management, rents for offence belonging to and occupied by the insurer, rent of other offices kept by the insurer), bad debts and other expenditure. Thereafter a balance has to be struck and this balance is the balance of the life insurance fund. This balance is arrived at after taking into account the balance of the fund at the beginning of the year and after making adjustments with respect to profit and loss and transfers from appropriation account. It is this balance which goes into the balance sheet form A provided in the First Schedule of the as life insurance fund and includes as provided in section 10(2) the deposit made by the insurer in respect of life insurance business. There is no doubt therefore that the words "life insurance fund" under the have got the meaning assigned to it under section 10(2) read with section 11 and form D of the Third Schedule. It is equally clear that all the assets of an insurance company doing life insurance business do not form part of the life insurance fund, for example, if the insurance company has got share capital that is not part of the life insurance fund even though the deposit required by law to be made for life insurance business is part of the fund. So far therefore as section 10(2), section 1 1 and form D are concerned, life insurance fund has a definite meaning. The working of a life insurance company is in some respects different from that of ordinary companies inasmuch as it is not open to a life insurance company to distribute dividends unless there is surplus computed under the . This surplus is determined thus: First of all the life insurance fund as disclosed by revenue account in form D is found out. Then the valuation of the policies in force as on a certain date is determined by actuarial valuation which has to be made at least once in three years under section 13(1) of the . After valuation of the policies of different kinds they are grouped under different heads and their summary is set out in form H of the Fourth Schedule. Form 1 of the said Schedule provides for determining the surplus or deficit. This form is known as valuation balance sheet and the surplus or deficit is the difference between net liability in business as shown in form H and the life insurance fund as shown in balance sheet form A. Surplus will only result if the balance of life insurance fund is greater than the net liability under form H. Where however the balance of life insurance fund is less than the net liability under form H, there will be a deficiency and not surplus. Section 49(1) of the insurance Act then provides that no amount of the life insurance fund will be used to pay any dividend to share holders or any bonus to policy holders or for making any payment in service of any debenture, unless the valuation balance sheet in form 1 of the Fourth Schedule 480 shows a surplus. It is further provided that out of the surplus only 71 per centum shall be allocated to or reserved for shareholders with the consequence that the balance of 92 1/2 per centum of the surplus remains in the fund for policyholders or may be allocated as bonus to policyholders. The life insurance find as defined in section 10(2) is an absolute security of the life policy holders and cannot be used in any manner except in accordance with the provisions to which we have already referred. Thus the words "life insurance fund" have a definite meaning under the under section 10(2), read with section 1 1 and form D of the and the words "surplus" and "deficiency" have also special meaning appearing from a combined reading of section 13 of the and form H and form 1 of the Fourth Schedule. The next question is whether the words "life insurance fund" have any other meaning under the . These words appear in a number of provisions of that Act. It is not necessary however to refer to all of those provisions for it is not in dispute that in most of the provisions the words have the meaning assigned to them under section 10(2) of the . But three provisions have been specifically brought to our notice where it is said that the words have a different meaning. The first is section 56 which deals with winding up of insurance companies. In sub section (2) thereof reference is made to surplus of assets over liabilities and how such surplus which is called prima facie surplus in the sub section is to be dealt with. It will however be seen that the sub section does not use the words "life insurance fund" when speaking of prima facie surplus which is the difference between all assets and all liabilities. But it is urged that the marginal note to the section which is in these words "application of surplus assets of life insurance fund in liquidation or insolvency" shows that for the purpose of this section, the words "life insurance fund" as used in the marginal note may have a different meaning. We are however of opinion that this is not so. Sub section (2) after speaking of prima facie surplus, which is equal to total assets minus total liabilities, provides how the prima facie surplus is to be dealt within winding up proceedings. The sub section provides that this prima facie surplus would be divided into two parts and one part would be in proportion to the profits of the insurer allocated to policy holders. This part will naturally be determined with respect to form 1 of the Fourth Schedule which deals with life insurance fund and surplus or deficiency. The sub section thus provides that out of the prima facie surplus a certain amount will be deducted in proportion to the profit allocated to the policy holders, and remaining will be the amount which may go to shareholders in winding up. Therefore as we read sub section (2) we find that it deals with entire assets and these entire assets will certainly include the life insurance fund. The marginal note indicates how out of the prima facie surplus indicated in sub section (2) the surplus in the life insurance fund as arrived at in form shall be used. The argument that the words "life insurance fund" in 481 section 56(2) has a different meaning therefore has no force for two reasons. In the first place the section does not use the words "life insurance fund" and in the second place when the marginal note refers to surplus assets of life insurance fund it means in reality the surplus to be found in form 1, for the prima facie surplus will include that. We cannot therefore accept the contention that for the purposes of section 56(2) the words "life insurance fund" have a different meaning in view of the marginal note of section 56. The next section to which reference is made in this connection is section 58(3). Section 58 deals with schemes for partial winding up of insurance companies, i.e. winding up of one kind of business while another kind of business goes on. Section 58(3) provides that the, provisions of this Act relating to valuation of liabilities of the in , surer in liquidation and insolvency and to the application of surplus assets of the life insurance fund in liquidation or insolvency shall apply to the winding up of any part of the affairs of the company. It is argued that the words "life insurance fund" here are used in a different sense . We are of opinion that this is not so. Sub section (3) of section 58 has to be read along with section 56 and in particular with Sub section (2) thereof and as we have already indicated the words "life, insurance fund" in the marginal note of section 56 have no different meaning from that to be found in section 10(2) the same applies to the use of the words "life insurance fund" in section 58(3) mutates mutandis. Lastly reference was made to regulation 7 of of the First Schedule, which provides for a certificate that no part of the assets of the life insurance fund has been directly or indirectly applied in contravention of the provisions of the relating to the application and investment of life insurance funds. It is urged that the use of the plural suggests that a different meaning is to be given to the words "life insurance fund" here. We are unable to agree with this contention either. The use of the words "life insurance funds" in plural is merely due to the exigencies of grammar in this provision and does not mean that the words have a meaning different from that assigned to them in section 10(2) to which we have already referred. We must therefore reject the contention on behalf of the appellant that the words "life insurance fund" have any meaning other than that assigned to them in section 10(2) of the so far as that Act is concerned. Reference is then made to section 27(1) of the which requires that every insurer shall invest and at all times keep invested assets equivalent to not less than the sum of the amount of his liabilities to holders of life insurance policies in India on account of matured claims and the amount required to meet the liability on policies of life insurance maturing for payment in India subject to certain deductions. It is urged that this provision lays down that an insurer is required to keep certain sums invested to meet his liabilities mentioned therein and this shows that the entire assets of the insurer are security for the policy holders. It is true that this provision requires an insurer to keep certain assets invested and those 482 have to be equal to his liabilities on policies matured and policies yet to mature. This provision is for the protection of the policyholders ' interest. It has however in our opinion nothing to do with the life insurance fund as such. What in fact it provides is that when the life insurance fund shows a deficit in form it would be the duty of the insurer to see that he has further assets to cover the deficit, and that these assets are always kept invested in accordance with the ; but the section does not provide that the assets brought in to cover the deficit would become part of the life insurance fund. It is not in dispute that there is no other provision in the which requires that whenever. the life insurance fund is in deficit the insurer must put sufficient money in that fund itself to 'cover the deficit. It is true that form D of the Third Schedule includes an item "other income" but that does not mean that any sum kept invested by an insurer for the purposes of section 27(1) in order to cover the deficit in the life insurance fund becomes part of that fund. Note (e) which appertains to "other income" of the said form makes it clear that all the amounts received by the insurer directly or indirectly whether from his head office or from any other source outside 'India shall also be shown separately in the revenue account except such sums as properly appertain to the capital account. Therefore sums invested for purposes of section 27(1) of the do not necessarily form part of the life insurance fund. It is only such moneys which are included in form D and which are not of capital nature that form part of the life insurance fund. In the present case it is not in dispute that the business of the respondent 1 in India always had shown a deficit in form . It is also not in dispute that in order to meet that deficit as required by s, 27(1), the respondent took advantage of section 27(6) which provides that the assets required by this section to be held invested by an insurer incorporated or domiciled outside India shall subject to certain exceptions be held in India and all such assets shall be held in trust for the discharge 'of the liabilities of the nature referred to in sub section (1) and shall be vested in trustees resident in India and approved by the Central Government and the instrument of trust under this sub section shall be executed by the insurer with the approval of the Central Government and shall define the manner in which alone the subject matter of the trust shall be dealt with. Such an instrument of trust was executed by the respondent and the State Bank of India was the trustee of the fund required to be kept under section 27(1) read with section 27(6). But that in our opinion did not make the whole of this trust fund part of the life insurance fund as defined in section 10(2). The money required to cover the deficit in form I could only become part of the life insurance fund if that was included in the revenue account form D and in such a case there would then be no deficit left in the life insurance fund. It is not ill dispute that in this case funds brought in by the respondent from outside to cover the deficit were never put in the revenue account and were never made part of the life insurance fund, though 483 they remained vested in the trustee for the purpose of section 27(1) read with section 27(6). The appellant 's contention always was that the case of the respondent, for purpose of compensation, was covered by part B of the First Schedule to the Act and not by its Part A, and this was because there was a deficit in form I submitted by the respondent throughout its working. It appears that in spite of this deficit in the Indian working of the respondent, the respondent used to pay bonuses to its policy holders out of its global surplus and these payments were made in cash. Even so the appellant insisted and rightly that as form I showed deficit at the relevant time the respondent was not entitled to take advantage of Part A. of the First Schedule to the Act for purposes of compensation. In such circumstances it seems strange when admittedly there was always a deficit in form I submitted by the respondent in connection with its. Indian. business that the appellant should now say for the purpose of compensation that there is a surplus disclosed by the business of the respondent, 96 per centum of which would go to the appellant under cl. (d) of the aforesaid 4th paragraph, We are. therefore of opinion that the appellant cannot take advantage of section 27(1) and ask us to hold that all the funds which are mentioned in.s. 27(1) to be kept invested are part of the life insurance fund. Part B applies to. ' two kinds of insurance companies viz., those which had deficits and those which had surplus but had not distributed it at the relevant time. It is the latter class of companies that cl. (d) is really meant to cover. As we have already. said section 27(1) has nothing to do with the life insurance fund and is meant only as a safety device for policyholders, particularly in cases where there is deficit in the life insurance fund. : But where such deficit is made up for the purpose of section 27(1), the extra amount so invested by the insurer to make up the deficit does not automatically become part of the life insurance fund unless it is put through the revenue account form D. That was admittedly never done in this case and form I always showed a deficit in the case of the respondent. Section 27(1) therefore does not help the appellant, for it is not in dispute that an insurer is not bound to make up the deficit by putting money in the life insurance fund though he is bound to keep assets invested to make up the deficit; but such assets may be kept outside the life insurance fund. Now we come to the last question whether there is anything in the Act which requires that we should give a different meaning to the words "life insurance fund" in cl. (d) of the aforesaid 4th paragraph. We have already referred to section 2(10) of the Act which lays down that all other words and expressions used in the Act but not defined and defined in the shall have the meanings respectively assigned to them in that Act. Prima facie, therefore, the words "life insurance fund" used in cl. (d) of the aforesaid 4th paragraph have the same meaning as in the , and the question is whether the context of the Act requires that we should give a different meaning to these words. We are of opinion 484 that there is nothing in the context of the Act which requires that a different meaning should be given to these words. If anything, the Act shows that these words have the same meaning in cl. (d) of the aforesaid 4th paragraph as in the . In the first place we have to see what is the reason for the provision in cl. (d) of the aforesaid 4th paragraph. We have no doubt that the provision in cl. (d) is related to the provision in section 49(1) of the . We have already referred to that section and it requires that 921% of the surplus in form I shall be kept for the policy holders. Where therefore there is surplus in form 1, 921/2 per centum thereof is meant for the policy holders under this provision. Secondly when transfer of life insurance business from the life insurance companies to the Life Insurance Corporation took place a provision had to be made to carry out the effect of section 49(1) in connection with the transfer. That provision is to be found in cl. It lays down that where there is a surplus in the life insurance fund as a result of the actuarial valuation of policy liabilities made under cl. (b) of the aforesaid paragraph 4, 96 per centum of such surplus shall be shown as a liability. This means that just as under section 49(1), 921 per centum of the surplus in form I was meant for the policy holders so in the case of transfer, 96 per centum or that surplus shall go to the Life Insurance Corporation in order to meet the liabilities arising under section 49(1) of the for past surplus and to that extent the compensation to be paid to the insurance company from which the Life Insurance Corporation was taking over business would have to be reduced. This was with reference to the past and could not be with reference to the future, for so far as the future was concerned, the Life Insurance Corporation alone was responsible. But if there was a deficit in form I of the insurance company which was being taken over by the Life Insurance Corporation there could be no allocation to the policy holders under section 49(1) of the and there would be no liability for the past. So there would be no liability for the past under cl. (d) on the insurer whose business was being taken over by the Life Insurance Corporation. In the present case admittedly there was no surplus in form I in the case of the respondent and therefore there would be no liability on the respondent under cl. (d) of the aforesaid 4th paragraph. This in our opinion is the rationale behind the provision in cl. (d) and as there was always a deficit in connection with the working of the respondent, there could be no liability on the respondent under cl. But apart from this rationale behind cl. (d) we find that the language of Part A and Part B of the First Schedule relating to principles for determining compensation also leads to the same inference. Part A provides that compensation to be given to an insurer having a share capital on which dividend or bonus is payable who has allocated as bonus to policy holders the whole or any part of the surplus as disclosed in the abstracts prepared in accordance with of the Fourth Schedule to the in 485 respect of the last actuarial investigation relating to his controlled business as at a date earlier than January 1, 1955 shall be computed under that part. Clearly therefore this provision in Part A refers to surplus to be found by looking at form of the Fourth Schedule to the . Part B of the First Schedule to the Act then speaks of compensation to be given to an insurer having a share capital on which dividend or bonus is payable but who has not made any such allocation as is referred to in Part A. This immediately brings in the opening words of Part A and shows that Part B applies also to those insurers who having a surplus in form I have not allocated the whole or any part of such surplus to policyholders. The surplus in form I is arrived at as already indicated when the life insurance fund is larger than the liabilities on the policies still to mature. Clearly, Part B provides how compensation is to be paid to companies who had no surplus as disclosed in form 1 of the Fourth Schedule to the or who if they had any surplus in that form had made no allocation to policy holders. Therefore when cl. (d) of the aforesaid 4th paragraph speaks of the life insurance fund being in surplus that surplus has to be determined in accordance with form 1 of the Fourth Schedule to the subject to modifications indicated in Part B in the matter of valuation under form H and not in the manner suggested on behalf of the appellant. The word "surplus" in cl. (d) cannot have a meaning different from what it has in the opening words of Part B which come therein from Part A. The context therefore instead of showing that there is any other meaning of the words "life insurance fund" in cl. (d) shows that they have the same meaning in that clause as in form 1 of the Fourth Schedule to the . Another reason which points to the same conclusion,namely, that the words "life insurance fund" in cl. (d) have the same meaning as in form 1 of the Fourth Schedule to the , is to be found in section 35(1) and (2) of the Act. Section 35(1) permits a foreign insurer to repatriate certain assets. It says that an insurer incorporated outside India may, before the appointed day, make an application to the Central Government stating that among the assets appertaining to the controlled business of the insurer there are assets brought into India by him for the purpose of building up his life insurance business in India which should not be transferred to and vested in the Life Insurance Corporation. On receipt of such an application, the Central Government has to determine the value of the assets of the insurer appertaining to his controlled business in existence on December 31, 1955 in accordance with the provisions contained in paragraph 3 of Part B of the First Schedule to the Act and deduct therefrom the total amount of the liabilities of the insurer appertaining to his controlled business as on December 31, 1955 computed in accordance with the provisions contained in the Second Schedule to the Act; and if there is any excess, the Central Government may direct that such assets equivalent in value to the excess shall not be transferred to or vested in 486 the Life Insurance Corporation. It is obvious from these provisions that where the legislature intended to refer to all the assets and liabilities it said so in terms and did not use the words "life insurance fund". The use of the words "life insurance fund" in cl. (d) of the aforesaid 4th paragraph therefore must have the special significance assigned to these words in the and cannot be equated to the difference between the total assets and liabilities apart from liabilities towards policies yet to mature. Besides we are of opinion that if the words "life insurance fund" in cl. (d) are to be given the meaning for which the appellant is contending there will be a clear inconsistency between cl. (d) and it. 35 of the Act. Section 35 permits a foreign insurer to take away what may be called excess assets but a foreign insurer is not bound to make an application under section 35. Now take the case of the respondent. It is not in dispute that the respondent has taken away excess assets with the permission of the Central Government under section 35, to the tune of about rupees fifteen or sixteen lakhs. But if the respondent had not, chosen to make the application under section 35, all Ms assets would have to be considered under Part B relating to compensation. If that Was so, according to the contention put forward on behalf of the appellant as to the meaning of the words "life insurance fund", the total compensation under Part B of the First Schedule to 'which the respondent would have been entitled, would be Rs. 1.74,408. This means that as by making an application the respondent was able to take away Rs. 15,73,540 under section 35(2) he would further get Rs. 1,11,466 as compensation under Part B of the First Schedule to the Act. But if he had not made the application under section 35, he would only get Rs. 1,74,408 in all. There is no doubt that the legislature could not have intended such a result, namely, that the insurer should get away with a much larger amount if he applies under section 35 and should get a much smaller amount if he does not choose to apply under section 35. On the other hand, if we accept the contention of the respondent as to the meaning of the words " 'life insurance fund" it would make no difference to the compensation whether the insurer applies under section 35 or not. We must hold that the legislature intended that in either case an insurer would get the same amount whether it comes to him as compensation in one sum or comes to him as compensation plus repatriation of excess assets. If the words "life insurance fund" are interpreted to mean what the respondent says, the result would be this. If it applies for repatriation it would get Rs. 15,73,540 as repatriation of excess assets and Rs. 27,86,658 as compensation under Part B: total Rs. 43,60,198. If it does not apply for repatriation and if cl. (d) has the meaning urged on behalf of the respondent, its total compensation would come to the same figure, namely, Rs. 43,60,198. This clearly shows that the legislature intended the words "life insurance fund" to mean what they meant in section 10(2) for that would give in our opinion the same result whether an insurer applied under section 35 or not. 487 We have already said that cl. (d) provides for past surplus in form 1, the responsibility for which passes on to the Life Insurance Corporation when it takes over the life business of an insurer. So far as the future is concerned, cl. (b) of the aforesaid 4th paragraph provides for a higher valuation for with profits policies with the result that the liability which the insurer whose business is being taken over has to bear with respect to with profits policies is higher. The appellant apparently claimed an amount under cl. (d) on the ground that at future valuation the bonus payable to the policy holders would be reduced. Now cl. (d) in our opinion provides for cases where there have been surpluses in the past while the provision for the future in respect of profit policies is to be found in cl. The appellant therefore cannot lay claim to anything under cl. (d) unless there were surpluses in the past in form 1 of the Fourth Schedule to the . The contention that the appellant is likely to suffer if the meaning contended for by the respondent is given to the words "life insurance fund", particularly with respect to with profit policies has in the circumstances no force, for there is already a weightage in favour of calculating liability for with profit policies under cl. (b) of the 4th. paragraph of Part B of the First Schedule to the Act. Lastly there will be another curious result if the words "life insurance fund" in cl. (d) is given the meaning contended for on behalf of the appellant. Take the case of an Indian company which has shares but which has always been showing deficit in form 1 of the Fourth Schedule to the . If its life insurance fund for the purposes of cl. (d) is calculated in the manner contended for on behalf of the appellant the result would be that the share capital of such a company would also come into the assets and if as a result of the share capital going into assets the deficit in form is converted into surplus such a company would in conceivable circumstances lose 96 per centum of its share capital as if it was part of the life insurance fund. It is obvious that the share capital of an insurance company cannot be a part of the life insurance fund; but on the interpretation urged on behalf of the appellant even 96 % of the share capital may be lost to an insurance company, whose business is being taken over by the Life Insurance Corporation if the words "life insurance fund" are given the wide meaning for which the appellant is contending. We have therefore no doubt that the tribunal was right in its conclusion that the words "life insurance fund" as used in cl. (d) of the aforesaid 4th paragraph have the same meaning as that given to them in section 10(2) of the read with section 1 1 and form D of the Third Schedule to the . In this view of the matter, the appeal must fail. We therefore dismiss the appeal with costs to the respondent. The respondent will be at liberty to withdraw the money deposited in this Court towards compensation. Appeal dismissed.

Under section 10(2) of the , where an insurer carries on the business of life insurance, all receipts due in respect of such business shall be carried to and form a separate fund called the life insurance fund. Section 11 (c) provides for keeping a revenue account in Form D of the Third Schedule, which applies to life insurance business also. This account, on the receipt side, has mainly income from premiums and out of investments from life fund and, on he expenditure side, all expenses and bad debts connected with the life business. A balance is struck after taking into account the balance of the fund at the beginning of the year and after making some adjustments and transfers, and the "life insurance fund" is arrived at. Form 1 of the Fourth Schedule to the , provides for determining the surplus or deficit, which is the difference between the net liability in business determined by actuarial valuation of policies in force and the Life Insurance Fund. If there is a surplus, section 49(1) of the provides, that 712 1/2 % of the surplus shall be allocated to shareholders, and the balance shall remain in the fund for policy holders. When transfer of life insurance business from the life insurance companies to the Life Insurance Corporation took place, a provision had to be made for carrying out the effect of s.49(1). That provision was made in Cl. (d) of para. 4 of Part B of the First Schedule to the , according to which, where there is surplus in the life insurance fund, as a result of the actuarial valuation of policy liabilities under Cl. (b) of the same Para. 4, 96 % of such surplus shall be shown as a liability, that is, 96% of that surplus shall go to the Corporation in order to meet the liabilities, and to that extent the compensation to be paid to the insurance company would be reduced. Part B applies to those insurers, who, having a surplus in Form 1 have not allocated the whole or any part of such surplus to policy Holders, and also provides, how compensation is to be paid to companies who had no surplus as disclosed in Form T. In the latter case, that is, if there was a deficit in Form 1, there could be no allocation to the policy holders under s.49(1) of the , and there would be no liability under Cl. On the taking over of the business of the respondent, a life insurance company incorporated in Canada, by the appellants, under the , the respondent claimed Rs. 27 lacs and odd as compensation. The respondent contended that the words "life insurance fund" in Cl. (d) referred to above had the same meaning as those words in the , and since there was deficit in its working as shown by Form 1. no amount was to be deducted as liability under Cl. The appellant was prepared to Day only Rs. 1 lac and odd, on the basis that, the words "life insurance fund" in Cl. (d) meant the difference between the total assets and the liabilities 475 under Cls. (a) and (c) and since there was a surplus of Rs. 27 lacs 'And odd, a sum of Rs. 26 lacs and odd, forming, 96% of it, was to be debited towards the liabilities of the respondent. The Insurance Tribunal accepted the respondent 's contention and awarded the compensation claimed by it. In its appeal to this Court, the appellant contended that: (i) the words "life insurance fund" under the have more than one meaning under that Act, and therefore it was not possible to give the meaning, claimed by the respondent, to those words in Cl. (d) under the Corporation Act, and (ii) even if those words have only one meaning under the , they have a different meaning under the Cl. HELD: (i) A combined reading of sections 10(2), 11 and 13 of the and Form D of the Third Schedule and Form 1 of the Fourth Schedule to the , shows, that the words "life insurance fund", "surplus" and "deficit" have only the definite meaning set out above, as contended by the respondent. [480B C] The contention, that the words "life insurance fund" have different meanings in sections 56(2) and 58(3), and in regulation 7 of of the First Schedule to the , has no force, because when the marginal note of section 56(2) refers to surplus assets of life insurance fund it means in reality the surplus to be found in Form 1 and the same applies to section 58(3); and as regards regulation 7, the plural is used in the words "life insurance funds" merely due to exigencies of grammar. [46OF: 481D E F G] It cannot be said that because section 27(1) of the lays down that an insurer is required to keep certain sums invested to meet his liabilities mentioned therein, the entire assets of the insurer are security for the policy holders and not merely the life insurance fund. This section only provides that when life insurance fund shows a deficit in Form 1 it would be the duty of the insurer to see that he has further assets to cover the deficit, and that these assets are always kept invested in accordance with the ; but the section does not provide that the assets brought in to cover the deficit would become part of the life insurance fund. It is only such moneys which are included in the revenue account, Form D, and which are not of a capital nature that form part of the life insurance fund. Since, in the instant case the business of the respondent in India had admittedly shown a deficit in Form 1, and the funds brought in by the respondent from outside to cover the deficit were never put in the revenue account, they were never made part of the life insurance fund, though they remained vested in a trustee under section 27(6) of the . [48 2B G] (ii) The Tribunal was right in its conclusion that the words "life insurance fund" as used in Cl. (d) of the aforesaid fourth paragraph have the same meaning as that given to them in section 10(2) of the read with section 11 and Form D of the Third Schedule to the . [483H] When Cl. (d) speaks of the life insurance fund being in surplus that surplus has to be determined in accordance with Form 1 subject to certain modifications indicated in Part B of the Corporation Act. The context. therefore, instead of showing that there is any other meaning of the words "life insurance fund" in Cl. (d), shows that they have the same meaning in that clause as in Form J. [485D, E] Section 35(1) and (2) of the Corporation Act also point to the same conclusion. because, these provisions show that where the legislature intended to refer to all the assets and liabilities it said so in terms and did not use the words "life insurance fund", Besides, if these 476 words were given the meaning for which the appellant contended, there would be an inconsistency between Cl., (d) and section 35, in that, the insurer would get away with a much larger amount if he applied for repatriation of excess assets under section 35, and would get a much smaller amount if he did not choose to apply under the section, a result which the legislature could not have intended. Moreover, the share capital of an insurance company cannot obviously form ptrt of the life insurance fund; but on the interpretation urged on behalf of the appellant, even 96% of the share capital may be lost to an insurance company, as part of the life insurance fund in conceivable,, circumstances, [486A C, F; 487G].

N: Criminal Appeal No. 4 of 1976. 279 Appeal by special leave from the judgment and order dated the 29th August 1975/1st Sept., 1975 of the Bombay High Court in Criminal Appeal No. 1639 of 1972. Ram Jethmalani, Mrs. section Bhandare, A.N. Karkhanis, T. Sridharan and C.K. Sucharita for the Appellant. J.L. Nain, and H.R. Khanna and M. N. Shroff for the Respondent. The Judgment of the Court was delivered by FAZAL ALI, J. This appeal by special leave is directed against a judgment dated 29th August 1975/1st September 1975, of the Bombay High Court convicting the appellant, Mohanlal Gangaram Gehani (hereinafter referred to as A 1) under section 326, I.P.C. and sentencing him to rigorous imprisonment for three years. He was also convicted under section 323 read with section 34 I.P.C. but no separate sentence was awarded. The trial court had convicted A 1 under section 326/34 I.P.C. which was altered by the High Court to one under section 326 simpliciter. The details of the prosecution case are to be found in the judgment of the High Court and it is not necessary for us to repeat the same. We shall, however, give a brief resume of the important facts which are germane for deciding the short points raised by Mr. Jethmalani, counsel for the appellant. The occurrence out of which the present appeal arises appears to have taken place on April 2, 1972 at about 11 11.30 p.m. According to the prosecution while Ishrat Malik Faqih (hereinafter referred to as 'Ishrat ') was returning from a movie in Paradise Cinema, situated at Lady Jamashedji Road, Mahim at about 12 15 a.m. he met Salim, a friend of his, alongwith Shaikh Abdul Kalim alias Pappu (P.W. 4). He also saw another person standing with Salim and Pappu. All of them started talking to one another when suddenly they saw a black Fiat car coming from Lady Jamashedji Road and taking a turn to Chotani Road. The car stopped near the place where the aforesaid persons were talking and A 1, A 2 (Shashi) and A 3 (Kumar) emerged from the car. According to the informant, Ishrat, all the three accused were known to him before. These persons were dead drunk and asked Ishrat and party as to who amongst them was their leader. Some sort of 280 an altercation took place in the course of which A 2 caught hold of the shirt of Shanker Shetty and assaulted him with fists. He was joined by A 3 and the altercation culminated in a murderous assault said to have been made by A 1 who took out a dagger and stabbed Shetty on the right side of the stomach below the chest. Shetty fell down. Thereafter A 1 ran back to his car and sped away leaving behind A 3 who could not get into the car. Ishrat immediately proceeded to the Mahim police station and lodged an F.I.R. with Sub Inspector Sawant (P.W. 7) at 00.50 hrs. On April 3, 1972. According to the prosecution, the informant had rushed to the police station and lodged the F.I.R. within an hour of the occurrence. Subsequently, it appears that a wireless police van which passed through the place of occurrence having found Shetty lying injured picked him up and removed him to K.E.M. Hospital. Dr. Heena (P.W. 11) admitted Shetty and made a note of the injuries received by him in the notesheet of the hospital register and also mentioned the fact that the injured had named his assailant as one Tiny. It was further alleged by the prosecution that Sawant after recording the F.I.R. rushed to the hospital and contacted Shetty and recorded his statement at 1.45 a.m. After the usual investigation, chargesheet was submitted against A 1 to A 3 who were ultimately tried and convicted for an offence under section 326 read with section 34 I.P.C. and A 1 was sentenced as mentioned hereinbefore. A 2 and A 3 each was sentenced to suffer rigorous imprisonment for two years. A 1 pleaded innocence and his defence was that he was falsely implicated due to enmity because Ishrat and his friends were carrying on Matka business and the appellant being an informer of the Customs Department had made certain reports against the prosecution witnesses particularly Ishrat who was a smuggler. We need not refer to the defence of A 2 or A 3 as they have been acquitted by the High Court. The appellant raised several points before the High Court which after hearing the parties confirmed his conviction but reduced his sentence to rigorous imprisonment for three years. In support of the appeal Mr. Jethmalani has argued three important points relating to certain circumstances which completely demolish the entire prosecution case against the appellant. 281 In the first place, it was argued that the F.I.R. was not at all lodged at 00.50 hrs. as alleged by the prosecution but much later. Secondly, Shetty did not know the appellant before the occurrence and thirdly, Mr. Jethmalani argued, that his version that the name of the appellant was disclosed to him by Salim should not be accepted. Another important circumstance to which our attention was drawn and which has greatly impressed us is that the hospital register (Ext. 22) shows that when Shetty was taken to the hospital and produced before Dr. Heena (P.W. 11) he gave the name of his assailant as one Tiny or Tony. The evidence further shows that Tiny or Tony was undoubtedly a known person who was living in a locality near the place of occurrence and was not a fictitious red herring as the prosecution would have us believe. According to Ext. 22 Shetty made a statement to Dr. Heena at 1. 15 a.m. on April 3, 1972. Dr. Heena, who appeared as P.W. 11, fully supported the contents of Ext. It is manifest that once the statement of P.W. 11 is accepted then the entire prosecution case against the appellant falls. The High Court realising the importance of this document and the evidence of P.W. 11 seems to have explained it away on three main grounds. In the first place, the High Court laid great emphasis on the fact that where Dr. Heena had mentioned the name of Tiny, there was no particular column where the name of assailant could be given. We have examined the original document ourselves and we find that the entire part of the register where the statement has been recorded by P.W. 11 is described as Registrar 's note which comprehends everything including the nature of injuries of the injured, any statement made by him or similar other matters. We are, therefore, unable to agree with the High Court that there was no particular column under which the name of the assailant could be mentioned. Moreover, there is absolutely no evidence on the record to show that P.W. 11 was in any way friendly with the appellant or had any animus against Shetty which might impel her to make false entries in order to oblige the appellant. P.W. 11 was an absolutely disinterested and independent witness. After going through her evidence we find no reason why her evidence should not be accepted in toto. The High Court further observed that from the hospital register it appears that the word 'Tony ' was first written, then crossed 282 and changed into 'Tiny '. This may be a mistake in the pronunciation of the name and much significance cannot be attached to this circumstance because P.W. 11 had initialled the change and it is not a case of forgery at all. Moreover, P.W. 11 was examined as a prosecution witness and if the learned prosecutor had thought that she (P.W. 11) had given false evidence to help the appellant, he could have declared her hostile and sought the permission of the court to cross examine her but no such course was adopted. Hence, the mere change of the word 'Tony ' to Tiny ' can be explained on the basis of a bona fide mistake. There is no erasure. Both names are decipherable. What may have happened was that the injured may have pronounced Tiny in such a way that P.W. 11 thought it was Tony but on further clarification the injured must have said that it was Tiny. P.W. 11 in her evidence has clearly stated that she had examined the patient and had given the history of the assault with knife by a person called Tiny and that the patient was fully conscious. There is nothing in her evidence to show that her statement could be untrue. The High Court then sought to exclude the evidence of P.W. 11 as being inadmissible as the provisions of section 145 of the Evidence Act were not complied with. It was suggested that Shetty had mentioned the name of the appellant in his statement in court but the statement of P. W. 11 shows that he had named Tiny as his assailant and, therefore, Dr. Heena (P.W. 11) should have been cross examined on this point to explain the contradiction. With great respect, the High Court has erred on this point and has misconstrued the provisions of section 145 of the Evidence Act which may be extracted thus: "145. Cross examination as to previous statements in writing. A witness may be cross examined as to previous statements made by him in writing or reduced into writing, and relevant to matters in question, without such writing being shown to him, or being proved, but, if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him. " 283 It is obvious from a perusal of section 145 that it applies only to cases where the same person makes two contradictory statements either in different proceedings or in two different stages of a proceeding. If the maker of a statement is sought to be contradicted, his attention should be drawn to his previous statement under section 145. In other words, where the statement made by a person or witness is contradicted not by his own statement but by the statement of another prosecution witness, the question of the application of section 145 does not arise. To illustrate, we might give an instance suppose A, a prosecution witness, makes a particular statement regarding the part played by an accused but another witness B makes a statement which is inconsistent with the statement made by A, in such a case section 145 of the Evidence Act is not at all attracted. Indeed, if the interpretation placed by the High Court is accepted, then it will be extremely difficult for an accused or a party to rely on the inter se contradiction of various witnesses and every time when the contradiction is made, the previous witness would have to be recalled for the purpose of contradiction. This was neither the purport nor the object of section 145 of the Evidence Act. For instance, in the instant case, if P.W. 11 had been examined under section 164 of Code of Criminal Procedure or before a committing court and made a particular statement which was contradictory to a statement made in the Sessions Court, then section 145 would have applied if the accused wanted to rely on the contradiction. Such, however, is not the position because the evidence of P.W. 11 is not only consistent throughout but the earlier statement recorded by her can be taken to corroborate her. There was no question of contradicting the statement of P.W. 11 by her previous or subsequent statement. On the other hand, Dr. Heena was a prosecution witness whose statement that Shetty had named Tiny on the earliest occasion, was an admission by a prosecution witness which threw considerable doubt on the complicity of the appellant in the occurrence. If Shetty stated in his evidence that he named A 1 (Mohanlal) then that would be a statement which was contradictory to that of P. W. 11 and the question will be which of the two statements should be preferred. If Dr. Heena had made two inconsistent statements then only section 145 would have applied. 284 In Bishwanath Prasad & Ors. vs Dwarka Prasad and Ors.(1) while dwelling upon a distinction between an admission and a statement to which section 145 would apply, this Court observed as follows: "In the former case an admission by a party is substantive evidence if it fulfills the requirements of section 21 of the Evidence Act; in the latter case a prior statement is used to discredit the credibility of the witness and does not become substantive evidence. In the former there is no necessary requirement of the statement containing the admission having to be put to the party because it is evidence proprio vigor: in the latter case the Court cannot be invited to disbelieve a witness on the strength of a prior contradictory statement unless it has been put to him, as required by section 145 of the Evidence Act. " The statement made by P.W. 11 was, therefore, an admission of a prosecution witness and if it was inconsistent with the statement made by another prosecution witness namely Shetty, there was no question of the application of section 145 of the Evidence Act which did not apply to such a case in terms. Thus, the reason given by the High Court for distrusting the evidence of Dr. Heena is wholly unsustainable. Moreover, the statement of the injured to Dr. Heena being the first statement in point of time must be preferred to any subsequent statement that Shetty may have made. In fact, the admitted position is that Shetty did not know the appellant before the occurrence nor did he know his name which was disclosed to him by one Salim. Therefore, Salim who is now dead, being the source of information of Shetty would be of doubtful admissibility as it is not covered by section 32 of the Evidence Act. And, once we believe the evidence of P.W. 11, as we must, then the entire bottom out of the prosecution case is knocked out. Apart from this, there is another circumstance which renders the testimony of Shetty (P.W. 5) valueless. He admits in para 10 of his evidence (page 35 of the paperbook) that he had not seen the accused before the date of the incident, that he did not know him at all, and that he came to know the name of the accused on the 285 date of the incident and that it was Salim who had given him the name of the accused while he was being taken to the hospital. The fact that Salim disclosed the name of the appellant to Shetty is falsified by the fact that he did not name the appellant to Dr. Heena when he reached the hospital but named one Tiny. It is also relevant to note that Tiny Advani is not an unknown figure but is a living person as would appear from the evidence of P.W. 3, Shaikh, where he says that he knew Tiny Advani who is also known to Ishrat, Salim and Pappu and they are on greeting terms. Another important circumstance which discredits the testimony of P.W. 5 (Shetty) is that he admits that although he did not know the accused from before the occurrence yet the accused was shown to him by the police at the police station. The relevant statement of P.W. 5 may be extracted thus: "I had seen the accused before coming to the Court and after the incident, I had seen the accused ten days after I was discharged from the hospital. I was shown these accused by the Police at the Police Station." Thus, as Shetty did not know the appellant before the occurrence and no Test Identification parade was held to test his power of identification and he was also shown by the police before he identified the appellant in court, his evidence becomes absolutely valueless on the question of identification. On this ground alone, the appellant is entitled to be acquitted. It is rather surprising that this important circumstance escaped the attention of the High Court while it laid very great stress in criticising the evidence of Dr. Heena when her evidence was true and straight forward. For these reasons, therefore, we are unable to place any reliance on the evidence of Shetty so far as the identification of the appellant is concerned. The other witness who knew the accused is P.W. 1 (Ishrat) who is said to have lodged the F.I.R. at Mahim police station at 12.50 a.m. on 3.4.1972. There is clear intrinsic evidence in the case to show that the FIR was ante timed and could not have been lodged at 12.50 a.m. P.W. 7, Sawant had clearly admitted in his evidence at page 41 of the Paperbook that the station diary entry which has to contain the contents of the F.I.R. does mention that Ishrat had 286 visited the Police station and lodged the complaint. The witness further admits that the station diary entry does not also mention anywhere that he (P.W. 7) had left the police station for K.E.M. hospital accompanied by P.W. 1, Ishrat. He also admits that he knew the accused before the incident. The witness further admits that although he had come to know the name of the assailant at 12.50 a.m. yet he did not take any step to arrest or cause the arrest of any one of the accused. He has not given any explanation for this unusual conduct. It is extremely doubtful if P.W. 1 had actually named the appellant, inspector Sawant would not have arrested him immediately after the F.I.R. was lodged or, at any rate, after he returned from the Hospital. The evidence, however, shows that A 1 was arrested on 5.4.72, that is to say, two days after the occurrence. No explanation for this unusual phenomenon has been given by the prosecution. For these reasons, therefore, the statement of P.W. 1 that he lodged the F.I.R. at 12.50 a.m. on 3.4.72 and disclosed the name of the appellant becomes absolutely doubtful. If we reject this part of the evidence of P.W. 1, then his evidence on the question of complicity of the appellant in the crime also becomes extremely doubtful. The only other evidence against the appellant is that of P.Ws. 3 and 4. So far as P.W. 3 is concerned his evidence also suffers from the same infirmity as that of Shetty. P.W. 3 (Shaikh) admits at page 22 of the Paperbook that he had not seen the accused or any of the three accused before the date of the incident and that he had seen all the three for the first time at the time of the incident. He further admits that the names of the accused were given to him by the police. In these circumstances, therefore, if the appellant was not known to him before the incident and was identified for the first time in the court, in the absence of a test identification parade the evidence of P.W. 3 was valueless and could not be relied upon as held by this court in V.C. Shukla vs State (Delhi Administration)(1) Where this Court made the following observations: "Moreover, the identification of Tripathi by the witness for the first time in the court without being tested by a prior test identification parade was valueless. " 287 Same view was taken in a Federal Court decision in Sahdeo Gosain & Anr. vs The King Emperor.(1) This, therefore, disposes of the evidence of P.W. 3. As regards the evidence of P.W. 4, the High Court itself found at page 129 of the paperbook that the learned Additional Sessions Judge had disbelieved P.W. 4, Shaikh alias Pappu. Therefore, the evidence of P.W. 4 also goes out of consideration. The position, therefore, is that there is absolutely no legal evidence on the basis of which the appellant could be convicted. For the reasons given above, we are satisfied that the prosecution has not been able to prove its case against the appellant beyond reasonable doubt. The appeal is accordingly allowed and the appellant is acquitted of the charges framed against him. He will now be discharged from his bailbonds and need not surrender. P.B.R. Appeal allowed.

The prosecution case against the appellant was that on the night of occurrence between 11 and 11.30 the informer and two of his friends were standing on a road when suddenly the three accused emerged out of the car and the appellant assaulted and stabbed the injured person with a dagger. The prosecution alleged that there was enemity between the assailants and the injured person; that the informer lodged a F.I.R. at 00.50 hrs. and that the injured man was picked up by a Police Wireless Van and admitted in the hospital. The trial court convicted the accused under section 326/34 I.P.C. and sentenced them variously. The High Court acquitted two of the three accused. In regard to the appellant, disbelieving the evidence of the doctor on the ground that the name of the assailant was first written by her as "Tony" but later changed to read as "Tiny" and that secondly there was no particular column in the register where the name of the assailant could be written, the High Court altered the conviction to one under section 326 I.P.C. and sentenced him to rigorous imprisonment for three years. On appeal to this Court it was contended on behalf of the appellant that (1) the F.I.R. was not lodged at 00.50 hrs. as claimed by the prosecution; (2) the injured did not know the appellant before the occurrence; (3) the version of the injured that the name of the assailant was disclosed to him by a friend of the informer should not be accepted and (4) the discrepancy in the name of the assailant recorded by the doctor was not such as to completely discredit her evidence. Allowing the appeal, ^ HELD: (a) The change of name "Tony" into "Tiny" in the hospital register might be due to mis hearing of the name in the first instance and correcting it later. Much could not be made of this circumstance. The doctor had initialled the alteration. The prosecution has not made any attempt to declare 278 the doctor a hostile witness and to cross examine her. Therefore the change in the name could be a bona fide mistake. That apart, the injured was fully conscious at the time he made the statement to the doctor. [282 A C] (b) The High Court was in error in stating that there was no particular column in the hospital register in which the name of the assailant could be mentioned. The entire part of the register where the statement had been recorded by the doctor is described as the "Registrar 's note" which comprehends everything including the nature of injuries to the injured, any statement made by him or similar other matters. [281 E F] (c) There is no evidence on record to show that the doctor was in any way friendly with the appellant or inimical towards the injured man; she was an absolutely disinterested and independent witness. [281 G] 2 (a) The High Court had erred in holding that the doctor 's evidence was inadmissible in that the provisions of section 145 of the Evidence Act had not been complied with. [282 F] (b) Section 145 applies only to cases where the same person makes two contradictory statements either in different proceedings or in two different stages of a proceeding. If the maker of a statement is sought to be contradicted, his attention should be drawn to his previous statements under section 145, that is to say, where the statements made by a person or a witness is contradicted not by his own statement but by the statement of another prosecution witness the question of application of section 145 does not arise. [283 A C] (c) The doctor 's statement was an admission of a prosecution witness. If it was inconsistent with the statement made by another prosecution witness there was no question of application of section 145 of the Evidence Act. [283 C] In the instant case the statement of the injured to the doctor being first in point of time it must be preferred to any subsequent statement made by the injured. There is much evidence to show that the injured did not know the appellant before the date of the incident. No test identification parade had been held. The appellant was shown by the police before he identified him. If the accused was not known to the injured and his friends before the incident and was identified for the first time in the court, this evidence has no value and cannot be relied upon in the absence of a test identification parade. [285 E,C,F] V.C. Shukla vs State (Delhi Administration), ; and Sahdeo Gosain & Anr. vs The King Emperor , referred to.

Appeal Nos. 173031/1993. From the Judgment and Order dated 30.6.1992 and 2.9.1992 of the Jammu and Kashmir High Court in L.P.A. No 161/90. and C.W. P. No. 1352/88. D.D. Thakur, M.H. Baig. Rajendra Mal Tatia, Indra Makwana and K. K. Gupta (for Suresh A. Shroff & Co.) for the Appellants. V.R. Reddy, Addl. Solicitor General and Ashok Mathur for the Respondents. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. Heard counsel for the parties. Leave granted in S.L.Ps. 12608/92 and 16418/92. The appeals are directed against the judgment of the Division Bench of the Jammu and Kashmir High Court allowing a special appeal preferred by the State of Jammu and Kashmir against the judgement of the learned Single Judge. The learned Single Judge had allowed the writ petition filed by the appellants herein. The matter pertains to approval and publication of the select list of District Munsifs prepared by the Jammu and Kashmir Public Service Commission. On May, 28. 1984 the High court intimated the Government of ten vacancies in the category of munsifs and requested the Government to initiate appropriate steps for selection of candidates. The government wrote to the public service commission and the latter issued the notification and put the process in motion. Written test was held in the year 1985. viva voce was also held. At that stage, the High Court requested the government (with a copy forwarded to the public service commission) to select twenty candidates in the place of ten. This was done on December 10, 1985. The government, in turn, requested the public service commission on December 27, 1985 to select twenty 100 candidates. On March 11, 1986 the Public Service Commission sent three select lists,. one containing twenty candidates, the other containing three scheduled castes candidates and a waiting list of ten candidates. From the record placed before us by the learned counsel for the State of Jammu and Kashmir, it appears that the government received several complaints against the selection process. The government appears to have been satisfied prima facie with some of those complaints and was toying with the idea of scrapping the entire list and asking for a fresh selection. The select list sent by the commission was kept pending without being approved as required by Rule 39 of the Jammu and Kashmir Civil Service,, (.Judicial) Recruitment Rules, 1967. Meanwhile, the High Court had been pressing for approval of the names in view of a number of vacancies and the consequent accumulation of work. Number of courts were without presiding officers. In particular, the High Court said, there was urgent need for at least thirteen Munsifs. In the circumstances, the government approved, on December 23, 1986. tile names of thirteen persons out of the list recommended by the public service commission and Published the same. They were appointed on December 30, 1986. Meanwhile, a writ petition had been tiled in the High Court for a direction to the Government to approve and publish the list recommended by the public Service commission. On December 30, 1986. the Advocate General for the State stated before the court that the Government has already approved thirteen entries and that the question of approval of the remaining, persons in the list was under the active consideration of the Government. Recording the said statement, the writ petition was dismissed as settled. The Government however, did not approve any of the other names in the lists. evidently in view of the very same reasons for which they were disinclined initially to approve the said lists. Meanwhile, the candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list. The High Court was also addressing the government from time to time to approve the list in view of certain vacancies arising since the appointment of the thirteen Munsifs aforementioned. Since no further names were being approved by the Government, the writ petition, from which these appeals arise, was filed on September 14, 1988. The writ petition was allowed on July 11,1990 by a learned Single Judge and a direction was issued to the State Government to approve and publish the list of 101 the remaining candidates submitted by the public service commission to it for appointment as munsifs immediately in accordance with the Rules of 1967 and to consider the appointment of such candidates (including the writ petitioners) as munsifs in the vacancies existing or likely to exist in accordance with the recommendations to be made by the High Court. On appeal, the Division Bench disagreed with the learned Single Judge. The Bench held that approval and publication of the select list by the Government under Rule 39 is not a mere ministerial act but a meaningful one. It is open to the government to examine the select list carefully and to reach its own conclusion regarding the suitability and merits of the candidates and publish the names of only those candidates who are found suitable. While approving the list, the Division Bench held, the State Government cannot alter or temper with the order of merit determined by the commission but it is certainly open to the government to stop at a particular point where it feels that a particular candidate is not meritorious and not to approve the remaining list. The government is not bound to fill up the existing vacancies within a particular time frame. The mere inclusion in the select list also does not confer upon the candidates any indefeasible right to appointment. The recommendations of the commission are not binding upon the State Government held the Division Bench. In the facts and circumstances of the case, it must be held that the remaining seven names in the select list have been disapproved by the government. The writ petition also suffers from leaches. The persons who had meanwhile become eligible and qualified to apply for the said post should also be given a chance. A list prepared as far back as 1985 86 cannot be directed to be approved in the year 1992. In these appeals, it is submitted by the learned counsel for the appellants that once the public service commission prepares and recommends a select list, the government has no power to sit in judgment over it. It is bound to approve the list as recommended. The function of the government under Rule 39 of the 1967 Rules is merely ministerial and formal. Even otherwise, the government has not disclosed any reasons for not approving the seven names while approving the first thirteen. The government 's action is arbitrary and capricious. It is indeed vitiated by inadmissible and extraneous considerations. The government cannot be allowed an absolute power in the matter. On the other hand, it is contended by Sri Dipankar Gupta, learned Solicitor General appearing for the State of Jammu and 102 Kashmir that the function of the government under Rule 39 is not merely formal or ministerial. The government being the appointing authority, is entitled to scrutinise the list prepared by the public service commission. It is open to the government either to approve or disapprove the list either wholly or in part. As a matter of fact, a large number of complaints were received by the government against the said selection and many of them were also found to be not without substance. However, in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration. The remaining seven names were not approved inasmuch as no vacancies were available at that time. In all the circumstances of the case, the Hon 'ble Chief Minister took a decision on March 28, 1988 not to approve any further names and to go in for fresh selection. Inasmuch as the vacancies at the end of the year 1986 were not more than thirteen, the refusal to approve the remaining seven is a valid and bonafide exercise of power and discretion on the part of the government. The appellants have no legal right to be appointed just because their names have been included in the select list prepared by the public service commission. The first requisition by the High court was sent in May, 1984. The written test was held in 1985. The select list was recommended in March, 1986. After a lapse of more than seven years, the said list cannot now be directed to be given effect to, the learned Solicitor general submitted. Such a direction would deprive a large number of persons, who have become qualified and eligible to apply and complete for the said post meanwhile of the opportunity of applying for the said post. Many of them may even become age barred meanwhile, he submitted. It is true that the government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the government has an absolute power. Such an argument does violence to the constitutional scheme. The Constitution has created a public service commission and assigned it the function of Conducting examinations for appointments to the services of the Union or to the services of the State, as the case may be. According to Article 320 clause (1) this is the primary function of the commission. The Government is directed to consult the public service commission on all matters relating to methods of recruitment to civil services and to civil posts and on the principles to be followed in making. appointment to civil services and posts and on the suitability of candidates for 103 such appointment, among other matters. An examination of Articles 317 to 320 makes it evident that the constitution Contemplates the commission to he an independent and effective body outside the governmental control. This is an instance of application of the basic tenet of democratic form of government viz., diffusion of governing power, The idea is not to allow the concentration of governing power in the hands of one person, authority or organ. It is in the light of this constitutional scheme that one has to construe Rules 39 and 41 of the 1967 Rules. They read as follows: 39.Final List: The list of selected candidates after it is approved shall be published by the Government Gazette and a copy thereof shall be sent to the court along with the Waiting list, if any, furnished by the commission for record in their office. Security to the list: The list and the Waiting list of the selected candidates shall remain in operation for a period of one year from the date of its publication in the, Govt. Gazette or till it is exhausted by appointment of the candidates whichever is earlier, provided that nothing in this Rule shall apply to the list and the waiting list prepared as a result of the examination held in 1981 which will in operation till the list or the waiting list is exhausted. " Construed in the above light, Rule 39, in our opinion, does not confer an absolute power upon the government to disapprove or cancel the select list sent by the public service commission. Where, however, the government is satisfied, after due enquiry that the selection has been vitiated either on account of violation of a fundamental procedural requirement or is vitiated by consideration of corruption, favourtism or nepotism, it can refuse to approve the select list. In such a case, the government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323. Indeed, clause (2) of Article 323 obliges the Governor of a State to ray a copy of the annual report received from the 104 commission before the Legislature "together with a memorandum explaining, as respect the cases, if any, where the advice of the commission was not accepted (and) the reasons for such non acceptance. " Evidently, this is meant as a check upon the power of the government. This provision too militates against the theory of absolute power in the government to disapprove or reject the recommendations of the commission. For the same reason, it must be held that the government cannot pick and choose candidates out of the list. Of course, where in respect of any particular candidate any material is discovered disclosing his involvement in any criminal activity, the government can. always refuse to appoint such person but this would not be a case touching the select list prepared and recommended by the commission. It is equally not open to the government to approve a part of the list and disapprove the balance. In this case, it may be remembered that the government itself had asked for a list of twenty and the commission had sent a list of twenty. (we are not concerned with the waiting list sent by the commission, at this stage). It could not have been approved in part and rejected in part. The number of vacancies available on the date of approval and publication of the list is not material. By merely approving the list of twenty, there was no obligation upon the government to appoint them forthwith. Their appointment depended upon the availability of vacancies. A reading of Rule 41 makes this aspect clear. The list remains valid for one year from the date of its approval and publication. If within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared. In this case, no doubt, a number of complaints appears to have been received by the government about the selection process. We have seen the note file placed before us. It refers to certain facts and complaints. But if the government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded. Not having done that and having approved the list partly (thirteen out of twenty names) the cannot put forward any ground for not approving the remaining list. I indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or have disapproved the entire list of twenty. The objection, the government have pertains to the very process of selection i.e., to the entire list, and not individually to any of the remaining seven candidates. It is true that mere inclusion in the select list does not confer upon 105 the candidates included therein an indefeasible right to appointment State of Haryana vs Subhash Chandra Marwaha A.I.R. 1 973 S.C.2216; M.S, Jain vs State of Haryana A.I.R. and State of Kerala vs A. Lakshmikutty A.I.R. but that is only one aspect of the matter. The other aspect is the obligation of the government to act fairly. The whole exercise cannot be reduced to a farce. Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the government the government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment. We do not think that any government can adopt such a stand with any justification today. This aspect has been dealt with by a Constitution Bench of this Court in Shankarsan Dash vs Union of India 1991 1 3 S.C.C.47 where the earlier decisions of this court are also noted. The following observations of the court are apposite: "It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied. Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post. Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies. However, it does not mean that the State has the licence of acting in an arbitrary manner. The decision not to fill up the vacancies has to he taken bona fide for appropriate reasons. And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted. This correct position has been consistently followed by this Court, and we do not find any discordant note in the decisions in State of Hary 106 ana vs Subhash Chander Marwahs, Neelima. Shangla vs State of Haryana or Jatendra Kumar vs State of Punjab. " We may reiterate that the principle of Article 323, referred to hereinabove, is equally relevant on the nature of the power of the government in such a matter. Looked at from the above stand point, it appears that the government 's action in not approving the rest of the seven names in the Select list is unsustainable but there are certain circumstances which induce us not to interfere in this matter. They are: (i) During the period of one year from the date of approval of ' thirteen names (23.12.1986/30.12.1986) no vacancy bid arisen. which means that even if the list of twenty had been approved and published on December 23 or December 30. 1986 none of the seven persons would have been appointed. At the end of one year. the list lapis and becomes inoperative. The first letter of the High Court stating that one or two more vacancies have arisen and requesting the Government to approve the remaining names, was sent only on August 13,1988 i.e., long after the expiry of the one year period. Any direction at this stage to approve the list would be a futile exercise. The list cannot be operated with respect to the vacancies existing as on today; and (ii) When the government failed to act within a reasonable period from the date of the order December 30, 1986 ) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General ) the petitioners ought to have moved in the matter. They did not do so. They waited for more then twenty months and approached the High Court only on September 14. This delay in our opinion, disentitles the petitioners from any relief in the facts and circumstances of the case. For the above reasons, the appeals fail and are dismissed. No costs. WRIT PETITION (C) NO. 81 OF 1993: 107 The petitioner in this writ petition was included in the waiting list prepared by the public service commission. Since the appeals preferred by the candidates at serial No. 14 onwards in the main list have themselves failed. there is no question of giving any relief to this petitioner. The writ petition accordingly fails and is dismissed. No costs. V. P. R. Appeals dismissed.

On 28.5.1984, the High Court intimated the government of ten vacancies in the category of Munsifs and requested it to initiate appropriate steps for selection of candidates. Written test was held in the year 1985 and viva voce was also held by the Public Service Commission. On 10.12.1985 the High Court requested the Government to select twenty candidates in the place of ten. On 27.12.1885 the Government requested the public Service Commission to select twenty candidates. On 11.3.1986 the public service commission sent three select lists, one containing twenty candidates the other containing three Scheduled castes candidates and a waiting list of ten candidates. The Government received several complaints against the pro cess of selection. It was toying with the idea of scrapping the entire list and asking for a fresh selection. 95 On 23.12.1986, as the High Court said that there was urgent need for at least thirteen Munsifs, the government approved the name,,, of thirteen persons out of the list recommended by the Public Service commission and published the same. They were appointed on 30.12. Meanwhile a writ petition had been riled in the High Court for a direction to the Government to approve and publish the list recommended by the Public Service Commission. On 30.12.1986, the State stated before the High court that it has already approved thirteen names and approval of the remaining seven persons was under its active consideration. The High Court dismissed the writ petition as settled. The Government did not approve any other names in the list in view of the complaints against the selection process by the Public Service Commission. The candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list and the High Court was also pressing the Government to approve the list in view of the vacancies. Another writ petition was riled to direct the Government to approve the remaining seven names from the select list. The High Court (Single judge) allowed the writ petition and directed the Government to approve and publish the list of the remaining candidates submitted by the Public Service Commission to it for appointment as Munsifs, immediately in accordance with the Jammu and Kashmir Civil Services (judicial) Recruitment Rules, 1967 and to consider the appointment of the candidates (including the writ petitioner .) as Munsifs in the vacancies existing or likely to arise, in accordance with the recommendations to he made by the High Court. On appeal, the division Bench of the High Court reversed the decision of the Single Judge. The present appeals by special leave were flied against the 96 decision of the Division Bench,. contending that once the Public Service Commission prepared and recommended a select list, the Government had no power to sit in judgment over it; that the Government was bound to approve the list as recommended; that the function of the Government under Rule 39 of the 1967 Rules was merely ministerial and formal; that the Government 's action was arbitrary and capricious and vitiated by any admissible and extraneous consideration. The State Government submitted that the function of the Gov ernment under Rule 39 was not merelY formal or ministerial; that the Government, being the appointing authority, was entitled to scrutinies the list open to the Government either to approve or disapprove the list, either whollY or in part , that a number of complaints were received bY the Government against the selection and many of them were found to he not without substance; that in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration; that refusal to approve the remaining seven names inasmuch as no vacancies were available at that time was a valid and bonafide exercise of power and discretion ton the part of the Government; that the appellants had no legal right to be appointed just because their names were included in the select list prepared by the Public Service Commission. Dismissing the appeals. this Court. HELD: 1.1. It is true that the Government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the Government has an absolute power. Such an argument does violence to the constitutional scheme. (102 F) 1.2. Rule 39 does not confer an absolute power upon the Government to disapprove or cancel the select list sent by the Public Service Commission Where, however, the Government is satisfied, after due enquiry that the selection has been vitiated either (on account of violation of a fundamental procedural requirement or is vitiated by consideration or corruption. favourtism or nepotism. it can refuse to 97 approve the select list. In such a case, the Government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323. (103 F H) 1.3. article 323 (2) is meant as a check upon the power of the Government. The provision militates against the theory of absolute power in the Government to disapprove or reject the recommendations of the commission. For the same reason, it must he held that the Government cannot pick and choose candidates out of the list. It is equally not open to the Government to approve a part of the list and disapprove the balance. (104 B) 1.4. Where is respect of any particular candidates an), material is discovered disclosing his involvement in any criminal activity the Government can always refuse to appoint such person but this would not he a case touching the select list prepared and recommended by the commission. (104 C) 1.5. In this case the Government itself had asked for a list of twenty and the commission had sent a list of twenty. It could not have been approved in part and rejected in part. The number of vacancies available on the date of approval and publication of the list is not material. By merely approving the list of twenty, there was no obligation upon the Government to appoint them forthwith. Their appointment depended upon the availability of vacancies. The list remains valid for one year from the date of its approval and publication, if within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared. (104 E F) 1.6. If the Government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded. Not having done that and having approved the list partly (thirteen out of twenty names), they cannot put forward any ground for not approving the remaining list. Indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or to have disapproved the 98 entire list of twenty. The objection, the Government have pertains to the very process of selection i.e., to the entire list and not individually to any of the remaining seven candidates. (104 G) 1.7. Mere inclusion in the select list does not confer upon the candidates included therein an indefeasible right to appointment. (104 H) State of Haryana vs Subhash Chandara Marwaha, ; , M. section Jain vs State of Haryana , A.I.R. 1977 S.C. and State of Kerala vs A. Lakshmikutty: A.I.R. 1987 S.C. 331, referred to. (111 E) 1.8. The other aspect is the obligation of the Government to act fairly. The whole exercise cannot be reduced to a more farce. Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the Government the Government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment. (105 B C) Shankarsan Dash vs Union of India. ; , referred to. The Government 's action In not approving the rest of the seven names in the select list is unsustainable but there are certain circumstances which induce the Court not to interfere in this matter. They are: (1) During the period of one year from the date of approval of thirteen names (23.12.1986/30.121986) no vacancy had arisen, which means that even if the list of twenty had been approved and published on December 23 or December 30, 1986 none of the seven persons would have been appointed. At the end of one year, the list lapses and becomes inoperative. (II) When the Government failed to act within a reasonable period from the date of the order (December 30, 1986) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General) the petitioners ought to have moved in the matter. They did not do so. They waited for more than twenty months and approached the High Court only on 99 September 14, 1988. This delay disentitles the petitioners from any relief in the facts and circumstances of the case. (106 C G)

Appeal No. 43 of 1952. Appeal by special leave granted by the Supreme Court of India on 11th May, 1951, from the Judgment and Order dated 11th December, 1950, of the Hyderabad High Court in Criminal Appeal No 598/6 of 1950. B.J. M. Mackenna (A. A. Peerbhoy and J. B. Dadachanji, with him) for the appellant. V.Rajaram Iyer (R. Ganapathy Iyer, with him) for the respondent ' 1953. October 5. The Judgment of the Court was delivered by MAHAJAN J. This is an appeal by special leave from the judgment of the High Court 'of Judicature of Hyderabad upholding the conviction of the appellant by the Special Judge, Warangal, appointed under Regulation X of 1359 F., under sections 243, 248, 368, 282and 124 of the Hyderabad Penal Code (corresponding to sections 302, 307, 436, 342 and 148, Indian Penal Code) and the respective sentences passed under these sections against him. The case for the prosecution which has been sub stantially accepted by the Special Judge and by the majority of the High Court is that the appellant was in the year 1947 the Subedar of Warangal within the State of Hyderabad, that on the 9th December, 1947, he proceeded to the village of Gurtur situate within his jurisdiction at about 10 a.m. along with a number of police officials and a posse of police force ostensibly to raid the village in order to arrest certain bad characters, that when a party of villagers, 60 or 70 in number, came out to meet him in order to make representations, he ordered the policemen to open fire on the unarmed and inoffensive villagers, as a result of which tailor Venkayya and Yelthuri Rama died of bullet wounds on the spot, Yelthuri Eradu and Pilli Malladu 477 received bullet wounds and died subsequently, five others received bullet wounds but they recovered, that the appellant gave match boxes and directed the policemen to go into the village and set fire to the houses as a result of which 191 houses were burnt down; that about 70 of the villagers were tied up under the orders of the appellant and taken to Varadhanapeth and were kept under wrongful confinement for some time and thereafter some were released and others were taken to Warangal jail and lodged there; that these acts were done by the appellant without legal authority or legal justification and that he and the two absconding accused were therefore guilty of the offences of murder, attempt to murder, arson,etc. The prosecution produced 21 witnesses in support of their case, while the accused examined a solitary witness in defence. The firing by the police, the death of the persons concerned, the arrest of some of the villagers and the burning down of the village houses on the date and the time in question are facts which were not disputed. But what was alleged by the defence was that the appellant did not give the order to fire, that the villagers were violent and attempted to attack the officials and the police by force and therefore whatever was done was done in self defence. It was said that the raiders were arrested in due course of law and that the destruction of their houses by fire was committed by the villagers themselves, and that the appellant had gone to the village only to arrest congress mischief mongers and to maintain and enforce law and order. The Special Judge on the materials before him came to the conclusion that the accused was guilty of the offences with which he stood charged. On appeal to the High Court of Hyderabad, a bench of two Judges (Sripatrao and Siadat Ali Khan JJ.) delivered differing judgments, Sripatrao J. taking the view that the appeal should be dismissed and the other learned Judge being of the opinion that the appeal ought to be allow he accused acquitted. The case was then to a third Judge (Manohar Prasad J.) who by 478 a judgment dated 11th December, 1950, agreed with the opinion of Sripatrao J. and dismissed the appeal. The present appeal has been preferred against the judgment of the majority of the High Court by our leave. This appeal was in the first instance heard by the Constitution Bencb(1) and at that stage the hearing was confined to certain constitutional points which had been raised by the appellant attacking the legality of the entire trial which resulted in his conviction on the ground that the procedure for trial laid down in Regulation X of 1359 F. became void after the 26th January, 1950, by reason of its conflict with the equal protection clause embodied in article 14 of the Constitution. The constitutional points raised by the appellant failed and the application preferred by him under article 32 of the Constitution was rejected, and the case was directed to be posted in the usual course for being heard on its merits and it is now before us. To appreciate the contentions raised on behalf of the appellant, it is necessary to give a short narrative of the incident and the events following thereupon which led to the prosecution of the appellant. In the first information report lodged against the appellant on the 29th January, 1949, it was said that the following persons accompanied the Subedar that morning: 1. Moulvi Ghulam Afzal Biabani, Deputy Commissioner, District Police, Warangal. Abdul Lateef Khan, Circle Inspector of Police, Warangal (absconding accused). Military Assistant. Naseem Ahmed, Sub Inspector, Vardhanapeth. Head Constables of Police, Vardhanapeth. Abdul Waheed Girdavar. Abdul Aleem Sahib, Vakil of Hanamkonda. 8. 70 military men, 10 policemen and 1 1 razakers. It appears that another person Abdul Wahid, Assistant D.S.P also went with this party. He submi (1) See ; , 479 a diary of the happenings at Gurtur on the same day. It was briefly stated therein that the people 'rebelled, that they had to open fire and that 70 persons were arrested. Abdul Lateef Khan, the absconding accused and who was the Circle Inspector of Police, also submitted a diary the same day of the happenings of the 9th, December. According to him, a crowd of 5,000, pursued the two persons who had been sent to the village and fired at the policemen, threw stones by the slings by which Kankiah the jamedar was injured, that one bullet fell in front of the Nayeb Nazim, that the unlawful assembly shouting slogans against the Government tried to surround the policemen; that the police tried to make them understand but they did not listen, that the crowd was armed with guns, spears, lathis, axes, sickles and slings, and that seeing the delicate circumstances the above mentioned high officers ordered the police to open fire in self defence. Turab Ali, Sub Inspector of Police, and Station House Officer, Vardhanapeth, on this information recorded the first information report under section 155 of the Hyderabad Penal Code on 9th December, 1947, against Narsivan Reddy, Congress leader of Mangp Banda, and several others under sections 124, 248, 272 and 82 of the Hyderabad Penal Code. In this report the facts stated by Abdul Lateef, Circle Inspector, were reiterated. Turab Ali also prepared a panchnama on the same date, the panches being Khaja Ahmed Wali Hyderi revenue inspector, residing at Vardhanapeth and Md. Abdul Wahid, special Girdavar of the same place. The narrative of events given in the report of Abdul Lateef was recited in the panchnama. Annexed to this panchnama was a list of the articles and weapons recovered from the individuals arrested on the 9th December, 1947. The list mentions a number of lathis, spears, sickles, churas, a muzzle loader and some axes. On the 11th December the appellant sent his report of the incident at Gurtur to Government and in this demi official letter substantially the account given by Abdul Lateef, Circle Inspector, was repeated and the justification for the firing was fully set out. Whether 480 Moulvi Afzal Biabani, Deputy Commissioner of Police, Warangal, also submitted a report giving his version of the incident to Government or to the InspectorGeneral of Police is a debatable point. The Government replied to the D. O. letter on 21st January, 1948, and called for a report from the Subedar as to how much collective fine was to be imposed on the villages mentioned in the D. O. letter. He was also asked to submit a resolution for the appointment of penal police soon so that sanction might be taken according to the procedure. On 13 March, 1948, a challan was presented against 70 persons arrested on the 9th December, 1947, by the police for offences under sections 124, 248 etc. in the Court of the Special District Judge of Hyderabad. The accused were remanded to the Central Jail, Warangal, and it was ordered that if there were any material objects in the case the police should bring them at the next hearing, viz., 31st March, 1948. On that date the special magistrate committed to the court of session 22 persons to be tried under sections 124, 293 and 248 of the Hyderabad Penal Code. The rest of the persons arrested were discharged. The Special Judge fixed the case for hearing on 18th May, 1948. On that date or some subsequent date in May the police put in an application withdrawing the case. The court accordingly acquitted all the accused and the proceedings initiated on the first information report of Abdul Lateef, Circle Inspector, thus terminated. On what grounds the case against these accused persons was withdrawn by the police is a matter which has been left unexplained on the record. Between the date of the withdrawal of this case and the police action in Hyderabad taken by the Government of India in September, 1948, whether any investigation was made as to the incidents at Gurtur by the Government is not known, but it appears that soon after the police action was over, in November, 1948, a statement was recorded of one Ranganathaswami who is a prosecution witness in the present case by one B. J. Dora Raj, Deputy Collector on 5th November, 1948, in which Ranga natahswami said as follows: 481 "On 9th December, 1947, at about 10 30 a.m. Habeeb Mohammad the Subedar, Biabani the D.S.P., Naseem the Sub Inspector, Abdul Wahid, Special Girdavar and about 70 persons, State Police, Razakars and Abdul Aleem, Vakil, had come to the village Gurtur, taluqa Mahaboobad, dist. Warangal. Policemen burnt nearly 200 houses by the order of the D.S.P. It caused damage to the extent of Rs. 1 lakh. Policemen fired the tailor Ramulu, two dheds, on the order of Biabani, the D.S.P. I do not know the names of the dheds. Five or six persons were injured. They were injured by the bullets. I do not know their names. At that time there I was doing the work of teaching. They arrested 70 persons saying that they are Congressmen and carried them forcibly to the Warangal jail . They snatched gold ornaments of 8 tolas valuing Rs. 400 from the women of Apana Raju and Narsivan Raju. I incurred loss of Rs. 600 as the house in which I was staying was burnt. The school peon incurred loss of Rs. 300 as his house was also burnt. When these above events were happening Subedar was present. They left the 70 persons who were put into the jail, after taking Rs. 600 bribe. I myself have seen the above events. I have read the statement. It is correct." The statement bears an endorsement of the Deputy Collector to the effect that it was taken before him, and was read over and admitted to be correct. It also appears that the Assistant Civil Administrator examined 76 villagers on the 28th November, 1948, and their statement is to the following effect : "On 9 12 47 at 9 30 a.m. the Subedar of Warangal, the Deputy Commissioner of Police, Biabani (who has a kanti on his neck), Military Assistant, Circle Inspector of Warangal, Sub Inspector of Police of Vardhanapeth, Head Constable of Police of Vardhanapeth, Girdavar, in the company of military police and 40 persons came to our village. Came from Okal and stayed out of the city on the west side. Nearly 100 or 150 persons of the Village went to them. They fired the guns by which Olsuri Eriah, Olsuri Ramiah 482 and Kota Konda Venkiah died. Batula Veriah, Basta Pali Maliah, Olsuri Veriah Yeliah, Ladaf Madar Dever Konda Lingiah and Beara Konda Peda Balraju were injured by the bullets. After this they entered into the village and after taking round in the bazar they got into the houses and looted. They looted money and clothes. Then they surrounded the village and gathering the village people took them out of the village. Made them lie down with face downwards and tied their hands, and kept them in the same condition from 10 a.m. to 3 p.m. At 3 p.m. the Subedar gave match boxes to his men and told them to burn the houses. On this they burnt the houses. The Subedar made us stand and said 'see the Lanka Dahan of your village. ' The Deputy Commissioner also said the same thing. After this they beat us and took us to Mailaram. From there they carried us in a car to the police station, Vardhanapeth. . The whole household utensils of the houses were looted, due to which the damage amounted to one lakh. It was also learnt that they outraged the modesty of 4 women. They felt ashamed to state their names before the public. The women are ashamed to expose the names of the persons concerned. The names of these women are with the State Congress. " On the basis of these two statements the Inspector of C.I.D. District Police, one Md. Ibrahim Ghori, wrote to the Sub Inspector of Police of Nalikadur, dist. Warangal, to issue the first information report for offences committed under sections 248, 312, 331 and 368 of the Hyderabad Penal Code against the Subedar and it was directed that the two sheets of original statements of the complainants should be sent to the court with the first information report and that he would himself investigate the case. On receipt of this letter the Sub Inspector of Police recorded the first information report for the offences mentioned above on 29th January, 1949, in terms of the above letter. Though this first information report was recorded on 29th January, 1949, the investigation of the case against the appellant did not start till the 8th August, 49. What happened in this interval and why the 483 investigation was delayed by a period of over seven months is again, a matter on which no explanation has been furnished on the record and the 'learned Advocate General who appeared On behalf of the State before us was unable to explain the cause, of this delay in the investigation of the crimes alleged to have been committed by the appellant. On 28th August, 1949, there was an order in terms of section 3 of the Special Tribunal Regulation V of 1358F., which was in force at that time directing the appellant to be tried by Special Tribunal (A). The Military Governor gave sanction for the prosecution of the appellant on 20th September, 1949. On 13th December, 1949, a new Regulation, Regulation X of 1359 F., was passed by the Hyderabad Government which ended the Special Tribunals created under the previous regulation and upon such termination, provided for the appointment, powers and procedure of the Special Judge. On 5th January, 1950, the case of the appellant was made over to Dr. Laxman Rao, Special Judge, who was appointed under the above regulation under an order of the Civil Administrator, Warangal, to whom power under section 5 of the Regulation was delegated and on the same day the Special Judge took cognisance of the offences with the result already indicated. Mr. McKenna, who argued the appeal on behalf of the Subedar, contended that his client was considerably prejudiced by certain grave irregularities and illegalities committed in the course of the trial by the Special Judge and that there had been a grievous disregard of the proper forms of legal process and violation of principles of criminal jurisprudence in such a fashion as amounted to a denial of justice and that injustice of a serious and substantial character has occurred. The first ground of attack in this respect was that a number of material witnesses, including Moulvi Afzal Biabani, Deputy Commissioner of Police, who accompanied the Subedar and witnessed the occurrence and who could give a narrative of the events of the 9th December, 1947, were not produced by the prosecution 64 484 though some of them were alive and available, that these witnesses were essential for unfolding the narrative on which the prosecution was based and should have been called by the prosecution, no matter whether in the result the effect of their testimony would have been for or against the case for the prosecution. The facts relating to Biabani are these: Admittedly he was a member of the party that visited village Gurtur on the fateful morning of the 9th December, 1947. There can be no doubt that he was a witness of this occurrence and could give a narrative of the incidents that happened there on that day. In the statement of Ranganathaswami cited above which accompanied the first information report against the appellant it was asserted that the firing took place under the orders of Biabani and the houses were burnt by his order. In the challan that was prepared on the first information report lodged under the directions contained in the letter of Md. Ibrahim Ghori, Inspector of C.I.D., District Police, against the appellant and the two absconding accused it was alleged that the accused merely on the pretext that the village Gurtur was the headquarters of the communists raided the village with the aid of the armed police force, that the villagers appeared before the accused, but accused I (the appellant) in view of the general policy of the Ittehad ul Muslimeen that the Hindus might be killed and be forced to run away from Hyderabad and to achieve this object opened fire on them, that as a result of the firing two villagers were killed on ' the spot, two of them died in the hospital, five others badly injured, that when the villagers took to their heels the appellant distributed match boxes amongst the police Constables and ordered them to go into the village habitation, loot and burn the houses and molest the villagers. In this challan the whole burden for the crimes committed on 9th December was thrown on Habeeb Mohammad in spite of the fact that in the documents accompanying the first information report this burden had been thrown on Biabani, the Deputy Commissioner of Police, 485 P.W. 21, the investigating officer, was questioned on this point and he deposed that in the course of the in vestigation the offence was only proved against the appellant and the two absconding accused and that it was not proved that Ghulam Afzal Biabani, Deputy Inspector Genaral of District Police, or Nasim Ahmad, Sub Inspector of Police, or Jamedar of Police, Vardhanapeth, Abdul Wahib, Revenue Inspector, or Abdul Alim, pleader, or the military police had committed any crimes or aided or abetted and for this reason their names were not mentioned therein. The prose cution in these circumstances in the list of prosecution witnesses mentioned the name of Biabani as P.W. 2, but for some unexplained reason it did not produce him as a witness during the trial. No explanation has ,been given by the prosecution for withholding this material witness from the court who was the most responsible officer next to the Subedar present at the time of the occurrence and who was at the time of the trial holding an important office under Government and who presumably would have given the court an accurate and true version of what took place. On 24th March,. 1950, the appellant made an application to the Special Judge alleging, inter alia, that though a number of police officers and other officials were present at the scene of occurrence including Ghulam Afzal Biabani, Kankiah, Abdul Wahid, Girdawar who was then confined in Warangal jail, Naseem Ahmad, Sub Inspector of Police, Vardhanapeth, Khaja Moinuddin, Police Jamedar, Abdul Ghaffar Khan, Reserve District Police Inspector, Turab Ali, Sub Ins pector, Vardbanapeth, and Shaik Chand, Police Inspector, they were neither arrested nor any action taken against any of them, that the investigating officer Ibrahim Ghori and Sub Inspector of Nallikudur police station were not produced in court, that though Kankiah Jamedar was presented to give evidence, Ghulam Afzal Biabani, ex Deputy District Police Commissioner, was not produced. It was alleged in this application that when this objection was raised on behalf of the accused, the Government Pleader said that 486 they could not produce him, and if the honourable court so desired, it may summon him. It was further alleged therein that the conduct of the. prosecution showed that they were endeavouring to incriminate the accused who was not guilty and on the other hand were trying to shield the police constables and officers, and that the Government Pleader had refused to produce the best evidence that could be produced in, the case. It was stated that in those circumstances it would be in conformity with justice that the court should inquire into the facts and summon the persons mentioned above under section 507 of the Code of Criminal Procedure and record their statements in ' order to find out the real facts. It was said further that Ghulam Afzal Biabani, ex Deputy District Police Commissioner, who was then in service in the Police Training School, had sent a report with regard to the ' incident to the Inspector General of Police and to the Secretary to Government, Home Department. On this application the learned Judge recorded the following order: "The application of the accused is not worth con sideration because neither the complainant nor the accused can persuade the court in this way. This right can be exercised only to settle a defect in the evidence. Otherwise it is not to be exercised at all. The right should be exercised only to rectify the defects of any of the parties. The accused has full right to adduce defence witnesses. Even after producing the defence evidence, if anything is omitted, the 'court by itself, will settle it. This application is filed beforehand. " Order was, however, made to summon the report, if any, made by Ghulam Afzal Biabani. In his judgment convicting the appellant, regarding Biabani the learned Judge made the following observations: " I regret to learn from Kesera Singh, investigating officer,that such a man is in service, i.e., in the capacity of Principal of Police Training School. 'Will he impart to the would be subordinate officers the same lesson of protection of life and property of royts. 487 And in this case the said Biabani is not challenged only because he is a police officer. This should not be construed in this sense that as the police left Biabani scot free because they favoured him, so also the court should leave Habeeb Mohamed. A strange logic that " you left one, therefore I leave the other ' will continue. " It is difficult to support such observations made behind the back of a person. Such observations could only be made after giving an opportunity to Biabani to explain his conduct. Before the High Court Mr. Walford who argued the case stressed the point that the police ought to have produced Ghulam Afzal Biabani to prove the fact that it was the appellant who ordered firing and in the alternative, the court should have summoned him as a court witness. This argument was disposed of by reference to the decision of their Lordships of the Privy Council in Adel Mohammad vs Attorney General of Palestine(1), wherein it was observed that there was no obligation on the prosecution to tender witnesses whose names were upon the information but who were not called to give evidence by the prosecution, for cross examination by the defence, and that the prosecutor has a discretion as to what witnesses should be called for the prosecution and the court will not interfere with the exercise of that discretion unless it can be shown that the prosecutor has been influenced by some oblique motive. It was held that in view of these observations it could not be said that the prosecution committed any mistake in not producing Afzal Biabani or that it had been influenced by some oblique motive. It was further held that no occasion arose for interfering with the discretion exercised by the Special Judge under section 507, Hyderabad Criminal Procedure Code, and that the evidence of this witness could not be regarded as essential for the just decision of the case. The dissenting Judge, Siadat Ali Khan J., took the view that Biabani was the second top ranking officer at the occurrence and as his report was not forthcoming, (1) A.I.R. 1945 P.C. 42. 488 there was a lacuna in the record and that it was the duty of the court to call him as a witness. In the judgment of the third Judge, Manohar Prasad J., it is stated that Mr. Murtuza Khan who appeared for the accused did in course of his arguments concede that from the documents filed it appeared that the order of fire was given by the appellant. Mr. Murtuza Khan who is a retired Judge of the Hyderabad High Court has filed an affidavit contesting the correctness of this observation. On the question therefore whether the order to fire was given by the appellant we have the solitary testimony of P.W. 10, Kankiah, the police Jamedar, contrary to the statements contained in the document accompanying the first information report; and even in his deposition it is said that the police officer took instructions from Biabani before carrying out the orders of the appellant. In this situation it seems to us that Biabani who was a top ranking police officer present at the scene was a material witness in the case and it was the bounden duty of the prosecution to examine him, particularly when no allegation was made that if produced, he would not speak the truth; and, in any case, the court would have been well advised to exercise its discretionary powers to examine that witness. The witness was at the time of the trial in charge of the Police Training School and was certainly available. In our opinion, not only does an adverse inference arise against the prosecution case from his non production as a witness in view of illustration (g) to section 114 of the Indian Evidence Act, but the circumstance of his being withheld from the court casts a serious reflection on the fairness of the trial. It seems to us that the appellant was considerably prejudiced in his defence by reason of this omission on the part of the prosecution and on the part of the court. The reasons given by the learned Judge for refusing to summon Biabani do not show that the, Judge seriously applied his mind either to the Provisions of the section or to the effects of omitting to examine such an important 'Witness. The terms in which the order of the Special Judge is couched exhibit lack of judicial balance in a matter which required 489 serious consideration. The reliance placed on the decision of their Lordships of the Privy Council in Adel Mohammad vs Attorney General of Palestine(1) is again misplaced. That decision has no bearing on the question that arises in the present case. The case came from Palestine and the decision was given under the provisions of the Palestine Criminal Code Ordinance, 1936. The contention there raised was that the accused had a right to have the witnesses whose names were upon the information, but were not called to give evidence for the prosecution, tendered by the Crown for cross examination by the defence. The learned Chief Justice of Palestine ruled that there was no obligation on the prosecution to call them. The court of criminal appeal held that the strict position in law was that it was not necessary legally for the prosecution to put forward these witnesses. They, however, pointed out that in their opinion the better practice was that the witnesses should be so tendered at the close of the case for the prosecution so that the defence may cross examine them if they so wish. Their Lordships observed that there was no obligation on the part of the prosecution to tender those witnesses. They further observed that it was doubtful whether the rule of practice as expressed by the court of criminal appeal sufficiently recognised that the prosecutor had a discretion as to what witnesses should be called for the prosecution, and the court would not interfere with the exercise of that discretion, unless, perhaps, it could be shown that the prosecutor was influenced by some oblique motive. No such suggestion was made in that case. The point considered by their Lordships of the Privy Council there *as somewhat different from the point raised in the present case, but it is difficult to hold on this record that there was no oblique motive of the prosecution in the present case for not producing Biabani as a witness. The object clearly was to shield him, who possibly might be a co accused in the case, and also to shield the other police officers and men who formed the raiding party. In our opinion, the true rule (1) A.I.R. 1945 P.C. 42. 490 applicable in this country on the question whether it is the duty of the prosecution to produce material witnesses has been laid down by the Privy Council in the case of Stephen Senivaratne vs The King (1), and it is in these terms : "It is said that the state of things above described arose because of a supposed obligation on the prosecution to call every available witness on the principle laid down in such a case as Ram Ranjan Boy vs Emperor (2), to the effect that all available eye witnesses should be called by the prosecution even though, as in the case cited, their names were on the list of defence witnesses. Their Lordships do not desire to lay down any rules to fetter discretion on a matter such as this which is so dependent on the particular circumstances of each case. Still less do they desire to discourage the utmost candour and fairness on the part of those conducting prosecutions; but at the same time they cannot, speaking generally, approve of an idea that a prosecution must call witnesses irrespective of consi derations of number and of reliability, or that a pro secution ought to discharge the functions both of prosecution and defence. If it does so confusion is very apt to result, and never is it more likely to result than if the prosecution calls witnesses and then proceeds almost automatically to discredit them by cross examination. Witnesses essential to the unfolding of the narrative on which the prosecution is based, must, of course, be called by the prosecution, whether in the, result the effect of their testimony.is for or against the case for the prosecu tion. " In a long series of decisions the view taken in India was, as was expressed by Jenkins C.J. in Ram Banjan Boy vs Emperor(2), that the purpose of a criminal trial is not to support at all costs a theory but to investigate the offence and to determine the guilt or innocence of the accused and the duty of a public prosecutor is to represent not the police but the Crown, and this duty should be discharged fairly and fearlessly with a full sense of (1) A.I.R. 1936 P.C. 289. (2) I.L.R. 491 the responsibility attaching to his position and that he should in a capital case place before the court the testi mony of all the available eye witnesses, though brought to the court by the defence and though they give different accounts, and that the rule is not a technical one, but founded on common sense and humanity. This view so widely expressed was not fully accepted by their Lordships of the Privy Council in Stephen Senaviratne vs The King(1), that came from Ceylon, but at the same time their Lordships affirmed the proposition that it was the duty of the prosecution to examine all material witnesses who could give an account of the narrative of the events on which the prosecution is essentially based and that the question depended on the circumstances of each case. In our opinion, the appellant was considerably prejudiced by the omission on the part of the prosecution to examine Biabani and the other officers in the circumstances of this case and his conviction merely based on the testimony of the police jamedar, in the absence of Biabani and other witnesses admittedly present on the scene, cannot be said to have been arrived at after a fair trial, particularly when no satisfactory explanation has been given or even attempted for this omission. Another grave irregularity vitiating the trial and on which Mr. McKenna laid great emphasis concerns the refusal of the Special Judge to summon six defence witnesses whom the appellant wished to call. The facts relating to this matter are these: On the 24th March, 1950, the appellant filed a list of defence witnesses containing the following names: 1. Moulvi Syed Hussain Sahib Zaidi, Ex District Superintendent of Police, Warangal, who was then special officer, Bahawalpur State, Pakistan. Moulvi Abdul Hamid Khan, Ex Secretary, Revenue Department, at present Minister for Sarf e Khas Mubarak. Nawab Deen Yar Jung Bahadur, Ex Inspector. General of Police, Districts and City. (1) A.I.R. 1936 P.C. 289. 65 492 4. Moulvi Abdul Rahim, Ex Railway Minister. Rai Raj Mohan Lal, Ex Law Minister. Moulvi Zahir Ahmed, Ex Secretary to Government, Home Department, at present residing at London. The first witness was called to prove that the inhabit ants of Gurtur committed destructive activities and threw stones on the police and that the police fired in self defence by the order of the Deputy Police Commissioner of the District. It was said that he would also reveal many other facts. Regarding the second witness, it was said that he would depose as to what happened to the D. O. letter sent by the accused and he would also reveal other facts. Regarding the third witness, it was said that he would confirm the report of Ghulam Afzal Biabani the Deputy Commissioner of Police and would reveal other facts about Gutur incidents. About the fourth and fifth witnesses, it was said that they would depose about the accused 's efficiency and his behaviour towards ryots and they would also reveal other facts. On 14th April, 1950, an application was made by the pleader for the accused that instead of sending for Syed Hussain Zaidi, Superintendent of Police, residing at Pakistan, Abdur Rasheed Khan Sahib, former Assistant Superintendent of Police, Warangal district, may be sent for. The learned Judge on this made the following order: "This request is improper. The application of the accused dated 24th March, 1950, about the list of the defence witnesses may be referred. In it the first name is of Zaidi, the Superintendent of Police. It is written in it by the accused himself that Mr. Zaidi will say whatever he has heard from the other policemen. Now I cannot understand when it is written so in the list, how can Abdur Rasheed be called for instead of Zaidi, and what evidence he will give. So the application to call for Abdur Rasheed Khan Sahib is disallowed. " Regarding witness No. 2, Abdul Hameed Khan, the learned Judge made the following order 493 "It is stated that he will speak about the efficiency of the accused and also about his behaviour towards his subjects. Efficiency and behaviour is neither a point at issue in this case, nor a relevant fact, '(section 216, Criminal Procedure Code, and section 110, sections 3 and 4 of the Evidence Act may be referred). It is also written below it that he will state what action was taken on the D.O. letter of the accused. No such paper is produced to show as to what has happened to the proceedings, for which Abdul Hameed Khan can be summoned to prove. Besides this the statement of the accused is in regard to something and witness Abdul Hameed Khan is being summoned for some other thing. " Regarding the third witness the Judge said as follows: "Nawab Deen Yar Jung Bahadur, former Inspector General of Police, is called for to certify the report of Ghulam Afzal Biabani, Deputy Director of Police. The report of Ghulam Afzal Biabani was called for from the office of the Inspector General of Police, Home Secretary, and from the office of the Civil Administrator, Warangal. But from all these offices, we have received replies stating that there is no report of Ghulam Afzal Biabani. In the light of these replies it is unnecessary to summon Deen Yar Jung Bahadur. When there is no report, what can Regarding witnesses 4 and 5, the Judge observed as follows: "These witnesses are called for to state about the efficiency and behaviour of the accused. It is not a point at issue nor a relevant fact. " Regarding witness 6, the Judge thought that there was no procedure to summon a witness residing in London. Finally it was observed that "by seeing the list of witnesses and the defence statement of the accused which are many pages, it appears that these applications are, given only to prolong the 'case unjustifiably and to disturb the justice. These are not worthy be allowed. So the said application dated 494 24th March, 1950, is disallowed. " Section 257, Criminal Procedure Code, which corresponds to section 216 of the Hyderabad Criminal Procedure Code is in these terms : " If the accused, after he has entered upon ' his defence, applies to the Magistrate to issue any process for compelling the attendance of any witness for the purpose of examination or cross examination, or the production of any document or other thing, the Magistrate shall issue such process unless he considers that such application should be refused on the ground that it is made for the purpose of vexation or delay or for defeating the ends of justice. Such ground shall be recorded by him in writing. " We have not been able to appreciate the view of the learned Judge that the application to summon defence witnesses who were available in Hyderabad was of a vexatious character and its object was to delay or defeat the ends of justice. There was controversy in the case between the prosecution and the defence about the motive of the accused which was stated by the prosecution to be that in pursuance of the policy of the Ittehad ul Muslimeen, and with the common object of destroying the Hindus and turning them out of Hyderabad the appellant went to this village to achieve that object with the help of the police. The accused was entitled to disprove the allegation and prove his Version that the village was in a state of rebellion, that the people who came out in a crowd did not come with peaceful motives but they were aggressive and were armed with weapons that he was not inimical to the Hindus, that his behaviour towards them had always been good and his state of mind was not inimical to them and the idea of exterminating them was far from his mind. Under the provisions of section 53 of the Evidence Act evidence as to the character of an accused is always relevant in a criminal case. So is the evidence as to the state of his mind. Evidence as to disturbed condition prevailing at Gurtur and of the destructive activities of its inhabitants was also a relevant fact. Whatever may be said about the other 495 witnesses, three of the witnesses named in that list were certainly material witnesses for the purpose of the defence. In criminal proceedings a man 's character is often a matter of importance in explaining his conduct and in judging his innocence or criminality. Many acts of an accused person would be suspicious or free from all suspicion when we come to know the character of the person by whom they are done. Even on the question of punishment an accused is allowed to prove general good character. When the allegation against the appellant was that he was acting in pursuance of the policy of the Ittehad ul Muslimeen that his state of mind was to exterminate the Hindus, he was entitled to lead evidence to show that he did not possess that state of mind ; but that on the other hand, his behaviour towards the Hindus throughout his official career had been very good and he could not possibly think of exterminating them. But even if the Judge was right in thinking that the evidence of character in this particular case would not have affected materially the result, the evidence of other witnesses who would have deposed as to whether Biabani had submitted a report, and what version he had given, or of those who were able to depose as to the condition of things at Gurtur where the incident took place, or who were in a position to depose from reports already submitted to the Home Department and the Inspector General of Police about the behaviour of the villagers of Gurtur, would have very materially assisted the defence if those witnesses were able to speak in favour of the appellant 's contention. In our opinion the trial before the Special Judge was vitiated by his failure in summoning the defence witnesses who were available at Hyderabad and who might have materially helped to prove the defence version. The first witness or his substitute may well have been able to depose as to what happened to, the arms that were alleged to have been captured from the villagers on the 9th December, 1947, and regarding which a panchnama was prepared and as 'to whether they existed in fact or not. That would have thrown a flood of light on the character of the 496 mob that was fired upon and it may well have transpired from that evidence that the firing was ordered at the instance of Biabani and not at the instance of the accused as alleged in the first instance by Ranganathaswamy. In the result we are constrained to hold that the accused has been denied the fullest opportunity to defend himself. Another point that was stressed by the learned counsel for the appellant is that the police investigation into the offences with which the appellant has been charged, after the first information report has been lodged in January, 1949, has been not only of a perfunctory nature but that there has been an unexplained delay of more than six months in making it and this has considerably prejudiced the defence. It was suggested that during this period most likely the police was cooking evidence against the accused without making any entries in the case diaries of statements made by the villagers. On this question it is necessary to set out a part of the statement of P.W. 21, the investigating officer, on which reliance was placed to support this contention. In cross examination the witness said as follows: "I went for investigation in the month of Mehir 1358 F. (August, 1949) Union officers did not investigate prior to my investigation; not even any ' Collector undertook any investigation Mohd. Ibrahim Ghori, Inspector, C.I.D., informed Sub Inspector of Nallikadur through a D. O. dated the 29th Isfandar, 1358 F., to issue an information report. I have no knowledge which officer ordered Mohd. Ibrahim Ghori to investigate and who signed on it. Superintendent of C.I.D. Police whose name I do not, remember now gave order to Mohd. Ibrahim Ghori to investigate the facts. Now the case diary is not with me The names of Mohd. Ibrahim and Achal Singh are not mentioned in the witnesses lists of A & B Charges under sections 312 and 331 are mentioned in the report, but during my investigation these offences were not proved The Superintendent of C.I.D. Police gave me order to 497 investigate but I do not remember the date of that order now. I prepared panchnamas on 8th Mehar, 1358 F. probably I reached Gurtur one or two days earlier. I finished circumstantial investigation with in eight days. Afterwards proceedings for permission were continued. At last on 28th August, 1949, the Civil Administrator gave order to file a challan. . . In the course of my investigation, it was proved that accused Habeeb Mohammad, Abdul Latif Khan and Abdul Wahid had committed crimes. It was not proved during the course of my investigation that Ghulam Afzal Biabani, Deputy I. G. of District Police, Assistant of Force, Nasim Ahmad Saheb, Sub Inspector of Police, Vardhanapeth, Jamedar of Police, Vardhanapeth, Abdul Wahid, Revenue Inspector, Abdul Alim Saheb, pleader, Hanamkonda, 70 military men and police and Razakars bad committed crimes or aided and abetted. Therefore their names were not mentioned in the challan. The crimes against them are not proved means that they are not identified ; the witnesses are not acquainted with them; so they are not prosecuted. Though in the information report 70 military men were mentioned I found in the course of my investigation 70 policemen only. I could not make out the identity of these policemen but I came to know that they belonged to Warangal district police force. I do not know how many of them were Hindus and how many were Muslims. But the names of Kankiah, police jamedar (head constable) and Abdul Latif Khan, Circle Inspector, were evident from the diary ; therefore it is produced as evidence. On enquiry, Kankiah said to me that he could not identify them now and that he could not recollect the number of policemen who went along with him (Kankiah) to Vardhanapeth. I could not see the register at Superintendent 's office to ascertain who went there because it was destroyed during the police action. When I asked the line inspector in this connection he replied that he could not even say whether the register was destroyed and that he could not remember the names now. As I could not gather any information from them, I did not refer their names in the case diary . I had not 498 even mentioned about line inspector in the case diary because I considered it unnecessary. From other source also, I could not make out the identity of these 70 men. Ghulam Afzal Biabani, Deputy Inspector General of Police, is alive and in service and I have heard that he is now the Principal of the Police Training School. I cannot tell who was Assistant of Force. I do not know the whereabouts of Nasim Ahmad as well as about his post. I did not make enquiries about Police Jamedar of Vardhanapeth who was mentioned in the information report, in regard to his identity and whether he is alive or dead because I could not find out his name from my witnesses. Further I do not know who was Shaik Chand. But I came to know from Kankiah that Shaik Chand was present on the scene of occurrence. Now I do not know about the whereabouts of Shaik Chand or about his job. None of the other witnesses recognised Shaik Chand and that I had not paraded him before the witnesses because I do not know his whereabouts. Though Jamedar Kankiah deposed that Abdul Ghaffar, Police Inspector, was present on the scene of occurrence the other witnesses were not acquainted with him. Whether Abdul Majid, Revenue Inspector, was on the place of occurrence or not, I could not make out and further whether he is alive or dead, too, I could not make out. Except Ghulam Afzal Biabani, I did not examine any of the other men, i.e., Assistant of Force, Nasim Ahmed, Police Jamedar of Vardbanapeth, Abdul Wahid, Revenue Inspector and others. I remember that after circum stantial investigation at Gurtur, I went to Hyderabad and enquired the facts to Ghulam Afzal Biabani orally; I did not take any statement from him. Whatever I enquired from him I entered in the case diary. I do not know what Ghulam Afzal Biabani reported to the high authority and whether he had reported it or not reported at all. I did not question him about it. I do not remember the name of the police patel of Gurtur village. I did not take his statement and he did not give any report in regard to this occurrence. Guns were not recovered because the 499 incident occurred one year ago and persons were not identified. " It is apparent from this statement that the investigation conducted by P.W. 21 was of a very perfunctory character. Apart from P.W. 10 Kankiah, none of the policemen or other I officers or panches present at the scene of occurrence were examined and even their whereabouts were not investigated. This is all due to the circumstance that though the depositions of the villagers were recorded in November, 1948, against the conduct of the appellant and though the first information report against him was lodged in January, 1949, for some reason of which no plausible or satisfactory explanation has been suggested, the matter was not investigated and relevant evidence as to this incident, whether for or against the appellant, was not recorded for a period of over six months. It is not unreasonable to presume that during this period of seven or eight months that evidence became either unavailable or the villagers after this delay in investigation were not able to satisfactorily identify any of the persons who were present on the occasion. It seems to us that there is force in the contention that a good deal of material evidence was lost and considerable material that might have been helpful to the case of the defence or which would have fully established the part played by the accused, was in the meantime lost. In this situation the learned counsel in the courts below as well as in this court laid emphasis on the point that the case diaries were not brought into court till ,after the close of the case and they were withheld to avoid any controversy of this nature and this omission had also resulted in a trial which was perfunctory and, prejudicial to the accused. During the examination of the investigating officer the question was put to him whether he had the case diaries. The cross examining counsel wanted to elicit from him certain materials about the conduct of the investigation after he had refreshed his memory from those diaries, but P.W. 21 deposed that he had not the diaries with him and the matter was closed at 66 500 that stage. On 12th April, 1950, an application was made to the court asking for copies of statements of P.Ws. recorded by the police. This application was obviously a belated one as the accused had no right to get the copies after the statements of those witnesses had been recorded by the Judge. The diaries were brought into court on 18th April, 1950. The learned Special Judge in his judgment on this point said as follows: "I have sent for the case diary relating to Superin tendent of C.I.D. in confidential on the prayer of the accused. I have seen it intently. Statements therein are almost the same as are deposed in the court. The statements of witnesses would not become unreliable even in view of the entries made in the case diary. " Section 162, Criminal Procedure Code, which concerns police diaries and the use that can be made of them, is in these terms: " No statement made by any person to a police officer in the course of an investigation under this Chapter shall, if reduced to writing, be signed by the person making it; nor shall any such statement or any record thereof, whether in a police diary or otherwise, or any part of such statement or record, be used for any purpose (save as hereinafter provided) at any inquiry or trial in respect of any offence under investigation at the time when such statement was made : Provided that, when any witness is called for the prosecution in such inquiry or trial 'Whose statement has been reduced into writing as aforesaid, the Court shall on the request of the accused refer to such writing and direct that the accused be furnished with a copy thereof, in order that any part of such statement, if duly proved, may be used to contradict such witness in the manner provided by section 145 of the . When any part of such statement is so used, any part thereof may also be used in the re examination of such witness, but for the purpose only of explaining any matter referred to in his cross examination. " 501 Section 172 provides that any criminal court may send for the police diaries of a case under inquiry or trial in such court and may use such diaries, not as evidence in the case but to aid if in such inquiry or trial. It seems to us that the learned Judge was in error in making use of the police diaries at all in his judgment and in seeking confirmation of his opinion on the question of appreciation of evidence from statements contained in those diaries. The only proper use he could make of these diaries was the one allowed by section 172, Criminal Procedure Code, i.e., during the trial he could get assistance from them by suggesting means of further elucidating points which needed clearing up and which might be material for the purpose of doing justice between the State and the accused. This he did not do because the diaries were not before him. It was pointed out in Rex vs Mannu(1) by a full court that a special diary may be used by the court to assist in an inquiry or trial by suggesting means of further elucidating points which need clearing up and which are material for the purpose of doing justice between the Crown and the accused but not as containing entries which can by themselves be taken to be evidence of any date, fact or statement therein contained. The police officer who made the diary may be furnished with it but not any other witness. The Judge made improper use of the diary by referring to it in his judgment and by saying that he intently perused it and the statements of witnesses taken in court were not inconsistent with those that were made by the witnesses before the police officer. It is difficult to say to what extent the perusal of the case diaries at that stage influenced the mind of the judge in the decision of the case. It may well be that that perusal strengthened the view of the judge on the evidence against the appellant and operated to his prejudice. If there was any case in which it was necessary to derive assistance from the case diary during the trial it was this case and the investigating officer who appeared in the witness box instead of giving unsatisfactory answers to 2I.L.R. 19 All,390. 502 the questions put to him might well have given accurate answers by refreshing his memory from those diaries and cleared up the lacunae that appear in the prosecution case. It was next contended that a number of documents that the accused wanted for his defence were not produced by the prosecution and were intentionally withheld. Reference in this connection may be made to an application submitted by the accused to the court on the 20th April, 1950. It reads thus : "As many documents were called for in defence of the accused, it was replied from the police or from the Home Department that the documents in question were either destroyed in the course of the police action, or as they are confidential, could not be sent. You are requested to review the excuses put forth by the police or other departments. In Warangal proper neither any firing took place nor any offices were burnt. I and Taluqdar Sahib lived in the headquarters for many months after the police action. Taluqdar Sahib lived for four months after the police action, and I lived there for nearly one month after the police action. Each and every document of my office and Taluqdar 's office are safe and which can be ascertained by the Civil Administrator, Warangal, himself. This is my last prayer to you to send immediately today for summary of intelligence of second, third and fourth weeks of the month of Bahman, 1357 F., from the office of the Peshi of Mr. Obal Reddy, the District Superintendent of Police, Warangal. These weekly reviews are confidential which are prepared at the C.I.D. branch of the office of the Inspector General of Police, and despatched to the districts. The District Superintendents of Police used to send these reviews to the Deputy Commissioner of Police, Subedars and Taluqdars. The Gurtur incident was mentioned in them. If they are not available from the office of the District Superintendent of Police, Warangal,, they may be called for from the office of the Inspector General of Police, C.I.D., and they may be held in the record. " 503 On this application the court recorded the following order: "The way in which the accused Habeeb Mohamed remarked on the higher office that documents are either not received or that they are destroyed is not the proper way of remarking. Investigation against officers cannot be conducted. Besides this, in this file all other things are decided and the accused was given sufficient time. Filing of an application on every hearing is not to be tolerated. " The appellant 's counsel, produced before us a list of the documents which were asked for, some of which were brought into court and regarding some the report was that they were destroyed or were not available. We cannot accede to the contention of the learned counsel that the court was called upon to make investigation into the question whether the replies from different officers as to what documents were destroyed or were not available were correct or not. It was open to the counsel for the accused, whenever any such report came, to challenge the statement and at that stage the court might have been in a position to ask the prosecution to support their replies by affidavits or otherwise. It, however, does appear somewhat curious that important documents which were required by the defence to establish the appellant 's version of the incident are stated to have been destroyed or not available. Such bald assertions do not create much confidence in the mind of the court and it does not appear that there was any occasion during police action for the officer responsible for it to destroy records made by police officers and submitted to the Inspector General of Police or to the Home Secretary. The appellant to a certain extent was justified in such circumstances to ask the court to raise the inference that if these documents were produced they would not have supported the prosecution story. The learned Advocate General appearing for the State contended that assuming that the failure of the prosecution to examine Biabani has caused, serious 504 prejudice to the accused or that the denial of opportunity to him to examine certain witnesses in defence has also caused him serious prejudice, this court may direct the High Court to summon the witnesses and record their statement and transmit them to this court and that the appeal may be decided after that evidence has been taken. In our opinion, this course would not be proper in the peculiar circumstances of the present case. It is not possible without setting aside the conviction of the appellant to reopen the case and allow the prosecution to examine a material witness or witnesses that ought to have been produced and allow the defence also to lead defence evidence. A conviction arrived at without affording opportunity to the defence to lead whatever relevant evidence it wanted to pro , duce cannot be sustained. The only course open to us in this situation is to set aside the conviction. The next question for consideration is whether in the result we should order a retrial of the appellant. After a careful consideration of the matter we have reached the conclusion that this course will not be conducive to the ends of justice. The appellant was in some kind of detention even before he was arrested. Since January, 1949, up to this date he has either been in detention or undergoing rigorous imprisonment and sirce the last three years he has been a condemned prisoner. The events regarding which evidence will have to be taken afresh took place on the 9th December, 1947, and after the lapse of six years it will be unfair and contrary to settled practice to order a fresh trial. In our opinion, as in substance there has been no fair and proper trial in this case, we are constrained to allow this appeal, set aside the conviction of the appellant under the different sections of the Hyderabad Penal Code and direct that he be set at liberty forthwith . It may well be pointed out that if there had been mere mistakes on the part of the court below of a technical character which had not occasioned any failure of justice or if the question was purely one of this court taking a different view of the evidence given in the case, there would have been no interference by us under the provisions of article 136 of the Constitution. Such questions 505 are as a general rule treated as being for the final decision of the courts below. In these circumstances it is unnecessary to examine the merits of the case on which both the learned counsel addressed us at some length. , Before concluding, however, it maybe mentioned that Mr. McKenna apart from the points above mentioned raised a few other points of a technical character but on those points we did not call upon the learned Advocate General in reply. It was contended that the court did not examine the accused under section 256, Criminal Procedure Code, after further crossexamination of the witnesses. In our opinion, this omission was not material as nothing further appeared from the cross examination which the court could ask the accused to explain. The accused had given a full statement on all the matters which required explanation in the case. Then it was argued that under the Hyderabad law at least two witnesses are necessary in a murder trial for a conviction in such a case. In this case more than two witnesses were produced who directly or indirectly implicated the appellant with the commission of the murder. The section of the Code referred to does not lay down that there should be two eye witnesses of the occurrence before a conviction can be reached as regards the offence. Further it was argued that the ' Special Judge had no jurisdiction because H. E. H. the Nizam had not given his assent to the law as contained in Ordinance X of 1359 F. In our opinion, there is no substance in this contention because the Nizam under a fireman bad delegated all his powers of administration including power of legislation to the Military Governor and that being so, no further reference to the Nizam was necessary and the Military Governor was entitled to issue the Ordinance in question. Lastly it was argued that the sanction for the prosecution of the appellant under the provisions of section 207 of the Hyderabad Code of Criminal Procedure (corresponding to section 197 of the Criminal Procedure Code) was given after the Judge had taken cognizance of the case. We see no force in this point as well. Before the trial started 506 the court was fully seized of the case and by then the sanction had been given. Appeal allowed. Conviction set aside.

Though the prosecution is not bound to call all available witnesses irrespective of considerations of number or reliability, witnesses essential to the unfolding of the narrative on which the prosecution is based must be called by the prosecution, whether in the result the effect of their testimony is for or against the case for the prosecution. Where the case against the accused, a Subedar, was that he gave orders to the police to fire and the Deputy Commissioner of Police who had accompanied the accused and had witnessed the occurrence was not examined by the prosecution: Held, that the failure to examine him not only led to an adverse inference against the prosecution case but also cast serious reflection on the fairness of the trial. Adel Mohammad vs Attorney General of Palestine (A.I.R.1946 P.C. 42) distinguished. Stephen Senivaratne vs The King (A.I.R. 1936 P.C. 289) relied on. Ram Banjan Roy vs Emperor (I. referred to. Police diaries of a case under inquiry or trial can be made use of by a criminal court only for aiding it in such inquiry or trial. The court would be acting improperly if it uses them in its judgment or seeks confirmation of its opinion on the question of appreciation of evidence from statements contained in those diaries. Though the Supreme Court would not interfere under article 136 of the Constitution if there were mere mistakes on the part of the court below of a technical character which had not occasioned any failure of justice or the question was purely one of the court taking a different view of the evidence given in the case, it would interfere if in substance there has not been Is fair and proper trial. Where material eye witnesses were not examined, to disprove the prosecution case as to the motive of the accused, the court, without calling for the police diaries during the trial, stated in the 63 476 judgment that the statements made by the witnesses before the police were the same as those made by them in the court: Held, that there was in substance no fair and proper trial and the conviction should be set aside.

N: Criminal. Appeal No. 330 of 1980. From the judgement and Order dated 3.4.1980 of the Madras High Court in Crl. Appeal No. 360 of 1974. Hardev Singh and Ms. Madhu Moolchandani for the Appellants. V.C. Mahajan, B. Parthasarthi and Ms. A. Subhashini for the Respondents. The Judgment of the Court was delivered by KULDIP SINGH, J. The appellant N.M. Parthasarathy is the sole proprietor of a firm called "Elector technik". He was formerly working as Inspector of Industries. He along with an Inspector of Industries, was prosecuted on the allegations that between February, 1967 and February, 1969 they entered into a criminal conspiracy to obtain Small Scale Industries Registration Certificate for additional lines of manufacture, Essentiality Certificate and import licences on false representations made to the Director of Industries, Assistant Director of Industries, Joint Chief Controller of Imports/Exports and the Iron and Steel Controller. The first 251 charge framed against both of them was for an offence of conspiracy punishable under section 120 B read with section 420 IPC and section 5(1) (b) read with section 5(2) of the Prevention of Corruption Act, 1947. Charges 2, 4 and 6 framed against him were for offence of cheating punishable under section 420 IPC. Charges 3, 5 and 7 were framed against the second accused for abetment of cheating punishable under section 420 read with section 109 IPC. The 8th charge was also against the second accused under section 5 (1) (b) read with section 5 (2) of the Prevention of Corruption Act, 1947. The trial court acquitted both of them on all the charges. The State went in appeal against the judgment of acquittal and the High Court on re appreciation of evidence set side the acquittal and convicted both of them on all the counts. The appellant was sentenced to undergo rigorous imprisonment for two years under Section 120 B IPC and rigorous imprisonment for two years for each of the three counts of cheating under section 420 IPC. The sentences were to run concurrently. We have heard Mr. Hardev Singh, learned counsel for the appellant and Mr. V.C. Mahajan, Senior Advocate for the respondents. Mr. Hardev Singh has taken us through the judgment of the trial court and that of the High Court. Mr. Hardev Singh has primarily argued that the High Court has grossly erred in reversing the judgment of acquittal rendered by the trial court. According to him even if two views were possible the High Court was not justified in taking a different view than the trial court and reversing the acquittal. This precise argument was raised before the High Court on behalf of the appellant. The High Court rejected the same as under: "In the circumstances, I am of the opinion that this is not a case where, on the evidence available on record, two conclusions are possible and therefore this Court could not interfere with the acquittal of the accused by the learned Special Judge. I am of the opinion that only one conclusion is possible on the evidence on record and that it is that the accused are guilty of all the charges framed against them and that interference with the acquittal of the accused by the learned Special Judge is called for in this case. " We are of the view that the High Court was justified in reaching the above conclusion. The High Court examined the evidence on the record in detail and rightly came to the conclusion that the guilt against the appellant was established beyond reasonable doubt. The High Court on re appreciation of the evidence, independently reached the following findings: 252 "Thus it is established by Exhibit D 36 as well as the evidence of P.Ws 3 and 6 that the first accused had only a single phase domestic supply of electricity at his premises in Katpadi Extension even in August, 1969, that he could not have used that supply of electricity validly for any non domestic purposes and that it would not have been possible to produce any industrial machinery with that single phase power. " "The evidence of P.W.s 6, 13, 15 and 19 shows that the machinery found in the premises of Electro technic during their inspections were worth only about Rs. 9,200 or Rs. 10,000 and not of the value of Rs. 94,000 as represented by the first accused in the list submitted by him along with his application, Exhibit P 18." "It has already been found that with the 230 Volts domestic supply he could not have produced any of the new end products. The additional machinery required for producing these new end products had not been installed in the first accused 's factory. It is hardly likely that all the alleged additional machinery could have been installed in the factory whose dimensions are only 18 feet by 12 feet." "It is made clear by the evidence that the second accused had made false statements in Exhibit P 96 about the alleged installation of the additional items of machinery in the first accused 's factory. For the reasons stated above I find that the prosecution has proved charges 2 and 3 satisfactorily, beyond all reasonable doubt." "The first accused has succeeded in obtaining the Essentiality Certificate, Exhibit P.5, by making these false representations and the 2nd accused has induced P.W.5 to recommend in Exhibit P.24 the issue of the Essentiality Certificate and P.W.12 to issue the Essentiality Certificate and Exhibit P 14 by making the false representations Exhibit P 22 and P 23, as in Exhibit P 19, which have been found to be false in the earlier part of his judgment. Therefore, I find that the prosecution has proved these two charges 4 and 5 against the accused satisfactorily and beyond all reasonable doubt." "In the present case both the accused have acted in concert in the first accused obtaining the S.S.I. registration certificate, Exhibit P 20 as amended by Exhibit P 21, the Essentiality Certificate, Exhibit P 5 and the import licenses, Exhibits P 6 and P 7, and the second accused enabling him to obtain the 253 same by his recommendations, Exhibits P 19, P 22 and P 23 which contain false particulars. This would show that both the accused have acted in concert for committing these offences and that they would not have done so if there had been no conspiracy. In these circumstances I find that the prosecution has established the charge of conspiracy framed against both the accused satisfactorily and beyond reasonable doubt. " We agree with the above quoted reasoning and the conclusions reached by the High Court. We, therefore, uphold the conviction and sentence awarded by the High Court. While upholding the judgment of the High Court, we are inclined to agree with the learned counsel for the appellant that this is fit case where benefit of section 360, Criminal Procedure Code be extended to the appellant. The occurrence in this case relates to the period between February, 1967 and February, 1969. The Special Judge, Madras by his judgment dated July 23, 1973 acquitted the appellant. The High Court on April 3, 1980 reversed the trial court and convicted the appellant. This Court granted bail to the appellant on April 29, 1980. Mr. Hardev Singh has placed before us documents showing several achievements of the appellant in the industrial field since then. The appellant 's industry has manufactured the largest Hot Air Kiln in India for Ministry of Railways, largest Degreasing plant for Nuclear Fuel Complex, Sintering Furnace for anti tank missiles and various other items for the Ministry of Defence and other Departments of the Government of India. The appellant claims that he has set up 100 per cent export unit with Rs. 75 crores export per annum. For all these reasons we are of the view that it is expedient that the appellant be released on probation. We, therefore, direct that he be released on his entering into a bond to the satisfaction of the Special Court, Madras. The Special Court shall pass an order in terms of Section 360, Criminal Procedure Code, 1973 to its satisfaction. A copy of this order be sent to the Special Court, Madras immediately. The appellant is directed to appear before the Special Court, Madras within two months from today to enable the Special Court, Madras to pass an order as directed by us. In the event of appellant 's failure to present himself before the Special Court as directed he shall undergo the original sentence awarded by the High Court. The appeal is disposed of in the above terms. T.N.A Appeal disposed of.

The appellant, (first accused), a former Inspector of Industries, alongwith an Inspector of Industries, (second accused), was prosecuted under section 120 B read with section 420 IPC, sections 5(1) (b) and 5(2) of the Prevention of Corruption Act, 1947 on the ground that both the accused entered into a criminal conspiracy and acting in concert, the first accused obtained the Small Scale Industries Registration Certificate for additional lines of manufacture, Essentiality Certificate and Import Licences on false representations while the second accused enabled him to obtain the same by his false recommendations. The Trial Court acquitted both of them on all the charges. The State filed an appeal before the High Court which on re appreciation of evidence held that the prosecution has established conspiracy beyond doubt and that only one conclusion was possible on the evidence that the accused are guilty of all the charges. Accordingly it set aside the acquittal and convicted both the accused on all the counts and sentenced the appellant to imprisonment for two years under section 120 B, and for two years under section 420 IPC. In appeal to this Court it was contended on behalf of the 250 appellant accused that: (i) the High Court erred in reversing the judgment of acquittal passed by the High Court; and (ii) the benefit of probation under section 360 of the Code of Criminal Procedure should be extended to the appellant. Disposing the appeal, this Court, HELD: The High Court was right in coming to the conclusion that the guilt against the appellant was established beyond doubt. Accordingly, the conviction and the sentence awarded by the High Court is upheld. [251 G 253 B] The occurrence relates to the period between February, 1967 and February, 1969. The Trial Court acquitted the appellant while High Court reversed the acquittal and convicted them. This Court granted bail to the appellant in 1980. Since then the appellant has several achievements to his credit in the industrial field. Therefore, this is a fit case where benefit of probation under section 360 of the Code of Criminal Procedure, 1973 should be extended to the appellant. [253 C E]

No 1 IN C.A. No 4444 of 1990 etc. From the Judgment and Order dated 25.5.90 of the Alla habad High Court in CWP No. 5267 of 90. Yogeshwar Prasad, Gopal Subramanium, S.K. Mehta, Dhruv Mehta, Arvind Verma, Aman Vachher, Pradeep Misra and R.B. Misra for the appearing parties. The following order of the Court was delivered: The dispute in these cases relates to admission in post graduate courses of the medical wing. There are seven medical colleges in the State of Uttar Pradesh. Sometime back in a fake writ petition the High Court of Allahabad made an order that admission could be effected on the basis of the MBBS results. That can counter to the decision of this Court and on being looked into it transpired that the proceedings before the High Court were totally fraudulent and no one by the name given in the petition as petitioner could really be identified. This Court at that stage had clearly indicated that the prescription by this Court has been that there should be a selection test for post graduate admission as admission has become very competitive and to have compliance of Article 14 of the Constitution a broad based arrangement should be made. On that account this Court had clearly indicated that no admission should be permitted on the basis of the MBBS results. In view of the fact that the Allahabad High Court 's order has already been reversed, nothing more need be done. 387 SLP (C) . . of 1990 This petition is directed against the order of the learned Single Judge of the Allahabad High Court dated 25.5.1990. U.P. Junior Doctors ' Action Committee in their special leave petition which has not yet been numbered challenge the order referred to above where the petitioner could not be identified and challenge was to the decision of the High Court dated 25.5.1990 which permitted admission on the basis of MBBS results. Since we have already clarified the position and reiterated the requirement of a selection test the order of the High Court must be taken to have already been vacated. 11 is not necessary to entertain this special leave petition. CA in SLP 15354/91 Special leave granted. In this appeal by special leave Principal of the Agra Medical college along with some others is the appellant. The High Court by the impugned order required provisional admis sion in M.S. (Surgery) and in M.D. (Medicine) to be given to respondents 1 and 2 respectively in the Medical College of Agra while the writ petition was yet to be heard. The con ten tion raised before us is that grading admission at an interlocutory stage in a pending proceeding even by styling it as provisonal create lot of adderse consequences and leads to indicipline in the system of imparting education, Admission into post graduate degrees in the medical wing through out the country has become very competitive and it has become clear thatstrict regulation is necessary. This Court by its judgement in Dr. Pradeep, Jain & Ors. vs Union of India & Ors [1984] 3 sec 654 indicated that admis sion for 25 percent of the seats in post graduate courses should be regulated on the basis of all India selection and in regard to the remainder 75 per cent of the States were left to decide the procedure for admission. Appropriate knowledge and expertise are a prerequisite for a person to be allowed to register himself as a medical practitioner. Very often, health problems require expert treatment. If anyone is authorised in society to practise medicine or undertake medical care without the appropriate qualification, society exposes itself to health hazards. The prescriptions by the Indian Medical Council and the attempts made by Government for regulating the medical study are for establishing basically uniform knowledge to be imparted to the students before they can be entrusted with the nation 's medicare. Unless there is a sincere and thorough educational discipline to be gone through as a precondition to the grant of the requisite certificate the lives of citizens would be at peril. 388 The Indian Medical Council has prescribed a reasonable period of study on expert advice and upon taking into con sideration the experience over the years as to how much study is necessary for the requisite qualification to be gathered. This Court has also indicated the dates of admis sion and commencement of the courses of study. These are prescriptions for a purpose and are not intended to be empty formalities to be violated. One of the prescriptions of the Medical Council is also the ratio between the teachers and the students. That again is a factor which cannot be brushed aside. It is a well known rule of practice and procedure that at interlocu . tory stage a relief which is asked for and is available at the disposal of the matter is not granted. The writ petitioners wanted admission into postgraduate course as the main relief in the writ petition. To have it granted at the threshold creates a lot of difficulties. In a case where the petitioner ultimately loses in a case of this type a very embarrassing situation crops up. If he has by then read for two to three years, there is a claim of equity raised on the plea that one cannot reverse the course of time. In a case of this type equities should not be claimed or grained. 'Faking an overall picture of the matter we are of the view that unless there is any special reason to be indicated in clear terms in an interlocutory order as a rule no provisional admission should be granted and more so into technical courses. On the basis of what we have said the order of the High Court should be reversed but we are not doing so on account of the fact that nine similarly placed medical graduates have already been given admission pursuant to such interloc utory orders by the respondents without even raising a challenge. The order was made as early as in February, 1991 and for all these nine months no steps have been taken by the appellants to comply with the order and they are in fact facing a contempt proceeding. While on principle we indicate that such provisional admission should not be granted. We dismiss this special leave petition and sustain the order not on merits but for the reason indicated. The interlocuto ry application in the civil appeal need not be further dealt with in view of what we have said above. We had issued notice to the Principals of the seven medical colleges. They have appeared and have given a writ ten undertaking to the Court by way of affidavit that there was some misunderstanding in regard to the requirement of a selection test for post graduate admission. There were two year and three year courses running simultaneously for some period and some confusion was there as to whether the two year course 389 students were covered by the direction of this Court. Though we are of the view that there was hardly any scope for being misled, we are prepared to give the benefit of doubt to the Principals. The contempt proceedings are withdrawn but the undertaking are kept on record. G.N. Appeals dismissed.

These matters relate to admission in post graduate courses in the Medical Colleges in Uttar Pradesh. On a Writ Petition, which later turned out to be fake, the High Court had ordered that admission could be effected on the basis of the MBBS Examination. This has been disputed in appeal before this Court. In another Writ Petition, pending hearing, the High Court directed that provisional admission be given to two candidates, one in MS (Surgery) and another in MD (Medicine). The Principal of the Medical college and others preferred an appeal against the High Court 's order. It was contended that granting admission, though provi sional, at an interlocutory stage in a pending proceeding creates a lot of adverse consequences and indiscipline in the system of imparting education. Dismissing the matters, this Court, 385 HELD: 1.1 It transpires that the proceedings before the High Court were totally fraudulent and no one by the name given in the petition as petitioner could really be identi fied. This Court had clearly indicated that no admission should be permitted on the basis of the MBBS results. Noth ing survives now, as the High Court 's order has already been reversed. [386 F,G] 2.1 It is already settled that admission for 25 per cent of the seats in post graduate courses should be regulated on the basis of all India selection and in regard to the re mainder of 75 per cent the States were left to decide the procedure for admission. [387 E] 2.2 Unless there is a sincere and thorough educational discipline to be gone through as a precondition to the grant of the requisite certificate the lives of citizens would be at peril. The Indian Medical Council has prescribed a rea sonable period of study, on expert advice, and upon taking into consideration the experience over the years as to how much study is necessary for the requisite qualification to be gathered. This Court has also indicated the dates of admission and commencement of the courses of study. These are prescriptions for a purpose and are not intended to be empty formalities to be violated. [387 G, H; 388 A] Dr. Pradeep Jain & Ors. vs Union of India & Ors. , [1984] 3 S.C.C. 654, relied on. It is a well known rule of practice and procedure that at an interlocutory stage, a relief which is asked for and is available at the disposal of the matter, is not (generally) granted. To have it granted at the threshold creates a lot of difficulties. In a case where the petition er ultimately loses in a case of this type a very embarrass ing situation crops up. If he has by then read for two to three years, there is a claim of equity raised on the plea that one cannot reverse the course of time. In a case of this type, equities should not be claimed or granted. Unless there is any special reason to be indicated in clear terms in an interlocutory order, as a rule no provisional admis sion should be granted and more so into technical courses. [388 C, D] 4.1 The order of the High Court in the instant case should be reversed but this is not being done so, on account of the fact that nine similarly placed medical graduates have already been given admission pursuant to such interloc utory orders by the respondents 386 without even raising a challenge. The order was made as early as in February, 1991 and for nine months no steps have been taken by the appellants to comply with the order and they are in fact facing a contempt proceeding. [388 F] 4.2 Notice had been issued to the Principals of the seven medi cal colleges who have appeared and given written undertakings to the Court by way of affidavit that there was some misunderstanding in regard to the requirement of a selection test for post graduate admission. Though there was hardly any scope for being misled, the benefit of doubt is being given to the Principals. The contempt proceedings are discharged, but their undertakings are kept on record. [388 G, H; 389 A]

Appeal No. 179 of 1954. Appeal from the judgment and order dated March 12, 1953, of the Bombay High Court in Income tax Reference No. 43 of 1952. C. K. Daphtary, Solicitor General of India, G. N. Joshi and B. H. Dhebar, for the appellant. N. A. Palkhivala, D. H. Dwarkadas, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the respondent. May 15. The Judgment of the Court was delivered by section K. DAS J. This is an appeal on a certificate granted by the High Court of Judicature at Bombay under sub section (2) of section 66A of the Indian Income tax Act (hereinafter referred to as the Act). The appellant is the Commissioner of Income tax, Bombay, and the respondent is the Provident Investment Co., Ltd., Bombay, hereinafter referred to as the assesses company. The short question which falls for consideration in this appeal is whether a particular transaction, details 1143 whereof we shall presently state, entered into by the assessee company in 1946 resulted in capital gains within the meaning of section 12B of the Act. The question which was referred to the High Court under section 66(1) of the Act was this: " Whether the assessee company made a capital gain amounting to Rs. 81,81,900 within the meaning of section 12B of the Indian Income tax Act?" The High Court answered the question in the negative. The appellant being dissatisfied with the judgment and order of the High Court asked for and obtained a certificate from the said High Court that the case is a fit one for appeal to the Supreme Court. The material facts may be very shortly stated. The assessee company is a private limited company, the shares of which were held by the then Maharaja Scindia of Gwalior and his nominees. At the material time, the assessee company was the managing agent of Madhowji Dharamsi Manufacturing Co., Ltd., hereinafter briefly referred to as the Dharamsi Company, and Sir Shapurji Broacha Mills Ltd., briefly referred to as the Shapurji Broacha Company. The assessee company held all the " conversion " shares of the Dharamsi Company and a substantial majority of the " conversion" shares of the Shapurji Broacha Company. The Dalmia Investment Company Limited, which will hereinafter be briefly referred to as the Dalmia Company, wrote two letters to the assessee company on September 14, 1946. In these two letters, the Dalmia Company offered to purchase 28,328 " conversion " shares of the Dharamsi Company at Rs. 500 per share together with the managing agency, and also 75,212 " conversion " shares of the Shapurji Broacha Company, together with the managing agency. We are not concerned with the other details mentioned in the two letters, except this that the Dalmia Company made it clear that it would purchase both the mills or neither, and a time limit till September 23, 1946, 3 p. m. was imposed during which the offer would remain open. This time limit was, however, extended later up to September 30, 1946. The letter further stated 1144 " On your accepting the offer, we will pay to you Rs. 20 lakhs in the case of the Dharamsi Company, Rs. 30 lakhs in the case of the Shapurji Broacha Company as and by way. of earnest money. You shall have to arrange to get the transfer of the managing agency sanctioned by the general body of the shareholders within a period of 40 days from the date of acceptance. As Boon as the transfer is sanctioned, we will pay the balance of the purchase price. " On September 26, 1946, there was a meeting of the Board of Directors of the assessee company. At that meeting, the Board considered the offers made by the Dalmia Company and resolved to accept the offers. The Board further stated in its minutes that out of the total amount received from the sale of the shares, a sum of Rs. 1 crore should be paid to the assessee company as compensation for ' the loss of the managing agency of the two mills. On September 30, 1946, the assessee company wrote to the Dalmia Company accepting the offers made, subject to a condition which is not material for our purpose. On the same date, the Dalmia Company received the acceptance of the offers made by it and sent two drafts, one for Rs. 20 lakhs and the other for Rs. 30 lakhs. On October 7, 1946, the Dalmia Company wrote a very important letter to the assessee company. This letter said inter alia: " With reference to the interview our Solicitor Mr. Tanubhai had with your Mr. Wadia, we beg to record that it is now being agreed upon as follows in modification of the arrangement previously made between yourselves and ourselves: (1)In our letters of offer which have been accepted by you, it was arranged that the managing agency will be transferred either to us or to our nominees. Now, instead of doing so by you, you as the present managing agents will give their (sic) resignation, so that at the time of delivery of the shares and payment of moneys, your managing agency will have come to an end. In view of the above, it is not necessary to obtain any sanction of general meeting. 1145 (2) 1. Mr. Shriyans Prasad Jain 2. Mr. Jaidayal Dalmia 3. Mr. Shanti Prasad Jain and 4. Mr. Vishnu Hari Dalmia will be appointed Directors of both the Mills Companies and thereafter all the present directors will tender their resignation. (3) Qualification shares in the names of the above proposed Directors will be transferred by you and the balance of the shares will be delivered to us along with the transfer deeds duly signed against payment. (4) You may communicate by a circular to the shareholders that you have resigned the managing agency. You may further mention in the circular that in accordance with the offer we are prepared to take up the deferred shares held by the shareholders which may be offered to us at the rate of Rs. 25 and Rs. 7 8 0 of Madhowji Dharamsi Manufacturing Co. Ltd. and Sir Shapurji Broacha Mills Ltd. Mills respectively within two months of the date of letter of offer which we would also send. " The assessee company accepted the modified arrangement suggested by the Dalmia Company, and on October 19, 1946, the assessee company wrote to the Dharamsi Company and the Shapurji Broacha Company that it had decided to resign the office of the managing agency and accordingly tendered its resignation on that date. The balance of the consideration money was then paid to the assessee company, and it was not disputed that the. value of the managing agency was computed at Rs. 1 crore, nor was there any dispute that the managing agency was a capital asset. Out of the said sum of Rs. 1 crore, the Income tax Officer computed the capital gains at Rs. 81,81,900 and asked the assessee company to pay tax thereon. The Appellate Assistant Commissioner held that the assessee company had sold the managing agency and therefore the profits or gains arising from that sale were capital gains within the meaning of section 12B of the Act. The Income tax Appellate Tribunal, Bombay Bench 'A ', held, however, that there was no sale of the managing agency, because the original contract of 147 1146 purchase was varied by the new contract embodied in the letter of October 7, 1946. The Tribunal, however, held as follows: " The assessee company was the owner of the shares and the managing agencies. It sold the shares to the Dalmia Co. and handed back the managing agencies to the managed companies. This handing back, in our opinion, constitutes a transfer of the managing agencies. " On that footing the Tribunal held that section 12B of the Act applied. On an application by the assessee company, the Tribunal on being satisfied that a question of law did arise out of its order, referred the question which we have already set out in an earlier paragraph of this judgment, to the High Court of Bombay. The High Court answered the question in the negative on the ground that there was neither a sale nor a transfer of the managing agency within the meaning of section 12B of the Act. The point for our consideration is whether the High Court has correctly answered the question. We must first read sub section (1) of section 12B of the Act as it stood at the material time. The sub section, so far as it is relevant for our purpose, was in these terms: " The tax shall be payable by an assessee under the head 'Capital gains ' in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after the 31st day of March 1946; and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place. " It is worthy of note that 'capital gains ' were charged for the first time by the Income tax and Excess Profits Tax (Amendment) Act, 1947, which inserted section 12B in the Act. It taxed 'capital gains ' arising after March 31, 1946, and the levy was virtually abolished by the Indian Finance Act, 1949, which confined the operation of the section to 'capital gains ' arising before April 1, 1948. The Finance (No. 77 of 1956) re introduced the section in wider terms so as to bring within 'capital gains ' any profits or gains arising from the sale, exchange, relinquishment or transfer of a 1147 capital asset effected after March 31, 1956, etc. ' We are not, however, concerned with the question whether the transaction under our consideration, which took place in 1946, resulted in capital gains within the meaning of section 12B as it stands after the enactment of the Finance (No. 77 of 1956). The question before us is whether the transaction under consideration resulted in capital gains within the meaning of section 12B as it originally stood. Two other points must be stated at the outset in order to clear the ground for a consideration of the relevant arguments advanced before us. The first point is that there is no question here of the assessee company trying to circumvent the provisions of section 12B of the Act by deliberately modifying the original agreement (by its letter dated October 7, 1946) so as to put the transaction outside the scope of that section. The agreement was modified in October, 1946, before even the insertion of section 12B in the Act. Therefore, no question of deliberate or fraudulent evasion arises in this case. The second point is that in construing fiscal statutes and in determining the liability of a subject to tax, one must have regard to the strict letter of the law and the true legal position arising out of the transaction in question. The Bombay High Court has referred to a large number of English decisions on this point. We consider it unnecessary to examine those decisions in the present case. The point was considered very recently by this Court in A. V. Fernandez vs The State of Kerala (1), where the following observations made are very pertinent: " If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come (1) (1957] S.C.R. 837. to the conclusion that the appellant was liable to assessment as contended by the Sales Tax authorities. " Those observations were made in a case dealing with sales tax but are equally applicable to the case under our consideration. Two conditions must be fulfilled before the transaction under our consideration can come within the purview of section 12B of the Act. The first condition is that the profits or gains must arise from the sale, exchange or transfer of a capital asset; and the second condition is that the sale, exchange or transfer must be effected after March 31, 1946. There is no doubt that the transaction before us was effected after March 31, 1946. There is also no dispute that the managing agency of the two mills which the assessee company held was a capital asset. Therefore, the question boils down to this did the profits or gains, namely, the sum of Rs. 1 crore which was computed as the value of the managing agency, arise from the sale or transfer of the managing agency ? The Income tax authorities held that there was a sale of the managing agency; but the Appellate Tribunal held that there was no sale in the strict sense but only a transfer of the managing agency to the managed companies, that is, the Dharamsi Company and the Shapurji Broacha Company. The High Court held that there was neither a sale nor a transfer, because the letter of October 7, 1946, substituted a different contract for the original contract entered into by the parties, and the true legal position with regard to the substituted contract was that the assessee company resigned the managing agency, or, in other words, the managing agency was relinquished by the assessee company. The learned Solicitor General, who has appeared for the appellant, has contested the correctness of the view of the Bombay High Court and has submitted a twofold argument before us. His first argument is that there was a concluded contract of sale as a result of the letters, dated September 14, 1946, and September 30,1946, exchanged between the parties, and the sale having taken place, the letter of October 7, 1946, which merely changed the mode of performance of the 1149 contract, did not affect the true legal character of the ,transaction which was a sale of the managing agency. We are unable to accept this argument. The true legal effect of the letters dated September 14, 1946, and September 30, 1946, which contained an offer and an acceptance, was merely this: the Dalmia Company offered to purchase (1) certain shares in the two mills and (2) the managing agency, on payment of a certain consideration, and the assessee company accepted that offer. In law, this was merely an agreement to sell and purchase the shares together with the managing agency on payment of the consideration, etc. The two letters did not by themselves amount to a sale of the shares or the managing agency, in the sense of a transfer of the property in them. Before any such sale could take place, the agreement was modified by the letter of October 7, 1946, and instead of " selling " the managing agency the assessee company agreed to resign or relinquish the managing agency. We are unable to agree with the learned Solicitor General that the letter of October 7, 1946, merely changed the mode of performance, and did not constitute a now contract. In our opinion, the Bombay High Court correctly held that whereas under the original contract the Dalmia Company wanted the managing agency to be transferred, which meant that it wanted the benefit of that contract to be vested in it and was also prepared to accept the burden of the obligations that went with that contract, under the substituted contract, the Dalmia Company did not want the managing agency to be assigned to it; on the contrary, it wanted the assessee company to relinquish its rights in the managing agency of the two mills by resigning. On a true interpretation, the letter of October 7, 1946, substituted a new contract, a contract of relinquishment rather than a contract of sale, so far as the managing agency was concerned. The second argument of the learned Solicitor General is that there was one indivisible consideration for the whole transaction, including the sale of the shares and of the managing agency. So far as the shares were concerned, the sale did take place and the entire 1150 consideration was paid; there was therefore a sale within the meaning of section 12B of the Act, and the consideration being one and indivisible, the transaction did result in capital gains within the meaning of that section. At the first blush, the argument has an apparent merit of plausibility, though it was not urged before the Bombay High Court in the manner in which it has been urged before us. On a closer scrutiny, however, it appears to us that this argument is not really available to the learned Solicitor General. The parties and the Income tax authorities, including the Appellate Tribunal, proceeded on the footing that part of the consideration, namely, the sum of Rs. 1 crore, was the consideration for the sale or relinquishment of the managing agency, the Department contending that the transaction was a sale or transfer and the assessee company contending that it was neither a sale nor a transfer but a mere relinquishment. In the agreed statement of the case, it was stated : " The value of the managing agencies was computed by the assessee company at Rs. 1 crore and there is no dispute on this point. The Income tax Officer thereupon computed capital gain at Rs. 81,81,900 and again there is no dispute on this point. The question which the Tribunal had to determine was whether the transactions between the Dalmia Company and the assessee company resulted in a capital gain of Rs. 81,81,900. It is obvious that the entire assessment proceedings proceeded on the basis that the sum of Rs. 1 crore was the consideration for the sale or relinquishment of the managing agencies, and the dispute between the parties was whether the transaction with regard to the managing agencies, in its true legal character, was a sale or transfer or relinquishment. That being the position, it is not now open to the learned Solicitor General appearing for the Revenue to go behind the agreed statement of the case and to ask us to give an answer to the question of law raised in the case on different assumptions or in a different set of circum stances. The answer must be given on the basis of 1151 the facts and circumstances as stated in the agreed statement of the case. We are of opinion that the answer was correctly given by the High Court of Bombay. The transaction in its true legal character was a relinquishment of the managing agency and was neither a sale nor a transfer thereof. Therefore, the High Court correctly answered, the question in the negative. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

The respondent company was the managing agent of two other companies holding certain shares therein. D wrote two letters to the respondent on September 14, 1946, offering to purchase some of those shares together with the managing agency and agreeing to pay certain sums as earnest money on the acceptance of the offer and to pay the balance after the transfer of the managing agency was sanctioned by the general body of shareholders. By a letter dated September 30, 1946, the respondent accepted the offer on condition of a sum of Rs. 1 crore being paid out of the consideration as compensation for the loss of the managing agency, and on receipt of the letter, D paid the earnest money. Subsequently, D wrote a letter on October 7, 1946, whereby, in modification of the arrangement previously made, it was agreed that instead of the managing agency being transferred by the respondent, the latter would resign the office of managing agents and certain individuals would be appointed Directors of the two companies. Accordingly, the respondent relinquished the managing agency and thereupon the balance of consideration money was paid to it. The Income tax Officer considered that section 12B of the Indian Income tax Act, 1922, was applicable to the transaction and on the footing that the managing agency, which was valued at Rs. 1 crore, was a capital asset, he computed the capital gains at Rs. 81,81,900. The Income tax Appellate Tribunal held that the respondent, as the owner of the shares and the managing agency, sold the shares to D and handed back the managing agency to the managed companies, and that this handing back constituted a transfer. On a reference to the High Court by the Tribunal, the agreed statement of the case proceeded on the basis that the dispute between the parties was whether the transaction with regard to the managing agency resulted in capital gains and the High Court held that there was neither a sale nor a transfer of the managing agency within the meaning Of section 12B of the Act. On appeal to the Supreme Court by the Commissioner of Income tax, it was contended for him (1) that there was a concluded contract 1142 of sale as a result of the letters of September 14, 1946, and September 30, 1946, and a sale having taken place, the letter of October 7, 1946, merely changed the mode of performance of the contract and did not affect the true legal character of the transaction which was a sale of the managing agency, and (2) that as there was one indivisible consideration for the whole transaction, including the sale of the shares and of the managing agency, the sale of the shares having taken place and the entire consideration having been paid, there was a sale within the meaning of section 12B of the Act and the transaction resulted in capital gains. Held (1) that on a true construction of the letters there was originally only an agreement to sell the shares together with the managing agency and before the sale could take place the letter of October 7, 1946, substituted a new contract, a contract of relinquishment rather than a contract of sale, so far as the managing agency was concerned, and (2) that it was not open to the appellant to go behind the agreed statement of the case and raise a question of law based on different facts and circumstances. Accordingly, the transaction in question was a relinquishment of the managing agency and was neither a sale nor a transfer within the meaning of section 12B of the Indian Income tax Act.

Appeal No. 721 of 1972. (From the Judgment and Order dated 13.10.1970 of the Punjab & Haryana High Court in Civil Writ No. 1831 of 1968). K.S. Suri, for the appellants. R.S. Sharma and A. D. Mathur, for the respondent. The Judgment of the Court was delivered by SARKARIA, J. The short question involved in this appeal on certificate, directed against a judgment of the High Court of Punjab and Haryana is: Whether the sales made to. a dealer who has applied for registration under the Punjab General Sales Tax Act 1948, before his application is al lowed, are to be treated as sales to an unregistered dealer or registered dealer, when the registration is effected from the date of the application ? M/s. Patiala Biscuits Manufacturers Pvt. Ltd. (hereinaf ter referred to as the assessees) appointed M/s. Rajpura Biscuit Company as their sole selling agents. The agents made an application on 1.1.1966 in the appropriate form for registration as a dealer under the Punjab General Sales Tax Act, 1948 (hereinafter called the Act). On the same day, the agents (referred hereafter as the purchasing dealer) made a similar application for obtaining registration cer tificate, under the Central Sales Tax Act. The appropriate Assessing Authority accepted both these applications and on March 27, 1966 issued the registration Certificate with effect from 1.1.1966. The assessees filed their return for the quarter ending March 31, 1966 in April, 1966 and claimed deductions under section 5(2)(a)(ii) in respect of sales of the value of Rs. 32,56,267.35 made by them between 1 1 1966 to 31 3 1966 to the purchasing dealer. The Assessing Authority, Patiala rejected this claim and assessed tax, amounting to Rs. 1,99,558.94. on the proceeds of the sales made by the asses sees to the purchasing dealer between 1.1.1966 and 27.3.1966. The reason given by the Assessing Authority for refusing this relief to the assessees was that during this period, the purchasing dealer was not in possession 87 of the registration certificate, the same having been issued only on March 27, 1966. The assesses impugned the validity of this order of the Assessing Authority by a writ petition in the High Court, under Articles 226/227 of the Constitution. The High Court held that since the certificate of registration had been granted with effect from 1 1 1966, which was the date of the application, it could not be said that the sales during this period commencing from 1.1.1966, were made to an unregis tered dealer. It further noted that apart from the asses sees, the purchasing dealer had also, been taxed with regard to the same transactions resulting in double taxation which was against the basic scheme of the Act, the Rules and the notifications issued thereunder. On these premises, the High Court allowed the writ petition and quashed the im pugned order to the extent to which it was contrary to s.5(2)(a)(ii) of the Act in respect of sales made between 1.1.1966 and 27.3.1966. The High Court however granted a certificate under article 133(1)(a) and (c) of the Constitu tion, on the basis of which the Revenue has come in appeal to this Court. It would be appropriate to have, at the outset, a look at the relevant provisions of the Act and the Rules. The material provision is in section 5(2) (a) (ii) which reads as under: "In this Act the expression "taxable turnover" means the part of a dealer 's gross turnover during any period which remains after deducting therefrom: (a) his turnover during that period on . . (i) . . (ii) sales to a registered dealer of goods . declared by him in a prescribed form as being intended for re sale in the State of Punjab . . Provided that in case of such sales, a declaration duly filled up and signed by the register dealer to whom the goods are sold and containing prescribed particulars on a pre scribed form (obtained from the prescribed authority) is furnished by the dealer who sells the goods. " Section 7 provides for the registration of dealers. It says: "(1) No dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered and possesses a registration certificate. (2) Every dealer required by sub section (1) to be registered dealer shall make appli cation in this behalf in the prescribed manner to the prescribed authority. (3) If the said authority is satisfied that an application for registration is in order, he shall, in accordance with 7 240SCI/77 88 such rules and on payment of such fees as may be prescribed, register the application and grant him a certificate of registration in the prescribed forms which may specify the class or classes of goods for the purpose of sub clause (ii) of clause (a) of subsection (2) of section 5. (4) . (5) When any dealer has paid the amount of penalty imposed under section 23 in respect of any contravention of sub section (1) of this section, the Commissioner shall register such dealer and grant him a certificate of regis tration, and such registration shah take effect as it had been made under sub section (3) of this section on the dealer 's applica tion. In case a dealer commits default is not getting himself registered as required by Sec. 7, certain consequences follow. Under s.11(6) such a defaulting dealer is liable to be assessed on the basis of best judgment and the Assessing Authority may, in addition to the tax so assessed, impose on him by way of penalty a sum not exceeding one and half times that amount. Such a defaulter is further liable to prosecution under section 23 (1) for carrying on business as a dealer in contravention of the provisions of section 7(1), and on conviction, he can be sentenced to fine not exceeding Rs. 1,000/ . The application for registration has to be made to the appropriate Authority in the prescribed Form. The manner in which such an application is to be dealt with by the Authority is provided in Rule 5 of the Punjab General Sales Tax Rules, 1949 framed under the Act. This Rule as it stood before the amendment of October 10, 1966 was as follows: "When the appropriate Assessing Authori ty, after making any enquiry that he may think necessary, is satisfied that the applicant is a bona fide dealer and has correctly given all the requisite information that he has deposit ed the registration fee into the appropriate Government treasury and that the application is in order, he shall register the dealer and shall issue a Certificate of registration in Form S.T.III or S.T. IV according as the dealer has one or more than one place of business in Punjab. " Rule 5 was amended by Punjab Government Notification No. GSR237/PA 46/48/S 27/Amd(5)/66 dated 10th October, 1966, and in place of the last sentence commencing with the words "in .Form S.T . "of the old Rule, the following was substituted: " . in Form S.T. IV which shall be valid from the date of receipt of application for registration by the Assess 89 ing Authority or from the date of commencement of the liability to pay tax, whichever is later. " Ride 26 provides: "A dealer, who wishes to deduct from his gross turnover the amount in respect of a sale on the ground that he is entitled to make such deduction under the provisions of subclause (ii) of clause (a) of sub section (2) of section 5 of the Act, shall, on demand, pro duce in respect of such a sate the copy of the relevant cash memo or bill, according as the sale is a cash sale or a sale on credit, and a declaration in writing in Form S.T. XXII by the purchasing dealer or by his agent, that the goods in question are intended for re sale in the State of Punjab or such goods are specified in his certificate of registration for use by him in the manufacture in the State. of Punjab of any goods for sale. " Rule 26 was also amended later. The amended Rule is, in substance, the same, excepting that it was clarified that the dealer claiming deduction has to produce the declaration of the purchasing dealer, in the prescribed form, at the time of assessment. The main contention of Shri K.S. Suri, learned Counsel for the appellant is that the declaration form prescribed under the old Rule 26, as it stood at the material time, required the purchasing dealer to specify at the time of the sale, in the prescribed Form S.T. XXII, the number of the registration certificate. Stress has also been placed on the words "registered and possesses" used in sub section (1) of Sec. 7, which according to Counsel, indicate that a dealer having a taxable turnover, cannot validly carry on his business, unless he is actually registered and is in physical possession of the registration certificate issued under Sec. 7. A compliance with the aforesaid mandatory requirement of section 7(1) and Rule 26, Form XXII proceeds the argument could be possible only if at the time of the sales in question, the purchasing dealer as well as the selling dealer, both, were in actual possession of the requisite registration certificates. Shri Suri has adopted the reasoning of the Sales Tax Tribunal in Appeal No. 109 of 1967 68 (M/s. Darshan Soap Mills, Batala Road, Amritsar vs The State) decided on 12 2 1968. It is contended that Rule 5, as it stood at the material time, did not empower the registering Authority to grant the registration Certificate retrospectively, with effect from the date of the application. It is maintained such a power was conferred on the Authority, only by the Punjab Govern ment Notification No. GSR 237/PA 46/48/S 27 Amd.(5)/16 with prospective effect from October 10, 1966. Taking the last point first, we are of opinion that the amendment of Rule 5 by the Punjab Government Notification, dated October 10, 1966, did not confer any new or additional power on the registering Authority. The power to grant the registration Certificate with effect from the date of the application was already there. The amendment was only clarificatory of the law as it stood prior to it. It only 90 made explicit which was formerly implicit. A definite indication is available in the language of sub section (5) read with sub sections (2) and (3) of section 7, . itself, that the registering Authority had the power to give effect to the registration from the date of making the application. Be that at it may, the words "has been registered and possesses a registration certificate" used in sub section (1 ) of section 7 have to be construed in accord with the general tenor of the Section as a whole, and in a manner which would avoid oppressive, unreasonable and anomalous results. As rightly pointed out in Chandra Industries vs The Punjab State and ors.(1), it could never be the intention of the Legislature that a dealer liable to pay tax who has in compliance with the requirements of sub sections (2) and (3) of section 7, "done all which lay in power to obtain the regis tration certificate, should pull down his shutters and keep his business closed under pain of being punished under section 23(1) and await indefinitely the pleasure and leisure of the prescribed authority in issuing the registration certifi cate. Adoption such a construction would be to make the applicant liable to punishment for the laches and delays of the authority and its office." As regards the requirement enjoined by the Form pre scribed under Rule. 26, to enter the number of the registra tion certificate in the declaration of the purchasing dealer at the time of sale, the same has to be viewed with rea sonable flexibility and reconciled with Rule 5 as clarified by the Notification, dated October 10, 1966. Thus con strued harmoniously with the related statutory provisions, the requirement of Rule 26 will be substantially satisfied, if the number of the registration certificate granted subsequently, but covering retrospectively the period of the sales in respect of which deduction is claimed is supplied by the claimant along with the declaration of the purchasing dealer at the time of assessment to the Assessing Authority. It is thus clear as daylight that at the relevant time, also, the registering Authority was fully competent to issue the registration certificate to the dealer with retrospective effect from the date of filing the applica tion. A perusal of the registration certificate would show that it was, in terms, made effective from January 1, 1966. This is manifest from the words "the dealer is liable to pay tax w.e.f. 1.1.1966" used by the Authority, prominently, in the heading of the Certificate. It necessarily follows, therefore, that during the period from 1.1.1966 to 27.3.1966, also, the purchasing dealer was a registered dealer possessing a registration Certificate within the Contemplation of section 7(1) of the Act. This being the correct position, the assessees; were enti tled to the deduction under section 5(2)(a)(ii) of the Act in respect of the sales made by them to the purchasing dealer during the whole of the quarter ending 31st March 1966. The High Court was therefore, right in determining the question posed, in favour of the assessees and against the Revenue. The appeal fails and is dismissed with costs. P.B.R Appeal dismissed.

According to section 5(2)(a)(ii) of the Punjab General Sales Tax Act, 1948, taxable turnover means the part of a deal er 's gross turnover during any period which remains after deducting therefrom the turnover during that period, on sales to a registered dealer of goods declared by him in a prescribed form as being intended for re sale in the State. Section 7(1) provides that no dealer shall carry on business as a dealer unless he has been registered and possesses a registration certificate. Rule 5 of the Punjab General Sales Tax Rules, 1949 as amended in October 1966 provides that the certificate of registration issued by the Assessing Authority shall be valid from the date of receipt by him of the application for registration or from the date of Commencement of the liability to pay tax whichever is later. Rule 26 provides that a dealer claiming deduction under section 5(2)(a)(ii) shall produce on demand the cash memos or bill and a declaration in writing by the purchasing dealer that the goods specified in the certificate of regis tration are for use by him. The assessee (respondent) and the purchasing dealer, the sole selling agent of the assessee, made applications on January 1, 1966 for registration as dealers. The registra tion certificates were issued to them on March 27, 1966 with retrospective effect from January 1, 1966. The Assessing Authority rejected the assessee 's claim for deduction under section 5(2)(a)(ii) of sales made by them to the purchasing dealer on the ground that during the period between January 1 and March 31, 1966, the purchasing dealer was not in possession of the registration certificate. In a petition under article 226 of the Constitution the High Court held that since the certificate of registration had been granted with effect from January 1, 1966, i.e. the date of application, it could not be said that the sales during the quarter were to an unregistered dealer. On appeal it was contended that to be entitled to deduc tion under the Act both the purchasing and selling dealers 'should be in physical possession Of the registration cer tificate at the time of sale. Dismissing the appeal, HELD: The assessees were entitled to deduction under section 5(2)(a)(ii) in respect of sales made by them to the purchas ing dealer during the quarter. [90 G] (a) At the relevant time, the registering authority was fully competent to issue the registration certificate to the dealer with retrospective effect from the date of filing of the application. The amendment of r. 5 made in October 1966 did not confer any new or additional power on the registering authority but was only clarificatory of the law. The language of section 7 is clear that the registering authority had the power to give effect to the registration from the date of making the application. [90 F; A] 86 (b) The words "has been registered and possesses a registra tion certificate" in section 7(1) should be construed in accord with the general tenor of the section as a whole, and in a manner which would avoid oppressive, unreasonable and anomalous results. So construed it could never be the intention of the legislature that a dealer liable to pay tax, who has in compliance with the requirements of section 7(2) and (3) done all which lay in his power to obtain the regis tration certificate, should pull down his shutters and keep his business closed under pain of being punished and await indefinitely the pleasure and leisure of the prescribed authority in issuing the registration certificate. Adoption of such a construction would be to make an applicant liable to punishment for the laches and delays of the authority and its office. [90 B C] Chandra Industries vs The Punjab State & Ors. 29, S.T.O. 558, approved. (c) The requirement of r. 26 will be substantially satisfied if the number of the registration certificate is supplied by the claimant alongwith the declaration of the purchasing dealer at the time of assessment to the Assessing Authority. [90 E]

ivil Appeals Nos. 357/77 and 1142 1143/78. Appeals by Special Leave from the Judgment and Order dated 28 8 75 and 17 9 75 of the Allahabad High Court in Special Appeal Nos. 233, 254 and 264 of 1975. L. N. Sinha, Santosh Chatterjee, Vineet Kumar and P. P. Singh for the Appellant in CA 357/77. section N. Kacker, Sol. General, M. V. Goswami and Rajiv Dutt for the Appellants in CA 1142 1143/78 and RR 4 and 5 in CA 357/77 A. K. Sen, section C. Patel and Bishamber Lal for Respondent No. 1 in All the appeals. V. M. Tarkunde, section C. Patel and Bishamber Lal for R. 2 in all appeals G. L. Sanghi, section C. Patel and Bishamber Lal for R. 3 in all appeals. Rajiv Dutt and P. C. Kapur for R. 6 in CA 357/77. Santosh Chatterjee and Vineet Kumar for R. 6 in CA 1142/78. The Judgment of the Court was delivered by DESAI, J. Respondents Nos. 1, 2 and 3 in Civil Appeal No. 357/77 filed writ petition No. 5462/74 challenging the selection by U.P. Public Service Commission ( 'Commission ' for short) and subsequent appointment by U.P. State Government of appellant and respondent No. 6 to the post of Professor in Medicine in State Government Medical Colleges. A learned single Judge of the High Court quashed the selec 855 tions. Four appeals came to be preferred against the judgment quashing selections. Special Appeal No. 232/75 was filed by Dr. R. N. Tandon, respondent No. 6; Special Appeal No. 233 of 1975 was preferred by the present appellant Dr. M. C. Gupta; Special Appeal No. 264 of 1975 was preferred by the State of U.P.; and Special Appeal No. 256 of 1975 was filed by respondents Nos. 1, 2 and 3 in Civil Appeal No. 357/77 against that part of the judgment of the learned single Judge by which appointment of appellant Dr. M. C. Gupta and respondent No. 6, Dr. R. N. Tandon, was not quashed. The appellate Bench partly allowed the appeals and while confirming the order quashing the selection of Dr. M. C. Gupta and Dr. R. N. Tandon, also quashed their appointment and remitted the matter to the Commission directing it to re examine the relative merits of all candidates in the light of the interpretation put upon the relevant regulations by the Court. Arising from this common judgment, three appeals by special leave are preferred to this Court. Civil Appeal No. 357/77 is preferred by Dr. M. C. Gupta and Civil Appeals Nos. 1142 & 1143 of 1978 are preferred by the State of U.P. To focus the attention on the contention raised at the hearing of these appeals, a brief resume of facts would be advantageous. The Commission invited applications for two posts of Professor of Medicine in the State Medical Colleges as per its advertisement dated 8th September 1973, subsequently extending the last date for receipt of applications to 30th March 1974, Dr. M. C. Gupta and Dr. R. N. Tandon (referred to as the 'appellants ') along with Dr. A. K. Gupta, Dr. Brij Kishore and Dr. section N. Aggarwal (referred to as 'respondents 1, 2 and 3), applied for the post. The advertisement set out the prescribed qualifications for the post under Regulations made under section 33 of the ( 'Act ' for short). They were in respect of the academic attainments, teaching/research experience, upper age limit, etc. The Commission was assisted by four medical experts in the matter of interview, selection and recommendation of suitable candidates satisfying the requisite qualifications for the post. The Commission selected Dr. M. C. Gupta and Dr. R. N. Tandon for the two posts of Professor in Medicine and recommended their names to the State Government, Respondents 1, 2 and 3 who were also candidates for the post, presumably came to know about the recommendation and moved the High Court on 13th September 1974 by way of a writ petition questioning the selection. The petition was admitted and rule nisi was issued. An ex parte interim stay restraining the Government from making the appointments was granted but sub 856 sequently it was vacated. The State Government accepted the recommendations of the Commission and appointed Dr. M. C. Gupta and Dr. R. N. Tandon as Professors of Medicine on 30th October 1974. The petition was subsequently amended questioning the order of appointment. As already stated above, the learned single Judge held that neither Dr. M. C. Gupta nor Dr. R. N. Tandon had the requisite teaching experience and that neither of them was qualified for selection as Professor of Medicine and accordingly allowed the writ petition and quashed the selection. By a common judgment in the appeals arising from the judgment of the learned single Judge, the appellate Bench confirmed the order quashing the selections and further quashed the order of appointment and remitted the matter to the Commission directing it to make fresh selection in consonance with the interpretation put upon the relevant regulations by the Court. Three appeals are before us. These three appeals obviously were heard together and are being disposed of by this common judgment. The selection and appointment of Dr. M.C. Gupta and Dr. R. N. Tandon were questioned only on one ground in that each of them did not satisfy the requisite teaching/research experience. The controversy in these appeals centres round the question of teaching/research experience and the relevant regulation in this behalf may be extracted: ___________________________________________________________ Post Academic Subject Teaching/ Qualification Research experience ___________________________________________________________ (b) Professor/ M.D., M.R.C.P., Medicine (b) As Reader/ Associate F.R.C.P., Asst. Professor Professor Speciality in Medicine for Board of 5 years in a Internal Medicine Medical College (USA) or an after requisite equivalent post graduate qualification in qualification. the subject. ___________________________________________________________ Regulation 4 of General Regulations provides as under: "4. 50% of the time spent in recognised research under the Indian Council of Medical Research or a University or a Medical College, after obtaining the requisite post graduate qualification be counted towards teaching experience in the same or an allied subject provided that 50% of the teaching experience shall be the regular teaching experience. " The teaching/research experience claimed by each of the appellants may be set out and then the comments of each side in respect of each item may be examined: 857 Experience of Dr. M. C. Gupta. I. 25th January 1965 to 19th About 6 years and July 1971 Lecturer in Cardio 6 month 's teaching logy in the Dept. of Medicine experience. II July 71 upto the date of About 3 years, 2 appointment as Professor months ' teaching Reader in Medicine in S.N. experience. Medicine College, Agra. Experience of Dr. R.N. Tandon I. 1st October 1965 to 31st One years ' teaching October, 1966 Post doctoral experience. teaching fellow, Dept. of Medicine, State University of New York at Buffalo, USA. II 1st February, 1967 to 31st One year 's teaching 1968 As a Lecturer while experience. posted as Pool Officer Dept. of Medicine in GSVM Medical College, Kanpur. III 5th April 1968 to 4th July 15 Months ' teaching 1969 Post doctoral research experience. fellow, Dept. of Medical in GVSM Medical College, Kanpur. IV 29th July 1969 to 30th October Over 5 years teaching 1974 (date of appointment as experience. Professor) Asst. Professor of Medicine, State University of New York, at Buffalo USA. Before the rival comments are probed and analysed, it would be necessary to keep in view the twilight zone of Court 's interference in appointment to posts requiring technical experience made consequent upon selection by Public Service Commission, aided by experts in the field, within the framework of Regulations framed by the Medical Council of India under section 33 of the , and approved by the Government of India on 5th June 1971. When selection is made by the Commission aided and advised by experts having technical experience and high academic qualifications in the specialist field, probing teaching/research experience in technical subjects, the Courts should be slow to interfere with the opinion expressed by experts unless there are allegations of mala fides against them. It would normally be prudent and safe for the Courts to leave the decision of academic matters to experts who are more familiar with the problems they face than the Courts generally can be. Undoubtedly, even such a body if it were to contravene rules and regulations binding upon it in making the selection and recommending the selectees for appointment, the Court in exercise of extraordinary jurisdiction to enforce rule of law, may interfere in a writ petition under Article 226. Even then the Court, while enforcing the rule of law, should give due weight 858 to the opinions expressed by the experts and also show due regard to its recommendations on which the State Government acted. If the recommendations made by the body of experts keeping in view the relevant rules and regulations manifest due consideration of all the relevant factors, the Court should be very slow to interfere with such recommendations (see, The University of Mysore & Anr. vs C. D. Govinda Rao & Anr.,(1). In a more comparable situation in State of Bihar & Anr. vs Dr. Asis Kumar Mukherjee, and Ors. ,(2) this Court observed as under: "Shri Jagdish Swaroop rightly stressed that once the right to appoint belonged to Government the Court could not usurp it merely because it would have chosen a different person as better qualified or given a finer gloss or different construction to the regulation on the score of a set formula that relevant circumstances had been excluded, irrelevant factors had influenced and such like grounds familiarly invented by parties to invoke the extraordinary jurisdiction under article 226. True, no speaking order need be made while appointing a government servant. Speaking in plaintitudinous terms these propositions may deserve serious reflection. The Administration should not be thwarted in the usual course of making appointments because somehow it displeases judicial relish or the Court does not agree with its estimate of the relative worth of the candidates. Is there violation of a fundamental right, illegality or a skin error of law which vitiates the appointment". With these blurred contours of periphery of jurisdiction under Article 226 to interfere with selections made by an independent body like Public Service Commission not attributed any mala fides, assisted by four experts in the field who presumably knew what constituted teaching/research experience, what institutions are treated prestigious enough, in which teaching/research experience would be treated valuable, we may examine the rival contentions. Two contentions which have found favour with the High Court must engage our attention: (1) In order to satisfy the experience qualification for the post of Professor in Medicine, the teaching/research experience must be in medicine and stricto sensu Cardiology being a separate branch, experience of teaching/research in Cardiology cannot be availed of, and (2) any such experience to satisfy the regulation must be acquire while holding the post of Reader or Assistant Professor (including the post of Lecturer) in Medicine. The controversy centres round the connotation of the expression 859 'medicine '. Does it include Cardiology or Cardiology is a separate Branch ? Section 2(f) of the Act defines medicine to mean modern scientific medicine in all its branches and includes surgery and obstetrics, but does not include veterinary medicine and surgery. This is too wide a definition to assist us in the problem posed for the decision of the Court. In the world of medical science there are general subjects and specialities. Medicine and surgery are general subjects. To wit, Cardiology is a speciality in medicine and orthopaedics is a speciality in surgery. Even the regulation from page 8 onwards bears the heading 'Specialist Branch under Medicine and Surgery '. Cardiology finds its place as a specialist branch under medicine. The relevant regulation requires teaching/research experience in medicine. Contention is, if any one who has teaching/research experience in Cardiology, could he be said to have such experience in medicine ? In this context we must recall regulation 4 which provides that 50% of the time spent in recognised research after obtaining the requisite post graduate qualification shall be counted towards teaching experience in the same or allied subject provided that 50% of the teaching experience shall be the regular teaching experience. If research in allied subject can be taken to satisfy the requisite experience, teaching experience in a speciality under the general head could not be put on an inferior footing. Undoubtedly, if the post is in a specialist department, the requisite teaching/research experience will have to be in the speciality. To illustrate, if one were to qualify for being appointed as Professor/ Associate Professor of Cardiology, his teaching experience must be in Cardiology though his research experience could as well be in Cardiology or allied subject. A person having such experience in the general subject medicine cannot qualify for the speciality. That it what distinguishes the speciality from the general subject. This becomes clear from the fact that in a number of hospitals there may not be posts in specialist branches and someone working in the general department may be assigned to do the work of specialist branches. If a particular hospital has not got Cardiology as a specialist branch, a Reader or Assistant Professor in the Department of Medicine may be required to look after Cardiology cases and teaching of Cardiology as a subject. In that event he is certainly a Reader/Assistant Professor in Medicine teaching one of the subjects, viz., Cardiology which again forms part of the general curriculum of the subject of medicine. Therefore, it is not proper to divorce a specialist branch subject from the general subject. It cannot be seriously contended that medicine does not include Cardiology. To be qualified for the specialist branch of Cardiology, the minimum academic qualification is M.D. (Medicine). This would clearly show that after acquiring the general qualification one can take the specialist branch. If any other approach is adopted it would work 860 to the disadvantage of the person who while being posted in the Department of Medicine, is asked to teach a subject which is necessary for being taught for qualifying for M.D. but which can be styled as speciality. He would simultaneously be denied the teaching experience in the subject of Medicine. An extreme argument was urged that in adopting this approach it may be that somebody may be working in different specialist branches such as Neurology, Gastroenterology, Psychiatry, etc. and each one would qualify for being appointed as Professor of Medicine without having even a tickle of experience on the subject of general medicine. This wild apprehension need not deter us because it should be first remembered that any one going into specialist branch under medicine has to be M.D. (Medicine). Thereafter, if he wants to become a Professor in the specialist branch such as Cardiology, the academic qualification required is to hold a degree of D.M. in the Specialist Branch. This becomes clear from a perusal of the regulations. It is not necessary, therefore, to go into the dictionary meaning of the expression 'medicine ' to determine whether it includes Cardiology. The Medical Council of India, a body composed of experts have in the regulations clearly manifested their approach when they said that Cardiology is a specialist branch under medicine. Ipso facto, medicine includes Cardiology. It was not disputed that one qualifying for M.D. (Medicine) has to learn the subject of Cardiology. And it must be remembered that the four experts aiding and advising the Commission have considered teaching experience in Cardiology as teaching experience in Medicine. The counter affidavit on behalf of the Commission in terms states that medicine is a wide and general subject and includes Cardiology whereas for the post of Professor of Cardiology a further two years ' special training in Cardiology or D.M. in Cardiology after M.D. in Medicine has been laid down as a requisite qualification by the Medical Council. It is further stated that teaching experience in Cardiology will make the person eligible for the post of Professor of Medicine. That was the view of the experts who assisted the Commission. Incidentally it may be mentioned that Mr. V. M. Tarkunde, learned counsel for respondents 1, 2 and 3 took serious exception to giving any weight to the counter affidavit because it has not been sworn to by any expert aiding or advising the Commission or by any officer or Member of the Commission but by an Upper Division Assistant whose source of knowledge is the legal advice tendered to him. In paragraph 1 of the affidavit the deponent says that he has been deputed by the Commission to file the counter affidavit on their behalf and as such he is fully acquainted with the facts deposed to in the affidavit. It is our sad experience that responsible authorities avoid filing affidavits in courts when it behoves them to assist the Court and facilitate the decision of the questions brought before the Court 861 but on this account alone we would not wholly ignore the counter affidavit. Some documents were brought to our notice showing that in State University of New York at Buffalo, U.S.A. the Assistant Professor of Cardiology is designated as Assistant Professor of Medicine. Further, in the Agra University Calendar, Cardiology is included in the Department of Medicine. Similarly it was also pointed out that the Department of Medicine in the University of Manchester includes Lecturer in Cardiology. Apart from this administrative arrangement, it could not be seriously disputed that Cardiology is a specialist branch under medicine and it could not be wholly divorced from medicine. Under the general head 'medicine ' number of subjects are to be taught, one such being Cardiology. If a teacher is asked to teach Cardiology as one of the subjects for general medicine, could he be at a disadvantage by being treated as having not acquired teaching experience in medicine ? Even under general medicine, apart from medicine as a subject, there are numerous other subjects and papers and there would be one or more persons incharge of one or more subjects and papers and indisputably each one would be gaining experience in general medicine. If general medicine is to be restricted only to the paper on medicine, it would lead to a startling as result, as startling as it was sought to be urged when it was said that a person teaching Neurology could not be said to be gaining teaching experience in medicine. The matter has to be looked at from this angle, viz., that where general subject such as medicine or surgery is being dealt with in a regulation, the specialist branch under it would be covered, though not vice versa, because if one wants to hold a post in the specialist branch he must be of necessity have teaching experience in the specialist branch. In reaching this conclusion the seniority list maintained branch wise would hardly be helpful. Therefore, it is not possible to agree with the High Court that the subject of medicine under the regulation is exclusive of the other subjects mentioned therein and, therefore, does not include Cardiology. The second contention which found favour with the High Court was that the requisite teaching or research experience must be acquired while holding the post set out in the regulation in that subject. In other words, the view of the High Court is that the teaching/research experience must be acquired while holding the post of Reader/Assistant Professor in Medicine for five years in a Medical College. The High Court placed the emphasis on the experience acquired while holding the post. The relevant regulation requires teaching/research experience as Reader/Assistant Professor (which includes Lecturer) 862 in Medicine for five years in a Medical College. Regulation 4 has to be read along with specific regulation. Regulation 4 clearly shows that 50% of the time spent in recognised research in the same or allied subject will be given credit provided that 50% of the teaching experience shall be regular teaching experience. The specific regulation prescribing the qualification will have to be read subject to the general regulation prescribed under regulation 4 because the experience qualification prescribed in specific regulation must be calculated according to the formula prescribed in general regulation No. 4. The specific regulation requires 5 years ' teaching/research experience. In calculating the research experience in the light of regulation 4, 2 1/2 years ' experience shall be specifically teaching experience and credit can be given to the extent of 50% of the time spent in recognised research as prescribed in the regulation, which experience can be in the same subject, viz., the subject for which the recruitment is being made or in allied subject. So far there is no dispute. The question is: while acquiring research experience, is it incumbent that the person conducting research must also hold of necessity designated post in the regulation ? Now, if general regulation 4 is properly analysed for the purposes of computing research experience, the pre requisite is that the research must be done after obtaining requisite post graduate qualification. It has no reference to the post held by the person engaged in research at the time of conducting the research. The heading is 'teaching/research experience '. The dichotomy will have to be applied to teaching and research experience for the purpose of computation. So far as teaching experience is concerned, it must be acquired while holding the post specified in the regulation. But to say that holding of the post is a pre requisite while conducting research is to read in regulation 4 what is not prescribed thereunder. The specific regulation prescribing qualification will have to be read subject to general regulation 4 and not vice versa. This also becomes manifest from the fact that general regulation 4 also provides that 50% of the teaching experience shall be regular teaching experience meaning thereby that if someone is engaged exclusively in research, he cannot claim to satisfy the teaching experience qualification prescribed in the regulation. Reading specific regulation with general regulation 4, it emerges that teaching experience shall be acquired while holding the particular post specified therein and the research experience can be taken into account if the person is engaged in research after obtaining post graduate qualification and it has nothing to do with the holding of the post. One may be engaged as a research scholar and holds no teaching post. The research is hardly related to post though capacity for research is directly related to academic attainment. That has been 863 taken care of. Teaching it indisputably related to the post because a higher post may entail greater responsibility for coaching in higher classes. This conclusion is reinforced by the language of general regulation 4 which permits recognised research under the Indian Council of Medical Research which body may not have such hierarchical posts of Lecturer or Assistant Professor or Reader. These three designations are to be found in teaching institutions and not in research institutions. If it were, therefore, to be held that even while acquiring research experience one must hold the post of either Reader or Assistant Professor, it would discourage many persons conducting research under the Indian Council of Medical Research. It is, therefore, not possible to agree with the generalisation made by the High Court that teaching/research experience to qualify for the post of Professor must be acquired while working as a Reader or Lecturer. Having cleared the ground about the interpretation of requisite regulations, we must now turn to examine the two individual cases. In re :Dr. M. C. Gupta. The experience qualification of Dr. M.C. Gupta has been extracted above. There is no dispute between the parties that he was appointed and was working as Reader in Medicine in S.N. Medical College, Agra, from 28th July 1971 till 30th March 1974 which was the last date by which applications had to be submitted to the Commission. This would give him a teaching experience of 2 years 8 months and 10 days. Dr. Gupta also claims teaching experience, being a Lecturer in Cardiology in the Department of Medicine, section N. Medical College, Agra, from 25th January 1965 to 19th July 1971, in the aggregate period of 6 years, 6 months and 24 days. There is a serious dispute between the parties whether Dr. Gupta is entitled to get credit for teaching experience while working as Lecturer in Cardiology. On the view that we have taken that Cardiology is a specialist branch under medicine and, therefore, a Lecturer in Cardiology could be said to be a Lecturer in one of the subjects under general medicine and hence he had requisite experience as Lecturer in Medicine. However, Dr. Gupta has produced a certificate issued by the Principal and Chief Superintendent, S.N. Medical College & Hospital, Agra, dated 19th September 1974 in which it is stated that 'Dr. Gupta joined the Department of Medicine as Lecturer in Cardiology on 25th January 1965 and continued till July 19, 1971 when he was appointed as Reader in Medical by Public Service Commission '. It is further certified by 864 the Principal & Chief Superintendent that 'Dr. Gupta was actively involved in patient care, teaching of undergraduates and post graduates in general medicine in addition to conducting Cardiac Out Patient, looking after cardiac beds and taking Cardiology lectures during his tenure as Lecturer in Cardiology, as Cardiology forms a part of general medicine in this college and there is no separate Department of Cardiology here '. There is another certificate issued by Dr. K. section Mathur, Professor & Head, Department of Medicine (RD), dated 17th September 1974, in which it is in terms stated that Dr. Gupta was actively involved in the patient care and teaching of undergraduates and postgraduates in General Medicine in addition to Cardiology during this period. Further, Dr. Gupta used to be the Senior Physician to attend to Emergencies of all medical cases on a particular day of week and he looked after indoor beds of general medical units during leave arrangements. He was also incharge of T.B. Clinic for a period of one month. It was further stated that Dr. Gupta had been assigned 'Special Clinics ' to 5th year and 3rd year and 'Long Clinics ' to final year students from time to time in addition to Cardiac Clinics and Cardiology lectures. He was also taking regular classes in clinical methods for third year and has also been called upon to teach them kidney diseases. There are further references in the certificate which we may ignore for the time being. Dr. Gupta also produced a certificate issued by Professor of Clinical Medicine, section N. Medical College, Agra, which, inter alia, states that Dr. Gupta was associated from time to time with teaching and patient care in general medicine and he was also actively associated with teaching of post graduates in general medicine in the way of clinical conferences, seminars, etc. He was also incharge of beds in general medicine in Professors ' Unit in the leave vacancy. A notice dated 24th October 1970 issued by the Department of Medicine, section N. Medical College, Agra, was also brought to our notice in which it was shown that Dr. Gupta was to be the Senior Physician on call on every Tuesday. It would thus appear that even if Dr. Gupta was designated as Lecturer in Cardiology for the period 25th January to July 19, 1971, undoubtedly he was teaching general medicine to undergraduate students and to some post graduate students also and this is testified by persons under whom he was working. It would be unwise to doubt the genuineness of these certificates. Therefore, even apart from the fact that Cardiology is a part of medicine, the teaching experience acquired while holding the post of Lecturer in Cardiology, was teaching experience in subject which substantially formed part of general medicine and over and above the same, he was also working as Lecturer in Cardiology and, therefore, the Commission was amply justified in reaching the conclusion that Dr. Gupta 865 had the requisite teaching experience qualification and the High Court was in error in quashing the selection of Dr. M. C. Gupta on this ground. Mr. L. N. Sinha, learned counsel, also wanted us to examine the research experience of Dr. M. C. Gupta when he pointed out that Dr. Gupta had published as many as 40 research papers in leading medical journals in India during 10 years he worked as Lecturer/Reader and that he had also been a recognised appraiser for the thesis submitted for the award of Doctor of Medicine. Mr. Sen seriously objected to our examining this contention because Dr. Gupta himself never claimed any credit for research experience. Undoubtedly, the counter affidavit on behalf of the Commission refers to having taken into consideration the research experience of Dr. Gupta but the affidavit is blissfully vague on the question which research experience was examined by the Commission. Therefore, we would not take into account the research experience claimed on behalf of Dr. Gupta. In re: Dr. R. N. Tandon. We have already extracted above the teaching/research experience qualification claimed on behalf of Dr. Tandon. Mr. Kacker, learned Solicitor General requested us to start examining each item of experience commencing from the last one as first. Before we proceed to examine each item of experience claimed by Dr. Tandon, one contention raised on behalf of the respondents must be dealt with. It was urged that wherever the regulations prescribe teaching or research experience, it must be one acquired in an institution in India or in any foreign institution recognised by the Medical Council of India or the Government of India. It is not necessary to examine this argument in depth because the point could be said to have been concluded by A. K. Mukherjee 's case, wherein same set of regulations came in for consideration of this Court and in which it was seriously contended that the teaching experience specified in regulations in question must be acquired in teaching institutions in India and, therefore, any teaching experience in a foreign country cannot be taken into consideration. This contention was in terms negativated simultaneously negativing the other extreme submission that teaching experience from any foreign institution is good enough, and after referring to sections 12, 13, and 14, it was held that those which are good enough for the aforementioned sections, are good enough for the teaching experience gained therefrom being reckoned as satisfied. The matter undoubtedly was not further pursued by this Court because the final decision was left to the Commission. 866 Proceeding in the order suggested by Mr. Kacker it is claimed that Dr. Tandon worked as Assistant Professor of Medicine, State University of New York at Buffalo from 29th July 1969 to 30th October 1974. This includes some period subsequent to the last date for submitting application to the Commission and we would exclude that part of the experience claimed by Dr. Tandon. Therefore, Dr. Tandon claims to be working as Assistant Professor of Medicine from 29th July 1969 to 30th March 1974 which was the last date for submitting the application to the Commission. Computing the period, he would have teaching experience of four years, six months and one day. It was also said that even if teaching experience in foreign teaching institution is to be taken into account, they must be some recognised institutions of repute and not any institution outside the territory of India. That of course is true. In A. K. Mukherjee 's case the pertinent observation is as under: "Teaching institutions abroad not being ruled out, we consider it right to reckon as competent and qualitatively acceptable those institutions which are linked with, or are recognised as teaching institutions by the Universities and organisations in Schedule II and Schedule III and recognised by the Central Government under section 14. Teaching institutions as such may be too wide if extended all over the globe but viewed in the perspective of the , certainly they cover institutions expressly embraced by the provisions of the statute. If those institutions are good enough for the important purposes of sections 12, 13 and 14, it is reasonable to infer they are good enough for the teaching experience gained therefrom being reckoned as satisfactory. " But it could hardly be urged with some confidence that the State University of New York at Buffalo would not be an institution of repute. An attempt was made to refer to the Schedules, not upto date, to the Act published by the Medical Council of India showing recognised institutions. In fact, the Schedules set out recognised degrees, certificates and diplomas of various Universities and certain examining Boards of U.S.A. being recognised by the Medical Council of India. This brochure hardly helps in coming to conclusion one way or the other. It refers to degrees and the Boards awarding the degrees and diplomas. It does not refer to teaching institutions. It nowhere shows that the certificates and diplomas issued by the State University of New York at 867 Buffalo would not be under one of the American Boards and, therefore, it is not recognised. Such a contention was not even urged before the High Court or specifically in affidavits so that factual material could have been more carefully examined. The experts aiding and advising the Commission must be quite aware of institutions in which the teaching experience was acquired by Dr. Tandon and this one is a reputed University. It was, however, contended that there is no proof in support of the submission that Dr. Tandon was working as Assistant Professor of Medicine at State University of New York at Buffalo, commencing from 29th July 1969. Dr. Tandon has produced a certificate, Annexure CA. 5 issued by Associate Professor of Medicine, Director Angiology Department, Buffalo General Hospital dated 3rd June 1971, in which it is stated that Dr. Tandon is an Assistant Professor of Medicine in the Department of Medicine on the full time staff of the Buffalo General Hospital having an annual salary of $ 15,000. Mr. Tarkunde urged that this certificate does not show that Dr. Tandon was appointed effective from 29th July 1969. Further, exception was taken to the certificate in that it is issued by the Buffalo General Hospital which the certificate does not show to be a teaching institution. If it was not a teaching institution, one would fail to understand how it had a post of Assistant Professor of Medicine. In a nonteaching hospital there could not be a post of Assistant Professor. Therefore, the very fact that Dr. Tandon was shown to be an Assistant Professor of Medicine, by necessary implication shows that Buffalo General Hospital was a teaching institution under State University of New York. In this connection reference may be made to a certificate dated 12th September 1974 issued by James P. Nolan, Professor of Medicine and Head, Department of Medicine, Buffalo General Hospital, in which it is stated that since July 1969 Dr. Tandon has been a teacher in general medicine at the Buffalo General Hospital. This removes any doubt about the commencement of appointment of Dr. Tandon as Assistant Professor at the Buffalo General Hospital. Mr. Tarkunde however urged that the certificate does not appear to be genuine in view of the inquiry made by a telegram (p. 257, Vol. II of the record) from the authorities incharge of the Buffalo General Hospital and the reply received that Dr. Tandon is in India and, therefore, cannot get any information as he left instructions not to release it. Who has sent this telegram is left to mere speculation. And who sent the reply is equally unknown. It would be improper to reject the certificate on such nebulous ground and we 868 can do no better than reject the contention of Mr. Tarkunde as unworthy of consideration as was done in A. K. Mukherjee 's case where in it was observed as under: "There are 6 certificates now on record and the 1st respondent is stated to have taken part in teaching work as Registrar. You cannot expect to produce those surgeons in Patna in proof and unless serious circumstances militating against veracity exist fair minded administrators may, after expert consultations, rely on them". Therefore, we see no justification for rejecting the certificates. It would appear that Dr. Tandon had the teaching experience while holding the post of Assistant Professor of Medicine for a period of four years, six months and one day. The minimum requirement is five years. We would next examine one more item of experience claimed by Dr. Tandon in that he was post doctoral teaching fellow, Department of Medicine, State University of New York at Buffalo from 1st October 1965 to 31st October 1966. Now, undoubtedly this was teaching experience in the same University where he was subsequently Assistant Professor. The grievance is that he was a Fellow and neither a Lecturer nor an Assistant Professor. What does 'Fellow ' in the University connote ? A certificate has been produced, Annexure CA. (page 50, Vol. IV) by Dr. Tandon issued by Eugine I. Lippasch, Professor & Administrative Associate Chairman of the Department of Medicine, State University of New York at Buffalo, dated 13th October 1966, in which it is stated that Dr. Tandon completed one year teaching fellowship in the Division of Cardiology of the Department of Medicine at the State University of New York at Buffalo and the Buffalo General Hospital on October 31, 1966. It is not very clear what is the equivalent of a Fellow in teaching Hospitals in India but Dr. Tandon has also claimed teaching experience from 5th April 1968 to 4th July 1969, being posted as post doctoral research fellow, Department of Medicine in G. section V. M. Medical College, Kanpur. In this connection, Annexure R 2, produced by none other than some of the contesting respondents shows that during the tenure of Fellowship, Dr. Tandon was expected to take part in the teaching and research activities of the College though he would not be treated as part of the regular establishment of the College. Now, if the certificate produced by Dr. Tandon shows that Fellowship included teaching work, it would be unwise to doubt it. Even if 50% of the time spent in these two places is given credit, Dr. Tandon had certainly 869 more than five years ' teaching experience. The Court is not competent to work out figures with mathematical precision. It can broadly examine the question whether the requirement is satisfied or not. Therefore, he had the requisite teaching/research experience and the Commission was fully justified in treating Dr. Tandon as having requisite teaching/research experience. It thus clearly appears that both Dr. M. C. Gupta and Dr. R. N. Tandon had the requisite qualifications, both academic and experience, and they were eligible for the post for which they had applied and if they were selected by the Commission and appointed by the Government, no exception can be taken to the same. The High Court was, therefore, in error in interfering with the same. Accordingly, all the three appeals are allowed and the writ petition filed by respondents 1, 2 and 3 in the High Court is dismissed with no order as to costs in the circumstances of the case. M.R. Appeals allowed.

The appellant Dr. M. C. Gupta and the sixth respondent Dr. R. N. Tandon, were appointed to the post of 'Professor in medicine in State Government Medical Colleges. The appointments were made by the State Government, on the recommendation of U.P. Public Service Commission, which had earlier with the assistance of four medical experts, selected them through an interview. The respondents No. 1, 2 and 3 who were also candidates for the post filed a writ petition in the High Court, challenging the selection and appointment of Dr. M. C. Gupta and Dr. R. N. Tandon, though no mala fides were attributed to the Commission. A Single Judge of the High Court issued a writ quashing the selection, on the ground that neither of the two selected doctors had the requisite teaching experience and that neither of them was qualified for selection as Professor of Medicine. In appeal, the appellate Bench of the High Court confirmed the order quashing the selections, and further quashed the order of appointment, remitting the matter to the Commission, directing it to make fresh selection in consonance with the interpretation put upon the relevant regulation, by the court. Allowing the three connected appeals, one by Dr. M. C. Gupta, and two by the State of U.P., the Court ^ HELD . I. Medicine includes cardiology. The Medical Council of India, a body composed of experts, have in the regulations clearly manifested their approach when they said that cardiology is a specialist branch under medicine. Where general subject such as medicine or surgery is being dealt with, in a regulation, the specialist branch under it would be covered, though not vice versa, because if one wants to hold a post in the specialist branch, he must of necessity have teaching experience in the specialist branch. [859 G, 860 D, 861 E]. If general regulation 4 is properly analysed for the purpose of computing research experience, the prerequisite is that the research must be done after obtaining the requisite post graduate qualification. It has no reference to the post held by the person engaged in research at the time of conducting the research, and, to say that holding of the post specified in the regulation, is a pre requisite while conducting research, is to read in regulation 4, what is not prescribed thereunder. [862 D F]. Teaching experience in foreign teaching institutions can be taken into account, but, they must be some recognised institutions of repute and not any institution outside the territory of India. 865 G, 866 C]. 854 State of Bihar & Anr. vs Dr. Asis Kumar Mukherjee & Ors., ; ; followed. Vade Mecum : In view of the twilight zone of Court 's interference in appointment to posts requiring technical experience made consequent upon selection by Public Service Commission, aided and advised by experts having technical experience and high academic qualifications in the specialist field, probing teaching/research experience in technical subjects, within the framework of Regulations framed by the Medical Council of India, under section 33 of the and approved by the Government of India, the courts should be slow to interfere with the opinion expressed by the experts, unless there are allegations of mala fides against them. [857E G]. University of Mysore & Anr. vs C. D. Govinda Rao & Anr., ; applied. State of BIhar & Anr. vs Dr. Asis Kumar Mukherjee & Ors., ; ; explained.

ivil Appeal Nos. 1231 of 1973 and 1408 of 197. (From the Judgment and Order dated 11 5 1973 of the Delhi High Court in Civil Writ No. 690/72). 380 B. Sen, and L N. Shroff for the Appellant (in Appeal No. 1231/73) S.V. Gupte, P.P. Rao and A.K. Ganguli for Respondent Nos. 1 ,. 2, 4, 6 18, 20, 22, 23, 25 32, 34 and 35. M.K. Ramamurthi, C. N. Murti and R. C Pathak for Re spondent 36. M.K. Ramamurthi, C.N. Murti and R. C: Pathak for the Appellant (in Appeal No. 1408/74). P.P. Rao and A.K. Ganguli for Respondents 1.2, 4, 6 18, 20, 22, 23, 25, 32, 34 & 35. B. Sen and I. N. Shroff for Respondent 36. The Judgment of the Court was delivered by BHAGWATI, J. The Reserve Bank of India is the appel lant in ' Civil Appeal No. 1231 of 1973. This appeal, on certificate, is directed against a judgment of the High Court of Delhi allowing Writ Petition No. 690 of 1972 filed by some of the employees of the Reserve Bank challenging the validity of the combined seniority Scheme issued by the Reserve Bank of India by its Circular dated 13th May, 1972. This judgment of the High Court is also assailed by the All India Reserve Bank Employees Association (hereinafter referred to as the Association) by preferring Civil Appeal No. 1408 of 1974 after obtaining certificate from the High Court. Both these appeals have been heard together since they are directed against the same judgment and all the arguments raised on behalf of the appellants are also common except one additional argument advanced on behalf of ,the Association in Civil Appeal No. 1408 of 1974. The facts giving rise to these two appeals are a little important and it is necessary to state ,them in order to appreciate the questions arising for determination in the appeals. The primary purpose for which the ,Reserve Bank of India was originally constituted was "to regulate the issue of bank notes and the keeping of the reserves with a view to securing monetary stability in India and generally to oper ate the currency and the credit system of the country to its advantage". But in course of time other functions came to be added as a result of various statutes passed by the Parliament from time to time to meet the economic needs of the country. The administrative machinery of the Reserve Bank ' for carrying out these diverse functions was at the material time divided into the following five groups of departments: (1) Group I: General Side. that is, Banking Department, Issue Department, Public Debt Division and Exchange Control Department; (2) Group II: Department of ' Banking Operations, Development and InduStrial Finance Department and Department of Non banking Companies; (3) Group III: Agricultural Credit Department, (4) Group IV: Economic Department and Department of Statistics and (5) Group V: Industrial Development Bank of India. The depart ments falling within the first group were known as the general departments, while the departments falling within the other four groups were known as the specialised depart ments. Though recruitment to these different groups of departments was 381 made on a common basis, each group of departments was treat ed as a separate unit for the purpose of determining the seniority and promotion of the employees within that group and this was done on centrewise basis. The result was that there was a separate seniority list for the employees in each group of departments at each centre of the Reserve Bank and the employees could seek confirmation and promotion only in the vacancies arising within their own group of departments at their own centre. There were two grades of clerks in each group of departments, namely, Grade I and Grade II. The pay scales of Grade I and Grade II clerks in all the groups of depart ments were the same and their conditions of service were also identical. There was automatic promotion from Grade II to Grade I and when a clerk from Grade II was promoted to officiate in Grade I he got an additional officiating allow ance of Rs. 25/ per month. While Grade 1 and Grade II clerks in the specialised departments were invariably gradu ates, those in the general departments were not always so. Some out of them were graduates, while others were non graduates. There were also several categories of non clerical posts in the general as well as specialised depart ments. They were in Grade II and the pay scale this Grade was the same as that of Grade II clerks in the general and specialised departments. It appears from the Circular of the Reserve Bank dated 13th May, 1963 that Stenographers, Typists and Coin/ Note Examiners, though falling within the category of non clerical staff, were sometimes transferred as Grade II clerks and by this circular, it was decided that "with effect from 1st July, 1963, the transfer of staff from one category to another should be governed" by the principles there set out. Two categories of transfers were contemplated by this Circular: one was transfer by selection and the other was transfer on grounds of health. The first category of transfers by selection required that the Stenog rapher, Typist or Coin/Note Examiner seeking transfer would have to be a graduate or should have passed both parts of the Institute of Bankers ' Examination and his applica tion for transfer would be considered by the manager from the point of view of his record of service and his suitabil ity for transfer to the clerical grade and he would then have to appear for interview before a selection board and it was only if he was selected that he would be transferred as Grade II clerk. But once he was transferred as Grade II clerk, his seniority in the new cadre would be counted from the date on which he joined service, as a Typist or Coin/Note Examiner and in the case of a Stenographer, from the date on which he jointed service as a Typist or as a Stenographer in case he was directly recruited as such "provided that the said date shall not_ be earlier than the date on which the transferee acquired the degree or banking qualification by reason of which he became eligible for such transfer: that is to say, in the case of a Coin/Note Examiner/ Typist/Stenographer who graduates or acquires the banking qualifications after the date of his joining serv ice, he will be deemed to have joined service "only o, the date he acquired the said qualification". 382 The second category of transfers was on grounds of health. However, that is not material for our purpose and we need not consider it. It seems that in view 'of the expanding activities of the Reserve Bank in the Specialised Departments, there were greater opportunities for confirmation and promotion for employees in the specialised departments as compared to those available to employees in the general departments. This gave rise to dissatisfaction amongst employees in the general department and they claimed for equalising the confirmation and promotional opportunities by having a combined seniority list for all employees in Class III irrespective of the departments to which they belonged basing promotions on such combined seniority list. This question was also raised by the Association before the National Tribunal consisting of Mr. Justice K.T. Desai and it was pleaded by the Association that "all promotions should be made strictly according to the combined seniority irrespective of the cadre of department". The Reserve Bank, on the other hand, sought to justify the maintenance of separate seniority lists for various departments on the ground that the work in each department was becoming more and more of a special nature and inter transferability was not only undesirable in the best interest of the Bank, but it was also hard to achieve. The National Tribunal, while not accepting the demand of the Association and expressing its inability to give any direction to the Reserve Bank in regard to this question, made the following observations in its Award: " I can only, generally, observe that it is desirable that wherever it is possible, without detriment to the interests of the Bank and without affecting the efficiency, to group employees in a particular category serving in different depart ments at one Centre together for the purpose of being considered for promotion a common seniority list of such employees should be maintained. The same would result in opening up equal avenues of promotion for a large number of employees and there would be lesser sense of frustration and greater peace of mind among the employees. " These observations of the National Tribunal were ap proved by Hidayatullah, J., as he then was, speaking on behalf of this Court in All India Bank Employees Association vs Reserve Bank of India(1) at page 57. In view of these observations of the National Tribu naI, which were endorsed by this Court, the Reserve Bank took the first step towards equalising the confirmation and promotional opportunities of employees in the General Departments by introducing the Optee Scheme of 1965 by a Circular dated 29th June, 1965. Clause (1) of the Scheme provided that all vacancies in Grade II Clerks occurring in Specialised Departments in each centre upto 30th June, 1970 would be treated as expansion vacancies to be filled up by transfer of confirmed Grade II Clerks including officiat ing Grade I Clerks in the (1) ; 383 General Departments. The manner in which these vacancies shall be filled was set out in clauses (2) and (3) which read inter alia as follows: "A circular will be issued inviting applica tions in form 'A ' from confirmed graduate Clerks Grade 1I (including officiating Clerks Gr. I) of the General Side (Group 1) for the preparation of a panel of suitable employees who are willing to opt for transfer to any of the Departments in Groups II, 1II and V at each centre under the optee scheme. As regards the non clerical staff trans ferred to the clerical cadre, only those who have been absorbed against permanent vacancies of clerks Gr. II on the General Side will be eligible to opt for transfer. (i) The panel will be a consolidated one, i.e., separate panels will not be prepared for each of the Departments in Groups II, 1II and V at each centre. (ii) The option exercised by the employees will be subject to the approval of the 'Manager ' depending on their past record of service and suitability for transfer to departments in Groups II, III and V. (iii) (a) The position of employees on the panel, recruited directly as clerks Gr. II from the waiting list of graduate clerks Gr. II will be determined according to their dates of recruitment. (b) In the case of employees recruited from the waiting list of undergraduate clerks Gr. II who have become graduates while in service, and in the case of non clerical graduate staff transferred to the clerical cadre, their position in the panel will be determined according to their dates of graduation. (iv) As and when vacancies arise in the Depart ments in Groups II, III and V at each centre, they will be filled up by drawing on the panel, the first vacancy going to the first person on the panel, the second to the second and so on. An employee will have no choice of the Department to which he will be posted. The posting will be made in the order in which the vacancies arise. (v) Officiating clerks Gr. I will be trans ferred only in their substantive capacity as clerks Gr. II (vi) (a) The seniority of the optees on transfer to the Departments in Groups II, III and V will be determined on the basis that their trans fers to the concerned Departments have been made in the interest of the Bank, that is to say, the substantive position of the transferee in the seniority list of the Department concerned will be fixed above and employee who joined service after the date of his recruitment 384 or date of graduation as the case may be and below the employee who joined service before the date of his recruitment/graduation . (c) The above method of fixation will, howev er be subject to the provision that if a substan tively junior employee in the Department to which the transferee is posted is already officiating in that Department in a higher grade on a longterm basis on the date the transferee reports for duty that officiating employee will be considered senior to the transferee. The inter se seniority of the transferee posted to the same Departments in Group II, III and V will be fixed in the order in which their names are listed in the panel . (viii) The panel will be revised annually. " It will be seen that under the Scheme the option to go over to the Specialised Departments was confined to confirmed Grade II Clerks. and offici ating Grade 1 Clerks in the General Departments. But there also, every Grade II Clerk and Officiat ing Grade I Clerk was not entitled to be absorbed in the Specialised Departments as of right, but he had to go through a process of selection and the option exercised by him was "subject to the approv al of the Manager depending on his past record of service and suitability for transfer" to the Spe cialised Departments. If he exercised the option and was selected, he would be entitled to be ab sorbed only as Grade II Clerk in one of the Specia lised Departments with the result that if he was an officiating Grade I Clerk in the General Depart ments at the time of the exercise of the option, he would lose the benefit of officiation in Grade I in the General Departments as also the monetary bene fit of Rs. 25/ per month which he was getting during such officiation. His seniority in the cadre of Grade II Clerks in the SpeciaIised Department in which he was absorbed would be liable to be deter mined on the basis of his length of service calcu lated from the date of his recruitment if he was also a graduate when he joined service or from the date of his graduation if he became a graduate whilst in service. The rationale behind this provision obviously was that graduation being_ regarded as essential qualification for being a Grade II Clerk in the Specialised Departments, the length of service from the date of graduation alone. should be taken for the purpose of determin ing the seniority of transferees from the General Departments. The petitioners in Writ Petition No. 690 of 1972, who may for the sake of convenience be hereafter referred to as the petitioners. were, at the time of the introduction of the Optee Scheme of 1965, confirmed Grade II Clerks in the General Departments and some of them were officiating in the General Departments as Grade I Clerks. Though most of the petitioners were recruited as Grade II Clerks from the beginning, so far as petitioners 4, 9, 16, 18, 19, 23 and 26 were concerned, they were originally recruited to non cleri cal posts and subsequently transferred as Grade II clerks by selection and that is how at the date when the Optee Scheme of 1965 came into force, they were confirmed Grade II Clerks in 'the General Departments. The 385 petitioners exercised the option under the Optee Scheme of 1965 and were absorbed substantively as confirmed Grade 1I Clerks in one or the other of the Specialised Departments. Obviously, the consequence was that those of the petition ers who were officiating as Grade I Clerks in the General Departments lost their officiating position as a result of this transfer together with the attendant monetary benefit of Rs. 25/ per month. Besides the petitioners, there were also other confirmed Grade I[ Clerks and Officiating Grade I Clerks in the General Departments who, having exercised the option and being selected, were taken over as confirmed Grade I1 Clerks in the Specialised Departments. Some of them a few were, in due course, in order of seniority, promoted as Officiat ing Grade I Clerks in their respective Specialised Depart ments. But before the turn of the petitioners for promo tion could arrive, a new Scheme was brought into force to which we shall presently refer. It appears that the Asso ciation was not satisfied with the Optee Scheme of 1965 as it did not go far enough and equalised opportunities for only a section of the employees in the General Depart ments, namely confirmed Grade II Clerks and Officiating Grade I Clerks, leaving the rest in the same disadvantageous position as before. The Association, therefore, continued to press its demand for complete equalisation of opportu nities and in 1969, the Reserve Bank took one further step with a view to partly satisfying that demand. The Reserve Bank introduced another Scheme called the Optee Scheme of 1969 for transfer of confirmed Grade I Clerks in the Gener al Departments to the Specialised Departments to the extent of one third of the long term normal vacancies of Grade I Clerks arising in the Specialised Departments during the period from 1st February, 1969 to 30th June, 1970. But this also did not satisfy the Association for what the Associa tion desired was full equalisation of opportunities between the General Departments and the Specialised Departments. The Association continued to agitate for acceptance of its demand and ultimately, as a result of negotiations, an agreement dated 7th May, 1972 was arrived at between the. Reserve Bank and the Association by which the demand of the Association was substantially conceded and the principle of a combined seniority list was accepted by the Reserve Bank. The petitioners and some other employees were, however, not members of the Association and they refused to accept the terms of this agreement and hence the Reserve Bank issued a Circular dated 13th May, 1972 introducing d Scheme for combined seniority list and switched over from non clerical to clerical cadre with effect from 7th May, 1972. This Scheme was substantially in the same terms as the agreement dated 7th May, 1972 and we shall hereafter, for the sake of convenience, refer to this Scheme as the Combined Seniority Scheme. The Combined Seniority Scheme consisted broadly of two parts. One part provided for the integration of the clerical staff of the General Departments with the clerical staff of the Specialised Departments and the other, for the switch over and integration of the non clerical staff with the clerical staff in all the Departments of the Reserve Bank 386 Clauses (8) and (9) dealt with the first part and they provided inter alia as follows: "8. Combined Seniority between clerical staff in dif ferent departments The seniority lists of the staff mentioned below work ing in the general side and Specialised Departments (i.e. in all the Groups 1 to V of the Department wise grouping) will be merged into one with effect from 7th May, 1972 in accordance with the provisions of clause 10 in the manner set out below: (a) All Clerks Grade II, Field Investigators and Clerks Grade I (with less than one year total officiating service) will be placed in the combined seniority list, relative seniority of an employee being fixed according to the date of his first appointment as Clerk/Field Investigator. (b) All confirmed Clerks Grade I, Clerks Grade I officiating as such on 7th May, 1972 with one year or more total officiating service, Assistants (temporary, officiating as well as confirmed) and Field Inspectors will be placed in the combined seniority list ranking as a group above the employ ees listed under sub clause (a) above. The relative seniority of an employee will be fixed on the basis of the total length of service put in by him from the date he first started officiating as Clerk Grade I/Field Inspector after deducting therefrom periods during which he reverted as clerk Grade II/Field Investigator otherwise than on account of proceeding on leave. (c) Fixation of seniority as referred to in sub clauses (a) and (b) above will be subject to the proviso that the inter se position as between two employees in the existing groupwise/departmentwise seniority lists is not disturbed to the detriment of any senior employee within the same group/department except as provided for in clause 6 and sub clause (e) below. (d) x x x x (e) ' The seniority of class III personnel having been fixed as provided for in sub clauses (a) and (b) above the seniority of an optee, selected clerk in the existing specialised departments whose seniority compared to his juniors in the existing General side is adversely affected will be protected to the extent of his entitlement had he not opted/been selected under the optee/select ed scheme: Provided that he shall apply in this regard in writing within one month from the date of notification of the combined seniority list. Applications 387 for such adjustments will not be entertained after expiry of the period stipulated above. (i) (a) Employees officiating as Clerks Grade I on 7lb May, 1972. An employee officiating as a Clerk Grade I as on 7th May 1972 will continue to officiate without prejudice to the claims of employees whose position may be above him in the. combined seniority list. he reverts, his next promotion will be according to his substantive seniority in the combined list. Reversion only on account of proceeding on leave will not be deemed as reversion for the purpose this clause. (b) Promotion as Clerks Grade I between 7th May 1972 and the notification of the combined seniority list. Promotions during this period will be made with reference to the existing departmental/groupwise seniority list but without prejudice to the claims of seniors in the combined seniority list. When the combined seniority list, becomes available, a review of all such promotions made in the interre gum will be made and senior employees not officiat ing in the higher grades will be promoted by re placing the junior employees. The review will be completed within a period of two weeks. (c) Promotions as Clerks Grade I thereafter. Promotions will be made from the combined seniority list" The second part Was provided for in clauses (1) to (7) and these clauses, so far as material read thus: "1. Combined seniority between clerical staff and eligible non clerical stall opting for switchover: (a) All employees in Class III non clerical cadre substantively in the categories that have been listed as groups I, Iii, IV and V in the annexure (Reference is not to the department wise groups) who are graduates or have passed both parts of Institute of Bankers Examination will be eligible to exercise an option in accordance with sub clause (a) or (b) of clause 2 to be transferred, automat ically and without any screening, to posts in the clerical cadre which are vacant and are other than of a purely stop gap or short term nature, subject to subclause (b) below. Actual transfer to posi tions involving clerical duties will be effected in a phased manner as laid down in clause 7. (b) On such option being exercised within the period of two months as per clause 2 (a), or one month as per clause 2 (b) as the case may be, the position of such optee will be fixed in the com bined seniority list by counting for the purpose of seniority in the clerical cadre onethird of his total non clerical service in Class III in the 388 Bank until 7th May 1972 or the date of acquiring the qualification i.e. the date of publication of the results of the examination, as the case may be (vide clauses 3(a) and 3(b). (a) x x x x (b) Any employee who acquires the qualifica tion for eligibility after the 7th May 1972, will have, within one month of acquiring the said qualification, to exercise his option whether he desires to switch over to the clerical cadre with his seniority being determined as per clause I(b). The option once exercised shall be final subject to the right of revocation and with the same consequences, as at subclause (a) above. Those eligible but not exercising the option within the, aforesaid period of one month shall lose 'the right of option thereafter. (a) The notional seniority in the clerical cadre of those employees who are eligible for switchover on the 7th May 1972 and exercise their option under clause 2(a) will be fixed with effect from 7th May 1972. (b) In respect of employees who acquire the eligibility qualification in future and exercise their option under clause 2(b), their notional seniority in the clerical cadre will be fixed with effect from the date of acquiring such quali fication viz. date of publication of the results of the examination. (c) Fixation of seniority whether under sub clause (a) or (b) will, however, be subject to the proviso that the inter se position as between two employ ees in the concerned seniority list of non cleri cal employees as it stood immediately before the 7th May 1972 or the date of acquiring the qualification for switchover is not disturbed to the detriment of a senior employee as in the relevant seniority list. (Illustration for fixation of seniority is Enclo sure. I) 4.(a) An employee opting for switchover will, for the, purpose of compilation of the combined sen iority list, be deemed to be a member of 'the clerical cadre with effect from the date as at clauses 3(a)and 3(b), as the case may be. (b) Until such time as he is actually transferred to the clerical cadre an optee from the non cleri cal grade in which he is placed at the time of option and will accordingly remain eligible for promotion in the non clerical cadre; Provided that an employee officiating in a category that is listed as group II, VI, VII or VIII of Annexure as the ease may be confirmed in that category only if he revokes his earlier option before confirmation, for which he will have an opportunity. " 389 _It may be pointed out that though the Optee Scheme of 1965 was originally intended to be operative only upto 30th June, 1970, it was .continued right upto the time that the Combined seniority Scheme came into force. The effect of the Combined Seniority Scheme was .that it superseded the Optee Scheme of 19 '65. The petitioners were ,aggrieved by the Combined Seniority Scheme since according to them it affected their chances of confirmation and promotion and placed them in a disadvantageous position and accordingly they filed Civil Writ No. 690 of 1972 in the Delhi High Court challenging the validity of the Combined Seniority Scheme on various grounds relatable to Articles 14 and 16 of the Constitution. These grounds of challenge found favour with the Division Bench of the Delhi High Court which heard the petition and the Division Bench quashed and set aside the Combined Seniority Scheme on the view that it was viola tive of Articles 14 and 16 of the Constitution. The three main grounds on which the Division Bench found fault with the Combined Seniority Scheme were first, that it discrimi nated against the petitioners vis a vis. the others who had opted under the Optee Scheme of 1965 and who had obtained promotion as Grade I Clerks in their respective Specialised Departments before the introduction of the Combined Seniori ty Scheme;secondly, it discriminated against the petitioners in relation to the . clerical staff in the General Depart ments who either did not exercise the option under the Optee Scheme of 1965 or having exercised the option, were not selected and thirdly, it treated alike the non clerical staff as well as the clerical staff by integrating them together in one cadre with a combined seniority list, though they formed two distinct and separate classes unequal to each other. The Division Bench accordingly allowed the petition and struck down the Combined Seniority Scheme. Two appeals were thereupon preferred to this Court after obtaining a certificate of fitness from the Delhi High Court, Civil Appeal No. 1231 of 1973 by the Reserve Bank and Civil Appeal No. 1408 of 1974 by the Association. Both the Reserve Bank and the Association seek to sustain the validi ty of the Combined Seniority Scheme in these appeals sub stantially on the same grounds. We will assume for the purpose of these appeals that the Reserve Bank is a "State" within the meaning of Article 12 of the Constitution and hence subject to the limitations imposed by Article 14 and 16. It was in fact so held by the Delhi High Court and this view was not seriously assailed before us on behalf of the Reserve Bank. The question which, therefore, requires to be considered is whether the Combined Seniority Scheme in any way falls foul of Articles 14 and 16. The Delhi High Court relied on three grounds for invalidating the Combined Seniority Scheme under Articles 14 and 16 and the same three grounds were also canvassed before us in these appeals, but we do not think there is any sub stance in them. We shall examine these grounds in the order in which they were advanced before us. The first ground was that the Combined Seniority Scheme discriminated unjustly against the petitioners vis a vis those confirmed Grade II Clerks and Officiating Grade I Clerks in the General Departments who either did not exer cise the option under the Optee Scheme 390 of 1965, or, having exercised the option, were not selected. The argument of the petitioners under tiffs head of chal lenge was that the Optee Scheme of 1965 was introduced by the Reserve Bank for the purpose of improving the promotion al opportunities of Grade II Clerks in the General Depart ments by absorbing them in the cadre of Grade II Clerks in the Specialised Departments where there were greater promotional opportunities by reason of a larger number of posts in the higher grades. That was the implied assurance given by the Reserve Bank as part of the Optee Scheme of 1965 and the petitioners, acting on this assurance, exer cised the option to be transferred as confirmed Grade II Clerks in the Specialised Departments, some of them even giving up their officiating position as Grade I Clerks and losing in the process the officiating monetary allowance of Rs. 25/ per month. The Reserve Bank was, in the circum stances, precluded from introducing the Combined Seniority Scheme which had the effect of prejudicing the promotional opportunities assured to the petitioners, until the peti tioners got their promotion to higher posts in the Specia lised Departments in accordance with such assurance. The position, however, which obtained when the Combined Senior ity Scheme was brought into force was that the petitioners were still confirmed Grade II Clerks in the Specialised Departments, while, as compared to them, some of the Grade II Clerks in the General Departments, who were junior to the petitioners and who had either not exercised the option or, having exercised the option, were not selected were already promoted as Grade 1 Clerks in the General Departments. In this situation, the effect of the Combined Seniority Scheme was that though theoretically, by reason of cl. (8)(c), the petitioners were given seniority over these Grade II Clerks who had been promoted as Grade I Clerks in the General Departments, the latter retained their higher Grade I in the Combined Seniority Scheme and thus secured an advantage over the petitioners. This was the anomalous and unjust result brought about by the Combined Seniority Scheme and that, according to the petitioners, introduced a serious infirmi ty. This argument, we are afraid, is more an argument of hardship than of law and we do not think we can accept it. When the petitioners opted to be transferred to the Specialised Departments under the Optee Scheme of 1965, they obviously did so as they thought that they would have quicker chances of promotion in the Specialised Department than in the General Departments. But it appears that before their turn for promotion as Grade I Clerks in the Specialised Departments could come, some vacancies occurred in the cadre of Grade I Clerks in the General Departments and naturally they were filled up by promotion of Grade II Clerks in the General Departments. Some of these Grade II Clerks who were promoted were junior to the petitioners, but they got an opportunity for promotion as the petitioners went out of the General Departments by exercising the option to be transferred to the Specialised Departments. This was a wholly fortuitous possibly not anticipated by the petition ers or perhaps the petitioners might have thought that they would have an advantage in the matter subsequent promotions to posts higher 391 than Grade I Clerks. Be that as it may, the fact remains that this was the position which obtained at the date when the Combined Seniority Scheme was introduced by the Reserve Bank. The question is, was there anything which prevented the Reserve Bank from doing so ? We fail to see how from the mere introduction of the Optee Scheme of 1965, any promise or assurance could be spelt out on the part of the Reserve Bank not to take any steps towards integration of other employees not covered by the Optee Scheme of 1965. The Reserve Bank could not, on any principle of law or by any process of implication, be held bound to hold its hands in the matter of further inte gration, until the petitioners were promoted in the Specia lised Departments. And the question would again.be: promoted how far one stage or two stages or more than that ? It is obvious that the only object of the Optee Scheme of 1965 was to equalise the promotional opportunities of Grade II Clerks in the General Departments with those of Grade II Clerks in the Specialised Departments by giving an option to the former to be absorbed in the latter. This object was car ried out as soon as the petitioners and other Grade II Clerks in the General Departments opted to be transferred to the Specialised Departments. Then they became Grade H Clerks in the Specialised Departments having the same promotional opportunities as the original Grade II Clerks in the Specia lised Departments. There was no assurance given by the Reserve Bank that the promotional opportunities available to Grade II Clerks in the Specialised Departments will not be diminished. The Combined Seniority Scheme affected the promotional opportunities of all Grade II Clerks in the Specialised Departments, irrespective of whether they were original or transferee Grade II Clerks. It did not discrim inate between transferee Grade II Clerks and original Grade II Clerks and treated them alike in bringing about total integration of the employees in the several Departments. There was no breach of the principle that the promotional opportunities of transferee Grade II Clerks should be equal to those of original grade II Clerks. Both were ef fected equally by the Combined Seniority Scheme. Now under the Combined Seniority Scheme, the integration could only be on grade to grade basis and, therefore, if by the time the Combined Seniority Scheme came into force, Grade II Clerks, junior to tile petitioners, had become Grade I Clerks in the General Departments, they could be equated only with Grade I Clerks in the Specialised Departments and to this equation, no valid objection could be taken on behalf of the petition ers. Undoubtedly, it would cause heart burning amongst the petitioners to find that Grade II Clerks, junior to them in the General Departments, have become Grade I Clerks in the integrated service, while they still continue to be Grade II Clerks, but that is a necessary consequence of integration. Whenever services are integrated, some hardship is bound to result. Reasonable anticipations may be belied. The second ground on which the petitioners challenged the validity of the Combined Seniority Scheme was that it discriminated against the petitioners vis a vis other Grade II Clerks who had opted under the Optee Scheme of 1965 and obtained promotion as Grade I Clerks in their respective Specialised Departments before the introduction of the 9 1104SCI/76 392 Combined Seniority Scheme. The contention of the petition ers was that some of the Grade I1 Clerks who had opted under the Optee Scheme of 1965 were promoted as Grade I Clerks, while the petitioners continued as Grade II Clerks and before their turn for promotion could arrive, the Combined Seniority Scheme was brought into force and that prejudi cially affected their promotional opportunities and thus brought about unjust discrimination between persons belong ing to the same class. This contention has no force and must be rejected. We have already discussed and shown that it was competent to the Reserve Bank to introduce the Com bined Seniority Scheme for the purpose of integrating the clerical staff in all the departments and the Reserve Bank was not bound to wait until all the transferee Grade II Clerks under the Optee Scheme of 1965 were promoted as Grade I Clerks in their respective Specialised Departments. There was not such assurance given by the Reserve Bank when it introduced the Optee Scheme of 1965. What it did was merely to equalise the opportunities Grade II Clerks in the General Departments with those of Grade II Clerks in the Specialised Departments. The Reserve Bank did not undertake that it will not take any steps for bringing about total integration of the clerical services until all the transferee Grade II Clerks were promoted. The Reserve Bank was entitled to introduce the Combined Seniority Scheme at any time it though fit and the validity of the Combined Seniority Scheme cannot be assailed on the ground that it was intro duced at a time when some of the transferee Grade II Clerks still remained to be promoted and was discriminatory against them. It may be that some transferee Grade I1 Clerks had already obtained promotion as Grade I Clerks by the time the Combined Seniority Scheme was introduced, while others like the petitioners had not. But that cannot be helped. It is all part of the incidence of service and in law, no griev ance can be made against it. That takes us to the last ground of challenge which relates to integration of non clerical with clerical serv ices. This ground of challenge was advanced under three heads: first, non clerical services and clerical services were wholly different from each other and by integrating them into one cadre, the Reserve Bank failed to recognise their differences and treated unequals as equals, thereby offending the equality clause of the Constitution secondly, by permitting, in case of non clerical staff, one third of the total non clerical service until 7th May, 1972 and in case of those who become graduates or pass both parts of institute of Bankers Examination subsequent to 7th May, 1972 until the date of acquiring such qualification to be taken into account for the purpose of seniority, the Reserve Bank laid down a wholly irrational and unjust principle of sen iority in the integrated service and thereby violated the equal opportunity clause and lastly, the seniority of the petitioners was adversely affected by the integration with out giving any opportunity to them to represent against it and the Combined Seniority Scheme was, therefore, in viola tion of the principles of natural justice. We have careful ly examined these three heads of challenge, but we do not find any substance in them. They are based on a misconcep tion of the true nature of the process involved in integra tion of non clerical with clerical services. There was, as already 393 pointed out above, a non clerical cadre in each Department of the Reserve Bank and it was decided by the Reserve Bank that the nonclerical cadres in all the Departments should be integrated with the clerical cadre. With that end in view, the Combined Seniority Scheme gave an option to all employ ees in non clerical cadres to be transferred to posts in the clerical cadre, but in the interest of efficiency, pre scribed a qualification that only those employees in non clerical cadres would be entitled to be transferred who are either graduates or have passed both parts of Institute of Bankers Examination. Now, when the employees from non clerical cadres are admitted in the clerical cadre, some rule would have to be made for determining their seniori ty vis a vis those in the clerical cadre. They would have to be fitted into the clerical cadre and for that purpose, some rule would have to be devised for determining how they shall rank in seniority. The Combined Seniority Scheme adopted the rule that for determining the seniority of non clerical staff who exercised the option and were admit ted in the clerical cadre, one third of their total non clerical service "until 7th May, 1972 or the date of acquir ing qualification" should be taken into account. This was the manner in which the Combined Seniority Scheme sought to bring about integration of non clerical with. clerical serv ices in the several departments of the Bank. Now, the first question which arises for consideration is whether the Reserve Bank violated the constitutional princi ple of equality in bringing about integration of non cleri cal with clerical services. We fail to see how integration of different cadres into one cadre can be said to involve any violation of the equality clause. It is now well set tled, as a result of the decision of this Court in Kishori Mohanlal Bakshi vs Union of India(1) that Article 16 a fortiori also Article 14 do not forbid the creation of different cadres for government service. And if that be so, equally these two Articles cannot stand in the way of the State integrating different cadres into one cadre. It is entirely a matter for the State to decide whether to have several different cadres or one integrated cadre in its services. That is a matter of policy which does not attract the applicability of the equality clause. The integration of non clerical with clerical services sought to be effectuated by the Combined Seniority Scheme cannot in the circumstances be assailed as violative of the constitutional principle of equality. Then we come to the question of the rule of seniority adopted by the Combined Seniority Scheme. Now there can be no doubt that it is open to the State to lay down any rule which it thinks appropriate for determining seniority in service and it is not competent to the Court to strike down such rule on the ground that in its opinion another rule would have been better or more appropriate. The only en quiry which the Court can make is whether the rule laid down by the State is arbitrary and irrational so that it results in inequality of opportunity amongst employees belonging to the same class. Now, here, employees from non clerical cadres were being absorbed in the clerical cadre and, there fore, a rule for determining their seniority vis a vis (1) A.I.R. 1962 S.C. 1139. 394 those already in the clerical cadre had to be devised. Obviously, if the non clerical service rendered by the ' employees from non clerical cadres were wholly ignored, it would have been most unjust to them. Equally, it would have been unjust to employees in the clerical cadre, if the entire non clerical service of those coming from non cleri cal cadres were taken into account, for non clerical service cannot be equated with clerical service and the two cannot be treated on the same footing. Reserve Bank, therefore, decided that one third of the non clerical service ren dered by employees coming from non clerical cadres should be taken into account for the purpose of determining seniority. This rule attempted to strike a just balance between the conflicting claims of non clerical and clerical staff and it cannot be condemned as arbitrary or discriminatory. Vide: Anand Parkash Saksena vs Union of India.(1) The last contention of the petitioners was that seniori ty is a civil right and the State cannot interfere with it to the prejudice of an employee without giving an opportuni ty to him to be heard and since the Combined Seniority Scheme adversely affected the seniority of the petitioners in the clerical cadre without giving them an opportunity to represent against it, it was void and inoperative. There are two answers to this contention and each is, in our opinion, fatal. In the first place, we do not find from the judgment of the High Court that this contention was at any time advanced before the High Court and, in the circum stance.s, we do not think it would be fight to permit it to be raised for the first time before this Court. Secondly, even if this contention were allowed to be raised, we do not think it can be sustained. Here, there was no question of any existing seniority being disturbed by change in the rule of seniority. The problem was of fitting into the clerical cadre employees coming from non clerical cadres and for that purpose, a new rule was required to be made which would determine the seniority of these new entrants vis a vis those already in the clerical cadre. Such rule did not affect seniority and hence there could be no question of giving the petitioners an opportunity to make representation against it. These were the only contentions urged before us against the constitutional validity of the Combined Seniority Scheme and since there is no substance in them, we think that the High Court was in error in striking down the Combined Sen iority Scheme. We accordingly allow the appeals, set aside the judgment and order of the High Court and uphold the validity of the Combined Seniority Scheme. There will be no order as to costs. V,P.S. Appeals allowed. (1) [1968] 2 S.C.R. 611, 622.

At every centre of the Reserve Bank of India there were five departments, the General Department and four Specialised Departments. There was a separate seniority list for the employees in each Department at each centre and confirmation and promotion of employees was only in the vacancies arising within their Department at each centre. There were two grades of clerks in each Department, namely, Grade I and Grade 11. The pay scales of Grade I and Grade II clerks in all the departments were the same and their conditions of service were also identical. There was automatic promotion from Grade II to Grade I and when a clerk from Grade H was promoted to officiate in Grade I, he got an additional officiating allowance of Rs. 25/ per month. There were also several categories of non,clerical posts in the General as well as Specialised Departments, and their pay scale was the same as that of Grade II clerks. In view of expanding activities in the Specialised Departments, there were great er opportunities for confirmation and promotion for employ ees in the Specialised Departments than in the General Department. This gave rise to dissatisfaction amongst employees in the General Department and they claimed equal opportunities by having a combined seniority list for all the clerks for confirmation and promotion. The Reserve Bank, sought to justify the separate seniority lists on the ground that the work in each department was of a special nature and inter transferability was undesirable and hard to achieve. As a result of the recommendation Of the National Tribunal, however, the Reserve Bank introduced the Optee Scheme of 1965 as h first step towards equalization of opportunities. Under the Scheme, the option to go over to the Specialised Departments was confined to confirmed Grade 11 clerks and officiating Grade I clerks in the General Department. If he exercised the option, he was eligible to be selected. If he was selected, he would be entitled to be absorbed only as Grade II clerk in one of the Specialised Departments with the result that if he was an officiating Grade I clerk in the General Department at the time of the exercise of the option, he would lose the benefit of officiation in Grade I in the General Department as also the monetary benefit of Rs. 25/ . His seniority in the cadre of Grade II clerks in the Specialised Department in Which he was absorbed would be determined on the basis of his length of service calculated from the date of his recruitment if he was a graduate when he joined service, or from the date of his graduation if he became a graduate whilst in service. The petitioners in the present case and some others were, at the time of introduction of the Optee Scheme, confirmed Grade II clerks in the General Department and some of them were officiating in the General Department as Grade I clerks. They exercised the option under the Optee Scheme land were absorbed substantively as confirmed Grade II clerks in one or the other of the Specialised Departments. The clerks, other than the petitioners were in due course, in order of seniority, promoted as officiating Grade I clerks in their respective Specialised Departments. But before the turn of the petitioners for promotion came, a new ' Scheme was introduced on May 13, 1972 as a result of continuous agitation by the employees for full equalisation of opportunities between the General Department and the Specialised Departments. This Scheme was known as the Combined Seniority Scheme, and it superseded the Optee Scheme. It consisted of two parts. One part provided for the integration of the clerical staff of the General Depart ment with the clerical staff of the Specialised Departments, and the other, 378 for the integration of the non clerical staff with the clerical staff in all the Departments. The Combined Seniori ty Scheme gave an option to the non clerical employees to be transferred to posts in the clerical cadre, but in the interest of efficiency, prescribed a qualification that only those employees in non clerical cadres would be transferred who arc either graduates or have passed both parts of Insti tute of Bankers Examination. For determining their seniori ty vis a vis those in the clerical cadre, the Combined Seniority Scheme adopted the rule that one third of their total non clerical service until 7th May, 1972 (the date on which agreement was reached between the Bank and its employ ees in the terms of the Combined Seniority Scheme) or the date of acquiring the qualification should be taken into account. The petitioners successfully challenged the Combined Seniority Scheme in the High Court. The High Court held that the Scheme was violative of articles 14 and 16 of the Constitution, because: (1) The position which obtained when the Combined Seniority Scheme was brought into force was that the petitioners were still confirmed Grade 11 clerks in the Specialised Departments, while some of the Grade II clerks in the General Departments, who were junior to them and who had either not exercised the option, or having exercised the option, were not selected, were promoted as Grade 1 Clerks in the General Departments. The result was that these Grade 11 clerks who had been promoted as Grade I Clerks in the General Department were equated to Grade I Clerks in the Specialised Departments. Therefore, according to the petitioners, the Combined Seniority Scheme had the effect of prejudicing the promotional opportunities assured to the petitioners under the Optee Scheme and hence the Combined Seniority Scheme discriminated against the petitioners in relation to the clerical staff in the General Department who either did not exercise the option under the Optee Scheme or having exercised the option, were not selected; (2) it discriminated against the petitioners vis a vis others who had opted under the Optee Scheme of 1965 and who had obtained promotion as Grade I clerks in their respective Specialised Departments before the intro duction of the Combined Seniority Scheme; and (3) (a) the Scheme treated alike the non clerical staff as well as the clerical staff by integrating them together in one cadre with a combined seniority list though they formed two dis tinct and separate classes, and thus violated the equali ty clause; (b) by permitting, in the case of non clerical staff, one third of the total non clerical service until 7th May, 1972 or the date of acquiring the qualification, to be taken into account for the purpose of seniority, the Bank laid down a wholly irrational and unjust principle of sen iority in the integrated service and violated the equal opportunity clause and; (c) the seniority of the petitioners was adversely affected by the integration without giving any opportunity to them and thus the introduction of the Com bined Seniority Scheme violated the principles of natural justice. Allowing the appeal to this Court and upholding the validity of the Combined Seniority Scheme. HELD: (1) Assuming that the Reserve Bank is State under article 12, and therefore subject to articles 14 and 16, by the mere introduction of the Optee Scheme no promise or assur ance could be spelt out on the part of the Bank not to take any steps towards integration of other employees not covered by the Optee Scheme. The Reserve Bank could not, on any principle of law or by any process of implication, be held bound to hold its hands in the matter of further inte gration, until the petitioners were promoted in the Specia lised Departments. The only object of the Optee Scheme was to equalise the promotional opportunities of Grade II clerks in the General Departments with those of Grade II clerks in the Specialised Departments by giving an option to the former to be absorbed in the latter. This object was carried out as soon as the petitioners and other Grade II clerks in the General Departments opted to be transferred to the Specialised Departments. Then they became Grade I1 clerks in the Specialised Departments having the same promo tional opportunities as the original Grade 1I clerks in the Specialised Departments. There was no assurance given by the Bank that the promotional opportunities available to Grade II clerks in the Specialised Departments will not be dimin ished. The Combined Seniority Scheme affected the promo tional opportunities of all Grade II clerks in the Specia lised Departments, irrespective of whether they were origi nal or transferee Grade II clerks. It did not discriminate between transferee Grade II clerks and original 379 Grade II clerks. There was no breach of the principle that the promotional opportunities of transferee Grade 11 clerks should be equal to those of original Grade II clerks. The fact that some of the Grade II clerks, junior to the peti tioners, had become Grade I clerks in the General Depart ments, and so could be equated only with Grade I clerks in the Specialised Departments is a wholly fortuitous result. It might cause heart burning amongst the petitioners that they still continue to be Grade II clerks but whenever services are integrated, some hardship is bound to result as a necessary consequence of integration. B G] (2) The Reserve Bank did not undertake that it will not take any steps for bringing about total integration of the clerical services until all the transferee Grade II clerks were promoted. The Reserve Bank was entitled to introduce the Combined Seniority Scheme at any time it thought fit and its validity cannot be assailed on the ground that it was introduced at a time when some of the transferee Grade II clerks still remained to be promoted and so was discrimina tory against them. The fact that some transferee Grade II clerks had already obtained promotion as Grade I clerks in the Specialised Departments by the time the Combined Senior ity Scheme was introduced, is all part of the exigencies of service and in law no grievance can be made against it. [392 D E] (3) (a) The integration of different cadres into one cadre cannot be said to involve any violation of the equali ty clause. It is entirely a matter for the State to decide whether to have several different cadres or one integrated cadre in its services. That is a matter of policy which does not attract the applicability of the equality clause. The integration of non clerical with clerical service sought to be effectuated by the Combined Seniority Scheme cannot, in the circumstances, be assailed as violative of the prin ciple of quality. [393 F] Kishori Mohanlal Bakshi vs Union of India AIR 1962 S.C. 1139 referred to (b) It is open to the State to lay down any rule which it thinks appropriate for determining seniority in service and it is not competent to the Court to strike down such a rule on the ground that in its opinion another rule would have been better or more appropriate. The only enquiry which the Court can make is whether the rule laid down by the State is arbitrary and irrational so that it results in inequality of opportunity amongst employees belonging to the same class. [393 G H] In the present case the employees from non clerical cadres were being absorbed in the clerical cadre, and, therefore, a rule for determining their seniority vis a vis those already in the clerical cadre had to be devised. To ignore their .entire non clerical service would have been unjust to them, and to take into account their entire non clerical services would be unjust to those in the clerical service. The Bank therefore, decided that one third of the non clerical service rendered by the employees coming from non clerical cadres should be taken into account for the purpose of determining seniority. It strikes a just balance between the conflicting claims of non clerical and clerical staff and cannot be condemned as arbitrary or discriminato ry. [394 A B] Anand Parkash Saksena vs Union of India [1968] 2 S.C.R. 611, referred to. (c) (i) The contention that there was violation of princi ples of natural justice was not raised before the High Court; (ii) Even if the contention is allowed be raised in this Court, there was no question of any existing seniority of the petitioners being disturbed by changing the rule of seniority. The problem was fitting into the clerical cadre employees coming from non clerical cadres. For that purpose, a new rule was required to be made. The rule did not affect the petitioners ' seniority, and hence, there was no question of giving the petitioners an opportunity to make representa tion against it. [394 E]

Appeal No. 1015 1968. Appeal from the judgment and Order dated April 30, 1964 of the Madras High Court in T.C. No. 194 of 1961 (Reference No. 74 of 1961). D.Narsaraju, R. H. Dhebar, R. N. Sachthey and B. D. Sharma, for the appellant. R.Gopalkrishnan and R. Balasubramaniam, for the respondent. The Judgment of the Court was delivered by Grover, J. This is an appeal by certificate from a judgment of the Special Bench of the Madras High Court in which the sole question that has to be determined is whether Rule 24 of the Appellate Tribunal Rules, 1946, insofar as it enables the Tribunal to dismiss an appeal for default of appearance was ultra vires the provisions of section 33 of the Income tax Act, 1922, hereinafter called the "Act". The facts which gave rise to the reference which was made to the High Court by the Appellate Tribunal lie within a narrow compass. The assessee owned 1674 shares in Asher Textiles Ltd. and 9 out of 20 shares in Textile Corporation (Private) Ltd. at Tiruppur. The latter company was the managing agents of the Asher Textiles Ltd. The assessee was a Joint Managing Director of the Textile Corporation (Private) Ltd. along with one P. D. Asher. The assessee sold on December 21, 1954 his entire holding in two companies to Asher and some of his relations. These sales resulted in a profit of Rs. 72,515/ and Rs. 3,14,100/ respectively. The Income tax Officer assessed these amounts to tax for the assesment year 1956 57 under section 10(5A) of the Act as compensation earned for parting with the effective power of management. The assessment was upheld by the Appellate Assistant Commis sioner. The assessee appealed to the Appellate Tribunal. After some adjournments the appeal was finally fixed for hearing on August 26, 1958. On that date no one was present on behalf of the assessee nor was there any application for an adjournment. On August 28, 1958 the Tribunal dismissed the appeal for default of appearance. This the Tribunal purported to do under Rule 24 of the Appellate Tribunal Rules, 1946 as amended by notification dated January.26, 1948. Five weeks after the disposal of the appeal the assessee filed a petition before the Appellate Tribunal praying for its restoration. It was stated, inter alia, in that petition 11 Sup CI/69 3 820 that it was owing to some misapprehension on the part of the assessees auditors at Coimbatore that the date of the hearing of the appeal was not intimated to the counsel at Madras who was convalescing there after a surgical operation. The Tribunal did not consider that there was sufficient cause for restoration and rejected the petition. The: assessee applied for a reference under section 66(1) of the Act on two questions of law but that application was rejected by the Tribunal. The assessee approached the High Court under section 66(2) of the Act and on April 5, 1960 the High Court directed the Tribunal to state the case on two questions. The matter was first heard by a division bench but owing to the validity of Rule 24 having been canvassed a special bench consisting of the Chief Justice and two judges was constituted. The special bench reframed the first question thus : "Whether rule 24 of the Appellate Tribunal Rules, 1946 in so far as it enables the tribunal to dismiss an appeal for default of appearance, is ultra vires. " The second question was "Whether on the facts and in the circumstances of the case the two sums of Rs. 72,515 and Rs. 3,14,100 were assessable to tax under section 10(5A) of the Income tax Act ?" Rule 24 was framed under sub section (8) of section 5A of the Act. This provision confers power on the Appellate Tribunal to frame Rules regulating its own procedure. Section 5A(8) reads : "Subject to the provisions of this Act, the appellate tribunal shall have power to regulate its own procedure and the procedure of Benches of the Tribunal in all matters arising out of the discharge of its functions, including the places at which the Benches shall hold their sittings. " The Appellate Tribunal first made certain Rules which were published by means of a notification dated Feburary 1, 1941. Rule 36 provided that the Tribunal shall determine the appeal 'on merits notwithstanding the fact that the appellant did not choose to appear. The Tribunal was also empowered to restore an appeal which had been disposed of without hearing the appellant. The Rules made in 1941 were substituted by the Appellate Tribunal Rules, 1946 which were promulgated by means of Income tax Appellate Tribunal Notification, dated October 31, 1946. Rule 24 was in the following terms Where on the day fixed for hearing or any other day to which the hearing may be adjourned, the appel 821 lant does not appear when the appeal is called on for hearing, the Tribunal may, in its discretion, either dismiss the appeal for defau lt or may hear it ex parte. " This Rule was amended by means of a notification dated January 26, 1948 and it took the following shape "Where on the day fixed for hearing or any other day to which the hearing may be adjourned,, the appellant does not appear when the appeal is called on for hearing, the tribunal may dismiss the appeal for default. " The Rule contained no provision for restoring an appeal dismissed for default. The Special Bench of the High Court noticed the previous history of Rule 24 as also the terms in which it came to be framed after the passing of the Income tax Act, 1961 which enables the Tribunal, in its discretion, either to dismiss the appeal for default or to hear it ex parte in case of non appearance of the parties and further enables the Tribunal to set aside the dismissal on sufficient cause being shown for non appearance. After referring to various decided cases and examining the relevant provisions of the Act, the Special Bench summed up the position thus "To sum up the position, the Appellate Tribunal is the appointed machinery under the Act for finally deciding questions of fact in relation to, assessment of income tax,. Its composition, consisting as it does of qualified persons in law and accountancy, makes it peculiarly qualified to deal with all questions raised in a case, whether there be assistance from the party or his counsel or not. Section 33(4) obliges it to decide an appeal, after giving an opportunity to the parties to put forward their case ' The giving of the opportunity only emphasises the character of the quasi judicial function per formed by the Appellate Tribunal. The fact that that opportunity is not availed of in 'a 'particular case, will not entitle the Tribunal not to decide the case. There can be no decision of the case on its merits if the matter is to be disposed of for default of appearance of the parties. Further, an adjudication on the merits of the case is essential to enable the High Court to perform its statutory duty and for the Supreme Court to hear an appeal filed under section 66 A Section 33 (4) itself indicates by the use of the word "thereon, that the decision should relate to the subject matter of the appeal. Rule 24, therefore, to be consistent with section 3 3 (4) could only empower the Tribunal to dispose of the appeal on 822 its merits, whether there be an appearance of the party before it or not. This was indeed the rule when it was first promulgated in the year 1941. The rule in its present form, as amended in the year 1948, in so far as it enables the dismissal of an appeal before the Income tax Appellate Tribunal for default of appearance of the appellant, Wm, therefore, be ultra vires, as being in conflict 'with the provisions of Section 3 3 (4) of the Act. " On behalf of the appellant it was urged that the powers of the Appellate Tribunal relating to an appeal are derived from section 3 3 (4) as also from section 5A(8) and the Rules made thereunder and when Rule 24 cannot be said to be ultra vires the latter provision it cannot be impugned as being repugnant to section 33(4). There is nothing, either express or implied, in the language of section 33(4) from which it could be held that the order of the Tribunal in an appeal must always be made on the merits. The decisions of the Allahabad, Madras and Punjab High Courts in Shri Bhagwan Radha Kishen vs Commissioner of Income tax, U.P., (1) Ruvula Subba Rao & Ors. vs Commissioner of Income tax, Madras (2) and Mangat Ram Kuthiala & Ors. vs Commissioner of Income tax, Punjab (3) have also been pressed in support of the appellants contention. Now section 5A of the Act appears in Chapter 2A relating to the Appellate Tribunal. Sub sections (1) to (4) provide for the constitution of the Tribunal and the appointment of its President and Members. Sub sections (5) to (7) provide for the manner in which the benches of the Tribunal have to function. Sub section (8) is to this effect "Subject to the provisions of this Act the Appellate Tribunal shall have the power to regulate its own procedure and the procedure of benches of the Tribunal in all matters arising out of the discharge of its functions including the places at which the bench shall hold their sittings. " The powers, functions and duties of the Appellate Tribunal are set out in sections 28, 33, 35, 37,48 and 66. For Our purpose reference may be made only to sections 33 and 66. Sub sections (1) and (2) of section 33 give a right to the assessee and the Commissioner to appeal to the Appellate Tribunal against the order passed by the Appellate Assistant Commissioner within sixty days of the cornmunication of his order. Under sub. 'section (2A) the Tribunal can admit an appeal after the expiry of sixty days if it is, satisfied that there was sufficient cause for not presenting it within that period. Sub section (3) lays down the formalities in the matter of the filing of an appeal. Sub section (4) is to the effect that the Appellate (1) (3) (2) 823 Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit and shall communicate any such orders to the assessee and "to the Commissioner. Sub section (5) deals with the changes lo be made in the assessment as a result of the orders of the Appellate Tribunal Sub section (6) makes the orders of the Tribunal on appeal final,, the only saving being with reference to the provisions of section 66. Under that section the assessee or the Commissioner can require the Appellate Tribunal to refer to the High, Court any question. of law arising out of the order of the Appellate Tribunal and if the Tribunal refuses to state the case on the ground that no question of law arises the assessee or the Commissioner can, within the prescribed period, apply to the High Court and the High Court can direct the Appellate Tribunal to state the case and make a reference. It is unnecessary to refer to all the previsions of section 66 except to notice the power of the High Court to decide the question of law which decision has to be implemented by the Appellate Tribunal. Now Rule 24 cannot be said to be ultra vires sub section (8) of section 5A but what has to be essentially seen is whether it is repugnant to the provisions of section 3 3 (4). The reasoning which prevailed with the Special Bench of the High Court, in the present case, was that under section 3 3 (4) the Tribunal is bound to dispose of the appeal on the merits, no matter whether the appellant is absent or not. Reference in particular was made to the remedies, namely, the provisions contained in section 66 relating to reference on question of law and the further right of appeal to this Court under section 66A if the case is certified to be fit one for appeal. The Special Bench found it difficult to accept that by exercising the power to dismiss an appeal for default of appearance under Rule 24, these remedies which were open to an aggrieved party could be defeated or ren dered infructuous. The fact that there was no provision in Rule 24 or any other Rule for restoring an appeal once it was dismissed for default was also considered weighty in the matter. The cases in which the validity of Rule 24 has been upheld may now be considered. In Shri Bhagwan Radha Kishen vs Commissioner of Income tax, U.P.(1) the discussion on the question of validity of the rule is somewhat meagre. It was no doubt said that Rule 24 did not in any way come into conflict with section 33(4) but hardly any reasons were given in respect of that view. It was recognoised ' that there was no specific rule empowering the Tribunal to restore an appeal dismissed for default of appearance but it was observed that the Tribunal would have inherent jurisdiction to set aside such an order if satisfied with regard to the existence of a sufficient cause. According to Ravula Subba Rao & Ors. vs Commissioner of Income tax, kadras(2) a very wide power was given to (1) (2) 824 the Appellate Tribunal by section 33(4) and it could pass any order which the circumstances of the one required. it was immaterial whether the opportunity of being heard had be en availed of by the party or not. This provision, it was held, did not make it obligatory for the Appellate Tribunal to dispose of the appeal on merits. In this case again there, was hardly much discussion and the Allahabad decision was simply followed. In Mangat Ram Kuthiala & Ors. vs Commissioner of Income tax, Punjab(1), the points raised were different and arose in a petition filed under articles 226 and 227 of the Constitution. It does not appear that the validity of Rule 24 was canvassed. The scheme of the provisions of the Act relating to the Appellate Tribunal apparently is that it has to dispose of an appeal by making such orders as it thinks fit on the merits. It follows from the language of section 33 (4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided, by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving A decision on the merits on questions of fact and law and not by merely disposing. of the appeal on the ground that the party concerned has failed to appear. As observed in Hukumchand Mills Ltd. vs Commissioner of Income tax, Central Bombay (2) the word "thereon" in section 33(4) restricts the jurisdiction of the Tribunal to the subject matter of the appeal and the words "pass such orders as the Tribunal thinks fit" include all the powers (except possibly the power of enhancement) which are conferred upon the Appellate Assistant Commissioner by section 31 of the Act. The provisions contained in section 66 about making a reference on question of law to the High Court will be rendered nugatory if any such power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been Properly filed, for default without making any order thereon in accordance with section 33 (4). The position becomes quite simple when it is remembered that the assessee or the Commissioner of Income tax, if aggrieved by the orders of the Appellate Tribunal, can have resort only to the provisions of section 66. So far as the questions of fact are concerned the decision of the Tribunal is final and refe rence can be sought to the High Court only on questions of law. The High Court exercises purely advisory jurisdiction and has no appellate or revisional powers. The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself has passed proper order under section 33(4). It follows from all this that the Appellate Tribunal is bound to give approper decision on questions of fact as well as law which can only be done,if the appeal is disposed of on the merits (1) (2) 8 25 and not dismissed owing to the absence of the appellant. It was laid down as far back as the year 953 by section R. Das, J. (as he then was) in Commissioner of Income tax, Madras vs Mtt. section Ar. Arunahalam Chettiar(1) that the jurisdiction of the Tribunal and of the High Court is conditional on there being an order by die Appellate Tribunal which may be said to be one under section 33 (4) and a question of law arising out of such an order. The Special Bench, in the present case, while examining this aspect quite ' appositely referred to the observations of Venkatarama Aiyar, J. in Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co. Ltd. (2) indicating the necessity of the disposal of the appeal on the merits by,the Appellate Tribunal. This is how the learned judge had put the matter in the form of interrogation "How can it be said that the Tribunal should seek for advice on a question which it was not called upon to consider and in respect of which it had no opportunity of deciding whether the decision of the Court should be sought. Thus looking at the substantive provisions of the Act there is no escape from the conclusion that under section 33(4) the Appellate Tribunal has to dispose of the appeal on the merits and cannot short circuit the same by dismissing it for default of appearance. Now although Rule 24 provides for dismissal of an appeal for the failure of appellant to appear, the Rules at the material time did not contain any provision for restoration of the appeal. Owing to this difficulty some of the High Courts had tried to find an inherent power in the Tribunal to set aside the order of dismissal [vide Shri Bhagwan Radha Kishen vs Commissioner of Income tax, U.P.(3) and Mangat Ram Kuthiala & Ors. vs Commissioner of Income tax, Punjab(4)]. There is a conflict of opinion among the High Courts whether there is any inherent power to restore fin appeal dismissed for default under the Civil Procedure. (Mulla, Civil. Procedure Code, Vol. II, pp. 1583, 1584). It is unnecessary to resolve that conflict in the present case. It is true that the Tribunal 's powers in dealing with appeals are of the widest amplitude and have, in some cases, been held similar to and identical with the power of an appellate court under the Civil Procedure Code. Assuming that for the aforesaid reasons the Appellate Tribunal is competent to set aside an order dismissing an appeal for default in exercise of its inherent power there are serious difficulties in upholding the validity of Rule 24. It clearly comes into conflict with sub. section (4) of section 33 and in the event of repugnancy between the substantive provisions of the Act and a rule it is (1) (2) ; (3) (4) 826 the rule which must give way to the provisions of the Act. We would accordingly affirm the decision of the Special Beach of the High Court and hold that the answer to the question which was referred was rightly given in the affirmative. The appeal fails and it is dismissed with costs. R.K.P.S. Appeal dismissed.

The respondent 's appeal against an order of assessment was rejected by the Appellate Assistant Commissioner and he, thereafter appealed to the Appellate Tribunal. The Tribunal, after having granted some adjournments, dismissed the appeal for default in appearance On a day fixed for the hearing, purporting to do so under rule 24 of the Appellate Tribunal Rules, 1946. The High Court directed the Tribunal to refer two questions to itself one relating to the merits and the other to the effect whether rule 24 of the Appellate Tribunal Rules, 1946, in so far as it enables the Tribunal to dismiss an appeal in default in appearance, is ultra vires. A special bench of the High Court took the view that under section 3 3 (4) the Tribunal was bound to dispose of the appeal on the merits, whether the appellant was present or not. On appeal to this Court, HELD : It follows from the language of section 33(4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned had failed to appear. [824 C D] The provisions contained in section 66 about making a 'reference on questions of law to the High Court would be rendered nugatory if a power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default, without making an order thereon in accordance with section 33(4). So far as the questions of fact are concerned the decision of the Tribunal is final and reference can be sought to the High Court only on questions of law. The High Court exercises purely advisory jurisdiction and has no appellate or revisional powers. The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself has passed a proper order under section 33(4). [824 E H] Rule 24 clearly comes into conflict with section 33(4) and in the event ,of repugnancy between the substantive provisions of the Act and a rule, it is the rule which must give way to the provisions of the Act. [825 H] Shri Bhagwan Radha Kishen vs Commissioner of Income tax, U.P. ; Ruvula Subba Rao & Ors. vs Commissioner of Income tax Madras, ; Mangat Ram Kuthiala & Ors. vs Commissioner of Income tax, Punjab, ; Hukumchand Mills Ltd. vs Commissioner of Income tax, Central Bombay, ; Commissioner of Income 819 tax Madras vs Mtt. section Ar. Arunachalam Chettiar, and Commissioner of Income tax, Bombay vs Scindia Stearn Navigation Co. Ltd. ; , referred to.

N: Criminal Appeal No. 558 and 559 of 1985. From the Judgment and order dated 14.2.85 of the Allahabad High Court in W.P. No. 5805 and 5806 of 1985. 775 Mohan Pandey for the Appellants. Yogeshwar Prasad and Dalveer Bhandari for the Respondents. The Judgment of the Court was delivered by B.C. RAY, J. These two appeals by special leave are against the order passed on February 14, 1985 by the High Court of Allahabad dismissing the writ petition No. 5806 of 1984 and writ petition No. 5805 of 1984 as well as writ petition No. 309 of 1985 whereby the order of detention passed against the appellants on October 1, and October 20, 1984 respectively under section 3(2) of the , was upheld as legal and valid. The copy of the order of detention as well as the grounds of detention and the first information report on the basis of which the detention order was made, were served on the appellants at the time of their detention. The grounds of detention are as follows: "On 25.9.1984, Shri Surya Kumar, son of Shri Vishwa Pal, resident of 33, Babuganj, P.S. Hasanganj, District Lucknow, lodged a report at P.S. Hazratganj, Lucknow that on 15.9.1984 there was a tender for the supply of ballast in P.W.D. in which tenders had been submitted by him in K.P. Singh 's name. You keep share with K.P. Singh. On account of your and K.P. Singh 's terror no other person submits any tender against you people for which reason you people obtain tenders at rates of your choice. If any other person submits his tender you and K.P. Singh terrorise him. On account of the rates of his tender being lower on 15.9.1984, the tender of the complainant was accepted in one group and in the remaining groups the tenders of K.P. Singh etc. were accepted. For this reason you and K.P. Singh bore a grudge against the complainant. On 25.9.1984 at about 3.45 P.M. when Surya Kumar was going, in connection with his tender, in his Ambassador Car No. USS 7418, accompanied by his brother in law, opposite to the National Highway Khand, he saw some contractors. On reaching near them the complainant had just started talking to them, when suddenly in two cars, you with a pistol, Phool Chand with a revolver, Jaleel with a revolver, Ashok with Desi katta, Ashok Sonkar and Sarrif 776 with hand grenade and Shankar Dey with a gun along with three other persons came and with intent to kill the complainant fired at the complainant, threw hand grenades which fell on the car of the complainant. Consequently, there was a commotion. Traffic was obstructed and public tranquility was disturbed. The complainant immediately saving his life took flight in his car. On the above information by the complainant a case FIR No. 1034 was registered at police station, Hazratganj against you and your other companions under Section 147, 148, 149, 307 I.P.C. and Section 6 of Explosives Act and after investigation a charge sheet No. 279 has been put up against you for the said offence. I have also been put up against you for the said offence. I have also come to know that on your behalf an application for grant of bail has been moved in a competent court, therefore, in case you come out on bail from the jail you will again start activities causing breach of public order on the abovesaid grounds, I have been satisfied that there is possibility of your acting in a manner prejudicial to the maintenance of public order and in order to prevent you from so acting, it is necessary to detain you. " The said order of detention was duly approved by the State Government under section 3(4) of the . The appellants made representation against the grounds of detention. The representations were rejected by the Government and the same were communicated to the appellants by the Joint Secretary, Vigilance & Home Department, Government of U.P. On November 26, 1984, the Secretary, Vigilance & Home Department, Government of U.P. informed the appellants that the Government after considering the report of the Advisory Board had confirmed the order of detention and directed that the appellants be detained for a period of 12 months with effect from October 1, 1984 and October 20, 1984 respectively. Aggrieved by this order of detention the appellants moved applications under Article 226 of the Constitution of India for quashing of the order of detention made by the respondent No. 1 and for setting 777 them free. These were registered as writ petition No. 5806 of 1984 and writ petition No. 5805 of 1984. Another detenu who was detained on identical grounds also filed writ petition No. 309 of 1985 before the High Court. The main contention advanced on behalf of the appellants before the High Court was that on the basis of facts alleged, at the most it could be said that the matter related to the maintenance of law and order. It was not a matter relating to the disturbance of public order. The assault on Surya Kumar can only be on account of an ill will arising out of business rivalry. It had been submitted that it affects only an individual and the society or community were not affected by the alleged act of omission on the part of the appellants. It therefore raised no problem of public order. It had been further contended that a solitary act can not be considered to be an act prejudiced to the maintenance of public order. The High Court of Allahabad after hearing the parties and on a consideration of the decisions cited before it found that whether an act creates a mere law and order problem or affects the even tempo of the life of the community, it is to be seen what is the extent of the impact of the act in question upon the society as a whole; whether the effect is restricted to an individual or a few individuals alone or it creates a sense of insecurity, danger and apprehension in the minds of the people in general apart from those who are the victims of the incident; whether the act or acts disturb the even tempo of life of the society or a section of society; whether the act leads to disturbance of public order or only law and order. The High Court further found that in the context the act committed tends to teach a lesson to the complainant and to act as a warning to prospective tenderers in future who may not dare to avail of the opportunity to submit their tenders against that of the appellants. It was also found that the impact and reach of the act in question goes beyond the individual and affects the community of contractors who take contracts for executing the public works. The Court further held that the order of detention made by the detaining authority is legal and valid and the writ petitions were dismissed. Undoubtedly, on the basis of the FIR lodged by Surya Kumar a case under Section 147/148/149/307 I.P.C. and under Section 5 of the Explosives Act has been registered as crime No. 1034 and the said case is pending for decision before the criminal court. The main question which falls for decision is whether the act 778 referred to in the grounds of detention is directed against certain individuals creating a law and order problem or the reach and potentiality of the act is so deep as to disturb the society to the extent of causing a general disturbance of public tranquility. It has now been well settled by several decisions of this Court (the latest one being Gulab Mehra vs State of U.P. & Ors., SC 559 judgment in which case was pronounced by us on September 15, 1987) that public order is the even tempo of the life of the community taking the country as a whole or even a specified locality. Disturbance of public order is to be distinguished from acts directed against individuals which do not disturb the society to the extent of causing a general disturbance of public tranquility. It is the degree of disturbance and its effect upon the life of the community in a locality which determines whether the disturbance amounts only to a breach of law and order or it affects public order. It has also been observed by this court that an act by itself is not determinant of its own gravity. In its quality it may not differ from another but in its potentiality it may be very different. Therefore it is the impact, reach and potentiality of the act which in certain circumstances affect the even tempo of life of the community and thereby public order is jeopardized. Such an individual act can be taken into consideration by the detaining authority while passing an order of detention against the person alleged to have committed the act. In the instant case the alleged act of assault by fire arms is confined to the complainant Surya Kumar and not to others. It is an act infringing law and order and the reach and effect of the act is not so extensive as to affect a considerable members of the society. In other words, this act does not disturb public tranquility nor does it create any terror or panic in the minds of the people of the locality nor does it affect in any manner the even tempo of the life of the community. This criminal act emanates from business rivalry between the detenus and the complainant. Therefore such an act can not be the basis for subjective satisfaction of the detaining authority to pass an order of detention on the ground that the impugned act purports to affect public order i.e. the even tempo of the life of the community which is the sole basis for clamping the order of detention. Moreover, no injury was caused to the person of the complainant, Surya Kumar by the appellants nor any damage was caused to the car though hand grenade was alleged to have been thrown on the car. No mark has been caused to the car also. It is relevant to mention in this connection that the appellants were released on bail by this Court after duly considering the facts and 779 circumstances of the case in July, 1985. The period of one year has also expired. We have already held hereinbefore that a solitary act of omission or commission can be taken into consideration for being subjectively satisfied, by the detaining authority to pass an order of detention if the reach, effect and potentiality of the act is such that it disturbs public tranquility by creating terror and panic in the society or a considerable number of the people in a specified locality where the act is alleged to have been committed. Thus it is the degree and extent of the reach of the act upon the society which is vital for considering the question whether a man has committed only a breach of law and order or has acted in a manner likely to cause disturbance to public order. It is pertinent to note in this connection that the Criminal Appeal Nos. 826 and 827 of 1985 arising out of the same incident and identical grounds of detention, filed by Ashok Arora and Ashok Kumar Sonkar have been allowed by this Hon 'ble Court by its order dated November 29, 1985 and the appellants were directed to be set at liberty forthwith. For the reasons aforesaid, we allow the appeals without any order as to costs. N.P.V. Appeals allowed.

% The appellants were contractors for the supply of ballast to PWD. They were detained under section 3(2) of the . It was stated in the grounds of detention that on account of business rivalry, appellants and their companions attacked the complainant with fire arms and hand grenades with intent to kill him, FIR was lodged by the complainant, a case was registered against them under section 147, 149, 307 I.P.C. and section 6 of the Explosives Act, and a chargesheet put up against the appellants, and since they had applied for bail, and if released there was a possibility that they will again start activities causing breach of public order, it was necessary to detain them in order to prevent them from so acting. The detention orders were approved by the State Government under section 3(4) of the Act, and the representations made by the appellants having been rejected they were directed to be detained for a period of 12 months. Challenging their detention, the appellants filed writ petitions before the High Court contending that the alleged assault on the complainant affected only an individual and such a solitary act could not be considered to be an act prejudicial to the maintenance of public order. The High Court, dismissing the writ petitions, held that the assault was to teach a lesson to the complainant and serve as warning to prospective tenderers who may not dare to submit their tenders and that the impact and reach of the act went beyond the individual and affected the community of contractors who take contracts for executing the public works. Allowing the appeals to this Court, 774 ^ HELD: Disturbance of public order is to be distinguished from acts directed against individuals which do not disturb the society to the extent of causing a general disturbance of public tranquility. An act by itself is not determinant of its own gravity In its quality it may not differ from another but in its potentiality it may be different. [778C D] A solitary act of omission or commission can be taken into consideration for being subjectively satisfied, by the detaining authority to pass an Order of detention if the reach, effect and potentiality of the act is such that it disturbs public tranquility by creating terror and panic in the society or a considerable number of the people in a specified locality where the act is alleged to have been committed. It is the degree and extent of the reach of the act upon the society which is vital for considering the question whether a man has committed only a breach of law and order or has acted in a manner likely to cause disturbance to public order. [779A C] In the instant case, the alleged act of assault by fire arms is confined to the complainant and not to others. It is an act infringing law and order and the reach and effect of the act is not so extensive as to affect considerable members of the society. In other words, this act does not disturb public tranquility, nor does it create any terror or panic in the minds of the people of the locality nor does it affect in any manner the even tempo of the life of the community. This criminal act emanates from business rivalry between the detenus and the complainant. Therefore, such an act cannot be the basis for subjective satisfaction of the detaining authority to pass an order of detention on the ground that the impugned act purports to affect public order i.e. the even tempo of the life of the community, which is the sole basis for clamping the order of detention. Moreover, no injury was caused to the person of the complainant, by the appellants nor any damage was caused to the car though hand grenade was alleged to have been thrown on the car. No mark has been caused to the car also. [778E H] Gulab Mehra vs State of U. P. & Ors., 3 SC 559, applied.

N: Criminal Appeal No. 168of 1991. From the Judgment and Order dated 26.7.1989 of the Madya Pradesh High Court in Crl. A. No. 102 of 1984. G.L. Sanghi and A.K. Sanghi for the Appellants. The facts are few and simple. The first appellant Rajendra, on 30th June, 1982, while running a shop under the name and style of M/s. Kumarvad Bros. in Khargaon Municipal ity, was found exhibiting and offering for sale tea dust, the quantity of which was about 11/2 kgs. D.P. Nath, P.W. 1, the Food Inspector for Khargaon purchased tea dust in the requisite quantity for test. The purchased tea was dealt with in the prescribed manner as per rules on the subject. The purchase and other attendant documents were witnessed by Madan, P 'W ' 2 and another. The Public Analyst, Bhopal, to whom one of the three samples was sent for analysis opined that the food article fell below the prescribed standard as its contents were present in quantities not within the prescribed limits of variabili ty. The report of the Public Analyst was communicated to the first appellant as well as to his two brothers, the second and third appellants, because it appears that at the time of 99 the sale of the tea to the Food Inspector, he was told by the first appellants that the court 's intervention could be sought to have one of three brothers. The accompanying covering letter suggested to the appellants that the court 's intervention could be sought to have one of the samples kept by the Local Health Authority examined one more time. The appellants did not avail of the opportunity and faced the prosecution launched under section 7 read with section 16 of the before the Chief Judicial Magistrate, Khargaon. Before the Trial Magistrate the facts as alleged by the prosecution regarding sale by the first appellant to the Food Inspector and of the article of food being adulterated as per report of the Public Analyst were not disputed. Shelter, however, was taken behind the provisions of Rules 7(3) and 9 A of the Prevention of Food Adulteration Rules, 1955, as then standing, whereunder the Public Analyst was required to send his report to the Local Health Authority within 45 days, which he had not done, and the Local Health Authority was required to 'immediately ' after the institu tion of prosecution forward a copy of the report of the result of the analysis to the appellants. Since there was a delay of nearly a month on that count the Trial Magistrate viewed this lapse as total to the prosecution. Furthermore, the Trial Magistrate took the view that in the covering letter while sending the report, nowhere had the appellants been told that they had a right to have the second sample with the Local Health Authority analysed by the Central Food Laboratory in terms of section 13(2) of the Act. The Trial Magistrate perhaps had in mind that had this been mentioned, the appellants may have chosen to avail of the opportunity of the analysis by the Central Food Laboratory and such report would have superseded the report of the Public Ana lyst, whether for or against the appellants. On these two grounds the learned Trial Magistrate recorded acquittal of the appellants. The High Court on appeal by the State of Madhya Pradesh, reversed the Order of acquittal and recorded conviction of the appellants add sentenced each one of them to six months ' rigorous imprisonment and to pay a fine of Rs.5000 each. This has occasioned the appeal before us. Our attention was brought to the aforesaid rules and section 13(2) of the Act and the case law on the subject. Rule 7(3) requires that the Public Analyst shall within a period of 45 days of the receipt of any sample for analysis, deliver to the Local Health Authority, a report of the result of such analysis in Form III. The Trial Magistrate found that this duty was not discharged by the Public Ana lyst within 100 the prescribed period of 45 days. The High Court, however, recomputed the period and came to the conclusion that such duty was performed within the prescribed period. That find ing is one of fact and nothing has been addressed to us in that regard. So far as the Local Health Authority being required to 'immediately ' after the institution of prosecu tion send a copy of the report of the result of the analysis in Form III, its failure to do so instantly was held to be of no consequence, relying on a judgment of this Court in Tulsiram vs State of Madhya Pradesh, ; where in the word 'immediately ' was interpreted to convey 'reason able despatch and promptitude ' intending to convey a sense of continuity rather than urgency. This Court then ruled at page 497 as follows: "The real question is, was the Public Ana lyst 's report sent to the accused sufficiently early to enable him to properly defend himself by giving him an opportunity at the outset to apply to the court to send one of the samples to the Central Food Laboratory for analysis. If after receiving the Public Analyst 's report he never sought to apply to the court to have the sample sent to the Central food Laborato ry, as in the present case, he may not be heard to complain of the delay in the receipt of the report by him, unless, of course, he is able to establish some other prejudice. Our conclusions on this question are: The expres sion 'immediately ' in Rule 9 A is intended to convey a sense of continuity rather than urgency. What must be done is to forward the report at the earliest opportunity, so as to facilitate the exercise of the statutory right under section 13(2) in good and sufficient time before the prosecution commences leading evidence. Non compliance with Rule 9 A is not fatal. It is a question of prejudice. " Tulsirarn 's case was thus a complete answer to the conten tion to contrary. The next question which requires consideration is wheth er all the appellants are guilty of the crime. From the material available on the record, we find no basis to sus tain the conviction of the second and third appellants, Om Prakash and Subhash. There is no evidence worth the name to conclusively prove their complicity beyond reasonable doubt. The first appellant is alleged to have told the Food Inspec tor on the date of sale of tea dust that the shop was being run in partnership by him with his two brothers. This was the only case set up by 101 the prosecution at the trial. No evidence was gathered or tendered to prove the partnership. On the facts, which are eloquent, the first appellant alone made the sale of tea dust to the Food Inspector and not all. Burden was on the prosecution to prove the existence of the partnership. We do not propose to indulge in the refinery of civil law but have to adopt the cautious approach to adjudge criminality of the accused appellants. Even it the Food Inspector is believed that the first appellant told him that 'the business on the shop was being run in partnership that per he was not enough to inculpate the remaining two appellants without further evidence '. We find an area of doubt in this sphere and extending the same to the second and third appellants order their acquittal. They be discharged from their bail bonds. Fine, if paid, be refunded to them. The case of the first appellant stands singled out. His conviction was well deserved which is hereby maintained confirming the sentence of imprisonment but reducing the fine to Rs. 1000, in default of payment of which further rigorous imprisonment for one month is ordered. He shall surrender to his bail bonds. The excess fine, if paid, be refunded to the first appellant. As a result the appeal of appellants 2 & 3 is allowed and that of appellant No. 1 dismissed, subject, however to the reduction of sentence. R.P. Appeal dis posed of.

Appellant No. 1 was found exhibiting and offering for sale tea dust. P.W. 1, the Food Inspector purchased tea dust in the requisite quantity for test. Appellant No. 1 told P.W. 1 that the shop which was being run by him was a part nership concern of the three brothersappellant No. 1 to 3. On receipt of Public Analyst 's report, prosecution was lanuched against the appellants under section 7 read with section 16 of the . Before the trial Magistrate the facts regarding sale by appellant no.1 of the food article and the same being adul terated as reported by the Public Analyst were not disputed. The appellants however, argued that the Public Analyst did not send the report within the period prescribed under r. 7(3) Prevention of Food Adulteration Rules, 1955 and the Local Health Authority did not forward the copy of the result of the analysis to the appellants 'immediately ' after institution of the prosecution as envisaged by r. 9A. Since there was a delay of nearly a month on that count, the trial Magistrate viewed this lapse as fatal to the prosecution. He also held that in the covering letter while sending the report, it was not mentioned that the appellants had a right to have analysed the second sample by the Central Food Laboratory in terms of section 13(2) of the 96 97 Act. He, therefore, acquitted the appellants. On appeal by the State, the High Court reversed the order of acquittal. It convicted the appellants and sen tenced each of them to six months ' rigorous imprisonment and to pay a fine of Rs.5000 each. Aggrieved the appellants preferred the appeal by special leave to this Court. On consideration of evidence regarding guilt of all the appellants and requirements of section 13(2) of the and rr. 7(3) and 9A of the Prevention of Food Adulteration Rules, 1955, Disposing of the appeal, this Court, HELD: 1. In the instant case, there was no basis to sustain the conviction of appellants No. 2 and 3. There was no evidence worth the name to conclusively prove their complicity beyond reasonable doubt. The only case set up by the prosecution against these appeliants was that appellant No. 1 was alleged to have told the Food Inspector that the shop was being run in partnership by him with his these two brothers. Appellant No. 1 alone made the sale in question to the Food Inspector. Burden was on the prosecution to prove the existence of partnership. Even if the Food Inspector is believed that appellant No. 1 told him that the shop was being run in partnership, that per he was not enough to inculpate the remaining two appellants without further evidence. There is an area of doubt in this sphere and extending the same to appellants No. 2 and 3, they are acquitted. [100G H; 101A B] The case of first appellant stood singled out. His conviction was well deserved, which should be maintained and the sentence confirmed. However, fine was to be reduced to Rs.1,000. [101C] 2. The expression 'immediately ' in r. 9A of the Preven tion of Food Adulteration Rules, 1955, is intended to convey a sense of continuity rather than urgency. What must be done is to forward the report at the earliest opportunity, so as to facilitate the exercise of the statutory right under section 13(2) in good and sufficient time before the prosecution commences leading evidence. Non compliance with r. 9 A is not fatal. It is a question of prejudice. The word 'immedi ately ' was to be interpreted to convey 'reasonable despatch and promptitude ' intending to convey a sense of continuity rather than urgency. The High Court was right in holding that failure to send instantly a copy of the analysis 98 report to the appellants was of no consequence. [100A F] Tulsiram vs State of Madhya Pradesh, ; , relied on. On the question of compliance of r. 7(3) in regard to the period of submission of the report by Public Analyst to the Local Health Authority, the High Court 's conclusion, reached by it after recomputing the period, that such duty was performed within the prescribed period was a finding of fact and nothing was addressed before this Court in that regard. [99G H; 100A]

Civil Appeal No. 899 of 1968. Appeal by special leave from the judgment and order dated the 15th February, 1967 of the Assam and Nagaland High Court in C. Rule No. 231 of 1965. Naunit Lal, for the appellants. Sukumar Ghose, for the respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. Was this virtually valstudinarian appeal by the Sate against an old and perhaps, by now, superannuated emyloyee necessary? Litigation by the State means laying out public resources, in a country of much poverty and scarce resources, and only if the demanding justice of a case calls for it should an appeal, otherwise of inconsequence, be carried to the highest Court. In the present instance, a veterinary assistant, the respondent herein, was suspended in 1960 followed by disciplinary proceedings. An enquiry officer, appointed by the Director of Animal Husbandry and Veterinary Department, conducted the proceedings, submitted his report of findings adverse to the respondent, whereupon a show cause notice indicating the penalty of dismissal was issued. The 'delinquent ' pleaded innocence by his explanatory statement and the Director, on a study of the case in the light of the explanation offered, directed reinstatement in a cryptic order which runs thus: 129 ORDER No. 81 DATED 11 12 62 Shri J. N. Roy Biswas, Manager, East Harinagar Live stock Farm (Cachar) who was placed under suspension vide this office order No. 42 dated 23 12 60, is re instated in the same post of Manager, at East Harinagar Livestock Farm with effect from the date the reports for duty. Sd/ G. K. Mehra, Director of Animal Husbandry & Vety. Department, Assam, Gauhati." Memo No. PI 918/26822 Dated Gauhati, the 13th Dec. '62. Copy forwarded to: 1. Shri J. N. Roy Biswas, Manager, East Harinagar Livestock Farm (under suspension) C/o Brahmachari Maharaj Shri Dawarikanath, Ramkrishna Seva Samity, Chatribari, Gauhati, for information and necessary action. The findings and orders of the proceeding will follow. 2 , . . 3 The findings and orders together with the regularisation of the period of suspension of Shri J. N. Roy Biswas with effect from 5 1 61 to the date of his reporting for duty at East Harinagar Livestock Farm will be communicated separately. The date of joining of Shri Biswas may be in formed to this office separately. Sd/ B. K. Das for Director of Animal Hy. & Vety. lt is noteworthy that no reasoned findings were recorded. That particular officer retired and his successor wrote to the Joint Secretary to Government that from the materials of the case the 'delinquent ' r merited punishment and the proceedings be re opened. This was done and as the de novo recording of evidence progressed the respondent moved the High Court under article 226 for a writ of prohibition as, in his submission, there was no power to re open a case concluded by exoneration and reinstatement and the illegal vexation of a second enquiry should be arrested. This grievance was held good by the High Court which granted the relief sought. What is the conspectus of circumstances ? A small veterinary official, a long enquiry for mis conduct, a final direction cancelling suspension and reinstating him, the likelihood of the man having retired (15 years have gone by) and nothing on record to substantiate any fatal infirmity in the earlier enquiry or dereliction of duty by the disciplinary authority except that a reasoned record of findings was to be forthcoming, but did not, because he had retired in the mean while. No action against the retired Director for this alleged omission was felt justified and perhaps was not warranted but with persistent 130 litigative zeal Government has come in appeal to this Court against the petty official. Had he misappropriated Government money he should have been punished expeditiously. But having been exculpated after enquiry, the State could go at him by re opening the proceedings only if the rules vested some such revisory power. None such has been shown to exist although one wonders why a rule vesting such a residuary power of a supervisory nature to be exercised in the event . of a subordinate disciplinary authority not having handled a delinquent adequately or rightly is brought to the attention of Government has not been made. No rule of double jeopardy bars but absence of power under a rule inhibits a second inquiry by the Disciplinary authority after the delinquent had once been absolved. The appeal must fail and is dismissed with costs. We may however make it clear that no government servant can urge that if for some technical or other good ground, procedural or other, the first enquiry or punishment or exoneration is found bad in law that a second enquiry cannot be launched. It can be; but once a disciplinary case has closed and the official re instated, presumably on full exoneration. a chagrined Government cannot re start the exercise in the absence of specific power to review or revise, vested by rules ill some authority. The basics of the rule of law cannot be breached without legal provision or other vitiating factor invalidating the earlier enquiry. For the present, this is theoretical because no such deadly defect is apparent on the record. P.B.R. Appeal dismissed.

The respondent, a Government servant, was suspended from service in 1960. on receipt of the findings of the Inquiry officer, a show cause notice was issued. The appointing authority exonerated the respondent but did not make a reasoned order. Later, however, the case WAS reopened. As the de novo recording of evidence progressed the respondent moved the High Court contending that there was no power in the Government to re open a case which had already been concluded by exoneration and re instatement. The High Court granted the relief . Dismissing the appeal of the sate, ^ HELD. Had the Government servant misappropriated government money he should have been punished expeditiously. But having been exculpated after enquiry, the State could go at him by re opening the proceedings only if the rules vested some such revisory power No rule of double jeopardy bars the reopening of the case. But once a disciplinary case has closed and the official re instated the government cannot restart the exercise in the absence of specific power to review or revise vested by rules in some authority. The basics of the rule of law cannot be breached without a legal provision or other vitiating factor invalidating earlier enquiry.

Civil Appeal Nos. 3216 3218 of 1983. Appeals by Special leave from the Judgment and Order dated the 10th February, 1983 of the Calcutta High Court in Original Order Nos. 374 376 of 1982. Soli J. Sorabjee, Harish N. Salve, Sudip to Sarkar & D.N. Gupta, for the Appellant. Santi Bhushan, S.K. Roy Chowdhury and H.S. Parihar for Respondent No. 1 in CA. 3216 of 1983. B. Gupta, S.K. Roy Chowdhary and H.S. Parihar for Respondent No. 1. in CA. 3217 18 of 1983 P.A. Francis, R.N. Poddar for the Respondent. K. Parasaran, Attorney General, Gopal Subramaniam and C. V. Subba Rao in response to notice. G.S. Sanghi, Shankar Mitra and P. Sinha for Intervener Oceanic Shipping Agency (P.) Ltd. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Nepal is our neighbour. Unfortunately Nepal is land locked. Nepal 's only access to the sea is across India. So, as one good neighbour to another with a view to `maintain, develop and strengthen the friendly relations between our two countries, by treaty and by International Convention, we allow a right of innocent passage in order to facilitate Nepal 's international trade. One of the questions before us is the extent of this right : Does the right cover the 670 transit of goods which may not be imported into India? May goods which may not be brought into India be taken across Indian territory? What does "import" mean, more particularly what does "import" mean in Sec. 53 of the ? Can an unauthorised reproduction of a literary, dramatic, musical or artistic work or a record embodying an unauthorised recording of a record (which, for short, adopting trade parlance, we may call a pirated work), whose importation into India may be prohibited, but whose importation into Nepal is not prohibited, be taken across Indian territory to Nepal? These are some of the questions which arise for consideration in this appeal. The questions have arisen this way: The appellant, the Gramophone Company of India Limited, is a well known manufacturer or musical records and cassettes. By agreement with the performing artistes to whom royalties are paid, the appellant company is the owner of the Copy right in such recordings. The appellant received information from the Custom. Authorities at Calcuttath at a consignment of prerecorded cassettes sent by Universal Overseas Private Ltd. Singapore to M/s. Sungawa Enterprises, Kathmandu, Nepal, had arrived at Calcutta Port by ship and was awaiting despatch to Nepal. The appellant learnt that a substantial number of cassettes were pirated works ', this fact having come to light through the broken condition of the consignment which was lying in the Calcutta docks. Basing upon the information received, the appellant sought the intervention of the Registrar of Copyrights for action under Sec. 53 of the . This provision enables the Registrar, after making such enquiries as he deems fit, to order that copies made out of India of a work which if made in India would infringe copy right, shall not be imported. The provision also enables the Registrar to enter any ship, dock or premises where such copies may be found and to examine such, copies. All copies in respect of which an order is made prohibiting their import are deemed to be goods the import of which is prohibited or restricted under Sec. 11 of the . The provisions of the Custom Act, are to have effect in respect of those copies. All copies confiscated under the provisions of the said Act are not to vest in the Government, but to be delivered to the owner of the copy right in the work. As the Registrar was not taking expeditious action on the application of the appellant and as it was apprehended that the pirated cassettes would be released for transportation to Nepal, the appellant filed a writ application in the Calcutta High Court seeking a writ in the nature of Mandamus to compel the Registrar to pass an appropriate order under Sec. 53 of the and to prevent release 671 of the cassettes from the custody of the customs authorities. The learned single judge of the Calcutta High Court, on the request of the appellant, issued a Rule Nisi and made an interim order permitting the appellant to inspect the consignment of cassettes and if any of the cassettes were thought to infringe the appellant 's copyright, they were to be kept apart until further orders of the Registrar. After causing the necessary inspection to be made, the Registrar was directed to deal with the application under Sec. 53 of the in accordance with law after hearing interested parties. The Registrar was directed to deal with the application within eight weeks from the date of the High Court 's order. In the event of any of the cassettes held back by the appellant being found not to infringe any provision of the Copy right Act, the appellant was to pay damages as assessed by the Court. Against the learned Single Judge 's order, the consignee preferred an appeal under clause 15 of the Letters Patent. A Division Bench of the Calcutta High Court held that the word 'import ' did not merely mean bringing the goods into India, but comprehended something more, that is, "incorporating and mixing, or mixing up of the goods imported with the miss of the property in the local area". The learned judges thought it would be wrong to say that there was importation into India, the moment the goods crossed the Indian customs barrier. Keeping in view the treaties with Nepal, the Division Bench took the view that there was no importation when the goods entered India en route to Nepal. The appeal was, therefore, allowed and the writ petition filed by the present appellant was dismissed. And so, the writ petitioner in the High Court has appealed to us under 136 of the Constitution. First, we shall examine if there is any mandate of international law or if the rules of international law afford us any guidance and if such mandate or guidance is perceptive under Indian law. Two questions arise, first, whether international law is, of its own force, drawn into the law of the land without the aid of a municipal statute and, second, whether, so drawn, it overrides municipal law in case of conflict. It has been said in England that there are two schools of thought, one school of thought propounding the doctrine of incorporation and the other, the doctrine of transformation. ( ') According to the one, rules of international law are incorporated into the law of the land automatically and considered to be part of the law of the land unless in 672 conflict with an Act of Parliament. According to the other, rules of International law are not part of the law of the land, unless already so by an Act of Parliament, judicial decision or long established custom. According to the one whenever the rules of international law changed, they would result in a change of the law of the land along with them, 'without the aid of an Act of Parliament. According to the other, no such change would occur unless those principles are 'accepted and adopted by the domestic law '. Lord Danning who had once accepted the transformation doctrine without question, later veered round to express a preference for the doctrine of incorporation and explained how courts were justified in applying modern rules of international law when old rules of international law changed. In fact, the doctrine of incorporation, it appears, was accepted in England long before Lord Danning did so. Lord Danning himself referred to some old cases. Apart from those, we may refer to West Rand Central Gold Mining Co. vs The King(1) where the court said: "It is quite true that whatever has received the common consent of civilized nations must have received the assent of our country, and that to which we have assented along with other nations in general may properly be called international law, and as such will be acknowledged and applied by our municipal tribunals when legitimate occasion arises for those tribunals to decide questions to which doctrines of international law may be relevant". Lauterpacht in International Law (General Works) refers to the position in Germany, France, Belgium and Switzerland and says it is the same. He quotes what a German Court said to meet an argument that the role of customary international law conflicted with Art.24 of the German Code of Civil Procedure. The court had said, "The legislature of the German Reich did not and could not intend any violation of generally recognised rules of international law, when enacting article 24 of the German Code of Civil Procedure". Lauterpacht refers to another German case where the argument that 'there ought not to be a direct recourse to the law of nations, except in so far as there has been formed a German customary law ' was rejected with the statement, "The contention of the Creditor that international law is applicable only in so far as it has been adopted by German Customary law, lacks foundation in law. Such a legal maxim would, more 673 over, if generally applied, lead to the untenable result that in the intercourse of nations with one another, there would obtain not a uniform system international law but a series of more or less diverse municipal laws". Lauterpacht summarises the position this way: "While it, is clear that international law may and does act directly within the State, it is equally clear that as a rule that direct operation of international law is, within the State subject to the overriding authority of municipal law. Courts must apply statutes even if they conflict with international law. The supremacy of international law lasts, pro foro interno, only so long as the State does not expressly and unequivocally derogate from it. When it thus prescribes a departure from international law, conventional or customary, judges are confronted with a conflict of international law and municipal law and, being organs appointed by the State, they are compelled to apply the latter". There can be no question that nations must march with the international community and the Municipal law must respect rules of International law even as nations respect international opinion. The comity of Nations requires that Rules of International law may be accommodated in the Municipal Law even without express legislative sanction provided they do not run into conflict with Acts of Parliament. But when they do run into such conflict, the sovereignty and the integrity of the Republic and the supremacy of the constituted legislatures in making the laws may not be subjected to external rules except to the extent legitimately accepted by the constituted legislatures themselves. The doctrine of incorporation also recognises the position that the rules of international law are incorporated into national law and considered to be part of the national law, unless they are in conflict with Act of Parliament. Comity of Nations or no, Municipal Law must prevail in case of conflict. National Courts cannot say yes if Parliament has said no to a principle of international law. National Courts will endorse international law but not if it conflicts with national law. National courts being organs of the National State and not organs of international law must perforce apply national law if international law conflicts with it. But the Courts are under an obligation within legitimate limits, to so interpret the Municipal Statute as to avoid conformation with the comity of Nations or the well established principles of International law. But if conflict is inevitable, the latter must yield. 674 The proposition has been well stated by Latham CJ in Politics vs The Commonwealth(1): "Every statute is to be interpreted and applied, as far as its language admits, as not to be inconsistent with the comity of nations or with the established rules of international law . . It must be held that legislation otherwise within the power of the. Commonwealth Parliament does not become invalid because it conflicts with a rule of international law, though every effort should be made to construe Commonwealth statutes so as to avoid breaches of international law and of international comity. The question, therefore, is not a question of the power of the Commonwealth Parliament to legislate in breach of international law, but is a question whether in fact it has done so". The Supreme Court of India has said practically the same thing in Tractor export, Moscow vs M/s Tarapore & Company and Anr.(2) "Now, as stated in Halsboury 's Laws of England, Vol. 36, page 414, there is a presumption that Parliament does not assert or assume jurisdiction which goes beyond the limits established by the common consent of nations and statutes are to be interpreted provided, that their language permits, so as not to be inconsistent with the comity of nations or with the established principles of international law. But this principle applies only where there is an ambiguity and must give way before a clearly expressed intention. If statutory enactments are clear in meaning, they must be construed according to their meaning even though they are contrary to the comity of nations or international law". The observations show that the court was only concerned with a principle of interpretation, but, by, implication, it may be possible to say that the court preferred the doctrine of incorporation; otherwise the question of interpretation would not truly arise. What has been 675 said in the Tractoroexport case is entirely consistent with what we have said earlier. Is there any well established principle of international law on the question of the right of land locked States to innocent passage of goods across the soil of another State? It appears that "the leading authorities on international law have expressed divergent views on the question of the transit rights of land locked countries. While one group of writers, such as, Sibert, Scelle and others have held the view that these countries have an inherent right of transit across neighbouring countries, other equally eminent authorities, such as, Mc Nair and Hyde have held the view that these rights are not principles recognised by international law, but arrange but arrangements made by sovereign States". (1) The result of the lack of unanimity has been that the land locked countries have to rely on bilateral, regional or multi lateral agreements for the recognition of their rights. The very existence of innumerable bilateral treaties, while on the one hand it raises it raises a presumption of the existence of a customary right of transit, on the other it indicates the dependence of the right on agreement. The discontenting situation led to attempts by national to commodity the rules relating to transit trade. The earliest attempt was the Convention on the Freedom of Transit known generally as the Barcelona Convention. The second attempt was the Convention on the High Cease, 1958. The most recent in the 1965 CONVENTION ON TRANSIT TRADE OF LAND LOCKED STATES. As this is the latest Convention on the subject and as both India and Nepal have signed the Convention, it may be useful to refer to it in some detail. The Convention was the result of a Resolution of the United Nations General Assembly which, "recognising the need of land locked countries for adequate transit facilities in promoting international trade", invited "the Governments of Member States to give full recognition to the needs of land locked Member States in the matter of transit trade and therefore, to accord them adequate facilities in terms of international law and practice in this regard, bearing mind the future requirements resulting from the economic development of the land locked countries". Article 1 (a) of the Convention defines the term 'land locked States ' as meaning 'any Contracting State which has no sea cast. The term "traffic in Transit" is defined like this: the passage of goods including unaccompanied baggage across the territory of a Contracting State between 676 a land locked State and the sea when the passage is a portion of a complete journey which begins or terminates within the territory of that land locked State and which includes sea transport directly preceding or following such passage. The transshipment, warehousing, breaking bulk, and change in the mode of transport of such goods as well as the assembly, disassembly or reassembly of machinery and bulky goods shall not render the passage of goods outside the definition of "traffic in transit" provided that any such operation is undertaken solely for the convenience of transportation. Nothing in this paragraph shall be construed as imposing an obligation on any Contracting State to establish or permit the establishment of permanent facilities on its territory for such assembly, disassembly or reassembly"; The term "transit State" is defined as meaning 'any Contracting State with or without a sea coast, situated between a land locked State and the sea, through whose territory "traffic in transit" passes '. Article 2 prescribes that freedom of transit shall be granted under the terms of this Convention for traffic in transit and means of transport. Traffic in transit is to be facilitated on routes in use mutually acceptable for transit to the Contracting States concerned. No discrimination is to be exercise based on the place of origin departure, entry, exit or destination or any circumstances relating to the ownership of the goods or the ownership, place of registration or flag of vessels, land vehicles or other means of transport used. article 3 provides for exemption of Traffic in Transit from customs duties or import or export taxes or any special dues in respect of transit, within the transit State. article 4 refers to means of transport and tariffs. article 5 refers to methods and documentation in regard to customs, transport, Act. article 6 refers to storage of goods in transit. article 7 refers to delays or difficulties in traffic in transit. article 8 refers to free zones or other customs facilities. article 9 refers to provision of greater facilities. All that we need mention about Articles 4 to 9 is that details have necessarily to be worked out by mutual agreement. article 10 refers to relation to most favoured nation clause. article 11 refers to 'exceptions to Convention ' or grounds of pubic health, securities, and protection. of intellectual property. It is perhaps useful to extract the whole of Art 11. "Exceptions to Convention on grounds of public health, security, and protection of intellectual property 1. No. Contracting State shall be bund by this Convention to afford transit to persons whose admission into its territory is forbidden, 677 or for goods of a kind of which the importation is prohibited, either on grounds of public morals, public health, or security or as a precaution against diseases of animals or plants or against pests. Each Contracting State shall be entitled to take reasonable precautions and measures to ensure that persons and goods, particularly goods which are the subject of a monopoly, are really in transit, and that the means of transport are really, used for the passage of such goods, as well as to protect the safety of the routes and means of communication. Nothing in this Convention shall affect the measures which a Contracting State may be called upon to take in pursuance of provisions in a general international convention, whether of a word wide or regional character, to which it is a party, whether such convention was already concluded on the date of this Convention or is concluded later, when such provisions relate: (a) to export or import or transit of particular kinds of articles such as narcotics, or other dangerous drugs, or arms; or (b) to protection of industrial, literary or artistic property, or protection of trade names, and indications of source or appellations of origin, and the suppression of unfair competition. Nothing in this Convention shall prevent any Contracting State from taking any action necessary for the protection of its essential security interests". article 12 refers to exceptions in case of emergency. article 13 refers to application of the Convention in time of war. article 14 refers to obligations under the Convention and rights and duties of United Nations Members. article 15 refers to reciprocity. article 16 refers to settlement of disputes. article 17 refers to signature. article 18 refers to ratification. article 19. refers to accession. article 20 refers to entry in to force. article 21 refers to revision. article 22 refers to notifications by the Secretary General. And article 23 refers to authentic texts. 618 It is thus seen that the Convention while providing for freedom of transit for the passage of goods between a land locked State and the sea, across the territory of a transit State emphasizes the need for agreement between the land locked country and the transit country and, more important for our present purposes, it specifies certain exceptions. It is indeed remarkable that the Convention places traffic (illicit) in industrial, literary or artistic property on the same footing as traffic in narcotics, dangerous drugs and arms. This opinion of the International Community as revealed by the convention must be borne in my mind in our further consideration of the question. It may, be interesting to notice here what Johan H.E. Fried, who represented the Government of Nepal as one of the members of the delegation at the U.N. Conference which produced the Convention, has to say about these exceptions. In an article which he wrote in the Indian Journal of International law, he said,: "The test of a treaty are its exceptions. The proof of a treaty pudding is, when it cannot be eaten. It is the old problem of finding a balance between demands for saving clauses and the opposite claim that the very value of a treaty depends on its reliability. For land locked States, conditions under their outlet to the outside world may be curtailed can of course be crucial. The Convention declares exceptions permissible for five reasons (1) certain well specified reasons of public policy; (2) because of overriding international obligations; (3) emergency in the country of transit; (4) in case of war: (5) protection of its essential security interests. A few words about each, in view of their extraordinary importance. Exceptions for reasons of public policy. The State of transit may this is permissive, not obligatory prohibit transit of certain goods for the reason that their import into its own territory is prohibited, namely (article 11, Para 1): (a) grounds of public morals e.g., indecent literature: 679 (b) on grounds of public health or public security; (e.g., contaminated food or improperly packed explosives); (c) as precaution against animal diseases plant diseases or pests. This clause (dubbed at the Conference as the "dirty pictures and rotten fish clause") will not hamper international trade if properly applied. The same can probably be said of the "measures which a Contracting State may be called upon to take ("poutetre amena a prendre" in the equally authentic French version which is several niches less permissive) in obedience to certain international treaties to which it is a party, namely, treaty provisions relating to (a) "expert, import or (i) transit of particular kinds of articles such as narcotics, or other dangerous drugs, or arms". (As to arms this would therefore only become operative if a worldwide or regional treaty prohibiting or restricting international arms trade existed). (b) "protection of industrial, literary or artistic property, or protection of trade names", and the like These provisions are noteworthy because they permit the States of transit to enforce, say a copy right or trade mark convention even if for example, neither the country of origin nor of destination is party to it. . . . . Far as these provisions go, transit traffic must not be hampered for any other reason of public policy of the State of transit. If that State forbids importation of certain luxury goods for financial reasons, or of certain textiles to protect its own spinning industry, that is, economic reasons, or of shortwave radios for political reasons all such goods must still be permitted to pass through its territory. Qualifiedmergency. . . . . . . 680 4. War. . . . . . . . . 5. Protection of essential security interests. . . . . We may now take a look at the treaties with our neighbour Nepal and the Protocols. First, the 'Treaty of Trade ' which was contracted "in order to expand trade between their respective territories and encourage collaboration in economic development". article 2 stipulates that the contracting parties shall endeavour to grant maximum facilities and to undertake all necessary measures for the free and unhampered flow of goods, needed by one country from the other, to and from their respective territories. article 3 enjoins the contracting parties to accord unconditionally to each other treatment no less favourable than that accorded to any third country with respect to (a) customs duties and charges of any kind imposed on or in connection with importation and exportation and (b) import regulations including quantitative restrictions. article 4 provides that the contracting parties should, on a reciprocal basis, exempt from basic customs duty as well as from quantitative restrictions the import of such primary products as may be mutually agreed upon, from each other. article 8 casts a duty on the contracting parties to cooperate effectively with each other to prevent infringement and circumvention of the laws, rules and regulations of either country in regard to the matters relating to foreign exchange and foreign trade. article 9 specially provides that notwithstanding the earlier provisions of the treaty either Contracting Parry may maintain or introduce such restrictions as are necessary for the purpose of (a) protecting public morals, (b) Protecting human, animal and plant life, (c) Safeguarding national treasures, (d) safeguarding the implementation of laws relating to the import and export of gold and silver bullion, and 681 (e) safeguarding such other interests as may be mutually agreed upon. Article (10) which may be extracted in full is as follows: "Nothing in this Treaty shall prevent either Contracting Party from taking any measures which may be necessary for the protection of its essential security interests or in pursuance of general international conventions, whether already in existence or concluded hereafter, to which it is a party relating to transit, export or import of particular kinds of articles such as opium or other dangerous drugs or in pursuance of general conventions intended to prevent infringement of industrial, literary or artistic property or relating to false marks, false indications of origin or other methods of unfair competition". It appears to us that the Treaty of Trade concerned itself with trade between India and Nepal and not with trade between Nepal and other countries. The provisions relating to import, export, transit and the free and unhampered flow of goods refer to the import and the export from one country to another i.e. from India to Nepal and from Nepal to India and to the transit and the free and unhampered flow of goods in the course of trade between the two countries. Even so, express reservation is made to enable each of the countries to impose restrictions for certain purposes and to take such measures as may be necessary for the protection of essential security interests and effectuating international conventions relating to opium and other dangerous drugs and also to effectuate "general conventions intended to prevent infringement of industrial, literary or artistic property or relating to false marks, false indications or origin or other methods of unfair competition". (article 10) The Treaty of Transit is more relevant. Its scheme, and sequence and even the language indicate that it is based on the 1965 CONVENTION ON TRANSIT TRADE OF LAND LOCKED COUNTRIES. The Preamble to the treaty mentions that a treaty has been concluded 'recognising that Nepal as a land locked country needs access to and from the sea to promote its international trade, and recognising the need to facilitate the traffic in transit through their territories '. article 3 defines 'Transit ' in Transit ' and is as follows: "The term 'Traffic in Transit ' means the passage of goods including unaccompanied baggage across the territory of a Contracting party when the passage is a portion of a complete journey which begins 682 or terminates within the territory of the other Contracting Party. The transshipment, warehousing, breaking bulk and change in the mode of transport of such goods as well as the assembly or reassembly of machinery and bulky goods shall not render the passage of goods outside the idefinition of "traffic in transit" provided any such operation is undertaken solely for the convenience of transportation. Nothing in the Article shall be construed as imposing an obligation on either Contracting Party to establish or permit the establishment of permanent facilities on its territory for such assembly, disassembly, or reassembly". Art.1 requires the Contracting Parties to accord 'Traffic in Transit ' freedom of transit across their respective territories through routes mutually agreed upon making no destination based on flag of vessels the places of origin, departure entry, exit, destination, ownership of goods or vessels. article 4 exempts Traffic in Transit from customs duties and transit duties or other charges except reasonable charges for transportation and such other charges as are commensurate with the costs of services rendered in respect of such transit. article 5 requires each of the Contracting Parties to provide, for the convenience of traffic in transit, warehouses or sheds, for the storage of traffic in transit awaiting customs clearance before onward transmission. article 6 stipulates that Traffic in Transit shall be subject to the procedure laid down in the Protocol, Articles 8 and 9 correspond to the provisions of Articles 11, 12 and 13 of the 1965 CONVENTION ON TRANSIT TRADE OF LAND LOCKED STATES and are similar to Article 9 and 5 to 10 of the Treaty of Trade and reserve the right of each of the contracting parties to impose restrictions for certain purposes and take measures in connection with certain interests. In particular article 9 mentions that nothing in the treaty shall prevent either Contracting Party from taking any measure which may be necessary in pursuance of general conventions intended to prevent infringement of industrial, literary or artistic property or relating to false marks, false indications of origin or other methods of 683 unfair competition. The protocol annexed to the Treaty of Transit contains a detailed procedure for the transit of goods across the territory of India en route from the Port of Calcutta to their Nepalese destination. The Protocol contains detailed provisions to ensure the goods reaching Nepal and to prevent the contingency of the goods escaping into the Indian market while on the way to Nepal. While the Treaty of Trade generally guarantees to each of the Contracting Parties the free and unhampered flow of goods needed by one country from the other, the Treaty of Transit generally guarantees to each of the Contracting Parties freedom of transit across the territory of the other Contracting Party in respect of goods which have to pass through the territory of such other Contracting party to reach the first Contracting Party from outside the territory of the second Contracting Party. In practice the two treaties really mean a guarantee to Nepal to permit free and unhampered flow of goods needed by Nepal from India and a guarantee of freedom of transit for goods originating from outside India across the territory of India to reach Nepal. In the matter of payment of customs duties the Treaty of Trade provides for the most favourable treatment while the Treaty of Transit grants exemption from such payment. Both treaties contain reservations. There is a reservation enabling the imposition of such restrictions as are necessary for the purpose of protecting public morals, human, animal and plant life, safeguarding national treasures, the implementation of laws relating to the import and export of gold and silver bullion and the safeguarding of other mutually agreed interests. There is an express reservation for the protection of essential security interests. There is also provision for necessary measures in pursuance of general international conventions relating to transit, export or import of articles such as opium or other dangerous drugs. There is further provision for taking necessary measures in pursuance of general conventions intended to prevent infringement of industrial, literary and artistic property or relating to false marks, false indications of origin or other methods of unfair competition. So, the two treaties generally assure to Nepal the free and unhampered flow from India and freedom of transit across India, to goods or of goods which we may say in the broad way are not res extra commercium. In particular the treaties expressly contain reservations enabling each of the contracting parties to 684 take measures in pursuance of general conventions for the protection of industrial, literary and artistic property. So we have it that article 11 of the 1965 CONVENTION ON TRANSIT TRADE OF LAND LOCKED STATES, article 10 of the Treaty of Trade and article 9 of the Treaty of Transit contain exceptions to protect "industrial, literary or artistic property" and to prevent "false marks, false indications of origin or other methods of unfair competition", pursuant to general conventions. Neither the International Convention of 1965 nor the Treaties between the two nations prohibit the imposing of restrictions for this purpose. On the other hand, they contain reservations to the contrary. So great is the concern of the International Community for industrial, literary or artistic property that the Convention on Transit Trade of Land locked Countries views traffic in, this kind of property with the same gravity as it views traffic in narcotics dangerous drugs and arms. So, the Convention on Transit Trade of Land locked States and the Treaties between the two countries, leave either country free to impose necessary restrictions for the purpose of protecting industrial, literary or artistic property and preventing faise marks, false indications of origin or other methods of unfair competitions in order to further other general conventions. It is clear that for this purpose, it is not necessary that the land locked country should be a party to the general Convention along with the transit country. The interpretation placed by Johan H.E. Fried that the provisions of the 1965. Convention permit the States of transit to enforce, sa/ a Copyright or trade mark convention even if, for example, neither the country of origin nor of destination is party to it appears to us to be a correct interpretation. The next step for us to consider is whether there is any general Convention on Copyright. An artistic, literary or musical work is the brain child of its author, the fruit of his labour, and, so, considered to be his property. So highly is it prized by all civilised nations that it is thought worthy of protection by national laws and international Conventions relating to Copyright. The International Convention for the protection of literary or artistic works first signed at Berne on 9th September, 1886, was revised at Berlin in 1908, at Rome in 1928, at Brussels in 1948, at Stockholm in 1967 and finally at Paris in 1971. article 1 of the Convention, as revised, constitutes the countries to which the Convention applies into a Union for the protection of 685 the rights of authors in their literary and artistic works. The expression 'literary and artistic works ' is defined to include every production in the literary, scientific and artistic domain whatever may be the mode or formation of its expression. It is provided that the work shall enjoy protection in all countries of the Union. Various detailed, provisions are made in the Convention for the protection of the works. article 9 provides that authors of literary and artistic works protected by the convention shall enjoy the exclusive right of authorising the reproduction of these works in any manner or form. It is also expressly stipulated that any sound or visual recording shall be considered as a reproduction for the purposes of the Convention. We are not really concerned with the several details of the Convention. But we may refer to article 16 which provides: "1. Infringing copies of a work shall be liable to seizure in any country of the Union where the work enjoy legal protection; 2. The provisions of the preceding paragraphs shall also apply to reproductions coming from a country where the work is not protected or has ceased to be protected. The seizure shall take place in accordance with the Legislation of each country". India we may mention is a party to the Berne Convention. The Universal Copyright Convention which was first signed in Geneva on September 6, 1952 was revised in Paris in 1971. Each Contracting State is called upon to undertake 'to provide for the adequate and effective protection of the right of authors and other copy right proterietors in literary, scientific and artistic works including writings, musical, dramatic and cinematograph works and paintings, engraving and sculpture '. The rights are to include the exclusive right to authorise reproduction by any means, public performance and broadcasting. Each Contracting State is required to adopt such measures as are necessary to ensure the application of the Convention. The Convention is not in any way to affect the provision of the Berne Convention for the protection of literary or artistic works or membership in the Union created by that Convention. The Universal Copyright Convention is not applicable to the relationships among countries of 686 the Berne Union in so far as it relates to the protection of works having as their country of origin, within the meaning of the Berne Convention, a country of the Berne Union. India is a signatory to the Universal Copyright convention also. The time is now ripe for us to refer to our own of 1957. Section 2(c), (h), (o), (p), (f) and (w) define 'artistic work ', dramatic work ', literary work, 'musical work ', 'cinematograph film ' and 'record ' respectively. 2(y) defines "work" as meaning any of the following works, namely,: (i) a literary, dramatic, musical or artistic works; (ii) a cinematograph film; (iii) a record. 'Record ' is defined by Sec. 2(w) to mean 'any disc, tape perforated roll or other device in which sounds are embodied so as to be capable of being reproduced therefrom, other than a sound track associated with the cinematograph film. 'Recording ' is defined by Sec. 2(x) to mean 'the aggregate of the sounds embodied in and capable of being reproduced by means of a record". "Infringing copy ' in relation to a record is defined to mean, by Sec. 2(m)(iii), "any such record embodying the same recording. If such record is made or imported in contravention of the provisions of the Act '. 13(1) states that copyright shall subsist through out India in (a) original, literary, dramatic, musical and artistic works; (b) cinematograph films; and (c) records. 14 explains the meaning of 'Copyright ' in relation to various 'works '. In the case of a record, copyright is said to mean "the exclaims right, by virtue of, and subject to the provisions of, this Act to do or authorise the doing of any of the following acts by utilising the record, namely: (i) to make any other record embodying the same recording; 687 (ii) to cause the recording embodying in the record to be heard in public; (iii) to communicate the recording embodied in the record by radio diffusion" (Sec. 14(1)(d). Sections 17 to 21 deal with 'Ownership of Copyright and the rights of the owner ', Sections 22 to 29 with 'Term of Copyright ', Sections 30 to 32 with 'Licences ', Sections 33 to 36 with 'Performing Rights Societies ', Sections 37 to 39 with Rights of Broadcasting Authorities, Sections 40 to 43 with International Copyright and Sections 44 to 50 with Registration of Copyright. Sections 51 to 53 deal with infringement of Copyright. Sec, 51 states when Copyright in a work shall be deemed to be infringed. In particular clause (b) states that Copyright shall be deemed to be infringed "when any person (i) makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire, or (ii) distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of the copyright or (iii) by way of trade exhibits in public, or (iv) imports (except for the private and domestic use of the importer) into India, any infringing copies of the work '. There is an explanation to which it is not necessary to refer for the purposes of this case, enumerates the acts which shall not constitute an infringement of copyright. It is unnecessary to refer to the various acts enumerated in Sec. it is enough to state that bringing into India an infringing work for the purpose of transit to Nepal or any other country is not one of the excepted acts. Sec. 53 which is of direct relevance as it deals with importation of infringing copies ' needs to be fully extracted '. It says,: "53.(1) The Registrar of Copyrights, on application by the owner of the copyright in any work or by this duly authorised agent and on payment of the prescribed fee, may, after making such inquiry as he deems fit, order that copies made out of India of the work which if made in India would infringe copyright shall not be imported. (2) Subject to any rules made under this Act, the Registrar of Copyrights or any person authorised by him in this behalf may enter any ship, dock or premises where any such copies as are referred to in sub section (1) may be found and may examine such copies. (3) All copies to which any order made under sub section(1) applies shall be deemed to be goods of which the import has been prohibited or restricted under Sec. 11 of the , and all the provisions of that Act shall have effect accordingly; Provided that all such copies confiscated under the provisions of the said Act shall not vest in the Government but shall be delivered to the owner of the copyright in the work. This provision empowers the Registrar of Copyrights to make an order that copies made out of India of any work which if made in India would infringe Copyright, shall not be imported. This the Registrar may do on the application of the owner of the Copyright in that work or by his duly authorised agent on payment of the prescribed fee and after making such enquiry as he deems fit. 689 The effect of such an order by the Registrar is to deem all copies to which the order applies to be goods of which the port has been prohibited or restricted under sec. 11 of the Custom Act, 1962, and to attract all the provisions of the that basis, including the liability to be confiscated, with the modification that copies confiscated under the provisions of the Act shall not vest in the Government, but shall be delivered to the owner of the Copyright. The question is what does the word import ' mean in Sec. 53 of the ? The word is not defined in the though it is defined in the . But the same word may mean different things in different enactments and in different contexts. It may even mean different things at different places in the same statute. It all depends on the sense of the provision where it occurs. Reference to dictionaries is hardly of any avail, particularly in the case of words of ordinary parlance with a variety of well known meanings. Such words take colour from the context. Appeal to the Latin root won 't help. The appeal must be to the sense of the statute. Hidayatullah J in Burmah Shall etc vs Commercial Tax Officer, has illustrated how the contextual meanings of the very words import ' and export ' may vary. We may look at Sec. 53, rather than elsewhere to discover the meaning of the word "import". We find that the meaning is stated in that provision itself. If we ask what is not to be imported, we find the answer is copies made out of India which if made in India would infringe copyright. So it follows that 'import ' in the provision means bringing into India from out of India. That, we see in precisely how import is defined under the . 2(23) of the defines the word in this manner: "Import, with its grammatical variation and cognate expression means bringing into India from a place outside India. But we do not propose to have recourse to to interpret expressions in the even if it is permissible to do so because Sec. 53 of the is made to run with Sec. 11 of the . 690 It was admitted by the learned counsel for the respondents that where go are brought into the country not for commerce, but for onward submission to another country, there can, in law, be no important. It was said that the object of the was to precious authorised reproduction of the work or the unauthorised explosion of the reproduction of a work in India and this object would not be frustrated if infringing copies of a work were allowed transit across the country. If goods are brought in only to go out, there is no import, it was said. It is difficult to agree with this submission thought it did find favour with the Division Bench of the Calcutta High Court, in the judgment under appeal. In the first place, the language of Sec. 53 does not justify reading the words 'imported for commerce for the words imported '. Nor is there any reason to assume that such was the object of the legislature. We have already mentioned the imported attached by International opinion, as manifested by the various International Conventions and Treaties, to the protection of Copyright and the gravity with which traffic in industrial, literary or artistic property is viewed, treating such traffic on par with traffic in narcotics, dangerous drugs and arms. In interpreting the word import ' in the , we must take note that while positive requirement of the Copyright Conventions is to protect copyright, negatively also, the Transit Trade Convention and the bilateral Treaty make exceptions enabling the Transit State to take measure to protect Copyright. If this much is borne in mind, it becomes bear that the word import ' in Sec. 53 of the cannot bear the narrow interpretation sought to be placed upon it to limit it to import for commerce. It must be interpreted in a sense which will fit the into the setting of the International Conventions. The Calcutta High Court thought that goods may be said to be imported into the country only if there is an incorporation or mixing up of the goods imported with the mass of the property in the local area. In other words the High Court realized on the original package doctrine ' as enunciate by the American Court. Reliance was placed by the High Court upon the decision of this court in the Central India Spinning and Weaving & Manufacturing Co. Ltd; The Empress Mills, Nagpur vs The Municipal Committee, Wardha ; That was a case which arose under the C.P. and Berar Municipalities Act and the question was whether the power to impose 'a terminal tax on goods or animals imported into 691 or exported from the limits of a municipality" included the right to levy tax on goods which were neither loaded or unloaded at Wardha but were merely carried across through the municipal area '. This court said that it did not. The word 'import ' it was thought meant not merely the bringing into but camprised something more, that is 'incorporating and mixing up of the goods with the mass of the property in the local area ', thus accepting the enunciation of the 'Original Package Doctrine ' by Chief Justice Marshall in Brown vs State of Maryland Another reason given by the learned Judges to arrive at the conclusion that they did, was that the very levy was a 'terminal tax ' and, therefore, the words 'import and export ', in the given context, had something to do with the idea of a terminus and not an intermediate Stage of a journey. We are afraid the case is really not of any guidance to us since in the context of a 'terminal tax ' the words 'imported and exported ' could be construed in no other manner than was done by the Court. We must however say that the 'original package doctrine ' as enunciated by Chief Justice Marshall on which reliance was placed was expressly disapproved first by the Federal Court in the Province of Madras vs Buddu Paidama, and again by the Supreme Court in State of Bombay vs F.N. Balsara, ; Apparently, these decisions were not brought to the notice of the court which decided the case of Central India Spinning and Weaving and Manufacturing Co. Ltd. The Empress Mills Nagpur Municipal Committee, Wardha. So we derive no help from this case. As we said, we prefer to interpret the words 'import ' as it is found in the rather than research for its meaning by referring to other than research statutes where it has been used. The learned counsel for the appellant invited our attention to Radhakishan vs Union of India : [1965] 2 S.C.R. 213, Shawhney vs Sylvania and Laxman, , Bernado vs Collector of Customs A.I.R. 1960 Kerala 170, to urge that importation was complete so soon as the Customs barrier was crossed. They are cases under the and it is needless for us to seek aid from there when there is enough direct light under the and the various conventions and treaties which have with the subject Copyright ' from different angles. We do not also desire to crow our judgment with reference to the history of the Copyright and the Customs legislations in the United Kingdom and India as we do not think it necessary to do so in this case. We have, therefore, no hesitation in coming to the conclusion that the word 'import ' in Secs. 51 and 53 of the 692 means 'bringing into India from outside India ', that it is not limited to importation for commerce only but includes importation for transit across the country. Our interpretation, far from being inconsistent with any principle of International law, is entirely in accord with International Conventions and the Treaties between India and Nepal. And, that we think is as it should be. We have said that an order under Sec. 53 may be made by the Registrar of Copyrights on the application of the owner of the Copyright, but after making such enquiry as the Registrar deems fit. On the order being made the offending copies are deemed to be goods whose import has been prohibited or restricted under Sec. 11 of the . There upon the relevant provisions of the are to apply, with the difference that confiscated copies shall not vest in the Government, but shall be delivered to the owner of the Copyright. One fundamental difference between the nature of a Notification under Sec. 11 of the and an order made under Sec. 53 of the is that the former is quasi legislative in character, while the latter is quasi judicial in character. The quasi judicial nature of the order made under Sec. 53 is further emphasised by the fact that an appeal is provided to the Copyright Board against the order of the Registrar under Sec.72 of the . We mention the character of the order under Sec. 53 to indicate that the effect of an order under of the is not as portentous as a notification under Sec. 11 of the . The Registrar is nor bound to make an order under Sec. 53 of the so soon as an application is presented to him by the owner of the Copyright. He has naturally to consider the context of the mischief sought to be prevented. He must consider whether the copies would infringe the Copyright if the copies were made in India. He must consider whether the applicant owns the Copyright or is the duly authorised agent of the Copyright. He must hear these claiming to be affected if an order is made and consider any contention that may be put forward as an excuse for the import. He may consider any other relevant circumstance. Since all legitimate defences are open and the enquiry is quasi judicial, no one can seriously complain. In the result, the judgment of the Division Bench is set aside and that of the learned single judge restored. There is no order as to costs. We are grateful to the learned Attorney General, who appeared at our instance, for the assistance given by him. H.S.K. Appeal allowed.

By treaty and by international convention, India allows transit facilities to Nepal, its neighbour and a land locked country. A company based in Kathmandu, Nepal imported a consignment of pre recorded cassettes from Singapore which was awaiting its despatch to Nepal at Calcutta Port. As the 665 appellant company suspected those cassettes to be unauthorised reproductions of its records and cassettes, the import of which into India was prohibited, the appellant company moved the Registrar of Copyrights for action under s.53 of the which enables the Registrar, after making such enquiries as he deemed fit, to order that copies made out of India of a work which if made in India would infringe copyright, shall not be imported. As the Registrar did not take expenditious action, the appellant company moved the High Court by a writ petition. A single Judge made an interim order permitting the appellant company to inspect the consignment and if any of the cassettes were found to have infringed the appellant 's copyright, they were to be kept apart until further orders of the Registrar. The Registrar was directed to deal with the application of the appellant company in accordance with law. The consignee preferred an appeal against this order of the single Judge. A Division Bench of the High Court allowed the appeal and dismissed the writ petition of the appellant company. The Division Bench held that there was no importation when the goods entered India en route to Nepal. The Division Bench was of the view that the word `import ' did not merely mean bringing the goods into India, but comprehended something more, that is, "incorporating and mixing, or mixing up of the goods imported with the mass of the property in the local area". The company obtained special leave to appeal. The questions which arose were : (i) whether international law is, of its own force, drawn into the law of the land without the aid of a municipal statute, (ii) whether, so drawn, it overrides municipal law in case of conflict; (iii) whether there is any well established rule of international law on the question of the right of land locked states to innocent passage of the goods across the soil of another state; and (iv) what is the meaning of the word `import ' used in s.53 of the . Allowing the appeal, ^ HELD : On questions (i) & (ii). There can be no question that nations must march with the international community and the municipal law must respect rules of international law even as nations respect international opinion. The comity of nations requires that rules of international law may be accommodated in the municipal law even without express legislative sanction provided they do not run into conflict with Acts of Parliament. But when they do run into such conflict, the sovereignty and the integrity of the republic and the supremacy of the constituted legislatures in 666 making the laws may not be subjected to external rules except to the extent legitimately accepted by the constituted legislatures themselves. The doctrine of incorporation also recognises the position that the rules of international law are incorporated into national law and considered to be part of the national law, unless they are in conflict with an Act of Parliament. Comity of nations or no, municipal law must prevail in case of conflict. National courts cannot say yes if Parliament has said no to a principle of international law. National courts will endorse international law but not if it conflicts will national law. National courts being organs of the national state and not organs of international law must perforce apply national law if international law conflicts with it. But the courts are under an obligation within legitimate limits, to so interpret the municipal statute as to avoid confrontation with the comity of nations or the well established principles of international law. But if conflict is inevitable, the letter must yield. [673 E H] Per Lord Danning MR in Trend text Trading Corpn. vs Central Bank, [1977] I All E.R. 881; West Rand Central Gold Mining Co. vs The King, [1905] 2KB 391; Lauterpacht in International Law (General Works); Latham CJ in Politics vs The Common wealth 70 Commonwealth Law Reports 60; Tractoro export, Mascow vs M/s. Tarapore & Company and Anr, ; referred to. On question (iii). As the leading authorities on international law expressed divergent views on the question of the transit rights of land locked countries, the result has been that the land locked countries have to rely on bilateral, regional or multi lateral agreements for the recognition of their rights. They very existence of innumerable bilateral treaties, while on the one hand it raises a presumption of the existence of a customary right of transit, on the other it indicates the dependence of the right on agreement. The most recent 1965 Convention on Transit Trade of Land Locked States, to which both Nepal and India are signatories, while providing for freedom of transit for the passage of goods between the land locked state and the sea, across the territory of a transit state emphasize the need for agreement between the land locked country and the transit country. The bilateral Treaty of Trade and Treaty of Transit entered into between India and Nepal in order to expand trade between the two countries in practice mean a guarantee to Nepal to permit free and unhampered flow of goods needed by Nepal from India and a guarantee of freedom of transit for goods originating from outside India across the territory of India to reach Nepal. But the Convention on Transit Trade of Land locked States and the Treaties between the two countries, leave either country free to impose necessary restrictions for the purpose of protecting industrial, 667 iterary or artistic property and preventing false marks, false indications of origin or other methods of unfair competition in order to further other general conventions. It is clear that for this purpose, it is not necessary that the land locked country should be a party to the general conventions along with the transit country. The interpretation placed by John H.B. Fried in the Indian Journal of international law that the provisions of the 1965 Convention permit the States of transit to enforce, say a Copyright or trade mark convention even if, for example, neither the country of origin nor of destination is party to it appears to be a correct interpretation. [675 B H] An artistic, literary or musical work is the brain child of its author, the fruit of his labour, and so, considered to be his property. So highly is it prized by all civilised nations that it is thought worthy of protection by national laws and international Conventions relating to Copyright. The International Convention for the protection of literary or artistic works first signed at Berne on 9th September, 1886 and finally revised at Paris in 1971 provided for protection to the authors of literary and artistic works. The Universal Copyright Convention first signed at Geneva on 6th September 1952 and revised in Paris in 1971 requires the contracting states to provide for the adequate and effective protection of the rights of authors and other copyright proprietors in literary, scientific and artistic works including writings, musical, dramatic and cinematograph works and paintings engraving and sculpture. [684 G H] On question No. (iv) The word `import ' is not defined in the though it is defined in the Customs Act. But the same word may mean different things in different enactments and in different contexts. It may even mean different things at different places in the same statute. It all depends on the sense of the provision where it occurs. Reference to dictionaries is hardly of any avail particularly in the case of words of ordinary parlance with a variety of well know meanings. Such word take colour from the context. Appeal to the Latin root won 't help. The appeal must be to the sense of the statute. [689 C D] The submission that where goods are brought into the country not for commerce, but for onward transmission to another country, there can, in law, be no importation, is not acceptable. In the first place, the language of section 53 does not justify reading the words `imported for commerce ' for the words `imported; Nor is there any reason to assume that such was the object of the legislature. While interpreting the words`import ' in the , one must take note that while the positive requirement of the Copyright Conventions is to protect copyright, negatively 668 also, the Transit Trade Convention and the bilateral Treaty make exceptions enabling the tranait state to take measure to protect Copyright. If this much is borne in mind, it becomes clear that the word `import ' in section 53 of the cannot bear the narrow interpretation sought to be placed upon it to limit it to import for commerce. It must be interpreted in a sense which will fit the into the setting of the International Conventions. [690 B E] The word `import ' in seces. 51 and 53 of the means bringing into India from outside India ', that it is not limited to importation for commerce only, but includes importation for transit across the country. This interpretation, far from being inconsistent with any principle of International Law, is entirely in accord with International Conventions and the Treaties between India and Nepal.[691 H, 692A] The High Court thought that goods may be said to be imported into the country only if there is an incorporation or mixing up of the goods imported with the mass of the property in the local area. In other words the High Court relied on the Original Package Doctrine ' as enunciated by Chief Justice Marshall in Brown vs State of Maryland Reliance was placed by the High Court upon the decision of this Court in the Central India Spinning and Weaving & Manufacturing Co. Ltd. The Empress Mills, Nagpur vs The Municipal Committee, Wardha ; That was a case which arose under the C.P. and Berar Municipalities Act and the question was whether the power to impose "a terminal tax goods or animals imported into or exported from the limits of a municipality" included the right to levy tax on goods which `were neither loaded or unloaded at Wardha but were merely carried across through the municipal area '. We are afraid the case is really not of any guidance to us since in the context of a `terminal tax ' the words `imported and exported ' could be construed in no other manner than was done by the Court. We must however say that the `original package doctrine ' on which reliance was placed was expressly disapproved first by the Federal Court in the Province of Madras vs Boddu Paidanna : and again by the Supreme Court in the State of Bombay vs F.N. Balsara, ; [690 G H, 691 A E] An order made under section 53 of the is quasi judicial. The Registrar is not bound to make an order under section 53 of the so soon as an application is presented to him by the owner of the Copyright. He has naturally to consider the context of the mischief sought to be prevented. He must consider whether the copies would infringe the Copyright if the copies were made in India. He must consider whether the applicant owns the copyright or the duly authorised agent of the Copyright. He must hear those claiming to be affected if an order is made and consider any contention that may be put forward as an excuse for the import. He may consider any other relevant circumstance. Since all legitimate defences are upon and the enquiry is quasi judicial, no one can seriously complain. [692 E G] 669

: Criminal Appeal No. 310 of 1971. (Appeal by Special Leave from the Judgment and Order dated 23 4 1971 of the Allahabad High Court in Criminal Appeal No. 168/ 69 with Criminal Appln. No. 986/69). Frank Anthony and U.P. Singh, for the Appellant. O.P. Rana, for the Respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. Some exceptions disprove the rule. Cases are legion where the proverbial proposition of litiga tive finality at the High Court level on findings of fact has been affirmed by this Court, but the exceptions which prove the. rule are also weB established. We must at the outset state that this case does not fit into the conventional legal mould but, nevertheless, pos sesses such strange features that our 'ultimate ' power may legitimately come into play. 690 A petty store keeper cum cashier in a rural block devel opment office (in the district of Shahjehanpur) was charged. with misappropriation of several sums adding up to a little over Rs. 5,000/ . The charges having been denied and the real culprit having been pointed out as the boss of the block development office, the Sessions Court received evi dence on both sides, found the testimony of the Block Development Officer (BDO, acronymically) 'completely false and unbelievable ' in regard to many of the items of embez zlement and made critical observations about his culpability in respect of many of the malversations. We may have something to say. about the not unusual phenomenon of the 'small fry getting caught, and the big shark breaking through the net ' in economic offences where public money is handled by public servants. For the nonce we may content ourselves with the statement that the little official in his twenties which the accused was was acquitted of all but one charge and the misappropriation of Rs. 5,194.82 dwindled into a solitary fugitive item of Rs. 50/ for which he was punished with imprisonment for one year a fine of Rs. 300/ . The conviction was confirmed but the sentence was reduced by the High Court. The aggrieved appellant urges before us that the soli tary surviving item of misappropriation held proved concur rently, had, in fact, been vitiated in the process by funda mental flaws. We will proceed briefly to narrate the epi sode and examine the tenability of the extraordinary fea tures leading to the exculpatory sequel. The agrestic immensity of Indian backwardness is sought to be banished by developmental activities through block level infrastructures. Jaitipur Block is one such and it has a nucleus of small officials and some rural development assistants, the hegemony being vested in the BDO. The dramaris personae here are the accused, the stock clerk cure cashier, the BDO (PW 8) and the Panchayat Secretary (PW 7) whose magnificent salary is Rs. 50/ per mensem. The prosecution narrative runs long but can be short if we abandon the plurality of charges and limit the facts to. the single item of Rs. 50/ . In skeletal brevity, there was a,Block Office in Jaitipur where a small staff worked on low salaries to stimulate rural development. The accused was cashier and used to be entrusted in such capaci ty with sums, large and small. The case, as originally projected, was that Rs. 5,194.82 was committed to his custo dy and the whole sum was siphoned off into his own pocket by various acts of criminal breach of trust. Admittedly it was the duty of the accused cashier to maintain the cash book and deal with the monies. Equally clear is the fact that the head of the office, the BDO, was duty bound 'to tally and check the dally entries of the cash book with the rele vant vouchers, to affix his signature. after 'checking the total at the end of the day '. The block office has, on its rolls, Panchayat Secre taries drawing small salaries. One of them is PW 7, on a monthly pay of Rs. 50/ . Another unfortunate feature of these. offices, as disclosed in the evidence, is that even these petty emoluments are paid irregularly pro 691 ducing both discontent and inclination for manipulation. That public offices should be so run is not too complimen tary. Anyway, PW 7 received his pay for December 1964 on February 22, 1965 and his pay for the later month of January 1965 he drew a few days earlier on February 15, 1965 (vide Exhibits Ka 26 and Ka 29). These oddities in disburse ments led to the plausible plea by Asiam, the accused, that P.W. 7 not having received his pittance for the month of December 1964 even after January had come and gone, pleaded his dire need for money and received Rs. 50/ as pay for the month of January 1965 and signed a separated voucher bearing that date, viz., February I, 1965. It is conceivable that a little man with a little pay packet, which is tantalizing ly postponed, pressurizes the cashier to pay him the small sum signing a voucher and it need not surprise us if the cashier gives in to compassion and makes the payment. This is precisely the case of the accused. To shore up this plea, he points out a regular entry in the cash register against the date February 1, 1965 of a payment of Rs. 50/ as salary for the month of January 1965 to P.W. 7. Rein forcement is received from the further fact that this spe cific entry of payment the falsification of which is the foundation. for the charge of misappropriation of Rs. 50/ is ticked and 'initialled by the BDO P.W. 8. We have earlier referred to the practice and the obligation of this officer to tally and check the daily entries in the cash book with the relevant vouchers and then to affix the signature after checking the total at the end of, day. Moreover he had the special responsibility, as the most responsible officer on the staff on his own showing, 'to keep the cash balance found at the end of every day in the cash chest register '. He does not do daily physical verification of the cash but does it on a monthly basis and he keeps the key of the same, although another key is left with the cashier. The accused 's contention that he paid the salary of Rs. 50/ to P.W. 7 on February 1, 1965 supported though it is by an entry in the Books duly initialled by the BDO presuma bly after verification with the corresponding voucher has been rejected by the Courts without advertence to these spinal circumstances by the superficial plea that P.W. 7 is seen to have been paid the salary for December 1964 on February 22, 1965 with a regular entry and a stamped voucher. P.W. 7, when examined, denied the earlier payment on February 1, with a touch of dubious candour and owned up the payment for December supported by the stamped voucher on February 22, 1965. A streak of mystique generates doubt in P.W. 7 's testimony because in cross examination he says: '1 do not remember as such that along with other officials the cashier would have given me the salary for the month of January 1965 for two times by mistake '. In the next breath he corrects himself to say that he had not been paid twice. On the strength of these materials a conviction of guilt has been rendered by both the Courts and. be the appreciation right or wrong, we, as the final court should have held back ordinarily from temptation for reappraisal, vehement argu ment notwithstanding. But certain grave factors, condu cive to miscarriage of justice have bulked forward to induce us to make an exception, which we will presently expatiate 692 There were nine items of misappropriation originally imputed to the accused. All, but one, remained unproven and the guilt is now fixed on one of the inconsiderable items. Not that the littlest sum of public money can be taken on privately with impunity but that the perspective is coloured somewhat by the substantial failure of the prosecution to make out its case regarding all the major items. More disquieting is the fact that the Single surviving charge stands or falls on the veracity or unveracity of a solitary witness appreciated in the light of the conspectus of circumstances. What are those circumstances ? The BDO, charged as he is with serious responsibilities including guardant functions over the finances of the institution, has sworn that he checks the daily entries in the cash book with the relevant vouchers and affixes his signature, checks the total at the end of the day and again affixes his signature. It is a pregnant piece of evidence that there is a specific entry on February 1, 1965 in the cash book that a payment of Rs. 50/ by way of salary to P.W. 7 has been made. The BDO has signed against the entry which means, in the ordinary course, he has verified the payment with reference to the relevant voucher. If this be a fact, the accused has proba bly paid the salary, made the necessary entry, shown it together with the relevant, voucher to the BDO, got his signature, totalled up the figures correctly and secured the BDO 's signature over again. The exculpatory impact of this testimony is sufficient, according to ordinary canons of criminal jurisprudence to relieve the accused of culpa bility since reasonable doubt is generated. The sensi ble scepticism about guilt which springs from the BDO 's signature against the relevant entry is heightened by the fact that the Finance Handbook referred to by the High Court in its judgment states that it is the duty of the drawing and disbursing officer to check each and every entry of receipt and expenditure recorded in the cash book and peri odically to check physically the cash balances. The BDO, according to the High Court, has made evasive statements to suppress certain facts and 'spoken some apparent ties '. Startlingly enough, the Sessions Court has recorded P.W. 8, the BDO, as false and unbelievable in regard to certain other charges and gone to the further extent of concluding that four entries figuring as charges against the accused had been really made to the BDO himself 'who probably embezzled these amounts '. The consequential acquittal of the accused on these four charges has not been disturbed. In sum, therefore, the conclusion is irresistible that the BDO, the top officer in full financial control, had behaved irresponsibly or delinquently with regard to the funds of the block office, had been described as too mendacious to be depended and had convicted himself, of gross neglect of public duty in regard to the checking of the cash register, out of his own mouth. If we are to attach there is no reason for a Court not to do so weight to the contemperane ous entry in the cash register coupled with the signature of the BDO the same day, as against his ipse dixit later, the accused is entitled to the benefit of reasona ble doubt. There is likely to have been a separate voucher evidencing the payment of Rs. 50/ which is the subject of the defalcation because the BDO is not likely to have at tested the entry of that payment without checking it up with the corresponding receipt. 693 Two circumstances fall to be mentioned before the probative balance sheet can be struck. The entry of Rs. 50/ on February 1, 1965 is seen scored off. Who did it ? Can we guess in the dark ? Nothing on record suggests that the accused alone could have done it There is much credibil ity in the theory that with the connivance of the BDO and the clerks petty sums are quietly abstracted from the public exchequer, make believe entries are made and attest ing signatures appended by the BDO and, if the peril of detection by higher officers is apprehended, scorings, additions, alterations and the like are made. It is common case that in the cash register there are many such cross ings, cuttings, scorings and like tamperings. Many scape graces were perhaps party to these processes but one scape goat cannot, for that reason, get convicted in the criminal court. In this context it is pertinent to remember that the District Accountant, after a fuller examination of the books of the block offices, has stated that the several embezzle ments have been facilitated by the laxity of the BDO who should be directed to make good the loss. A further recom mendation by him to proceed departmentally as against the BDO and as against the Cashier is also found in the report. Whether action had been taken against the BDO, the State 's counsel was not able to tell us. The sole lip service to the criminality imputed is lent by PW 7. Did he receive his salary of Rs. 50/ twice over ? Undoubtedly he was interested in denying it. Doubt hardly exists of the fact that he got his small December salary of Rs. 50/ only in February next. Far more likely that in such a situation he would have pressed for the payment of Rs. 50/ to be adjusted later. Likewise, his initial ambi guity in plainly denying that he had been paid twice en hances this suspicion. When the cash affairs of the office is in a mess, when the Chief is guilty of dereliction, when the clerks are receiving petty salaries at irregular intervals, the somewhat tainted testimony of PW 7 is fax too slender a string to hang the guilt upon, pitted as it is against the cash register entry by the BDO, apparently after consulting the payment voucher. The accused was suspended promptly and therefore this voucher, if it did exist, must have been in the office and its non production in court is not a matter for drawing an inference against the ac cused. We have made this unusual probative survey of the evi dence for the sole reason that the bona fides of the prose cution, leaving off bigger and going at the smaller, mixing false testimony with true seriously suspect and holding on to the conviction of the accused on no evidence, which a reasonable person reasonably instructed in the law will rely upon, is neither just nor legal. The accused, at the time of the offence, was in his early twenties probably a neophyte or new entrant into a little racket. Doubts there are about his complicity but that a man may be guilty is different from saying that he must be guilty. The dividing line between the two is 694 sometimes fine, but always real. There is undoubtedly collective. guilt in the conjoint delinquency in the running of the block development office. Public affairs and public funds, especially on the developmental front, require far more integrity, orderliness, activism and financial pru dence. Its absence we regret, but the specific guilt of the particular accused not having been proved, as mandated by the law, results in his acquittal. We accordingly allow the appeal. The guilt finding function is over, but judges have accountability to the country to the extent matters falling within their professional examination deserve sounding the tocsin. With this alibi we make a few observations. The popular art of helping oneself to public money, in little bits or large slices, is an official pathology whose pernicious spell has proliferated with the considerable expansion in institutions of public welfare and expenditure for rural development. From Kautilya 's Arthashastra to Gunnar Myrdal 's Asian Drama, the vice is writ large and the demoralising kink in the projects for criminal prosecution to eradicate these vices in public offices is that more often than not the bigger engineer of these anti social schemes figures as prosecuting witness and the smaller men in the package deal are put up as sacrificial goats. The head escapes, the hand is chased down and, when the Court convicts, cynicism, instead of censure, is the unintended public response. In a social system of the high and low, where the wheels of punitive processes are steered by the former, laws equal in the face quirk unequal at heart. Crack down Crime Control itself takes its alignment from the social philosophy of the agencies of public power. The present ease is a small symptom of a spread out disease and the State, in its highest echelons, determined to down this rocket of economic offences must launch massive, quick acting, broad spectrum prosecutorial remedies, regardless of personal positions, and leisurely procedural apparatuses, if high social dividends are to be drawn. The mystique of ,making the dubious officer the veracity vendor in the witness box and the collaborating minion the dock dweller, is suspected as intrigue to Shelter the upper berth culprit. Caesar 's wife, where public interest is at stake, must be above suspicion, if prosecutorial credibility is to be popular purchase. If the nation, poised for socialism, must zero in on public office offences, what we have observed must not and surely, will not slumber as obiter sermons but serve as catalysts to crash strategies on white collar crimes. In a developing country of scarce resources, husbanding public funds has a special onerousness. Gross negligence, even absent mens rea, in handling the nation 's assets by those in office must be visited with criminal liability as it in flicts double injury on that voiceless, faceless, woe stricken have not community which is aplenty. Public power, under the penal Law, must be saddled with 695 higher degree of care, if Indian jurisdiction is to fulfil its social mission through developmental legislation. Had such a law existed, many superior officers routinely signing away huge sums or large contracts could have been alterted into better standards by potential penal consequence. The present case is an instance in point and our parliamen tarians we hope, will harken. M.R. Appeal allowed.

The appellant, a cashier in a rural block development office of Shahjahanpur district, was convicted for misappro priating public money. Both the courts concurrently found that he had pocketed the sum which he claimed to have paid the Panchayat Secretary as salary. The appellant contended that the charge against him was falsified by the voucher and regular entry of the cash register regarding the above payment, which had been ticked and initialled by the Block Development Officer, and pro duced in evidence. Allowing the appeal, the Court HELD: (1) The proposition of litigative finality at the High Court level on findings of fact has been affirmed by this Court, but the exceptions which prove the rule are also well established. A conviction of guilt has been rendered by both the Courts, but certain grave factors conducive to miscarriage of justice, induce us to make an exception. The accused is entitled to the benefit of reasonable doubt owing to the contemporaneous entry in the cash register coupled with the signature of the B.D.O. the same day, as against ipsi dixit later. [689 G, 691 H, 692 G H] (2) Our observations must serve as catalysts to crash strategies on white collar crimes. Gross negligence, even absent mens rea, in handling public funds by those in office must hold penal consequences as it inflicts double injury on the poor masses. [694 G H]

ivil Appeal No. 65 of 1956. Appeal from the judgment and order dated August 31, 1954, of the Calcutta High Court in Income tax Ref. No. 57 of 1953. N. C. Chatterjee and B. P. Maheshwari, for the appellant. K. N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent. March 26. The Judgment of the Court was delivered by HIDAYATULLAH, J. Messrs. Howrah Trading Company, Ltd., Calcutta (hereinafter called the assessee) obtained on April 28, 1955, a certificate under section 66A(2) of the Indian Income tax Act from the Calcutta High Court, to appeal to this Court against the judgment dated August 31, 1954, in Income tax Reference No. 57 of 1953. The Divisional Bench (Chakravarti, C. J., and Lahiri, J.) in the judgment under appeal merely followed their earlier judgment delivered the same day in Income tax Reference No. 22 of 1953, since reported as Hindustan Investment Corporation vs Commissioner of Income tax (1). It is the latter judgment which gives the reasons for the decision. The facts of the case have been stated with sufficient fulness, yet briefly, in the statement of the case submitted by the Income tax Appellate Tribunal (Calcutta Bench) and may be conveniently set out in its own words: (1) 57 450 " The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four assessment years, 1944 45, 1945 46, 1946 47 and 1947 48 as income from dividends. The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons. It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies. The Applicant 's claim in these income tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under section 16(2) and credit for the tax deducted should be allowed to the Applicant under section 18(5). " The Income tax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income tax, Calcutta, " A " Range and by the Appellate Tribunal. The Tribunal, however, on being moved, referred the following question to the High Court: " Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income tax Act? " The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal. The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income I grossed up ' under section 16(2) and also to claim credit for tax deducted at source, under s.18(5) of the Income tax Act. The relevant sections are as follows: " 16(2) : For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been 451 paid, credited or distributed to him, and shall be increased to such amount as would, if income tax (but not super tax) at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income tax charged for the financial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed, were deducted therefrom, be equal to the amount of the dividend: (proviso omitted). 18 (5): Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub section (2) of section 16 shall be treated as a payment of incometax or super tax on behalf. . of the shareholder and credit shall be given to him therefor on the production of the certificate furnished under. .section 20 . in the assessment, if any, made for the following year under this Act: (proviso omitted). 49B(1): Where any dividend has been paid, credited or distributed or is deemed to have been paid, credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income tax in the taxable territories or elsewhere, such person shall, if the dividend is included in his total income, be deemed in respect of such dividend himself to have paid income tax (exclusive of super tax) of an amount equal to the sum by which the dividend has been increased under sub section (2) of section 16. " It was contended in the High Court that inasmuch as section 16(2) referred to an I assessee, the assessee company was entitled to have the dividend 'grossed up ' by the addition of income tax paid by the various companies at source and consequently to have the benefit of the credit allowed under the two remaining sections. In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions. The learned Judges of the High Court were of the opinion that the word " shareholder " in 452 s.18(5) had the same signification as the word " member " used in the Indian Companies Act; and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares. In our opinion, the High Court was right in its conclusion. A company when it pays income tax, does not do so on behalf of the shareholders. It is itself chargeable under the Act, In Cull vs Inland Revenue Commissioners (1), Lord Atkin stated the law (which in substance is also the law in our country) thus: My Lords, it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders. . At one time it was thought that the company, in paying tax, paid on behalf of the shareholder; but this theory is now exploded by decisions in this House, and the position of the shareholders as to tax is as I have stated it. " When the company pays its own income tax and declares a dividend from the balance of its profits, it deducts from such dividend a proportionate part of the amount of the tax paid by it. This principle is explained in another English case, and it is substantially also the law in this country. In Inland Revenue Commissioners vs Blott (2), Viscount Cave stated the law in these words: " Plainly, a company paying income tax on its profits does not pay it as agent for its shareholders. It pays as a tax payer, and if no dividend is declared, the shareholders have no direct concern in the payment. If a dividend is declared, the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company; and, in that case, the payment by the company operates in relief of the shareholder. But no agency, properly so called, is involved. " The share holders, however, get the benefit of the payment of the tax by the company. Though under (1) , 56 ; , 636. (2) , 201. 453 s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company, the payment of the tax by the company is deemed tinder sections 18(5) and 49B(1) to be payment by the shareholders. The rates of income tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of 'grossing up ', as it is commonly called, the recipient of the dividend gets some benefit. The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever. But transfers of shares are common, and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913, or by what are known as blank transfers '. In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable. Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of 'a blank transfer ', and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee. These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of members can be made against the company, if the tranferor retains the money in his own hands and fails to pay it to him. A glance at the scheme of the Indian Companies Act, 1913, shows that the words " member ", " shareholder " and " holder of a share " have been used interchangeably in that Act. Indeed, the opinion of most of the writers on the subject is also the same. 454 Buckley on the Companies Act, 12th Edition, page 803 has pointed out that the right of a transferee is only to call upon the company to register his name and no more. No rights arise till such registration ,takes place. Section 2(16) of the Indian Companies Act, 1913, defines " share " as " share in the share capital of the company Section 5 deals with the mode of forming incorporated companies, and in the case of companies limited by shares, the liability of the members is limited to the amounts, if any, unpaid on the shares respectively held by them. By section 18, Table A is made applicable to companies, unless by the Articles of any company the terms of Table A have been excluded or modified. Regulation 18 of Table A reads as follows: " The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof. " The words " holder of a share " are really equal to the word shareholder and the expression " holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members. A similar view of the Companies Clauses Consolidation Act, 1845, was taken in Nanney vs Morgan(1). The learned Lord Justices held that under section 15 of that Act, the transferee bad not the benefit of a legal title till certain things were done, which were indicated by Lopes, L.J., in the following passage: " Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities. (1) , 356. 455 The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made. See Nagabushanam vs Ramachandra Rao (1). During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company, equities exist between them, but not between the transferee and the company. The transferee can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings and inter alia, also compel the transferor to pay such dividend as he may have received. See E. D. Sassoon & Co. Ltd. vs Patch (2) approved in Mathalone vs Bombay Life Assurance Co. Ltd. (3 ). But these rights though they, no doubt, clothe the transferee with an equitable ownership , are not sufficient to make the transferee a full owner, since the legal interest vis a vis the company still outstands in the transferor; so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed. The cases in Black vs Homersham (4) or Wimbush, In re Richards vs Wimbush (5) hardly advance the matter further than this. The position, therefore, under the Indian Com panies Act, 1913, is quite clear that the expression " shareholder " or " holder of a share " in so far as that Act is concerned, denotes no other person except a " member ". The question that arises in the present case is whether by reason of sections 16(2) and 18(5) the assessee, who was a transferee on a blank transfer ' is entitled to the benefits of the grossing up of the dividend income. Learned counsel for the assessee strenuously contends that the assessee being an owner in equity of the shares and thus also of the dividend is entitled to this benefit. He refers to the use of the word I assessee in section 16(2). The Department, on the (1) Mad. 537. (3) ; (2) (4) (1878 79) L. R. (5) 456 other hand, says that the dividend can be increased under section 16(2) and credit allowed under section 18(5) if the assessee is a 'shareholder ', because the benefit of section 18(5) can go only to the shareholder, i. e., a person with his name on the register of members, and not to a person holding an equity against such shareholder. The assessee contends that the word " shareholder " includes even a person who holds a share as a result of a blank transfer, and does not necessarily mean a member of the company, whose name is on the register of members. Authorities on this point are not wanting, and indeed, in the judgment of the Calcutta High Court they have all been referred to. They are all against the assessee. See Shree Shakti Mills Ltd. vs Commissioner of Income tax (1), Jaluram Bhikulal vs Commissioner of Income tax (2), Arvind N. Mafatlal vs Incometax Officer (3) and Bikaner Trading Co. vs Commissioner of Income tax (4). The question that falls for consideration is whether the meaning given to the expression "shareholder" used in section 18(5) of the Act by these cases is correct. No valid reason exists why " shareholder " as used in section 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913. In In re Wala Wynaad Indian Gold Mining Company (5), Chitty, J., observed: " I use now myself the term which is common in the Courts, I a shareholder ', that means the holder of the shares. It is the common term used, and only means the person who holds the shares by having his name on the register. " Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question, and it was held that the transferee whose name was not registered, was entitled to the dividend after transfer had been made. These cases are Commissioners of Inland Revenue vs Sir John Oakley (6), Spence vs Commissioners of Inland Revenue (7) (1) (3) (5) , 854. (2) (4) (6) , (7) 457 and others cited at page 367 in Multipar Syndicate, Ltd. vs Devitt (1). No one can doubt the correctness of the proposition in these cases, but from an equitable right to compel the transferor to give up the dividend to the transferee, to a claim to the dividend by him as a " shareholder " against the company is a wide jump. In so far as the company is concerned, it does not even issue the certificate under section 20 of the Income tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books. Section 20 lays down: " The principal officer of every company shall, at the time of distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income tax on the profits which are being distributed, and specifying such other particulars as may be prescribed. " The meaning of section 20 as also of section 18(5) is clear if they are read with section 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income tax Officer. It lays down: " The principal officer of every company . shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder. " (Italics supplied). Section 19A makes it clear, if any doubt existed, that by the term " shareholder " is meant the person whose name and address are entered in the register of " shareholders " maintained by the company. There is but one register maintained by the Company. There (1) 58 458 is no separate register of " shareholders " such as the assessee claims to be but only a register of " members ". This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income tax Act, the words ',member and " shareholder " can be read as synonymous. The words of section 18(5) must accordingly be read in the light in which the word " shareholder " has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a "shareholder" for the purpose of section 18(5) of the Act. That benefit can only go to the person who, both in law and in equity, is to be regarded as the owner of the shares and between whom and the company exists the bond of membership and ownership of a share in the share capital of the company. In view of this, we are satisfied that the answer given by the Calcutta High Court on the question posed by the Tribunal was correct. The appeal fails, and is dismissed with costs. Appeal dismissed.

The assessee acquired shares in certain companies under "blank transfers " without getting the transfers registered with the companies and it received dividends in respect of these shares. It claimed that the dividend income should be grossed up under section 16(2) Income tax Act and that it should be allowed credit under section 18(5) for the tax deducted at source on the dividend in the hands of the companies. Held, that, the assessee was not entitled to the benefits of sections 16(2) and 18(5) as its name was not in the register of members of the companies. The benefit of section 18(5) could only go to a shareholder; and a shareholder in that section meant the same thing as in the Indian Companies Act, 1913, i. e., a " member having his name on the register. The scheme of the Indian Companies Act, 1913, shows that the words " member ", " shareholder " and " holder of a share " have been used interchangeably. The words "holder of a share" are really equal to the word "shareholder" and the expression " holder of a share " denotes only a person who, as a shareholder, has his name entered on the register of members. In re Wala Wynaad Indian Gold Mining Company, (1882) 21 Ch. D. 849, Shree Shakti Mills Ltd. vs Commissioner of Income tax, , jaluram Bhikulal vs Commissioner of Income tax, , Arvind N. Mafatlal vs Incometax Officer, [1957] 32 I.T . R. 350, Bikaner Trading Co. vs Commissioner of Income tax, , referred to. A company when it pays income tax does not do so on behalf of the shareholders, but the shareholders get the benefit of such payment. The rates of income tax applicable to the company are, in most instances, higher than the rates applicable to individual shareholders and by the process of grossing up the recipient of the dividend gets some benefit. Cull vs Inland Revenue Commissioners, and Inland Revenue Commissioners vs Blott, , referred to. 440 In blank transfers the transfer deed signed by the transferor is handed over with the share scrip to the transferee who may complete the transfer by entering his name and applying to the company for registration of his name. The company only recognises those persons whose names are on the register of members and they alone are legally entitled to the dividend declared. In the case of a blank transfer equities exist between the transferor and the transferee and the transferee has a right to claim the dividend from the transferor who holds it in trust for him, but the company is only liable to the transferor and not to the transferee. Though the transferee is clothed with an equitable ownership he is not a full owner, since the legal interest vis a vis the company still outstands in the transferor.

N: Criminal Appeal No. 381 of 1975. Appeal by Special Leave from the Judgment and order dated the 10th January, 1973 of the Punjab and Haryana High Court at Chandigharh in Criminal Revision No. 606 of 1974. V. C. Mahajan, section K. Mehta and K. R. Nagaraja for the Appellant. Ram Sarup and R. A. Gupta for Respondent No. 1 H. section Marwah and section P. Nayar for Respondent No. 2 The Judgment of the Court was delivered by j, GOSWAMI, J. On April 19, 1973, the respondent Om Parkash (hereinafter to be described as the accused) inflicted as many as five stab wounds on the appellant Suraj Bhan. The injuries were very severe as will be found from the description given below: "1. Incised wound 5 cm x 2 cm x oblique spindle shape on the left side of the front of abdomen, 8 cm below the xiphisternum and 6 cm to the left of mid line. Depth `not probed edges were fresh. Incised wound 2 1/2 cm x 1 cm oblique, 6 cm on the left and 2 cm above injury No. 1, spindle J shaped. Edges were fresh and depth was not probed. Incised wound 2 1/2 cm x 1 cm horizontal, spindle shaped 6 cm above the left anterior superior iliac spine Depth was not probed and edges were fresh. Incised wound 1 cm X 1/4 cm X 2 mm deep, horizontal 6 cm inner to end at the level of f left anterior superior iliac spine, edges were fresh. Penetrating wound 5 cm x 2 1/2 cm x cavity deep, horizontal on the front of abdomen 2 cm to the right of mid line 10 cm below the level of xiphisternum, edges were clean cut and fresh the coils of small intestine protruding through the wound. " The appellant had also to under go an operation. There is no doubt that prompt and proper medical attention alone saved the i` appellant from death. The accused was convicted under section 307 IPC by the trial court by its judgment dated February 26, 1974 and sentenced to 10 years ' rigorous imprisonment and also to a fine of Rs. 200/ in default rigorous imprisonment for one year. Although the accused gave his 301 age as 19 years, according to the trial court he appeared to be aged about 23 years. The accused appealed to the High Court against his conviction and sentence. The appeal was numbered as Criminal Appeal No. 442 of 1974. The injured Suraj Bhan also filed a Criminal Revision Application being numbered as 606 of 1974 for enhancement of the sentence passed on the accused. The appeal was decided by a learned single Judge of the High Court of Punjab and Haryana on January 10, 1975. It appears from the judgment of the High Court in that appeal that conviction of the accused was not challenged. The only point that was argued was that the accused was entitled to set off the period of his detention as an under trial prisoner against the period of imprisonment imposed upon him under section 428 of the Criminal Procedure Code 1973 (Act No. 2 of 1974) which came into force from April 1, 1974. It appears also from the judgment that the State did not oppose the aforesaid submission on behalf of the accused. The learned single Judge, therefore, passed the order in the following terms: There is force in this submission of the learned counsel which is not opposed by the State counsel. I am of the view that the ends of justice will be met if the term of imprisonment of the convict appellant is reduced to that already undergone by him." Having said. so the learned single Judge dismissed the appeal maintaining the conviction and reduced the accused 's term of imprisonment to that already undergo by him and also maintained the sentence of fine. Including ' the pre conviction detention the accused served only one year and eight months of the sentence. It appears the State did not choose to prefer any appeal against the grossly inadequate sentence passed by the High Court. On the other hand the injured Suraj` Bhan made an application to the High Court for a certificate of fitness for leave to appeal to this Court under article 134(1)(c) of the Constitution without success and thereafter obtained special leave from this Court after notice to the respondents including the State to show cause why special leave to appeal should not be granted. We have described the above facts in some detail as we fail to appreciate why the State in this case should have ordinarily ignored to take notice of such a grossly lenient sentence. G The order of the High Court was clearly unsustainable even in terms of section 428, Criminal Procedure Code, as the only set off which was urged for under the section and which was admissible, was a period of about nine months which the accused had served as an under trial prisoner prior to the conviction. It is also clear from section 428, Criminal Procedure Code itself that even though the conviction was prior to the enforcement of the Code of Criminal Procedure, benefit of section 428 would be avail able to such a conviction. Indeed section 428 does not contemplate any 5 L522SCI/76 302 challenge to a conviction or a sentence. It confers a benefit on a convict reducing his liability to undergo imprisonment out of the sentence imposed for the period which he had already served as an under trial prisoner. The procedure to invoke section 428, Criminal Procedure Code, could be a miscellaneous application by the accused to the court at any time while the sentence runs for passing an appropriate order for reducing the term of imprisonment which is the mandate of the section. In the appeal before the High Court there was no scope for the High Court to reduce the sentence only to the period already under gone under section 428, Criminal Procedure Code, in view of the only point argued before it. Since in an attempt to murder hurt was caused, the maximum punishment under second part of section 307 IPC would be imprisonment for life. The injured was not satisfied with the maximum punishment of ten years contained in the first part of the section and moved the High Court in revision for enhancement of the sentence. The revision was separately discussed by the High Court for the "reasons recorded in Criminal Appeal No. 442 of 1974" and it is this order of the High Court in revision that special leave was obtained by the appellant. In the absence of an appeal against the judgment of the High Court in Criminal Appeal No. 442 of 1974. either by the State or by the injured, that Judgment has become final which means that the accused 's sentence remains to be for a period of one year and eight months and a fine of Rs. 200/ in default rigorous imprisonment for one year. The scope of the criminal revision before the High Court was whether the sentence of ten years should be further enhanced but that sentence itself disappeared by virtue of the Judgment of the High Court in the criminal appeal. The criminal revision, therefore, be came infructuous and we can do nothing about it while the Judgment of the High Court remains operative. Unfortunately that judgment in the criminal appeal is not before us in this Court. Although, therefore, we cannot approve of such a grossly lenient sentence in the present case, we have no other alternative than to dismiss the present appeal. The appeal is, therefore, dismissed. S.R. Appeal dismissed.

The respondent "OP" inflicted five stab wounds on the appellant "S" on 19 4 1973 but the appellant survived thanks to prompt medical attention and are immediate operation. The trial court convicted "OP" under section 307 I.P.C. by its judgment dated 26 2 74 and sentenced him to 10 years rigorous imprisonment and also to a fine of Rs. 200/ The accused "OP" filed a Criminal Appeal No. 442/74) in the Punjab High Court on the ground that he was entitled to set off u/s 428 of the Crl. P.C. 1973 (Act 2 of 1974), the period of his detention as an under trial prisoner against the period of imprisonment imposed upon him. The appellant "S" also filed a Criminal Revision No. 606/ 74 74 in the High Court for enhancement of the sentence against the accused. Since there was no opposition from the State to the plea in the criminal appeal, the High Court accepting the appeal, reduced the sentence of the term of imprisonment to that already undergone by him. Against the said appeal, there was no further appeal either by the State or by "S" and therefore the orders became final. The criminal revision filed by "S" was however dismissed separately by the High Court for the "reasons recorded in Criminal Appeal No. 442/74". Unable to obtain leave under article 134(1)(c) of the Constitution, "S" obtained special leave after notice to the accused "OP" and the State. Dismissing the appeal, the Court ^ HELD: (1) It is clear from section 428 of the Criminal Procedure Code, 1973 (Act 2 of 1974) itself that even though the conviction was prior to the enforcement of the code of criminal procedure benefit of Section 428 would be available to such a conviction. Indeed section 428 does not contemplate any challenge to a conviction or a sentence. It confers a benefit on a convict reducing his liability to undergo imprisonment out of the sentence imposed for the period which he had already served as an under trial prisoner. [301H, 302A] (2) The procedure to invoke Section 428 Criminal Procedure Code could be a Miscellaneous application by the accused to the court at any time while the sentence runs for passing appropriate order reducing the term of imprisonment which is the mandate of the section. [302A] (3) In the instant case, in the absence of an appeal against the judgment of the High Court in Criminal Appeal No. 442/74 either by the State or by the injured, that judgment has become final. The scope of criminal revision before the High Court was whether the sentence of ten years should be further enhanced, but that sentence itself disappeared by virtue of the judgment of the High Court in the Criminal Appeal. The criminal revision therefore became infructuous and the Supreme Court can do nothing about it while the judgment of the High Court remains operative. 1302D, E P] Obiter: The order of the High Court was clearly unsustainable even in terms of section 428 Criminal Procedure Code as the only set off which was 300 urged for under the section and which was admissible, was a period of about nine months of pretrial detention. [The Court disapproved of such a grossly lenient sentence imposed by the High Court and deprecated that the State ignored to take notice of such a grossly lenient sentence and for not preferring an appeal to the Court.]

vil Appeal No. 350 (NT) of 1987. 632 From the Judgment and Order dated 19.11. 1985 of the Allahabad in S.T.R. No. 401 of 1985. S.C. Manchanda and Ashok K. Srivastava for the Appellant. Raja Ram Agarwal, Ajay Kumar Jain, Pramod Dayal and A.D. Sanger for the Respondent. The Order of the Court was delivered by THAKKAR, J. A transaction of sale or purchase which takes place 'in the course of export ' falling within the purview of sub section (3) of Section 51 of the Central Sales tax Act. 1956 (hereinafter called the 'Act ') cannot be subjected to sales tax by any State. The said provision inter alia provides that the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export. (i) provided such last sale or purchase took place 'after ' and (ii) was for the purpose of complying with, the agreement or order for or in relation to such export Such a transaction cannot be subjected to sales tax/purchase tax by any State in view of the embargo imposed by article 286(1) (a).1 The controversy centering around this question has been set at rest in Consolidated Coffee Ltd. v . Coffee Board, Bangalore, A.I.R. (Vol. 46) p. 164. Under the circum stances, if the last sale in favour of the respondent who is a dealer in hides and skins and exports the same out of the territory of India has taken place (1) after an agreement was entered When a sale or purchase of goods said to take place in the course of import or export (1) X X X X (2) X X X (3) Notwithstanding anything contained m ' sub section(1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after and was for the purpose of complying with, the agree ment or order for or in relation to such export. " 1. "286(1) (a) No law of a State shall impose, or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods, or export of the goods out, of the territory of India. 633 into for such export or order for such export had been accepted by him. (2) last sale made in his favour was for the purpose of complying with the obligation undertaken under the said agreement or order, the transaction reflected in such last sale or purchase cannot be lawfully taxed under the Sales Tax Act. It cannot be taxed because of the consti tutional bar embodied in Article 286 (1) (a) of the Consti tution of India. The view taken by the High Court in the Judgment under appeal that such transactions are not exigi ble to sales tax/purchase tax under the U.P. Sales Tax Act, is unexceptionable in the light of the aforesaid provisions of the Constitution and sub section (3) of Section 5 of the Act and the law declared by this Court in Consolidated Coffee Ltd. We, therefore, see no reason to interfere with the order of the High Court. It is no doubt true that Form III A under Rule 12 A of the U.P. Sales Tax Act is not an appropriate form to use in the context of such a transaction of last sale or purchase for the purpose of complying with an agreement or order for export which has already come into existence. However, it is equally true that an appropriate form to meet the situation in relation to such last sales which are not exigible to sales/ purchase tax under the U.P. Sales Tax Act having regard to the constitutional bar and having regard to the provision contained in sub section (3) of Section 5 of the Act has not been devised under the afore said Rules. It was under these circumstances that the respondent has furnished to his vendors form III A which is not appropriate except in regard to purchases made for sales of undressed hides as such within the State or in the course of inter State trade. But the mere fact that such a form has been given will not empower the State to collect or levy the sales tax/purchase tax in respect of a transaction in the course of export which satisfies the aforesaid tests prescribed by Section 5 (3) of the . It would be unconstitu tional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not. The transactions entered into by him which are such on which sales tax/purchase tax cannot be levied on account of the constitutional bar read with sub section (3) of Section 5 of the cannot become exigible to tax merely because a wrong form is used (particularly when the appropriate form has not been devised by the Rule making authority). Liability for tax in respect of such transactions cannot be fastened on the respondent for the very good reason that the State has no power to collect or levy sales tax/purchase tax on such transactions. The U.P. Sales Tax authorities should have devised an appropriate form in this behalf. They can do so even now (as has 634 been done under the Delhi Sales Tax Act by prescribing Form 49 to meet such a situation). Learned counsel for the appel lant submits that till such a form is prescribed the re spondent who claims to have entered into these transactions in the course of export as defined by sub section (3) of Section 5 of the Act may furnish to his vendor a copy of Form H as provided by the . The respondent has no objection and is prepared to do so. Under the circumstances, for the future purposes instead of fur nishing form III A under Rule 12 A of the Sales Tax Act, .the respondent will furnish a photostat copy of form H under the . Learned counsel for the respondent states that if such a copy is furnished to the vendor it will be accepted by the competent authority and the vendor will not be held liable for payment of sales tax/purchase tax in respect of such transactions subject to the rider that respondent will be held liable in case the purchases made by him do not satisfy the conditions and tests prescribed by sub section (3) of Section 5 of the and are not made in the course of export within the meaning of the said provision. So far as the past transactions are concerned the respondent will not be liable provided he satisfies the aforesaid tests and the transactions of last sales made to him are in the course of export within the deeming clause of sub section (3) of Section 5 of the Act. The appeal is disposed of accordingly. There will be no order as to costs. N.P. V Appeal dis posed of.

The respondent, a dealer in hides and skins and export ing the same out of the territory of India, entered into transactions failing within the purview of sub section (3) of Section 5 of the and which could not be taxed because of constitutional bar under Article 286( 1 )(a) of the Constitution of India, furnished Form III A under Rule 12 A of the U.P. Sales Tax Act, as an appropriate form to meet the situation was not devised under the U.P. Sales Tax Act, and sought a clarification from the Commissioner, Sales Tax, as to whether the firm was liable to tax under Section 3 AAAA of the U.P. Sales Tax Act on the purchases made against Form III A or H under the , when such dressed hides and skins were ex ported beyond the territory of India. The Commissioner, Sales Tax clarified and held that the purchases of dressed hides and skins made against Form H were not liable to purchase tax under Section 3 AAAA of the U.P. Sales Tax Act provided the same were exported outside the territory of India and the conditions laid down in Section 5(3) of the were satisfied, but if the purchases were made against Form III A and exported outside the terri tory of India, they shall be liable to purchase tax under Section 3 AAAA. On appeal, the Sales Tax Tribunal held that the respond ent was not liable to any purchase tax under Section 3 AAAA of the U.P. Sales Tax Act whether they were purchased against or without Form III A or H, as the same were export ed outside the territory of India in compliance with the order received from the foreign buyers and those transac tions were exempted under Section 6 of the . 631 A Revision Petition filed before the High Court by the appellant Revenue, contending that the decision of the Tribunal was bad in law was dismissed. Disposing of the appeal by the U.P. Sales Tax authori ties, this Court, HELD: 1.1 The mere fact that Form III A has been given will not empower the State to collect or levy the sales tax/purchase tax in respect of a transaction in the course of export which satisfies the tests prescribed by Section 5(3) of the . It would be unconstitu tional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not. [633E F] 1.2 The transactions entered into by the respondent which are such on which sales tax/purchase tax cannot be levied on account of the constitutional bar read with sub section (3) of Section 5 of the , cannot become exigible to tax merely because a wrong form is used (particularly when the appropriate form has not been devised by the rule making authority). [633F G] 1.3 Liability for tax in respect of such transactions cannot be fastened on the respondent for the very good reason that the State has no power to collect or levy sales tax/purchase tax on such transactions. The U.P. Sales Tax authorities should have devised an appropriate form in this behalf. They can do so even now (as has been done under the Delhi Sales Tax Act, by prescribing Form 49 to meet such a situation). [633G H; 634A] 1.4 For the future purposes instead of furnishing Form III A under rule 12 A of the U.P. Sales Tax Act, the re spondent will furnish a photostat copy of Form H under the . [634B] So fas as the past transactions are concerned, the respondent will not be liable provided the tests prescribed under Section 5(3) of the , are satis fied. [634D] Consolidated Coffee Ltd. vs Coffee Board, Bangalore, A.I.R. (Vol. 46) p. 164 refferred to.

iminal Appeal No. 69 of 1961. Appeal by special leave from the Judgment and order dated December 23, 1960, of the Punjab High Court (Circuit; Bench) at Delhi in Criminal 'Appeal NO.: 10 D of 1960. WITH CRIMINAL APPEAL NO. 62 of 1960. Appeal from the judgment and order dated December 23, 1959, of the Allahabad High Court in Criminal Revision No. 1694 of 1958. Sarjoo Prasad and K. K. Sinha, or the appellant in Cr. A. No. 69 of 1961. B. K. Khanna and P. D. Menon., for the respondent in Cr. A. No. 69 of 1961. R. K. Garg, D. P. Singh and section C. Agarwala, for the respondent in Cr. A. No. 62 of 1960. G. C. Mathur and C. P. Lal, for the respondent in Cr. A. No. 62 of 1960. May 3. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. The appellant in Criminal Appeal 69 of 1961 Jia Lal Was searched by the Delhi Police on April 15, 1959, and was found to be in possession of ' an ' English pistol for Which he held no licence. He was then prosecuted for an offence under section 20 of the Indian Arms Act of 1878 (XI of 1878), hereinafter referred to as 'the Act ' 867 before the Additional Sessions Judge; Delhi who convicted him under section 19 (f) of the Act, and sentenced him to rigorous 'imprisonment for nine ,months. No sanction for the prosecution had been obtained as required by section 29 of the Act. the appellant then took the matter in appeal to the High Court of Punjab which confirmed his conviction but reduced the sentence to 4 1/2 months rigorous imprisonment. It is against this judgment that this appeal by special leave is directed. Bhagwana was searched by the Saharanpur Police on August 6, 1956, and was found to be in possession of a country made pistol and four cartridges for which he held no licence. He was prosecuted before the City Magistrate, Saharanpur under a. 19(f) of the Act and was convicted and sentenced to six months rigorous imprisonment. No sanction was obtained for his prosecution, obviously because under section 29 of the Act it is not required when the offence are committed in certain areas and Saharanpur is within those areas. The appellant preferred an appeal against his conviction and sentence to the Sessions Judge, Saharanpur but the appeal was dismissed and the conviction and sentence were confirmed. The appellant then took the; matter in revision to the High Court of Allahabad which rejected the same but granted certificate under article 134(1) of the Constitution. This , is how this appeal comes before us. Though the two appeals arise out of two different prosecutions un. connected with each other, they were heard together as the same questions of law arise for determination in both. The first question that arises for our decision is whether a. 29 of the Act is unconstitutional and void as contravening article 14, in that it requires sanction for prosecution for offences under the Act, 868 when they axe committed in some areas, but not in others. Section 29 of the Act is as follows: "Where an offence punishable under section 19, clause (f), has been committed within three months from the date on which this Act comes into force in any State, district or place to which section 32, clause 2 of Act XXXI of 1860 applies at such date, or where such an offence has been committed in. any part of India not being such a district, State or place, no proceedings shall be instituted against any person in respect of such offence without the previous sanction of the Magistrate of the district or in a presidency town, of the Commissioner of police. " For a correct understanding of the true scope of the section, it is necessary to refer to the history of the Legislation relating to it. The earliest enactment dealing with this subject is the Arms and Ammunition and Military Stores Act 18 of 1841 which came into force on August 30, 1841, and that prohibited the export of arms and ammunition out of the territories belonging to the East India Company and enacted certain prohibitions as regards the storing of ammunition. This Act was repealed by Act 13 of 1852. After the uprising against the British rule in 1857, the Government felt that a more stringent law was required for preventing insurrections and maintaining order and so a new Act was passed, Act 28 of 1857. This Act is a comprehensive one dealing with many matters not dealt with in previous legislation, and contains elaborate provisions as regards the manufacture, import, sale, possession and use of arms and ammunition. of particular relevance to the present discussion is P. 24 of this Act which empowered the Governor 869 General to order general search for arms and ammunition in any district. In exercise of the power conferred by this section, the Governor General issued a notification on December 21, 1858, ordering a general search and seizure of arms in in the territories north of the Jumna and Ganga then known as North Western Provinces. The reason for this was that it was this territory that was the main seat of the disturbances of 1857. Act 28 of 1857 was a temporary Act which was to be in force for a period of two years and after some extentions it finaly lapsed on October 1, 1 60. On that date a new Act, Arms and Ammunition Act 31 of 1860 came into force. This statute contains in addition to what was enacted in Act 28 of 1857, certain new provisions, of which a. 32 is material for our discussion. It is as follows: " 'Clause 1. It shall be lawful for the Governor General of India in Council or for the Executive Government of any Presidency or for any Lieutenant Governor, or with the sanction of the Gevernor General in Council for the Chief Commissioner or Commissioner of any Province, District or place subject to their administration respectively, when. ever it shall appear necessary for the public ,safety, to order that any Province, District, or place shall be disarmed. "Clause 2. In every such Province, District, or place as well as in any Province, District, or place in which an order for a general search for arms has been issued and is still in operation under Act XXVIII of 1857, it shall not be lawful for any person to have in his possession any arms of the description mentioned in section 6 of this Act, or any percussion caps, sulphur, gunpowder or other ammunition without a licence. 870 This Act ,,a, in was repealed, in 1878,and the present Indian Arms Act (XI of 1878) was enacted. Now examining section 29 in the light of the history of the legislation as aforesaid, it will be seen that it makes a distinction between the areas to which section 32 of Act 31 of 1860 applied and the other areas. The former included territories which had been disarmed under orders of the Governor General in accordance, with cl. (1) and those in which a general search had been ordered under cl. (2) which under the notification of December 1858 comprised the territories north of the Jumna and Ganga. Section 29, provides,.that for prosecution for offences committed within the rem to which section 32 applied, No. sanction was required but suoh sanction was required, for a prosecution for the same offence when committed in 'other areas. The point for decision is whether this, discrimination which is hit by article, 14 of th Constitution. Now the principles governing the application of Art 14 are ,Well, settled and there is no need to restate them. Article, 14 prohibits hostile legislation directed against individuals or groups of individuals, but it does not forbid reasonable Classiit scation. And in order that a classifcation might be valid, it must rest on an intelligent ,differentia which distinguishes it from others and that further that must ' have, a reasonable relation to the ob ject of the legislation. There can be a valid classi fication based on a geographical differentia, but even then, that differentia must be, ,pertinent to the object of the legislation. The short question before decision the are fore is whether the differentiation between the territories north of, the; Jumna and Ganga on theme band and the other Territories on the other, has any relevance to the object of 871 the legislation. As already Pointed out this differen tiation came to be made as a result of the political situation during 1857, and has reference to the fact ' that the largest opposition to the British Grovernment came from the Taluqdars to the north of the Jumna and Ganga. But more, than a ventury has since elapsed and the conditions have so radically, changed that if is impossible now to sustain any distinction between the territories, north of the Jumna and Ganga and the other territories on any ground pertinent to the object of the law in question and on the well known principles differentiation is discrimination repugnant to article 14. That was the the view taken by, the Allhabad High Court in Mehar Chand vs State(1) and we are in agreement with it. The correctness of this decision on this point has been assailed, before us. On this conclusion two questions arise,for decision: (i) Is a. 29, omitting that part, of it which" contravenes article 14, valid, and are the prosecutions in the instant cases bad for want of sanctions thereunder; and (ii) if a. 29 is void in toto whether a. 19 also 'becomes void and unenforceable. On the first question our attention has, been drawn to two decisions of the High Court of Allahabad where this Point has been considered. in Mehar Chand 's case (1) already referred to, after holding that the distinction made in section 29 between offences committed in territories to the north of the Jamuna and Ganga and those committed elsewhere was repugned to Art, 14, the learned Judges stated as its consequence that sanction for prosecution under the Act was necessary in all cases. But this decision was overruled by a Full Bench of the Allahabad High Court in Bhai Singh vs The State(2) (1) A.I.R. (1959) All. 660. (2) A.I.R. (1960) All 369. 872 where it was held that the effect of the finding that the section was in part unconstitutional was to render it void in its entirety and that accordingly no sanction was necessary for instituting prosecutions under the Act. The respondent relies on this decision, and contends that the present proceedings are not illegal for want of sanction. The position of the appellants in the two appeals in relation to this question is somewhat different. In Criminal Appeal 69 of 1961 the appellant comes from an area which is not to the north of the Jumna and Ganga and under s.29 sanction would be required for his prosecution but the appellant in Criminal Appeal 62 of 1960 comes from an area north of the Jumna and Ganga and no sanction would be required under that section for his prosecution. The arguments of learned counsel on this question therefore proceeded on somewhat different lines. Mr. Sarju Prasad appearing on behalf of the appellant in Criminal Appeal 69 of 1961 contended that the decision in Bhai Singh 's case (1) was erroneous, that the fact that the section was invalid in its operation as regards territories to the north of the Jumna and Ganga did not render it invalid in its application to the other territories, as the two parts of the section were distinct and severable and that on the principles enunciated by this Court in R.M.D. Chamarbaugwalla vs The Union of India (2), that portion of the section which requires sanction must be held to be valid. Mr. Garg appearing for the appellant in Criminal Appeal 62 of 1960 also contended that sanction was required for prosecution under the Act and his argument in support of the contention may thus be stated It "the portion of section 29 873 which offends article 14 is , struck out, what remains will read as follows: "Where an offence under section 19 clause (f) has been committed in any part of India; No proceedings shall be instituted against any, person in respect of such of offence without the previous sanction of the Magis trate of the District. " The section as thus expurgated is complete in itself and in harmony with the rest of the Act. The appropriate rule of interpretation applicable to this situation is thus stated in Chamarbaugwalla 's Case "On the other hand, if they are so distinct and separate that after striking out what is invalid, what remains is in itself a complete code independent of the rest, then it will be upheld notwithstanding that the rest has become unenforceable. " (p. 951). On this test, the part of section 29 which requires sanction must be held to be severable from the portion, under which no sanction is required, and therefore valid. This contention must fail for the simple reason, that if accepted it must result in defeating the intention clearly and unequivocally expressed in the section, that no sanction is required for prosecution for offences committed north of the Jumna and Ganga. It will be opposed to all recognised canons of interpretation, to construe a statute as forbidding what it expressly authorises. We cannot therefore so read the section as to require sanction for prosecution for offences in the areas north of the Jumna and Ganga. When once this conclusion is reached it is difficult to accept (1) ; 874 the contention, of Mr. Sarju Prasad that the section insofar as it requires sanction for prosecution for offences committed in territories other than those to the north of the Jumna and Ganga is severable from the rest and that to that extent the law is valid. If this contention is correct, it must necessarily result in discrimination between persons who commit offences in the territories to the north of the Jumna and Ganga and those who commit the same offences elsewhere in that while the latter cannot be prosecuted without sanctions the former can be. It will then be open 'to the persons who are charged with offences committed to the north of the Jumna and Ganga to assail the law on the, ground that it discriminates against them. , and there can be no answer, to it as we have held that, the classification made by the section is not valid. The fact is that it is inherent in the very vice of discrimination that it is incapable.of being broken up into what is good and what is bad. The gravemen of the charge that article 14 has been contravened is that it makes an irrational distinc tion among persons who are similarly circumstanced and where such a charge is well founded the section must in its entirety be struck down. We are accordingly of the opinion that on our conclusion that the section is repugnant to article 14 in that it discriminates between the persons who commit offence in areas north of the Jumna and Ganga and those who commit the same offences elsewhere, the whole of it ought. to to be held to be bad. It is next contended that if section 29 is void in its entirety, section 19(f) of the Act should also be held to be void, as both these provisions form integral parts of a single scheme and must stand or fall together. 'it is, argued that the policy behind section 29 was manifestly. , to give protection to innocent subjects, against, frivolous and, vexatious prose cution, and that sanction under that section must 875 therefore be regarded as one of the essential elements, which go to make the offence. Support for this contention was also sought in the statement of objects and reasons, made when the measure 'was introduced in the Legislature, wherein it was said that ample safeguards were provided "to prevent this prohibition pressing unfairly against respectable persons". It was strongly pressed on us that in view of the above statement. it ought to be inferred that the Legislature would not have enacted section 19, if it had known that section 29 was void, and on that the conclusion must follow that the two sections are inseverable. In support of this argument reliance was placed on certain observations in Daris vs Wallace (1) and Lemke vs Farmers ' Grain Company (2). In Davis Wallace (1) the point for decision was whether when a provision which is in the nature of an exception in held to be unconstitutional, the main provision which it is intended to qualify can be enforced in its own terms. In answering it in the negative the Court observed : "Here the excepting provision was in the statute when it was enacted, and there can be no doubt that the legislature intended that the meaning of the other provisions should be taken as restricted accordingly. Only with that restricted meaning did they receive the legislative sanction which was essential to make them part of the statute law of the State '; and no other authority is competent to give them a larger application." In Lemke Farmers Grain Company (2), a law of North Dakota was assailed as unconstitutional on the ground that it was one on interstate commerce which the State Legislature could not enact. One of the contentions raised was that there were certain provisions in the Act which could be sustained as within the competence of State Legislature In rejecting this contention the Court (1) ; (1921) 257 U.S. 477 ; , 329. (2) (1921) 258 V.S. 506 876 observed : ,It is insisted that the price fixing feature of the statute may be ignored, and its other regulatory features of inspection and grading sustained if not contrary to valid Federal regulations of the same subject. But the features of this act, clearly regulatory of interstate commerce, are essential and vital parts of the general plan of the statute to control the purchase of grain and to, determine the profit at which it may be sold. It is apparent that, without these sections, the State legislature would not have passed the act. Without their enforcement the plan and scope of the act fails of accomplishing its manifest purpose. We have no authority to eliminate an essential feature of the law for the purpose of saving the constitutionality of parts of it. " It is contended that on the rule of construction laid down above, a. 19 must be held to be inseverable from section 29, and must be struck down. We are unable to agree. The contention that sanction under section 29 should be regarded as an essential ingredient of the offence under a. 19 proceeds on a misconception as to the true scope of that section. The scheme of the act is that it imposes certain obligations and breaches thereof are made offences for which penalties are prescribed. These provisions pertain to the domain of substantive law. Thus with reference to the, matters involved in this appeal, sections 14 and 15, enact that no person shall have possession of arms, and ammunition, specified therein, without a licence, and under section 19(f) a contravention of these sections is an offence punishable, as provided therein. The offence is complete, when the conditions mentioned in sections 14 and 15 are satisfied, and sanction is thus not one of the elements which enter into the constitution of the offence. Then comes section 29. It is purely procedural. It comes 877 into operation only when there is an offence already completed. It cannot therefore be regarded as an ingredient of the offence, which is" to be punished under a. 19 (f) . This must be further clear from the fact that offences under the Act are punishable under a. 19, without sanction under a. 29, when they are committed in the territories to the north of the Jumna and Ganga. It cannot be contended that the contents of as. 14 and 15, for example , which are punishable under a. 19(f) differ according as they are to be applied to areas north of the Jumna and Ganga or elsewhere. We agree with the appellants that the object a. 29 was to give protection to subjects against harassment. That appears clearly on the reading of the section. There was some argument before us as to whether the statement of objects and reasons relied on for the appellants is admissible in evidence. It is well settled that proceedings 'of the Legislature cannot be called in aid for constructing a Section, vide Administrator General of Bengal, vs Prem Lal Mullick Krishna Ayyangar vs Nellapuru mal (2). "It is clear" observed Lord Wrightin Assam Railway & Trading Co. Ltd. vs Inland Revenue Commissioner (3) "that the languageof a Minister of the Crown in proposing in Parliament a measure which eventually becomes law is inadmissible. " The question whether the statement of objects and reasons admissible in evidence for construing the statue arose directly for decision In Aswini Kumar Ghosh vs Arabinda Bose (4), and it was held that it was not. It was argued that the history of a legislation Would be admissible for ascertaining the legislative intent when the question is one of severability. That is so as held by this Court in B.M.D. Chamarbaugwalla 's case (5) at pages 951 952. (1) (1895) 221.A.107,118. (2) (1919) L.R. 47 I.A. 33, 42. (3) ; , 458. (4) (1953) S.C.R. I. 28. (5) ; 878 But the statement of objects and reasons is not a part of the history of the legislation. It is merely an expression of what according to the mover of the Bill are the scope and purpose of the legislation. But the question of severability has to be judged on the intention of the legislature as expressed in the Bill as passed, and to ascertain if the statement of the mover of the Bill is no more admissible than a speech made on the floor of the House. It may be mentioned that there are observations in some of the, judgments of this Court judgments of this that the statement of objects and reasons but for Act right be admissible not for construing the Act but for ascertaining the conditions which prevailed when the legislation was enacted. Vide the State of West Bengal vs Subodh Gopal Bose (1), M. K. Ranganathan vs Government of Madras (2), A. Thangal Kunju Mudaliar vs M. Venkitachalam Potti (3) and Commissioner of Income tax, Madhya Pradesh V. Sm. Sodra Devi It is sufficient for the purpose of this case to say that the statement of objects and reasons is sought to be used by the appellants not for ascertaining the conditions which existed at the time When the statute was passed but for showing that the legislature would not have enacted the law without the protection afforded by section 29. In our opinion it is clearly not ' admissible for this purpose. But even apart from the statement of objects, it is clear on the face of the section that it has been enacted with a, view to giving protection to the subjects. But is this sufficient to support the conclusion that the legislature would not have enacted section 19 if it had known that a. 29 was void ? It is this that the appellant has to establish before he (1) ; , 628. (2) ; , 385. (3) ; , 1237. (4) ; 879 can succeed, and the policy behind a. 29 is only one element in the decision of it. Now it appears to us ' that what is really determinative of the question is what has been already stated that section 19 is a substantive provision, whereas section 29 is an adjectival one, and in general, the invalidity of a procedural enactment cannot be held to affect the validity of a substantive provision. It might be possible to conceive of oases in which the invalidity of a procedural section or rule might so react on substantive provision, as to render it ineffective. But such cases must be exceptional. And we see nothing in the present statute to take it out of the general rule. On the other hand, the paramount intention behind the law was to punish certain offences. No doubt section 29 was enacted with a view to give some measure of protection to the subjects. But if the legislature had been told that section 29 would be bad, can there be any doubt as to whether it would have enacted the statute without section 29 ? The consequence of withdrawing the protection of that section is only that the accused will have to take up his trial in a court, but there ultimately justice will be done. Therefore if the choice was given to the legislature between allowing an offence against the State to go unpunished, and failing to give protection to a subject against frivolous prosecution, it is not difficult to see where it would have fallen. We cannot, be mistaken if we conclude that the intention of the legislature was to enact the law, with section 29 if that was possible, without it, if necessary. And that is also the inference that is suggested by the provision in section 29, exempting certain areas from its operation. The American authorities cited for the appellants do not require detailed consideration, as the principles laid down therein have been approve by this Court in Chamarbaugwalla 's case (1) at pages 950 951. The question is only one of application (1) ; 880 of the rules of interpretation laid down therein to particular legislation. It is however worthy of note that in Davis V. Wallace (1) as well as Lemke vs Farmers Grain Company the point for decision was to what the effect was of holding that a substantive provision in a law was unconstitutional, on another substantive law in the same statute. We are aware that it has some times been stated that a distinction should be made in the matter ' of severability between Criminal and Civil Laws, and that a penal statute must be construed strictly against the State. But there are numerous decisions in which the same rules of construction have been applied in deciding a question of severability of a Criminal statute as in the case of a Civil Law, and on principle it is difficult to see any good ground for the distinction. "Perhaps the moist that can be said" ' says Sutherland, for the distinction between criminal and civil statutes is that the penal nature of a statute may be a make weight on the side of inseparability" Vide Statutory Construction Vol. 2 p. 197 para 2418. In the present case the fact that a. 29 is a procedural and not a substantive enactment is sufficient to turn. the scale heavily in favour of the State. On a consideration of the scheme of the Act, and its provisions, we are of opinion that section 29 is severable from the other portions of the Act, and that its invalidity does not affect the validity of 19. In Criminal Appeal 69 of 1961 a contention was also raised that the pistol of which the appellant was 'in possession was not in a fit condition to be effectively used, and it bad no chamber, and it therefore did not fall within the definition of 'Arms ' in section 4(1) of the Act. There is no force in this (1) ; 7: ; 329, (2) ; ; 881 contention which is accordingly rejected. In Criminal Appeal 62 of 1960 an argument was advanced that the State had launched prosecutions under the De Act, some with, and others without ' sanction, and that was discrimination bit by article 14. There is no substance in this contention, which also is rejected. In the result both these appeals are dismissed. Appeal dismissed.

Section 29 of the Indian Arms Act, 1878, provided that for prosecution for an offence under section 19(f) of the Act com mitted in the territories north of the jumna and Ganga no sanction was required but sanction was required for the pro. section if the offence was committed in other areas. j was found in possession of an unlicensed firearm in Delhi, and though sanction under section 29 was necessary, he was tried and convicted without obtaining such sanction. B was found in possession of an unlicensed firearm in Saharanpur and as no sanction under section 29 was necessary for his prosecution he was tried and convicted without obtaining any sanction. The respondents contended that section 29 offended article 14 of the Constitution and was unconstitutional. j contended that even if section 29 was invalid in its operation as regards territories to the. ,North of the jurnna and Ganga it was not invalid in its 865 application to the other territories as the parts of section 29 were separate and severable. B contended that if the portion of section 29 which offended article 14 was struck down the remaining portion was complete in itself and required sanction for prosecution in all cases, and that if s.29 was void in toto s.19 could not stand and also become void and unenforceable. Held, that section 29 Arms Act offended article 14 and was unconstitutional and as such no sanction was necessary for the prosecution of either j or B. The differentiation between the territories north of the jumna and Ganga and the other territories had no relevance now to the object of the legislation. The differentiation had come into being an account of the fact that the largest opposition to the British Government in 1857 had come from the people to the north of the jumna and Ganga and they had been disarmed. But now after more than a century conditions have changed and the distinction could not be sustained on any ground pertinent to the object ,of the law in question. Mehar Chand vs State, A.I.R. (1959) All. 660, approved. Held, further, that it was not permissible to strike out only the offending words from section 29 and to read the section as requiring sanction for prosecution for offences in areas north of the jamna and Ganga. The section could. not be construed as for bidding what it expressly authorised. Nor could the section insofar as it required sanction for prosecution for offences committed in other territories be severed from the rest and held valid as that would necessarily again result in discrimination. The entire section 29 must be struck down. Bhai Singh vs State, A.I.R. (1960) All. 369. approved. Chamarbaugwalla vs Union of India, ; , referred to. Held, further, that section 29 was severable from the other, provisions of the Act and that its invalidity did not affect the validity of section 19. Section 19 was a substantive provision providing punishment for violation of sections 14 and 15 and section 29 was merely procedural and in general the invalidity of a procedural provision could not be held to affect the validity of a substantive provision. There was nothing in the Arm Act to take it out of the general rule. Section 29 was intended for giving protection to the subjects against frivolous and vexatious prosecutions but sanction was not one of the elements of the under offence s, 19(f). It could not be said that the legislature 866 would not have enacted the ' law without the; protection afforded by section 29. Davis vs Wallace, (1921)257 U.S. 477; ; and Lemka Parmers ' Grain Company; , ; 66 L. Ed. 458, referred to.

Appeal No. 80 of 1952. Appeal from the Judgment and Decree dated the 6th September, 1950, of the High Court of Judicature at Calcutta (Das Gupta and Lahiri JJ.) in Appellate Decree No. 318 of 1949 from the Judgment and Decree dated the 25th February, 1949. of the Court of the District Judge of Zillah 24 Parganas in Title Appeal No. 8 of 1948 arising out of the Judgment and Decree dated the 10th October, 1947, of the Court of the Additional Subordinate Judge, 7th Court, Alipore. M.C. Setalvad, Attorney General for India (Aurobindo Guha and Gobinda Mohan Roy, with him) for the appellant. Atul Chandra Gupta (Bijan Behari Das Gupta, with him) for respondent No. 1 1953. November 16. The Judgment of the Court was delivered by MUKHERJEA J. The facts giving rise to this appeal are, for the most part, uncontroverted and the dispute between the parties centres round the short point as to whether a contract for sale of land to which this litigation relates, was discharged and came to an end by reason of certain supervening circumstances which affected the performance of a material part of it. To appreciate the merits of controversy, it will be necessary to give a brief narrative of the material facts. The defendant company, which is the main respondent in this appeal, is the owner of a large tract of land situated, in the vicinity of the Dhakuria Lakes within Greater Calcutta. The 313 company started a scheme for development of this land for residential purposes which was described as Lake Colony Scheme No. I and in furtherance of the scheme the entire area was divided into a large number of plots for the sale of which offers were invited from intending purchasers. The company 's plan of work seemed to be, to enter into agree ments with different purchasers for sale of these plots of land and accept from them only a small portion of the con sideration money by way of earnest at the time of the agree ment. The company undertook to construct the roads and, drains necessary for making the lands suitable for building and residential purposes and as soon as they were completed. the purchaser would be called upon to complete the con veyance by payment of the balance of the consideration money. Bejoy Krishna Roy, who was defendant No. 2 in the suit and figures as a pro forma respondent in this appeal, was one of such purchasers who entered into a contract with the company for purchase of a plot of land covered by the scheme. His contract is dated the 5th of August, 1940, and he paid Rs. 101 as earnest money. In the receipt granted by the vendor for this earnest money, the terms of the agree ment are thus set out: "Received with thanks from Babu Bejoy Krishna Roy of 28 Tollygunge Circular Road, Tollygunge, the sum of Rs. 101 (Rupees one hundred and one only) as earnest money having agreed to sell to him or his nominee 5 K. more or less in plot No. 76 on 20 and 30 ft. Road in Premises No. Lake Colony Scheme No. 1, Southern Block at the average rate of Rs. 1,000 (Rupees one thousand only) per Cotta. The conveyance must be completed within one month from the date of completion of roads on payment of the balance of the consideration money, time being deemed as the Essence of the Contract. In case of default this agreement will be considered as cancelled with forfeiture of earnest money. Mokarari Mourashi 314 Terms of payment:One third to be paid at the time of registration and the balance within six years bearing Rs. 6 per cent. interest per annum". On 30th November, 1941, the plaintiff appellant was made a nominee by the purchaser for purposes of the contract and although he brought the present suit in the character of a nominee, it has been held by the trial judge as well as by the lower appellate court, that he was really an assignee of Bejoy Krishna Roy in respect to the latter 's rights under the contract. Some time before this date, there was an order passed by the Collector, 24 Parganas, on 12th of November, 1941 under section 79 of the Defence of India Rules, on the strength of which a portion of the land covered by the scheme was requisitioned for military purposes. Another part of the land was requisitioned by the Government on 20th of December, 1941. while a third order of requisition, which related to the balance of the land comprised in the scheme, was passed sometime later. In November, 1943, the company addressed a letter to Bejoy Krishna Roy informing him of the requisitioning of the lands by the Government and stating inter alia that a considerable portion of the land appertaining to the scheme was taken possession of by the Government and there was no knowing how long the Government would retain possession of the same. The constructs of the proposed roads and drains, therefore, could not be taken up during the continuance of the war and possibly for many years after its termination. In these circumstances,, the company decided to treat the agreement for sale with the addressee as cancelled and give him the option of taking back the earnest money within one month from the receipt of the letter. There was offer made in the alternative that in case the purchaser refused to treat the contract as cancelled, he could, if he liked, complete the conveyance within one month from the receipt of the letter by paying the balance of the consideration money and take the land in the condition in which it existed at that time, the company undertaking to construct the roads and the drains, as circumstances might permit, after the termination of the war. 315 The letter ended by saying that in the event of the addressee not accepting either of the two alternatives, the agreement would be deemed to be cancelled and the earnest money would stand forfeited. This letter was handed over by Bejoy Krishna to his nominee, the plaintiff, and there was some correspondence after that, between the plaintiff on the one hand and the company on the other through their respective lawyers into the details of which it is not necessary to enter. It is enough to state that the plaintiff refused to accept either of the two alternatives offered by the company and stated categorically that the latter was bound by the terms of the agreement from which it could not, in law, resile. On 18th of January, 1946, the suit, out of which this appeal arises, was commenced by the plaintiff against the defendant company, to which Bejoy Krishna Roy was made a party defendant and the prayers in the plaint were for a two fold declaration, namely, (1) that the contract dated the 5th of August, 1940, between the first and the second defendant, or rather his nominee, the plaintiff, was still subsisting; and (2) that the plaintiff was entitled to get a conveyance executed and registered by the defendant on payment of the consideration money mentioned in the agreement and in the manner and under the conditions specified therein. The suit was resisted by the defendant company who raised a large number of defences in answer to the plaintiff 's claim, most of which are not relevant for our present purpose. The principal contentions raised on behalf of the defendant were that a suit of this description was not maintainable under section 42 of the Specific Relief Act and that the plaintiff had no locus standi to institute the suit. The most material plea was that the contract of sale stood discharged by frustration as it became impossible by reason of the supervening events to perform a material part of it. Bejoy Krishna Roy did not file any written statement and he was examined by the plaintiff as a witness on his behalf. 316 The trial judge by his judgment dated 10th October, 1.947, overruled all the pleas taken by the defendant and decreed the plaintiff 's suit. An appeal taken by the defendant to the Court of the District Judge of 24 Parganas was dismissed on the 25th February, 1949, and the judgment of the trial court was affirmed. The defendant company thereupon preferred a second appeal to the High Court which was heard by a Division Bench consisting 'of Das Gupta and Lahiri JJ. The only question canvassed before the High Court was, whether the contract of sale was frustrated by reason of the requisition orders issued by the Government? The learned Judges answered this question in the affirmative in favour of the defendant and on that ground alone dismissed the plaintiff 's suit. The plaintiff has now come before us on the strength of a certificate granted by the High Court under article 133(I)(c) of the Constitution of India. The learned Attorney General, who appeared in support of the appeal, has put forward a three fold contention on behalf of his client. He has contended in the first place that the doctrine of English law relating to frustration of contract, upon which the learned Judges of the High Court based their Decision has no application to India in view of the statutory provision contained in section 56 of the Indian Contract Act. it is argued in the second place, that even if the English law Applies, it can have no application to contracts for sale of land and that is in fact the opinion expressed by the English ,judges themselves. His third and the last argument is that on the admitted faacts and circumstances of this case there was no frustrating event which could be said to have taken away the basis of the contract or tendered its performance impossible in any sense of the word. The first argument advanced by the learned AttorneyGeneral raises a somewhat debatable point regarding the true scope and effect of section 56 of the Indian Contract Act and to what extent, if any, it incorporates the English rule of frustration of contracts. 317 Section 56 occurs in Chapter IV of the Indian Contract Act which relates to performance of contracts and it purports to deal with one circumstances under which performance of a, contract is excused or dispensed with on the ground of the contract being void. The section stands as follows: "An agreement to do an act impossible in itself is void. A contract to do an act which after the contract is made, becomes impossible, or, by reason of some event which the promiser could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promise sustains through the non performance of the promise". The first_paragraph of the section lays down the law in the same way as in England. It speaks of something which is impossible inherently or by its very nature, and no one can obviously be directed to an act. The second paragraph enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done. The wording of this paragraph is quite general, and though the illustrations attached to it are not at all happy, they cannotderogate from the general words used in the enactment. This much is clear that the word "impossible" has not been used here in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticbale and useless from the point of view of the object and purpose which the parties had in view and if an untoward event or change of circumstances totally upset the very foundation upon which the parties rested their bargain, it can very well be said that the promisor L/B(D)2SCI 6(a) 318 found it impossible to do the act which he promised to do. Although various theories have been propounded by the Judges and jurists in England regarding the juridical basis of the doctrine of frustration, yet the essential idea upon which the doctrine is based is that of impossibility of performance of the contract: in fact impossibility and frustration are often used as interchangeable expressions. The changed circumstances, it is said, make the performance of the contract impossible and the parties are absolved from the further performance of it as they did not promise to perform an impossibility The parties shall be excused, as Lord Loreburn says(1), "if substantially the whole contract becomes impossible of performance or in other words impracticable by some cause for which neither was responsible,. " In Joseph Constantine Steamship Line Limited vs Imperial Smelting Corporation Ltd.(2), Viscount Maugham obseryed that the "doctrine of frustration is only a special case of the discharge of contract by an impossibility of performance arising after the contract was made." Lord Porter agreed with this view and rested the doctrine on the same basis. The question was considered and discussed by a Division Bench of the Nagpur High Court in Kesari Chand vs Governor General in Council(3) and it was held that the doctrine of frustration comes into play when a contract becomes impossi ble of performance, after it is made, on account of circum stances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under section 56 of the Indian Contract Act. We are in entire agreement with this view which is fortified by a recent pronouncement of this court in Ganga Saran vs Ram Charan(4), where Fazl (1) See Tamplin Steamship Co. Ltd. vs Anglo Mexican Petroleum Products Co. Ltd.[1916] 2 A.C. 397, 403. (2) at 168. (3) I.L.R. (4) ; at 52. 319 Ali J., in speaking about frustration, observed in his judgment as follows: "It seems necessary for us to emphasise that so far as the courts in this country are concerned, they must loot primarily to the law as embodied in sections 32 and 56 of the . " We hold, therefore, that the doctrine of frustration is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of section 56 of the . It would be incorrect to say that section 56 of the Contract Act applies only to cases of physical impossibility and that where this section is not applicable, recourse can be had to the principles of English law on the subject of frustration. It must be held also that to the extent that the deals with a particular subject, it is exhaustive upon the same and it is not permissible to import the principles of English law dehors these statutory provisions. The decisions of the English courts possess only a persuasive value and may be helpful in showing how the courts in England have decided cases under circumstances similar to those which have come before our courts. It seems necessary however to clear up some misconception which is likely to arise because of the complexities of the English law on the subject. The law of frustration in England developed, as is well known, under the guise of reading implied terms into contracts. The court implies a term or exception and treats that as part of the contract. In the case of Taylor vs Caldwell(1), Blackburn J. first formulated the doctrine in its modern form. The court there was dealing with a case where a music hall in which one of the contracting parties had agreed to give concerts on certain specified days was accidentally burnt by fire. It was held that such a contract must be regarded "as subject to an implied condition that the parties shall be excused, in case, before breach, performance becomes impossible from perishing of the thing without (1) ; 320 default of. the contractor. " Again in Robinson vs Davison(1) there was a contract between the plaintiff and the defendant 's wife (as the agent of her husband) that she should play the piano at a concert to be given by the plaintifl on a specified day. On the day in question she was unable to perform through illness. The contract did not contain any term as to what was to be done in case of her being too ill to perform. In an action against the defendant for breach of contract, it was held that the wife 's illness and the consequent incapacity excused her and that the contract was in its nature not absolute but conditional upon her being well enough to perform. Bramwell B. pointed out in course of his judgment that in holding that the illness of the defendant incapaciated her from performing the agreement the court was not really engrafting a new term upon an express contract. It was not that the obligation was absolute in the original agreement and a new condition was subsequently added to it; the whole question was whether the original contract was absolute or conditional and having regard to the terms of the bargain, it must be held to be conditional. The English law passed through various stages of development since then and the principles enunciated in the various decided authorities cannot be said to be in any way uniform. In many of the pronouncements of the highest courts in England the doctrine of frustration was held "to be a device by which the rules as to absolute contracts are reconciled with a special exception which justice demands"(2). The court, it is said, cannot claim to exercise a dispensing power or to modify or alter contracts. But when an unexpected event or change of circumstance occurs, the possibility of which the parties did not circumstance occurs, the possibility contract is taken to be not what the parties actual intended, but what they as fair and reasonable men would presumably have intended and agreed upon, if having such possibility in view they had made express provsion as to their rights and liabilities in the event of such occurrence(1). As Loard Wright (1) ; (2) Vide Hirji Mulji vs Cheong Yue Steamship Co. Ltd. at 510. (3) Vide Dahl vs Nelson, Donkinand Co. (1881) 6 App. 38 at 59. 321 observed in Joseph Constantine Steamship Co. vs Imperial Smelting Corporation Ltd.(1). "In ascertaining the meaning of the contract and its application to the actual occurrences, the court has to decide, not what the parties actually intended but what as reasonable men they should have intended. The court personifies for this purpose the reasonable man. " Lord Wright clarified the position still further in the later case of Denny, Mott and Dickson Ltd. vs James B. Fraser & Co. Ltd.(1), where he made the following observations: "Though it has been constantly said by high authority, including Lord Sumner, that the explanation of the rule is to be found in the theory that it depends on an implied con dition of the contract, that is really no explanation. It only pushes back the problem a single stage. It leaves the question what is the reason for implying a term. Nor can I reconcile that theory with the view that the result does not depend on what the parties might, or would, as hard bargainers, have agreed. The doctrine is invented by the court in order to supplement the defects of the actual contract. To my mind the theory of the implied condition is not really consistent with the true theory of frustration. It has never been acted on by the court as a ground of decision, but is merely stated as a theoretical explanation. " In the recent case of British Movietonews Ltd. vs London and District Cinemas Ltd.(1), Denning L. J. in the Court of Appeal took the view expressed by Lord Wright as stated above as meaning that "the court really exercises a qualifying power a power to qualify the absolute., literal or wide terms of the contract in order to do what is just and reasonable in the new situation". "The day is gone," (1) at 185. (2) ; at 275. (3) L/ B(D) 2SCI 7 322 the learned Judge went on to say, "when we can excuse an unforeseen injustice by saying to the sufferer 'it is your own folly, you ought not to have passed that form of words. You ought to have put in a clause to protect yourself '. We no longer credit a party with the foresight of a Prophet or his lawyer with the draftsmanship of a Chalmers. We realise that they have their limitations and make allowances accor dingly. It is better thus. The old maxim reminds us that he who clings to the letter clings to the dry and barren shell and misses the truth and substance of the matter. We have of late paid heed to this warning, and we must pay like heed now. " This decision of the Court of Appeal was reversed by the House of Lords and Viscount Simon in course of his judgment expressed disapproval of the way in which the law was stated by Denning L.J. It was held that there was no change in the law as a result of which the courts could exercise a wider power in this regard than they used to do previously. "The principle remains the same", thus observed his Lordship. "Particular applications of it may greatly vary and theoretical lawyers may debate whether the rule should be regarded as arising from implied term or because the basis of the contract no longer exists. In any view, it is a question of construction as Lord Wright pointed out in Constantine 's case and as has been repeatedly asserted by other masters of law. "(1) These differences in the way of formulating legal theories really do not concern us so long as we have a statutory provision in the . In deciding cases in India the only doctrine that we have to go by is that of supervening impossibility or illegality as laid down in section 56 of the Contract Act taking the word "Impossible" in its practical and not literal sense. It must be borne in mind, however, that section 56 lays down a rule of positive law and does not leave the matter to be determined according to the intention of the parties. (1) at 184. 323 In the latest decision of the House of Lords referred to above, the Lord Chancellor puts the whole doctrine upon the principle of construction. But the question of construction may manifest itself in two totally different ways. In one class of cases the question may simply be, as to what the parties themselves had actually intended and whether or not there as a condition in the contract itself, express or implied, which operated, according to the agreement of the Parties themselves to release them from their obligations; this would be a question of construction pure and simple and the ordinary rules of construction would have to be applied to find out what the real intention of the parties was. According to the , a promise may be express or implied(1). In cases, therefore, where the court gathers as a matter of construction that the contract itself contained impliedly or expressly a term, according to which it would stand discharged on the happening of certain circumstances the dissolution on of the contract would take place under the terms of the contract itself and such cases would be outside the purview of section 56 altogether. Although in English law these cases are treated as cases of frustration, in India they would be dealt with under section 32 of the which deals with contingent contracts or similar other provisions contained in the Act. In the large majority of cases however the doctrine of frustration is applied not on the ground that the parties themselves agreed to an implied term which operated to release them from the performance of the contract. The relief is given by the court on the ground of subsequent impossibility when it finds that the whole purpose or basis of a contract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was beyond what was contemplated by the parties at the time when they entered into the agreement. Here there is no question of finding out an implied term agreed to by the parties em bodying a provision for discharge, because the parties did not think about the matter at all nor could possibly have any intention regarding it. When such an event or change of (1) Vide section 9. L/B(D)2SCI 7(a) 324 circumstance occurs which is so fundamental as to be re garded by law as striking at the root of the contract as a whole, it is the court which can pronounce the contract to be frustrated and at an end. The court undoubtedly has to examine the contract and the circumstances under which it was made. The belief, knowledge and intention of the parties are evidence, but evidence only on which the court has to form its own conclusion whether the changed cir cumstances destroyed altogether the basis of the adventure and its underlying object(1). This may be called a rule of construction by English Judges but it is certainly not a, principle of giving effect to the intention of the parties which underlies all rules of construction. This is really a rule of positive law and as such comes within the purview of section 56 of the . It must be pointed out here that if the parties do con template the possibility of an intervening circumstance which might affect the performance of the contract, but expressly stipulate that the contract would stand despite such circumstances, there can be no case of frustration because the basis of the contract being to demand performance despite the happening of a particular event, it cannot disappear when that event happens. As Lord Atkinson said in Matthey vs Curling(1), "a person who expressly contracts absolutely to do a thing not naturally impossible is not excused for nonperformance because of being prevented by the act of God or the King 's enemies. . or vis major". This being the legal position, a contention in the extreme form that the doctrine of frustration as recognised in English law does no come at all within the purview of section 56 of the cannot be accepted. The second contention raised by the Attorney General can be disposed of in few words. It is true that in England the judicial opinion generally expressed is, that the doctrine of frustration does not operate in the case of contracts for (1) Vide Morgan vs Manser (1947] 2 AU E.R. 666. (2) at 234. 325 sale of land(1). But the reason underlying this view is that under the English law as soon as there is a concluded contract by A to sell land to B at certain price, B becomes in equity, the owner of the land, subject to his obligation to pay the purchase money '. On the other hand, A in spite of his having the legal estate holds the same in trust for the purchaser and whatever rights he still retains in the land are referable to his right to recover and receive the purchase money. The rule of frustration can only put an end to purely contractual obligations, but it cannot destroy an estate in land which has already accrued in favour of a contracting party. According to the Indian law, which is embodied in section 54 of the Transfer of Property Act, a contract for sale of land does not of itself create any interest in the property which is the subject matter of the contract. The obligations of the parties to a contract for sale of land are, therefore, the same as in other ordinary contracts and consequendy there is no conceivable reason why the doctrine of frustration should not be applicable to contracts for sale of land in India. This contention of the Attorney General must, therefore, fail. We now come to the last and most important point in this case which raises the question as to whether, as a result of the requisition orders, under which the lands comprised in the development scheme of the defendant company were requisitioned by Government, the contract of sale between the defendant company and the plaintiff 's predecessor stood dissolved by frustration or in other words became impossible of performance. It is well settled and not disputed before us that if and when there is frustration the dissolution of the contract occurs automatically. It does not depend, as does rescission of a contract on the ground of repudiation or breach, or on the choice or election of either party. It depends on the effect (1) Vida Billington Estates Co. vs Stonfield Estate Ltd. [1952] 1 All E.R.853. 326 of what has actually happened on the possibility of performing the contrat (1). What happens generally in such cases and has happened here is that one party claims that the contract has been frustrated while the other party denies it. The issue has got to be decided by the court "ex post facto, on the actual circumstances of the case"(2). We will now proceed to examine the nature and terms of the contract before us and the circumstances under which it was entered into to determine whether or not the disturbing element,which is allowed to have happened here, has substantially prevented the performance of the contract as a whole. It may be stated at the outset that the. contract before us cannot be looked upon as an ordinary contract for sale and purchase of a piece of land; it is an integral part of a development scheme started by the defendant company and is one of the many contracts that have been entered into by a large number of persons with the company. The object of the company was undoubtedly to develop a fairly extensive area which was still undeveloped and make it usable for residential purposes by making roads and constructing drains through it. The purchaser. on the other hand, wanted the land in regard to which he entered into the contract to be developed and make ready for building purposes before he could be called upon to complete the purchase. The most material thing which deserves notice is, that there is abso lutely no time limit within which. the roads and drains are to be made. The learned District Judge of Alipore, who heard the appeal, from the trial court 's judgment found it as a fact, on the evidence in the record, that there was not an understanding between the parties on this point. As a matter of fact, the first requisition order was passed nearly 15 months after the contract was made and apparently no work was done by the defendant company in the meantime. Another important thing that requires notice in this con (1) Per Lord Wright in Denny, Mott and Dicksom Ltd. vs Jameso B. Fraser and Co., Ltd. ; , 274, (2) Ibid. 327 nection is that the war was already on, when the parties entered into the contract. Requisition orders for taking temporary possession of lands for war purposes were normal events during this period. Apart from requisition orders there were other difficulties in doing construction work at that time because of the scarcity of materials and the various restrictions which the Government had imposed in respect of them. That there were certain risks and difficulties involved in carrying on operations like these, could not but be in the contemplation of the parties at the time when they entered into the contract, and that is probably the reason why no definite time limit was mentioned in the contract within which the roads and drains are to be completed. This was left entirely to the convenience of the company and as at matter of fact the purchaser did not feel concerned about it. It is against this background that we are to consider to what extent the passing of the requisition orders affected the performance of the contract in the present case. The company, it must be admitted, bad not commenced the development work when the requisition order was passed in November, 1941. There was no question, therefore, of any work or service being interrupted for an indefinite period of time. Undoubtedly the commencement of the work was delayed but was the delay going to be so great and of such a character that it would totally upset the basis of the bargain and comercial object which the parties had in view? The requisition orders, it must be remembered, were ' by their very nature, of a temporary character and the requisitioning authorities could, in law, occupy the position of a licensee in regard to the requisitioned property. The order might continue during the whole period of the war and even for some time after that or it could have been withdrawn before the war terminated. If there was a definite time limit agreed to by the parties within which the construction work was to be finished, it could be said with perfect propriety that delay for an indefinite period would 328 make the performance of the contract impossible within the specified time and this would seriously affect the object and purpose of the venture. But when there is no time limit whatsoever in the contract, nor even an understanding bet ween the parties on that point and when during the war the parties could naturally anticipate restrictions of various kinds which would make the carrying on of these operations more tardy and difficult than in times of peace, we do not think that the order of requisition affected the fundamental basis upon which the agreement rested or struck at the roots of the adventure. The learned Judges of the High Court in deciding the case against the plaintiff relied entirely on the time factor. It is true that the parties could not contemplate an absolutely unlimited period of time to fulfil their contract. They might certainly have in mind a period of time which was reasonable having regard to the nature and magnitude of the work to be done as well as the conditions of war prevailing at that time. Das Gupta, J., who delivered the judgment of the High Court, says first of all that the company had in contemplation a period of time not much exceeding 2 or 3 years as the time for performance of the contract; the purchaser also had the same period of time in contemplation. The learned Judge records his finding on the point in the following words: "My conclusion on a consideration of the surrounding circumstances of the contract is that the parties contemplated that the roads and drains would be constructed and the conveyance would be completed in the not distant future. " This finding is inconclusive and goes contrary to what has been held by the District Judge who was undoubtedly the last court of facts. In our opinion, having regard to the nature and terms of the contract, the actual existence of war conditions at the time when it was entered into, the extent of the work involved in the development scheme and last though not the least the total absence of any definite period of time agreed to by the parties within which the work was 329 to be completed, it cannot be said that the requisition order vitally affected the contract or made its performance impossible. Mr. Gupta, who appeared for the respondent company. put forward an alternative argument that even if the performance of the contract was not made impossible. it certainly became illegal as a result of the requisition order and con sequently the contract became void under section 56 of the as soon as the requisition order was made. In support of his contention the learned counsel placed reliance upon certain provisions of the Defence of India Rules and also upon illustration (d) to section 56 of the Contract Act. All that the Defence Regulations show is that the violation of a requisition order could be punished as a criminal offence. But no matter in whichever way the requisition order could be enforced, in substance it did nothing else but impose a prohibition on the use of the land during the period that it remained in force. The effect of such prohibition on the performance of the contract, we have discussed above, and we do not think that the mere fact that the requisition order was capable of being enforced by a criminal sanction made any difference in this respect. In any view this question was not raised in any of the courts below and has not been indicated even in the respondent 's statement of the case. We do not think that it would be proper to allow this question to be raised for the first time before us, as it requires consideration of the different provisions of the Defence of India Act and also of the implication of illustration (d) appended to section 56 of the Contract Act. In our opinion, the events which have happened here cannot be said to have made the performance of the contract impossible and the contract has not been frustrated at all. The result is that the appeal is allowed, the judgment and decree of the High Court of Calcutta are set aside and those of the courts below restored. The plaintiff will have his costs in all the courts. Appeal allowed. Agent for the respondent No. I : R. R. Biswas.

The doctrine of frustration is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of section 56 of the Indian Contract Act. The view that section 56 applies only to cases of physical impossibility and that where this section is not applicable recourse can be had to the principles of English law on the subject of frustration is not correct. English cases can have only a persuasive value, and are only helpful in showing how English courts decided cases under similar circumstances. Section 56 of the Indian Contract Act lays down a rule of positive law and does not leave the matter to be determined according to the intention of the parties. According to the Indian Contract Act. a promise may be express or implied. In cases, therefore, where the court gathers as a matter of construction that the contract itself contained impliedly or expressly a term, according to which it would stand discharged on the happening of certain circumstances, the dissolution of the contract would take place under the terms of the contract itself and such cases would be outside the purview of section 56 altogether. Although in English law these cases are treated as cases of frustration, in India they would be dealt with under section 32 of the Indian Contract Act which deals with contingent contracts or similar other provisions contained in the Act. In the large majority of cases however the doctrine of frustration. is applied not on the ground that the parties themselves agreed to an implied term which operated to release 311 them from the performance of the contract. The relief is given by the court on the ground of subsequent impossibility when it finds that the whole purpose or basis of a contract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was beyond what was contemplated by the parties at the time when they entered into the agreement. Here there is no question of finding out an implied term agreed to by the parties embodying a provision for discharge, because the parties did not think about the matter at all nor could possibly have any intention regarding it. When ' such an event or change of circumstance occurs which is so, fundamental as to be regarded by law as striking at the root of the contract as a whole, it is the court which can pronounce the contract to be frustrated and at an end. The court undoubtedly has to examine the contract and the circumstances under which it was made. The belief, knowledge and intention of the parties are evidence, but evidence only on which the court has to form its own conclusion whether the changed circum stances destroyed altogether the basis of the adventure and its underlying object. This may be called a rule of construction by English Judges but it is certainly not a principle of giving effect to the intention of the parties which underlies all rules of construction. This is really a rule of positive law and as such comes within the purview of section 56 of the Indian Contract Act. The reason underlying the rule of English law that the doctrine of frustration does not apply to contracts for the sale of land. is that under the English law, ,is soon as the agreement to sell is complete the buyer becomes the owner of the land in equity. As a mere agreement to sell does not confer any rights of ownership on the buyer under the Indian law, the doctrine of frustration is as applicable in India to agreements for sale of land as in the case of other agreements. In 1940 as an integral part of a development scheme of an extensive area of land started by the defendant company, it entered into a contract with the plaintiff 's predecessor for the sale of a Plot of land to the latter accepting a small sum of money as earnest. It undertook to construct roads and drains and the conveyance was to be completed soon after the completion of tile roads on payment of the balance of the Price. As a considerable portion of the area comporised in the scheme was requisitioned by the Government for military Purposes in 1941, the company wrote to the defendant that the road construction could not be taken up for an indefinite period and required him to treat the agreement as cancelled and receive back his earnest: Held. that having regard to the nature and terms of the contracts the actual existence of war condition at the time when it was entered into the extent of the work involved in the scheme fixing no time limit in the agreement for the cons truction of the roads etc., and the fact that the order of requisition was in its very nature of a temporary character, the requisition did not affect the fundamental basis of the contract; nor 312 did the performance of the contract become illegal by reason of the requisition, and the contract had not therefore become impossible within the meaning of section 56 of the Indian Contract Act. Joseph Constantine Steamship Co. vs Imperial Smelting Cor poration Ltd. ([1942] A.C. 154), Tamplin Steamship Co. Ltd. vs Anglo American Products Co. Ltd. ([1916] A.C. 397), Kesari Chand vs Governor General in Council (I.L.R. , Ganga Saran vs Ram Charan ([1952] S.C.R. 36), Taylor vs Caldwell (3 B. and section 826), Robinson vs Davison ; Denny Mott and Dickson Ltd. vs James B. Frazer & Co. Ltd. ; referred to.

tition No. 215 of 1989. (Under Article 32 of the Constitution of India.) M.S. Gujral, Ms. Kirti Misra and B .B. Sawhney for the Petitioners. G.B. Pari, O.C. Mathur, Ms. Meera and section Sukumaran for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. This writ petition under article 32 filed on behalf of about 450 erstwhile employees of M/s. Burmah Shell retired between May 1, 1979 and December 1984, is for a mandamus or direction to the respondents to restore full pension (which had been commuted) to the petitioner Nos. 2 to 5 and others similarly situated upon the expiry of 12 1/2 years from date of retirement in case of those retired prior to April 1985 and after 11 1/3 years to those retired prior to April 1, 1985 from their respective dates of retirement. They claim that though in their previous Writ Petition No. 590/87 disposed of by a Division Bench of this Court on May 11, 1988 of which one of us (Ranganath Misra, J.) was a member, a hike in the pension effective from May 1, 1988 was granted. Consideration of the present relief had been left over for a later period. Admittedly, the petitioners in Writ Petition No. 590/87 sought two reliefs, namely, (i) restora tion of the commuted portion of the pension, and (ii) en hancement of pension or par with the pensioners of the Hindustan Petroleum Corporation Limited, for short 'HPCL '. During the course of hearing, claim for the 964 first relief was given up and submission was confined to the second relief. This Court accepted the contentions of the petitioners and ordered a seizeable hike in the pension. The relief in this writ petition squarely covers relief No. 1 of Writ Petition No. 590/87. But the ground on which the peti tioners have again come before the Court within a short spell is that their hope of the respondent 's sister concern, namely, HPCL, restoring commuted portion of pension to its pensioners has been smashed as it has deferred its decision on the issue till 1992. Their learned counsel contends that in Common Cause & Ors. vs Union of India, ; this Court upheld the 15 years formula and directed that the commuted portion of the pension should be restored to all the civil servants as well as the armed forces personnel of the Central Government effective from April 1, 1985. It is maintained that as principle the same would be applicable to the petitioners as well. The respondents, it is claimed, have to bear an additional liability of only a sum of Rs.1,02,41,635 out of its huge profits without in any manner affecting its functioning. When the employees of the Central Govt. and other Public Sector Undertakings are receiving the same benefits, the denial thereof to the petitioners is arbitrary, unjust and unfair and offends article 14 of the Constitution. There is no scheme in vouge in other Public Sector Undertakings like commuted pension scheme except in HPCI. Though HPCL has postponed action in this regard till 1992, the petitioners are not precluded to approach this Court for redressal and the previous decision does not operate as res judicata. This Court having accorded in equity benefits of pension, which is a legal right of the petitioner, the relief also may be granted to the petition ers. Shri Pai, learned counsel for the respondents, has resisted all these contentions. The short question is wheth er it is a fit case for interference and issue of a direc tion to the respondents to give the relief as prayed for. Admittedly, the petitioners claimed this relief in Writ Petition No. 590/87. This Court after appropriate considera tion held that a sizeable hike in pension would meet the ends of justice. Admittedly, Burmah Shell has a unique scheme known as "Burmah Shell India Pension Fund" with its own rules. This Court held that the retired personnel would be entitled to a hike in pension at par with pensioners of HPCL. Admittedly, HPCL has not accorded to its pensioners the relief of restoration of the commuted portion of pension after the expiry of 15 years. The order passed by this Court is as recent as May 11, 1988. After such a short time lag and in the absence of any substantial change in the posi tion, in our considered view, it is not desirable to enter tain the claim for restoration of commuted pen 965 sion. Admittedly, the petitioners are governed by a special scheme, which is not at par with Government employees or the other Public Sector Undertakings. In all fairness Shri Pai also has stated that as and when HPCL revises its scheme the petitioners would be entitled to the same benefits. Grant or ' the relief at this stage would create disparity between the personnel who receive pension from HPCL and the re spondents. We find sufficient justification in the conten tion of Shri Pai. So we do not feel justified that it would be appropriate to interfere and grant the relief as prayed for. The writ petition is accordingly dismissed, but without costs. G.N. Petition dismissed.

Some of the erstwhile employees of Burmah Shell, in an earlier writ petition, claimed restoration of the commuted portion of pension and enhancement of pension on par with the pensioners of Hindustan Petroleum Corporation Limited, (HPCL). At the time of hearing, the claim for restoration of the commuted portion of pension was given up. This Court accepted the claim of the petitioners as regards enhancement of pension and ordered a sizeable hike in the pension. The present writ petition claims the same relief which was given up at the time of hearing of the earlier writ petition, viz., restoration of commuted portion of pension. Admitted ly, HPCL had deferred its decision till 1992 in this regard. On behalf of the petitioners it was contended that though, HPCL has deferred its decision till 1992, the peti tioners were not precluded from approaching this Court and that the earlier decision did not operate as res judicata. On behalf of the respondents it was contended that as soon as HPCL revises its scheme the petitioners would also be entitled to the benefit thereof and that grant of the relief earlier would create disparity between the persons who receive pension from HPCL and those from the Respondent. Dismissing the writ petition, this Court, HELD: 1.1. It would be inappropriate to interfere and grant the relief as prayed for at this stage since that would create disparity between the personnel who receive pension from Hindustan Petroleum Corporation Ltd. and the respondent Corporation. [965B] 963 1.2. This Court has already held that the retired per sonnel of Burmah Shell would be entitled to a hike in pen sion at par with pensioners of HPCL. (W.P. No. 590/87 decid ed on 11.5. 1988). HPCL has not accorded to its pensioners the relief of restoration of the commuted portion of pension after the expiry of 15 years. The order passed by this Court is as recent as May 11, 1988. After such a short time lag and in the absence of any substantial change in the posi tion, it is not desirable to entertain the claim for resto ration of commuted pension. The petitioners are governed by a special scheme, which is not at par with Government em ployees or the other Public Sector Undertakings. [964G H; 965A] Common Cause & Ors. vs Union of India, ; , referred to.

Civil Appeal No.2877 of 1977. From the Judgment and Decree dated 19.8.1977 of the Punjab and Haryana High Court in R.S.A. No. 334 of 1975. R. Bana for the Appellants. Harbans Lal and G.K. Bansal for the Respondents. The following Order of the Court was delivered: Kehar Singh had two wives, Basant Kaur and Sahib Devi. Sahib Devi died during Kehar Singh 's life time. Sahib Devi 's son was Niranjan Singh who also died during Kehar Singh 's life time. Niranjan Singh had four sons and one daughter. On 26th April, 1947 Kehar Singh in lieu of maintenance made three oral gifts of properties situated in three different villages in favour of his wife Basant Kaur. The question which arose for consideration before the lower Court was whether Basant Kaur got an absolute estate in the gifted properties as result of the passing of the . In regard to the land in village Ballowal the lower Courts have held that she got an absolute estate. The High Court was concerned in the second Appeal with the lands in village Dhaipai and Chominda, and it held the gift having been without any power of alienation would fall under Section 14(2). The Exhibit D I was the report of the Patwari in connection with the mutation proceedings and it said: "Today Kehar Singh owner of Khewat came alongwith Narain Singh Lambardar and stated that he had on 14th April, 1947, made an oral gift of land half of total land measuring 8 bighas Pukhta, 3 Biswas and 3 Biswani, which is 4 Bighas Pukhta, 12 Biswas and 1 Biswani as detailed in favour of his wife Mst. Basant Kaur, and given possession of the same. I had only one son who is dead and he had four sons and no other male issue. There is no certainty of life. She served me. Lambardar attests so the mutation is entered. " 387 On 30th July, 1947, the Assistant Collector made the following orders: "In the gathering, Kehar Singh donor and Basant Kaur donee, identified by Kishan Singh Lambardar are present. The change of possession of this case is admitted and verified by the donor and the donee. Donor stated that he has got no son. I had got two wives. My grand sons, it is possible may not gift maintenance to my wife. With this view I make the gift. Gift is for maintenance. After gift there would be no powers of mortgage or sale. After the death of Basant Kaur Malkiat Singh, Amar Singh, Gurdeep Singh and Mohan Singh, children would be heirs. This gift is of 1/2 share or Khasra No.4658/2468 measuring 4 Bighas, 12 Biswas 1 Biswani, Khewat Nos. 324 to 326, which is attested in favour of Mst. Basant Kaur donee. " The High Court on interpretation of the Assistant Collector 's report came into conclusion that Basant Kaur derived only a limited estate inasmuch as such a gift, according to the high Court, would fall directly under section 14(2) of the and as such the limited estate of Basant Kaur would not stand enlarged into an absolute estate. The challenge was to the gift made by Basant Kaur in favour of two step grand sons ignoring the other two. There is no doubt that Basant Kaur had the right of maintenance and the gift was explicitly in lieu of maintenance. As such we are of the view that it was not a case of her acquiring any new property by virtue of the gift but it was a case of her right of maintenance being given to her by way of a gift. It was a property acquired by gift in lieu of maintenance. This acquisition on 26th April, 1947 having been prior to the , we are of the view that she having acquired this property by way of gift in lieu of her antecedent right to maintenance, it would fall under sub section (1) and not under sub section (2) of section 14 of the . In this view we are in consonance with the decisions in Bai Vijia (Dead) by Lrs. vs Thakorbhai Chelabhai & Ors., ; ; Gulwant Kaur & Anr. vs Mohinder Singh & Ors., [19871 3 SCC 674; Maharaja Pillai Lakshmi Ammal vs Maharaja Pillai Thillanayakom Pillai & Anr., ; and Jaswant Kaur vs Major Harpal Singh, In view of the facts and circumstances, we are of the view that the decisions of Mst. Karmi vs Amru & Ors., [ and Kothi Satyanarayana vs Galla Sithayya & Ors. , [ ; are distinguishable on facts. 388 In the result, the Judgment and decree of the High Court are set aside, this appeal is allowed and the suit is dismissed. However, under the facts and circumstances of the case, we make no orders as to costs. G.N. Appeal allowed.

The grandfather of the appellants and respondents had two wives. The first wife and her only son died during his life time. The pre deceased son left behind four sons and a daughter. In 1947, the grand father made three oral gifts of certain properties in favour of his second wife, in lieu of maintenance. Later, the grandmother gifted some of these properties to two step grandsons. The gift was challenged by the other two grandsons. The lower court held that she had the absolute estate in the properties after the possing of the . In Second Appeal, the High Court held that she derived only a limited estate inasmuch as the gift in her favour would fall directly under section 14(2) of the and as such her limited estate would not stand enlarged into an absolute estate. This appeal is against the said judgment of the High Court. Allowing the appeal, this Court, HELD: 1. There is no doubt that the donee had the right of maintenance and the gift was explicitly in lieu of maintenance. It was a case of her acquiring any new property by virtue of the gift but it was a case of her right of maintenance being given to her by way of a gift. It was a property acquired by gift in lieu of maintenance. The acquisition made on 26th April, 1947 having been prior to the , and she having acquired the property by way of gift in lieu of her antecedent right to maintenance, it would fail under sub section (1) and not under sub section (2) of section 14 of the and she derived absolute estate in the properties. [387E F] Bai Vajia (Dead) by Lrs. vs Thakorbhai Chelabhai & Ors. ; ; Gulwant Kaur & Anr. vs Mohinder Singh & Ors., ; ; Maharaja Pillai Lakshmi Ammal vs Maharaja Pillai Thillanayakom Pillai & Anr. , ; ; Jaswant Kaur V. Major 386 Harpal Singh, ; relied on. Karmi vs Amru & Ors., ; Kothi Satyanarayana vs Galla Sithayya & Ors. , ; ; distinguished.

vil Appeal No. 369596 of 1988. From the Judgment and Order dated 10.12.87 of Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No. 1105/ 83 D (Order No. 961/87 B). Soli, J. Sorabjee, section Ganesh, C.M. Mehta P.G. Gokhale and R.B. Hathikhanawala for the Appellants. A.K. Ganguli, Mrs. Sushma Suri and K. Swami for the Respondent. The Judgment of the Court was delivered by VENKATACHALIAH J. These two appeals under Section 35 L of the (Act) by Messrs Mafatlal Fine Spinning & Manufacturing Co. Ltd., arise out of and are directed against the common appellate order dated 10.2.1987 of the Customs Excise & Gold (Control) Appellate Tribunal in Appeal Nos. 1105 of 1983 and 2540 of 1987 hold ing that in respect of the deferred duty on yarn appellant is liable to pay interest at 3 per cent of the duty under 207 Rule 49A(2) of the Central Excises & Salt Rules, 1944, as according to the Tribunal, the cotton fabric cleared is not 'Grey ' (unprocessed) cotton fabric. Appellant is engaged in the manufacture of cotton fabrics in its composite mills and opted under Rule 49A for facility of payment of duty of excise payable on the yarn to be deleted until the clearance of the cotton fabrics manu factured therefrom. The said Rule 49A provides for payment of interest on the excise duty payable on the yarn which is deferred till the manufacture and clearance of the fabrics made out of the dutiable yarn. As such payment is deferred, at the instance of the option of the manufacturer, till completion of manu facture and clearance of fabrics out of the yarn and Rule 49A envisages that when cotton fabrics are cleared 'grey ' (unprocessed) the yarn duty shall be paid at the time of clearance of the fabrics along with 1 1/2% of the yarn duty, by way of interest. But where the cotton fabrics are cleared after 'processing ', the interest payable on, and along with, the yarn duty would, however, be 3% of the yarn duty. The question in these appeals is whether the inter est rate should be one & half per cent or three per cent which in turn depends upon whether the cotton fabrics cleared are 'grey ' (unprocessed) or they are cleared after 'processing '. The cotton fabrics cleared in this case, admittedly, underwent the process of 'calendering ' and 'shearing '. The cognate and sequential question is whether these processes render the 'grey ' fabric, a 'processed ' fabric within the meaning of Rule 49A(2). The Appellate Tribunal has held that 'calendering ' and 'shearing ' are 'finishing processes ' and render the 'Grey ' fabrics to cease to be 'unprocessed ' so as to attract interest at 3%. We have heard Sri Soli J. Sorabjee, learned Senior Counsel for the appellant and Sri A.K. Ganguly, learned Senior Counsel for the revenue. There is no dispute that before clearance, the cotton fabrics were subjected to 'calendering ' and 'shearing ' which, in the jargon of the textile industry are 'finishing processes '. The Tribunal, accordingly, held that the cotton fabrics cleared were not 'unprocessed ' for pur poses of Rule 49A(1)(b). In regard to 'calendering ', the Tribunal relied upon the views expressed by it in the case of Siddeshwari Cotton Mills Ltd. and Anr. vs Collector of Central Excise, Calcutta [1984] 18 The relevant part of Rule 49A provides: "(1) When the cotton fabrics are cleared grey (unprocessed), the yarn duty payable shall be (a) the appropriate duty payable on such cellulosic spun yarn or cotton yarn, or both, as the case may be; plus (b) one and a half per cent of the duty pay able on such cellulosic spun yarn or cotton yarn, or both, as the case may be, by way of interest on the amount of yarn duty; (2) When the cotton fabrics are cleared after processing, the yarn duty payable shall be (a) the appropriate duty payable on such cellulosic spun yarn, or cotton yarn, or both,. as the case may be; plus (b) three per cent of the duty payable on such cellulosic spun yarn, or cotton yarn, or both, as the case may be, by way of interest on the amount of yarn duty: Explanation Omitted as unnecessary. Sri Sorabjee contended that such controversy, as is raised, as to whether the fabric, after 'calendering ' and 'sheafing ' ceases to be 'unprocessed ' fabric would require to be resolved on the language of the Rule 49A itself and that the differentium for the attraction of the different rates of interest was whether the cotton fabrics cleared were 'grey fabrics ' as known and understood in the textile industry. The learned counsel emphasised the distinction between the expressions in Rule 49A(1) which refer to the expression "cotton fabrics are cleared grey (unprocessed)" on the one hand and the expression "cotton fabrics are cleared after processing" in Rule 49A(2) on the other, to demonstrate that the condition for levy of 1 1/2 % is not whether some process or processes were applied to the 'grey fabrics ' but whether such process or processes to which the grey fabric was subjected had the effect of making such 'grey fabric ' cease to be 'grey fabric '. 209 6. Sri Ganguly, for the revenue, urged that the condi tions for the choice of the different rates of interest are not envisaged in the context whether the process or process es amounted to 'manufacture ' within the meaning of Sec. 2(f)(v) of the Act, but only in the context of estimating the extent of time consumed by the process or processes as that is the criterion for the choice of the rate of inter est. The purpose and intendment of the rule, says Sri Gan guly, is to provide for the rates of interest on the de ferred yarn duty depending on the time consumed by the processing. If 'grey cloth ' directly obtained from the loom and that is what 'grey fabric ' or 'greige ' in textile parlance means is cleared then a lesser rate of interest is attracted. But, where, as here, the 'grey fabric ' is sub jected to time consuming processes the rate of interest, says Sri Ganguly, would be the higher rate of 3 per cent, taking note of the delays consequential upon such processing occasioned in the recovery of yarn duty. Sri Ganguly, ac cordingly, submitted that the test appropriate in this context is not whether the grey fabrics undergo any change in their nature or quality as a result of the processes but is whether any time consuming process, whatever be its nature, is resorted to by the manufacturer which will, in turn, occasion delays in the clearance of the cotton fabric and thereby delay payment of the yarn duty. Sri Ganguly is right in his submission as to the objects of Rule 49A in prescribing differential rates of interest on deferred yarn duty. But the standards for as sessment of the relative delays depending on which the different rates of interest are charged are themselves set by the rule making authority. The measure of the delay so as to attract one or the other of the rates is not in terms of any period of time specified but is prescribed to be with reference to the nature of the processes. The measure of the delay in deferment of yarn duty legislatively considered appropriate to attract higher rate of interest at 3%, is in terms of the processes that would be required to make the 'greycloth ' cease to be grey cloth. That is why in Rule 49A(1) the expression 'grey ' is used while in Rule 49A(2) that word is omitted. So the period of deferment of yarn duty to attract higher interest 3% would, according to the wisdom of the rule makers, be the delay incidental to con verting 'grey fabric ' into 'processed ' fabric which ceases to be 'grey fabric '. With this legislative estimate of the period of deferment appropriate to a situation attracting 3% interest, the matter has necessarily to be examined by those standards, which in turn, bring in the idea whether the process or processes concerned are such as to change the nature of the 'grey fabric '. This leads to the question whether 'calendering ' and 'shearing ', though by themselves are finishing processes, render the 'grey ' fabric cease to be so. 210 8. Sri Sorabjee submitted that the process of calender ing is nothing more than mere pressing of the 'grey fabric ' by running it through plain rollers to impart a better finish, which is a mere temporary finish. Sri Sorabjee referred to some of the notifications issued under Section 8(1) of the Act which say that calendering would not be treated as "processing". Learned Counsel contended that having regard to the very nature, the calendering does not bring about any change in the quality of the goods. In Siddeshwari Cotton Mills ' case, the Tribunal has referred to certain technical and scientific literature on the process of 'calendering '. Sri Sorabjee referred to some of them. In Modern Textiles (by Dorothy section Lyle John Welay & Sons, N. York) under the caption "Finishes that provide Asthethic Values", referring to "CALENDER FINISH" it is stated: "This is the simplest of all finishes used to give a good appearance to the finished fabric. It consists of passing the fabric between the heated cylinders of a calendering machine. It is simply ironing a fabric to make it smooth and give it a lustrous surface. The round yarns are flattened, hence reflect more light. It is a temporary finish, since the yarns revert to their round shape with steaming, laundering, and dry cleaning. Examples of calendered fabrics the sheeting, poplin, and broadcloth, both cotton and wool". Encyclopaedia Britannica has the following to say: "Calendering is a final process in which heat and pressure are applied to a fabric by pass ing it between heated rollers, imparting a flat, glossy, smooth surface, Lustre, in creases when the degree of heat and pressure is increased. Calendering is applied to fab rics in which a smooth, flat surface is de sirable, such as most cottons, many linen and silks, and various man made fabrics . . . . . Calendering is not usually a permanent process. " In "Glossary of Terms relating to treated fabrics I.S. 2244 1972 published by the Indian Standards Institution it is stated: "Calender A machine comprised of at least three heated rollers, used to produce film and sheet material". 211 "Calendering A mechanical method done by rollers to provide glaze, glossiness, hard ness, lustre, shine and even embossed designs to fabrics. Calendering is usually done to impart a special finish to fabrics. " It is accordingly urged by Sri Sorabjee that calendering does not alter the nature of the 'grey fabric ' and would not take cotton fabric out of Rule 49(1)(b). In regard to the process of "Shearing" Sri Sorabjee relied upon Fairchild 's Dictionary of Textiles which says: "SHEARING: 1. A process of cutting fleece from sheep generally by power driven clippers or sometimes by hand shears. Properly sheared fleece will be removed in one solid sheet, which is rolled into a compact bundle with the wool on the inside. A finishing operation in which uneven threads are mechanically cut or trimmed from the face of the fabric. Almost always employed for woollen and worsted and extensively employed on other fabrics. The amount of shearing on napped and pile fabrics varies according to the desired height of the nap or pile; on clearfinish fabrics like gabardine, a very close shearing is given. A finishing operation in which floating por tions of yarn are cut, e.g., in extra warp or extra filling figured fabrics. The method is similar to that employed in para 2, above. " In "Textile Terms and Definitions" 8th Edn. by the Textile Institute: "SHEAR: (1) To Cut the fleece from a sheep. (2) . . . . . (3) To cut loose fibres or yarn from the surface of a fabric after weaving (also called crop). " In Handbook on Glossary of Textile Terms (Bureau of Indian Standards): "SHEARING Shearing indicates: 212 (a) Cutting fleece from live sheep, (b)Trimming nap or pile to the required uniform height, and (c) Removing all protruding fibres from the surface of the fabric i.e. cropping. Both 'calendering ' and 'shearing ' involve an assort ment and variety of processes, some of which might and some others might not affect or alter the nature of the fabric. Both the expressions, 'calendering ' and 'shearing ' are collective expressions representing a number of sub species of operations which, depending upon the nature of the par ticular operation, may or may not alter the nature of the 'grey fabric ' as such. Sri Sorabjee submitted that in the present case "calend ering" was not done by 'grooved ' rollers or cylinders but only by plain rollers and the "Shearing" operation was only to cut off protruding stray fibres from the 'grey fabric ', and that actual processes of 'calendering ' and 'shearing ' involved in the present case were amongst the simplest of the processes and did not have the effect of bringing about any change in the 'grey fabric '. These matters depend on particularities of the facts of each case and are to be decided on a case by case basis, The Tribunal proceeded on the basis that "Calendering" and "Shearing" amounted to process of finishing and that by itself, without more, satisfied the conditions that would take the case out of Rule 49 A(1). The test applied by the Appellate Tribunal, as well as by the authorities below, is not the appropriate one on the language of Rule 49A. Any processing that can take a case out of Rule 49A(1)(b) must be a process which renders cotton fabric cease to be 'grey fabric ' as commercially known and understood. The question whether 'calendering ' and 'shearing ', as actually carried out by the appellant has had the effect of taking the cotton fabric out of Rule 49A(1) should be decided in the light of this test. In the present cases, the claim of the appellant before the authorities that the calendering process employed by them was such as to give temporary finish by pressing the fabric is not controverted. No lasting change is brought about. There is no finding to the contrary. Likewise the claim as to the "Shearing" which was only to trim 213 protruding, stray fibres from the fabric. If these are the nature of the operations, the 'grey ' fabric, in the facts of these cases, does not become new and commercially different commodity and cease to be 'Grey cloth '. There is thus no justification to take it out of Rule 49A(1)(b). Accordingly, these appeals are allowed, the appellate order, of the Tribunal and the decisions of the authorities below set aside and the liability for payment interest is directed to be computed under Rule 49A(1)(b). No Costs. N.P.V. Appeals allowed.

Rule 49A of the Central Excise Rules, 1944 provided for payment of different rates of interest on the excise duty on the yarn, payment of which was deferred at the option of the manufacturer till the manufacture and clearance of the fabrics made out of the dutiable yarn, depending on whether cotton fabrics were cleared 'grey ' (unproceased) or 'after processing '. When the fabrics were cleared grey the interest payable was 1 1/2% of the yarn duty. But where the cotton fabrics were cleared after 'processing ', it was 3% of yarn duty. Appellant Company, engaged in the manufacture of cotton fabrics, in its composite mills, opted for such deferment of payment of duty of excise. The cotton fabrics cleared admit tedly underwent the process of 'calendering ' and 'shearing '. The Appellate Tribunal held that 'calendering ' and 'shear ing ' were 'finishing processes ' which rendered the 'grey ' fabrics to cease to be 'unprocessed ' and thus attracted interest at 3% of yarn duty. In the appeal before this Court, it was contended on behalf of the appellant company that whether the fabric, after 'calendering ' and 'shearing ' ceased to be 'unproc essed ' fabric would require to be 'resolved on the language of the Rule 49A itself and that the differentium for the attraction of the different rates of interest was whether the cotton fabrics cleared were 'grey fabrics ' as known and understood in the textile industry, and that the condition for levy of 1 1/2% was not whether some process or processes were applied to the 'grey fabrics ' 205 but whether such process or processes to which the grey fabric was subjected had the effect of making such grey fabric ceased to be 'greyfabric ', and that actual processes or 'calendering ' and 'shearing ' involved in the present case were amongst the simplest of the processes and did not have the effect of bringing about any change in the 'greyfabric ', as to take it out of Rule 49A(1)(b). On behalf of the Revenue it was contended that the conditions for the choice of the different rates of interest were not envisaged in the context whether the process or processes amounted to 'manufacture ' within the meaning of section 2(f)(v) of the Act, but only in the context of estimating the extent of time consumed by the process or processes and that the test appropriate in this context was not whether the greyfabrics under went any change in their nature or quality as a result of the processes but was whether any time consuming process, whatever be its nature, was resorted to by the manufacturer which, in turn, occassioned delays in the clearance of the cotton fabrics and thereby delayed payment of the yarn duty. Allowing the appeals, HELD: 1. Though the purpose of Rule 49A of the Central Excise Rules 1944, was to provide for rates of interest depending on the time consumed by the processing, the meas ure of the delay so as to attract one or the other of the rates is not in terms of any period of time specified, but is prescribed to be with reference to the nature of the processes. The measure of the delay in deferment of yarn duty legislatively considered appropriate to attract higher rate of interest at 3%, is in terms of the processes that would be required to make the 'greycloth ' cease to be grey cloth. Any processing that can take a case out of Rule 49A(1)(b) must be a process which renders cotton fabric cease to be 'grey ' fabric as commercially known and under stood. That is why in Rule 49A(1) of the expression 'grey ' is used while in Rule 49A(2), that word is omitted. [209E F] The matter has to be examined by those standards, which in turn, depends on the fact, whether the process or proc esses concerned were such as to change the nature of the 'grey fabric '. [209G H] 2.1 There is no dispute that before clearance the cotton fabrics were subjected to 'calendering ' and 'shearing ' which in the jargon of the textile industry are finishing process es. [207G] 206 2.2 Both 'calendering ' and 'shearing ' involve an assort ment and variety of processes, some of which might and some others might not affect or alter the nature of the fabric. Both the expressions, 'calendering ' and 'shearing ' are collective expressions representing number of sub species of operations which, depending upon the nature of the particu lar operation, may or may not alter the nature of the 'greyfabric ' as such. [212B C] 2.3 These matters depend on particularities of the facts of each case and are to be decided on a case by case basis. [212E] In the present case, the claim of the appellant before the authorities that the 'calendering ' process employed by them was such as to give temporary finish by pressing the fabric is not controverted. No lasting change is brought about. There is no finding to the contrary. Likewise the claim as to the "shearing" which was only to trim protrud ing, stray fibres from the fabric. If these are the nature of the operations, the 'grey ' fabric, in the facts of these cases, does not become new and commercially different com modity and cease to be 'grey ' cloth. There is thus no justi fication to take it out of Rule 49A(1)(b). [212G H; 213A]

Civil Appeal Nos. 1992 1997 and 2219 of 1969. 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. section Chitale, J. B. Dadachanji and D. N. Misra for the Appellant in all appeals. section Markandeya and Girish Chandra for the Respondents in all the 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 January 16, 1969 by which six revisional applications of the appellants were dismissed, and a similar order 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 , 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 1144 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 applications 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 sections 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 argued 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 argued 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 1145 was promulgated 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) in the case of goods entered 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 purposes 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 currency" and "Indian currency" have the meanings respectively assigned to them in the Foreign Exchange Regulation Act, 1947. " It is 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 tariff 1146 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 of 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 matter 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 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, the 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 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.

As a result of devaluation of Indian Currency in June, 1966, Ss. 14 & 15 of the 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 warehouse under section 68, on the date on which the goods were actually removed from the warehouse. 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 1, 1966 and February 20, 1967. Under protest, they paid customs duty at 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 housing. Their appeals and revision were unsuccessful. In appeal to this Court it was contended that the material change in section 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 according 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 section 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 section 68 provides that an importer of any warehoused goods may clear them if the import duty leviable on them has been paid. That is why clause (b) of sub section (1) of section 15 makes a reference to section 68. [1146D, 1145H 1146C] 1143 In the instant case the goods were removed from the warehouse after the Ordinance came into force on July 7, 1966. [1146D]

Appeal No. 251 of 1982. From the Judgment and Order dated 24.10.81 of the Disciplinary Committee of the Bar Council of India, Delhi in B.C.I.T R. Case No. 28 of 1979. B.Singh, S.K.Gambhir and Davinder Singh for the Appellant. R.P.Kapur and Rajiv Kapur for the Respondents. The Judgment of the Court was delivered by 491 KULDIP SINGH, J. D.S. Dalal was a practising advocate in Delhi. The Bar Council of India by its order dated October 24, 1981, removed his name from the rolls of advocates of the Bar Council of Delhi and the sanad granted to him has been withdrawn. This appeal under Section 30 of the is against the order of the Bar Council of India. The State Bank of India lodged a complaint before the Bar Council of Delhi on September 4, 1978. It was alleged in the complaint that the appellant along with two other advocates was practising under the name and style of "M/s Singh and Company" a firm of advocates and solicitors having their office at 2670, Subzi Mandi, Delhi. It was alleged that the advocates were duly engaged by the Asaf Ali Road branch of the State Bank of India to file a recovery suit against M/s Delhi Flooring (Pvt) Ltd. for the recovery of Rs. 6,12,164.10. "Singh and Company" (the firm) at that time was represented by Mr. D.S. Dalal, Mr. B. Singh and Ms V.Singh, Advocates, who were the partners of the said firm and were conducting cases for and on behalf of the firm. It is the case of the complainant that in the year 1975, the file relating to the case which was to be filed against m/s Delhi Flooring (Pvt) Ltd., containing original and valuable documents, was handed over to the Firm by the complainant. Thereafter, the Firm submitted a bill for filing the recovery suit which included the professional fees and other miscellaneous charges. An amount of Rs. 11,475 was paid to the Firm on November 15, 1975, for filing the suit which included 1/3rd of the professional fee plus the miscellaneous charges. This was acknowledged by the Firm under a receipt which was placed on the record. Till December 19, 1975, the Firm did not inform the bank as to whether the suit was filed and if so what was the stage of the proceedings. The bank wrote a letter dated December 05, 1975 to the Firm asking it to send a copy of the plaint before December 8, 1975, for signatures and verification failing which the bank would be compelled to withdraw the case from the firm. At that stage Mr. B. Singh, Advocate, one of the partners of the Firm, in his letter dated December 15, 1975 informed the bank that the suit had been filed on December 15, 1975 in the High Court of Delhi. Thereafter, the bank appears to have received no communication from the said advocates despite repeated reminders oral and other ,vise and the bank was kept in the dark about the fate of the case entrusted to the appellant and his associates. 492 As there was no response from the appellant, the bank engaged the services of Mr. R.P. Arora, Advocate, in order to find out as to what happened to the suit filed by the appellant and his associates on behalf of the bank. R.P. Arora in his letter dated March 2, 1977, informed the bank that the suit which had been filed on December 15, 1975 was returned by the original Branch on January 31, 1976 to the Registry of the High Court with objections. Mr. Arora in his letter dated March 31, 1977 further informed the bank that the entire suit paper book had been returned to Mr. B. Singh, Advocate on July 27, 1976 for removing the objection and thereafter the suit has not been re filed in the Registry of the High Court of Delhi. The complainant, therefore, claimed that the appellant and his associates were guilty of serious professional misconduct as they failed to discharge their professional duties and responsibilities entrusted to them by the bank in its capacity as a client. It was further claimed by the bank that the appellant and his associates had misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee. The complainant further stated that even the documents and other papers handed over to the appellant and his associates for filing the suit were not returned. The complainant was originally registered with the Bar Council of Delhi. On September 19, 1979, the Disciplinary Committee of the Bar Council of Delhi transferred the case to the Bar Council of India on the ground that the case had been pending for more than one year. The Bar Council of India issued notices returnable on November 2, 1980. On that date the respondents were not present and as such fresh notices were issued for December 20, 1980. Mr. D.S. Dalal, though served was not present on December 20, 1980 and as such ex parte proceedings were ordered. Notice to Mr. B. Singh, Advocate was returned with the postal endorsement "refused". He was also ordered to be proceeded ex parte. The case was posted for January 23, 1981 for the evidence of the complainant. On that day the appellant moved an application for setting aside the ex parte order dated December 20, 1980. The ex parte order was set aside conditionally permitting the appellant to participate in the proceedings and the case was adjourned to February 27, 1981. On February 27, 1981, three witnesses were examined in the presence of the appellant and he cross examined them. Thereafter the case was adjourned from time to time and finally fixed for evidence on August 22, 1981. The appellant again sent an application for adjournment which was rejected. The evidence was con 493 cluded, arguments were heard and the order reserved. The Bar Council of India in the impugned order observed as under : "From a perusal of the order sheet of the Disciplinary Committee of the Bar Council of Delhi and also of the order sheet before us, it reveals that the respondents have throughout adopted the tactics of non cooperation purposely with a view to protract the proceedings unnecessarily '. It may be mentioned that the complainant had given up its case against Ms. V. Singh, Advocate and as such the Bar Council of India ultimately did not proceed against her. So far as Mr. B. Singh and Mr. D.S. Dalal are concerned, the case against them was proved beyond reasonable doubt and their names were removed from the rolls of advocates of Bar Council of Delhi and the sanads granted to them were ordered to be withdrawn. The appeal before us is by D.S. Dalal. We have been informed that Mr. B. Singh Advocate filed a review petition before the Bar Council of India on October 22,1989 which is still pending. The Bar Council has also granted stay of the order dated October 24, 1981 with the result that Mr.B. Singh is continuing with his legal practise. This appeal was argued before us by Mr. B.Singh, Advocate. It is not disputed before us that Mr.B.Singh and Mr. D.S.Dalal were the main partners of the Firm. It is also not disputed that an amount of Rs.11,475 was received by these advocates towards the filing of the suit and further that the connected documents and papers were received by them. B.Singh, learned counsel for the appellant primarily argued that the suit was filed by the appellant in the Delhi High Court on December 15, 19 '/5 but the record of the suit file was misplaced/lost by the High Court registry. He further stated that by his letter dated August 20, 1977, he informed the bank about the suit file being not traceable and further that the record of the suit was to be re structured and refiled. We have been taken through the copy of the letter dated August 20, 1977, written by Mr.B.Singh on behalf of the Firm to the Regional Manager, State Bank of India, Parliament Street, New Delhi. The relevant paragraph is as under 494 "However, as already intimated two bank cases one of Delhi Flooring (P) Ltd. of Asaf Ali Road branch and second of J.M.A.I.E. Corporation of Jungpura branch filed by the undersigned in Delhi High Court have been misplaced/lost by High Court Registry and the record reconstruction petitions have already been given to the branches in March, 1976 itself. In case the said suits have not already been got restored through some other learned counsel and the assistance the undersigned is required for the restoration/reconstruction then he is willing to cooperate fully without charging any fee and without insisting on the payment of his outstanding bills first. The undersigned can work only when he is allowed to work in terms of his approved schedule of fees and the payment is made of all his bill, forthwith. " The letter dated August 20, 1977, quoted above was not produced before the Bar Council of India. It has been placed before us for the first time. Apart from the ipse dixit of the appellant and Mr.B. Singh in the above letter, there is no evidence on the record to show that the suit file was misplaced or lost by the High Court Registry. On the other hand, there is cogent and reliable evidence on the record to show that the Delhi High . Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it. Mr. R.P. Arora, Advocate, appeared as a witness before the Bar Council of India. The relevant part of his evidence is as under "I know the respondents in the case. I was instructed by the complainant in case to find out as to whether the respondents had filed the suit against the Delhi Flooring (P) Ltd. in the High Court of Delhi which was entrusted by the complainant with the respondents. Accordingly I went to Delhi High Court and made enquiries to find out whether such a suit has been filed. On enquiry I came to know from the registers of the High Court that the suit had been filed on behalf of the complainant against Delhi Flooring (P) Ltd. on 15th December, 1975. 1 found from the records that the office has not registered the suit 495 because of certain objections raised by the office. I also came to know that the entire suit filed had been returned to the respondents for complying with the objections and to refile the suit. This was so returned on 27.7.76. The enquiries that were made by me in the High Court office was during March 1977 and till that date the suit had not been refiled by the respondents." Mr. R.P. Arora, Advocate, after examining the records of the Delhi High Court had sent two reports to the State Bank of India. In his report dated March 2, 1977 he stated as under : "As desired by you, to know the whereabouts of the above noted case, I contacted the concern clerk in the Original Branch of High Court of Delhi at New Delhi and also inspected the registers of the Original suits. The above noted case was filed by M/s Singh & Co. on 15.12.1975, but there were certain objections by the original branch and on 31.1.76 the said case (file) was returned to the registree by the original branch. The register of the registree in respect of the period from 31.1.1976 is not available and I shall let you know the upto date information, when the said case was returned to M/s. Singh & Co. within a short period. " Subsequently in his report dated March 31, 1977, Mr. R.P.Arora, Advocate gave the following information to the bank: "I have enquired from the Original section of High Court of Delhi at New Delhi, that the file of the above stated case was returned to Shri B.Singh on 27.7.1976 as the said case was under objections. So far he has not again filed the said case in High Court. " Both the above quoted reports have been proved on the record of the Bar Council of India as evidence. The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr. B. Singh was proved beyond doubt. The Bar Council of India concluded as under: 496 ". After having gone through the evidence and the documents produced in the case carefully, we have come to the conclusion that the complainant had entrusted the suit to be filed against M/s Delhi Flooring (Pvt) Ltd. with the necessary papers and Rs. 11,400.74 for expenses etc. to the respondent advocates. It is also established that the respondents have filed the suit on 15.12.1975 with some objections deliberately and when the papers were returned by the High Court, they had not refiled the suit for a pretty long time and as is established tiff this day. So, we have no hesitation to conclude that the respondents, have misappropriated the amount realised by them from the Bank without filing the suit in a proper manner. " We have given our thoughtful consideration to the evidence on the record against the appellant. We see no ground to interfere with the order of the Bar Council of India. We agree with the reasoning and the conclusions reached therein. We, therefore, dismiss the appeal. No costs. V.P.R. Appeal dismissed.

Respondent Bank lodged a complaint before the Bar Council of Delhi against the appellant Advocate, alleging that the appellant and two other Advocates of the M/s. Singh and Company, (a Firm of Advocates and solicitors) were guilty of serious professional misconduct, as they failed to discharge their.professional duties and responsibilities entrusted to them. The case of the Bank was that in 1975, the Bank engaged the Firm to rile a recovery suit for the recovery of Rs. 6,12,164.10 from M/s. Delhi Flooring (P) Ltd. and handed over the case rile containing original and valuable documents. The Firm submitted a bill for riling the recovery suit which included the professional fees and other miscellaneous charges. On 15.11.1975 the Bank paid a sum of Rs. 11,475 which included 1/3rd of the professional fee and the miscellaneous charges. It did not inform the Bank whether the suit was filed or not. On 5.12.1975 the Bank wrote a letter to the Firm to send a copy of the plaint before 8.12.1975 or the Bank would be compelled to withdraw the case from the Firm. On 15.12.1975, one of the partner of the firm informed the Bank the suit was filed on 15.12.1975 in the High Court. Thereafter the Bank was kept in the dark about the fate of the case. Hence the Bank engaged the services of one Mr. Arora, Advocate, in order to find out as to what happened to the suit. On 23.1977, the Bank was informed by Mr. Arora, Advocate that 489 suit was filed on 15.12.1975 in the High Court and on 31.1.1976, it was returned by the Original Branch to the Registry with objections. Mr. Arora, Advocate further informed the Bank on 31.3.1977 that the entire suit paper book was returned to Mr. Singh, Advocate of the Firm on 27.7.1976 for removing the object ions and thereafter the suit was not refiled. The respondent Bank, therefore, claimed before the Bar Council of Delhi that the appellant and his associates misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee. The Disciplinary Committee of the Bar Council of Delhi transferred the case of the Bar Council of India, as the case was pending for more than one year. The Bar Council of India issued notices returnable on 2.11.1980. The appellant and his associates were not present on that date. Therefore fresh notices were issued for 20.12.1980. The appellant did not present on 20.12.1980and ex parte proceedings were ordered. The case was posted for 23.1.1981 for the evidence of the complainant. On 23.1.1981 the appellant moved an application for setting aside the ex parte order dated 20.12.1980, which was allowed and the case was adjourned to 27.2.1981. The case was adjourned from time to time and finally fixed for evidence on 22.8.1981. On 22.8.1981, the appellant 's application for adjournment was rejected. The evidence was concluded, ar guments were heard and the order was reserved. (The complainant had given up its case against one Ms. V.Singh, Advocate an associate of the appellant, and the Bar Council of India did not proceed against her. One Mr. B.Singh, Advocate the other associate of the appellant, was also proceeded against. Notice to him was returned with the postal endorsement "refused" and ex parte proceeding were ordered.) The Disciplinary Committee of the Bar Council of India held that the case against the appellant and his associate was proved beyond reasonable doubt. Their names were removed from the rolls of Advocates of the Bar Council of Delhi and the Sanads granted to them were ordered to be withdrawn. 490 The appellant riled the appeal before this Court, while his associate, riled a review petition before the Bar Council of India, which was still pending. The Bar Council of India granted him stay of the order dated 24.10.1981 in the review proceeding. The appellant contended that the suit was filed by the appellant on 15.12.11975 but the record of the suit file was misplaced/lost by the Registry of the High Court; that by his letter dated 20.8.1977, he informed the Bank about the suit rile being not traceable; and that the record of the suit was to be structured and refiled. Dismissing the appeal, this Court, HELD : 1.01. The letter dated August 20,1977 was not produced, before the Bar Council of India. It has been placed before this Court for the first time. Apart from the ipse dixit of the appellant and Mr. B.Singh in the said letter, there is no evidence on the record to show that the suit rile was misplaced or lost by the High Court Registry. On the other hand, there is cogent and reliable evidence on the record to shows that the Delhi High Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it. [494D E] 1.02. Both the reports of Mr.R.P.Arora, Advocate have been proved on the record of the Bar Council of India as evidence. The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr. B.Singh was proved beyond doubt. There is no ground to interfere with the order of the Bar Council of India. [495H, 496D]

ition (Civil) No. 12739 of 1985. (Under Article 32 of the Constitution of India.) Petitioner in person. B. Datta, Additional Solicitor General, A.B. Diwan, F.S. Nariman, B.R.L. lyengar, Hardev Singh, Hemant Sharma, C.V.S. Rao, R.D. Aggarwal, Ms. section Relan, R.S. Sodhi, section Sukumaran, Ravinder Narain, D.N. Mishra, Aditya Narayan, Ms. Lira Goswami, section Kachwaha, Mohan, Ravinder Bana, K.C. Dua, K. Kumaramangalam, O.C. Jain and K.R.R. Pilai for the Respond ents. Raju Ramachandran for the Intervener. Soli J. Sorabji for Citizens Action Committee. The Judgment of the Court was delivered by BHAGWATI, CJ. This writ petition under Article 32 of the Constitution has come before us on a reference made by a Bench of three Judges. The reference was made because cer tain questions of seminal importance and high constitutional significance were raised in the course of arguments when the writ petition was originally heard. The facts giving rise to the writ petition and the subsequent events have been set out in some detail in the Judgment given by the Bench of three Judges on 17th February 1986, and it is therefore not necessary to reiterate the same. Suffice it to state that the Bench of three Judges 826 permitted Shriram Foods and Fertiliser Industries (hereinaf ter referred to as Shriram) to restart its power plant as also plants for manufacture of caustic chlorine including its by products and recovery plants like soap, glycerine and technical hard oil, subject to the conditions set out in the Judgment. That would have ordinarily put an end to the main controversy raised in the writ petition which was filed in order to obtain a direction for closure of the various units of Shriram on the ground that they were hazardous to the community and the only point in dispute which would have survived would have been whether the units of Shriram should be directed to be removed from the place where they are presently situate and relocated in another place where there would not be much human habitation so that there would not be any real danger to the health and safety of the people. But while the writ petition was pending there was escape of oleum gas from one of the units of Shriram on 4th and 6th December, 1985 and applications were filed by the Delhi Legal Aid & Advice Board and the Delhi Bar Association for award of compensation to the persons who had suffered harm on account of escape of oleum gas. These applications for compensation raised a number of issues of great constitu tional importance and the Bench of three Judges therefore formulated the issues and asked the petitioner and those supporting him as also Shriram to file their respective written submissions so that the Court could take up the hearing of these applications for compensation. When these applications for compensation came up for hearing it was felt that since the issues raised involved substantial questions of law relating to the interpretation of Articles 21 and 32 of the Constitution, the case should be referred to a larger Bench of five Judges and this is how the case has now come before us. Mr. Diwan, learned counsel appearing on behalf of Shri ram raised a preliminary objection that the Court should not proceed to decide these constitutional issues since there was no claim for compensation originally made in the writ petition and these issues could not be said to arise on the writ petition. Mr. Diwan conceded that the escape of oleum gas took place subsequent to the filing of the writ petition but his argument was that the petitioner could have applied for amendment of the writ petition so as to include a claim for compensation for the victims of oleum gas but no such application for amendment was made and hence on the writ petition as it stood, these constitutional issues did not arise for consideration. We do not think this preliminary objection raised by Mr. Diwan is sustainable. It is undoubt edly true that the petitioner could have applied for amend ment of the writ petition so as to include a claim for compensation but merely because he did 827 not do so, the applications for compensation made by the Delhi Legal Aid & Advice Board and the Delhi Bar Association cannot be thrown out. These applications for compensation are for enforcement of the fundamental right to life en shrined in Article 21 of the Constitution and while dealing with such applications, we cannot adopt a hypertechnical approach which would defeat the ends of justice. This Court has on numerous occasions pointed out that where there is a violation of a fundamental or other legal right of a person or class of persons who by reason of poverty or disability or socially or economically disadvantaged position cannot approach a Court of law for justice, it would be open to any public spirited individual or social action group to bring an action for vindication of the fundamental or other legal right of such individual or class of individuals and this can be done not only by filing a regular writ petition but also by addressing a letter to the Court. If this Court is prepared to accept a letter complaining of violation of the fundamental right of an individual or a class of individuals who cannot approach the Court for justice, there is no reason why these applications for compensation which have been made for enforcement of the fundamental right of the persons affected by the oleum gas leak under Article 21 should not be entertained. The Court while dealing with an application for enforcement of a fundamental right must look at the substance and not the form. We cannot therefore sustain the preliminary objection raised by Mr. Diwan. The first question which requires to be considered is as to what is the scope and ambit of the jurisdiction of this Court under Article 32 since the applications for compensa tion made by the Delhi Legal Aid and Advice Board and the Delhi Bar Association are applications sought to be main tained under that Article. We have already had occasion to consider the ambit and coverage of Article 32 in the Bandhua Mukti Morcha vs Union of India & Ors., ; and we wholly endorse what has been stated by one of us namely, Bhagwati, J. as he then was in his judgment in that case in regard to the true scope and ambit of that Article. It may now be taken as well settled that Article 32 does not merely confer power on this Court to issue a direction, order or writ for enforcement of the fundamental rights but it also lays a constitutional obligation on this Court to protect the fundamental rights of the people and for that purpose this Court has all incidental and ancillary powers including the power to forge new remedies and fashion new strategies designed to ' enforce the fundamental rights. It is in reali sation of this constitutional obligation that this Court has in the past innovated new methods and strategies for the purpose of securing enforcement of the fundamental rights, 828 particularly in the case of the poor and the disadvantaged who are denied their basic human rights and to whom freedom and liberty have no meaning. Thus it was in S,P. Gupta vs Union of India, [1981] Supp. SCC 87 that this Court held that "where a legal wrong or a legal injury is caused to a person or to a determinate class of persons by reason of violation of any constitution al or legal right or any burden is imposed in contravention of any constitutional or legal provision or without authori ty of law or any such legal wrong or legal injury or illegal burden is threatened, and any such person or determinate class of persons is by reason of poverty or disability or socially or economically disadvantaged position unable to approach the court for relief, any member of the public or social action group can maintain an application for an appropriate direction, order or writ in the High Court under Article 226 and in case of breach of any fundamental right of such person or class of persons, in this Court under Article 32 seeking judicial redress for the legal wrong or injury caused to such person or determinate class of per sons. " This Court also held in S.P. Gupta 's case (supra) as also in the People 's Union for Democratic Rights and Ors. vs Union of India, [1983] 1 SCR 456 and in Babdhua Mukti Mor cha 's case (supra) that procedure being merely a hand maden of justice it should not stand in the way of access to justice to the weaker sections of Indian humanity and there fore where the poor and the disadvantaged are concerned who are barely eking out a miserable existence with their sweat and toil and who are victims of an exploited society without any access to justice, this Court will not insist on a regular writ petition and even a letter addressed by a public spirited individual or a social action group acting probono publico would suffice to ignite the jurisdiction of this Court. We wholly endorse this statement of the law in regard to the broadening of locus standi and what has come to be known as epistolary jurisdiction. We may point out at this stage that in Bandhua Mukti Morcha 's case (supra) some of us apprehending that letters addressed to individual justices may involve the court in frivolous cases and that possibly the view could be taken that such letters do not invoke the jurisdiction of the court as a whole, observed that such letters should not be addressed to individual justices of the court but to the Court or to the Chief Justice and his companion judges. We do not think that it would be right to reject a letter addressed to an individual justice of the court merely on the ground that it is not addressed to the court or to the Chief Justice and his companion Judges. We must not forget that 829 letters would ordinarily be addressed by poor and disadvan taged persons or by social action groups who may not know the proper form of address. They may know only a particular Judge who comes from their State and they may therefore address the letters to him. If the Court were to insist that the letters must be addressed to the court, or to the Chief Justice and his companion Judges, it would exclude from the judicial ken a large number of letters and in the result deny access to justice to the deprived and vulnerable sec tions of the community. We are therefore of the view that even if a letter is addressed to an individual Judge of the court, it should be entertained, provided of course it is by or on behalf of a person in custody or on behalf of a woman or a child or a class of deprived or disadvantaged persons. We may point out that now there is no difficulty in enter taining letters addressed to individual justice of the court, because this Court has a Public Interest Litigation Cell to which all letters addressed to the Court or to the individual justices are forwarded and the staff attached to this Cell examines the letters and it is only after scrutiny by the staff members attached to this Cell that the letters are placed before the Chief Justice and under his direction, they are listed before the Court. We must therefore hold that letters addressed to individual justice of the court should not be rejected merely because they fail to conform to the preferred form of address. Nor should the court adopt a rigid stance that no letters will be entertained unless they are supported by an affidavit. If the court were to insist on an affidavit as a condition of entertaining the letters the entire object and purpose of epistolary juris diction would be frustrated because most of the poor and disadvantaged persons will then not be able to have easy access to the Court and even the social action groups will find it difficult to approach the Court. We may point out that the court has so far been entertaining letters without an affidavit and it is only in a few rare cases that it has been found that the allegations made in the letters were false. But that might happen also in cases where the juris diction of the Court is invoked in a regular way: So far as the power of the court under Article 32 to gather relevant material bearing on the issues arising in this kind of litigation, which we may for the sake of con venience call.social action litigation, and to appoint Commissions for this purpose is concerned, we endorse. what one of us namely, Bhagwati, J., as he then was, has said in his Judgment in Bandhua Mukti Morcha 's case (supra). We need not repeat what has been stated in that judgment. ' It has our full approval. We are also of the view that this Court under Article 32(1) is free 830 to devise any procedure appropriate for the particular purpose of the proceeding, namely, enforcement of a funda mental right and under Article 32(2) the Court has the implicit power to issue whatever direction, order or writ is necessary in a given case, including all incidental or ancillary power necessary to secure enforcement of the fundamental right. The power of the Court is not only in junctive in ambit, that is, preventing the infringement of a fundamental right, but it is also remedial in scope and provides relief against a breach of the fundamental right already committed vide Bandhua Mukti Morcha 's case (supra). If the Court were powerless to issue any direction, order or writ in cases where a fundamental right has already been violated, Article 32 would be robbed of all its efficacy, because then the situation would be that if a fundamental right is threatened to be violated, the Court can injunct such violation but if the violator is quick enough to take action infringing the fundamental right, he would escape from the net of Article 32. That would, to a large extent, emasculate the fundamental right guaranteed under Article 32 and render it impotent and futile. We must, therefore, hold that Article 32 is not powerless to assist a person when he finds that his fundamental right has been violated. He can in that event seek remedial assistance under Article 32. The power of the Court to grant such remedial relief may include the power to award compensation in appropriate cases. We are deliberately using the words "in appropriate cases" because we must make it clear that it is not in every case where there is a breach of a fundamental right committed by the violator that compensation would be awarded by the Court in a petition under Article 32. The infringement of the funda mental right must be gross and patent, that is, incontro vertible and ex facie glaring and either such infringement should be on a large scale affecting the fundamental rights of a large number of persons, or it should appear unjust or unduly harsh or oppressive on account of theft poverty or disability or socially or economically, disadvantaged posi tion to require the person or persons affected by such infringement to initiate and pursue action in the civil courts. Ordinarily, of course, a petition under Article 32 should not be used as a substitute for enforcement of the right to claim compensation for infringement of a fundamen tal right through the ordinary process of civil court. It is only in exceptional cases of the nature indicated by us above, that compensation may be awarded in a petition under Article 32. This is the principle on which this Court award ed compensation in Rudul Shah vs State of Bihar, (AIR So also, this Court awarded compensation to Bhim Singh, whose fundamental right to personal liberty was grossly violated by the State of Jammu and Kashmir. If we make a fact analysis of the cases where compensation has been 831 awarded by this Court, we will find that in all the cases, the fact of infringement was patent and incontrovertible, the violation was gross and its magnitude was such as to shock the conscience of the court and it would have been gravely unjust to the person whose fundamental right was violated, to require him to go to the civil court for claim ing compensation. The next question which arises for consideration on these applications for compensation is whether Article 21 is available against Shriram which is owned by Delhi Cloth Mills Limited, a public company limited by shares and which is engaged in an industry vital to public interest and with potential to affect the life and health of the people. The issue of availability of Article 21 against a private corpo ration engaged in an activity which has potential to affect the life and health of the people was vehemently argued by counsel for the applicants and Shriram. It was emphatically contended by counsel for the applicants, with the analogical aid of the American doctrine of State Action and the func tional and control test enunciated by this Court in its earlier decisions, that Article 21 was available, as Shriram was carrying on an industry which, according to the Govern ment 's own declared industrial policies, was ultimately intended to be carried out by itself, but instead of the Government immediately embarking on that industry, Shriram was permitted to carry it on under the active control and regulation of the Government. Since the Government intended to ultimately carry on this industry and the mode of carry ing on the industry could vitally affect public interest, the control of the Government was linked to regulating that aspect of the functioning of the industry which could vital ly affect public interest. Special emphasis was laid by counsel for the applicants on the regulatory mechanism provided under the Industries Development and Regulation Act, 1951 where industries are included in the schedule if they vitally affect public interest. Regulatory measures are also to be found in the Bombay Municipal Corporation Act, the Air and Water Pollution Control Acts and now the recent Environment Act, 1986. Counsel for the applicants also pointed to us the sizable aid in loans, land and other facilities granted by the Government to Shriram in carrying on the industry. Taking aid of the American State Action doctrine, it was also argued before us on behalf of the applicants that private activity, if supported, controlled or regulated by the State may get so entwined with govern mental activity as to be termed State action and it would then be subject to the same constitutional restraints on the exercise of power as the State. 832 On the other hand, counsel for Shriram cautioned against expanding Article 12 so as to bring within its ambit private corporations. He contended that control or regulation of a private corporations functions by the State under general statutory law such as the Industries Development and Regula tion Act, 1951 is only in exercise of police power of regu lation by the State. Such regulation does not convert the activity of the private corporation into that of the State. The activity remains that of the private corporation, the State in its police power only regulates the manner in which it is to be carried on. It was emphasised that control which deems a corporation, an agency of the State, must be of the type where the State controls the management policies of the Corporation, whether by sizable representation on the board of management or by necessity of prior approval of the Government before any new policy of management is adopted, or by any other mechanism. Counsel for Shriram also pointed out the inappositeness of the State action doctrine to the Indian situation. He said that in India the control and function test have been evolved in order to determine wheth er a particular authority is an instrumentality or agency of the State and hence 'other authority ' within the meaning of Article 12. Once an authority is deemed to he 'other author ity ' under Article 12, it is State for the purpose of all its activities and functions and the American functional dichotomy by which some functions of an authority can be termed State action and others private action, cannot oper ate here. The learned counsel also pointed out that those rights which are specifically intended by the Constitution makers to be available against private parties are so pro vided in the Constitution specifically such as Articles 17, 23 and 24. Therefore, to so expand Article 12 as to bring within its ambit even private corporations would be against the scheme of the Chapter on fundamental rights. In order to deal with these rival contentions we think it is necessary that we should trace that part of the devel opment of Article 12 where this Court embarked on the path of evolving criteria by which a corporation could be termed 'other authority ' under Article 12. In Rajasthan Electricity Board vs Mohan Lal, ; this Court was called upon to consider whether the Rajasthan Electricity Board was an 'authority ' within the meaning of the expression 'other authorities ' in Article 12. Bhargava, J. who delivered the judgment of the majority pointed out that the expression 'other authorities ' in Article 12 would include all constitutional and statutory authorities on whom powers are conferred by law. The learned Judge also said that if any body of persons has authority to issue directions, the dis 833 obedience of which would be publishable as a criminal of fence, that would be an indication that the concerned au thority is 'State '. Shah, J., who delivered a separate judgment agreeing with the conclusion reached by the majori ty, preferred to give a slightly different meaning to the expression 'other authorities '. He said that authorities, constitutional or statutory, would fail within the expres sion "other authorities" only if they are invested with the sovereign power of the State, namely, the power to make rules and regulations which have the force of law. The ratio of this decision may thus be stated to be that a constitu tional or statutory authority would be within the expression "other authorities" if it has been invested with statutory power to issue binding directions to third parties, the disobedience of which would entail penal consequences or it has the sovereign power to make rules and regulations having the force of law. This test was followed by Ray, C J, in Sukhdev vs Bhagat Ram, ; Mathew, J. however, in the same case propounded a broader test. The learned Judge emphasised that the concept of 'State ' had undergone drastic changes in recent years and today 'State ' could not be conceived of simply as a coercive machinery wielding the thunderbolt of authority; rather it has to be viewed mainly as a service corporation. He expanded on this dictum by stating that the emerging principle appears to be that a public corporation being an instrumentality or agency of the 'State ' is subject to the same constitutional limitations as the 'State ' it self. The preconditions of this are two, namely, that the corporation is the creation of the 'State ' and that there is existence of power in the corporation to invade the consti tutional rights of the individual. This Court in Ram anna Shetty vs International Airport Authority, ; accepted and adopted the rational of instrumentality or agency of State put forward by Mathew, J., and spelt out certain criteria with whose aid such an inference could be made. However, before we come to these criteria we think it necessary to refer to the concern operating behind the exposition of the broader test by Justice Mathew which is of equal relevance to us today, especially considering the fact that the definition under Article 12 is. an inclusive and not an exhaustive definition. That concern is the need to curb arbitrary and unregulated power wherever and howsoever reposed. In Ramanna D. Shetty vs International Airport Authority (supra) this Court deliberating on the criteria on the basis of which to determine whether a corporation is acting as instrumentality or agency of Government said that it was not possible to formulate an all inclu 834 sive or exhaustive test which would adequately answer this question. There is no out and dried formula which would provide the correct division of corporations into those which are instrumentalities or agencies of Government and those which are not. The Court said whilst formulating the criteria that analogical aid can be taken from the concept of State Action as developed in the United States wherein the U.S. Courts have suggested that a private agency if supported by extra ordinary assistance given by the State may be subject to the same constitutional limitations as the State. It was pointed out that the State 's general common law and statutory structure under which its people carry on their private affairs, own property and enter into con tracts, each enjoying equality in terms of legal capacity, is not such assistance as would transform private conduct into State Action. "But if extensive and unusual financial assistance is given and the purpose of such assistance coincides with the purpose for which the corporation is expected to use the assistance and such purpose is of public character, it may be a relevant circumstance supporting an inference that the corporation is an instrumentality or agency of the Government". On the question of State control, the Court in R.D. Shetty 's case (supra) clarified that some control by the State would not be determinative of the question, since the State has considerable measure of control under its police power over all types of business organisations. But a find ing of State financial support plus an unusual degree of control over the management and policies of the corporation might lead to the characterisation of the operation as State Action. Whilst deliberating on the functional criteria namely, that the corporation is carrying out a governmental func tion. the Court emphasised that classification of a function as governmental should not be done on earlier day percep tions but on what the State today views as an indispensable part of its activities, for the State may deem it as essen tial to its economy that it owns and operate a railroad, a mill or an irrigation system as it does to own and operate bridges street lights or a sewage disposal plant. The Court also reiterated in R.D. Shetty 's case (supra) what was pointed out by Mathew, J. in Sukhdev vs Bhagatram that "Institutions engaged in matters of high public interest or public functions are by virtue of the nature of the func tions performed government agencies. Activities which are too fundamental to the society are by definition too impor tant not to be considered government functions. " The above discussion was rounded off by the Court in R.D. 835 Shetty 's case (supra) by enumerating the following five factors namely, (1) financial assistance given by the State and magnitude of such assistance (2) any other form of assistance whether of the usual kind or extraordinary (3) control of management and policies of the corporation by the State nature and extent of control (4) State conferred or State protected monopoly status and (5) functions carried out by the corporation, whether public functions closely related to governmental functions, as relevant criteria for determining whether a corporation is an instrumentality or agency of the State or not, though the Court took care to point out that the enumeration was not exhaustive and that it was the aggregate or cumulative effect of all the rele vant factors that must be taken as controlling. The criteria evolved by this Court in Ramanna Shetty 's case (supra) were applied by this Court in Ajay Hasia vs Khalid Mujib; , where it was further empha sised that: "Where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool for constitu tional law must seek the substance and not the form. Now it is obvious that the Government may through the instrumental ity or agency of natural persons or it may employ the in strumentality or agency of judicial persons to carry out its functions. It is really the Government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government . . (for if the Government acting through its officers is subject to certain constitu tional limitations it must follow a fortiorari that the Government acting through the instrumentality or agency of a corporation should be equality subject to the same limita tions". On the canon of construction to be adopted for interpreting constitutional guarantees the Court pointed out: ". constitutional guarantees . should not be allowed to be emasculated in their application by a narrow and con structed judicial interpretation. The Courts should be anxious to enlarge the scope and width of the fundamental 836 rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activi ties, whether through natural persons or through corporate entities to the basic obligation of the fundamental rights. " In this case the Court also set at rest the controversy as to whether the manner in which a corporation is brought into existence had any relevance to the question whether it is a State instrumentality or agency. The Court said that it is immaterial for the purpose of determining whether a corpora tion is an instrumentality or agency of the State or not whether it is created by a Statute or under a statute: "the inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by statute or it may be a Government company or a company formed under the Compa nies Act, 1956 or it may be a society registered under the or any other similar stat ute". It would come within the ambit of Article 12, if it is found to an instrumentality or agency of the State on a proper assessment of the relevant factors. It will thus be seen that this Court has not permitted the corporate device to be utilised as a barrier ousting the constitutional control of the fundamental rights. Rather the Court has held: "It is dangerous to exonerate corporations from the need to have constitutional conscience, and so that inter pretation, language permitting, which makes governmental agencies whatever their main amenable to constitutional limitations must be adopted by the court as against the alternative of permitting them to flourish as an imperium in imperio". Som Prakash vs Union of India, ; Taking the above exposition as our guideline, we must now proceed to examine whether a private corporation such as Shriram comes within the ambit of Article 12 so as to be amenable to the discipline of Article 21. In order to assess the functional role allocated to private corporation engaged in the manufacture of chemicals and fertilisers we need 837 to examine the Industrial Policy of the Government and see the public interest importance given by the State to the activity carried on by such private corporation. Under the Industrial Policy Resolution 1956 industries were classified into three categories having regard to the part which the State would play in each of them. The first category was to be the exclusive responsibility of the State. The second category comprised those industries which would be progressively State owned and in which the State would therefore generally take the initiative in establish ing new undertakings but in which private enterprise would also be expected to supplement the effort of the State by promoting and development undertakings either on its own or with State participation. The third category would include all the remaining industries and their future development would generally be left to the initiative and enterprise of the private sector. Schedule B to the Resolution enumerated the industries. Appendix I to the Industrial Policy Resolution, 1948 dealing with the problem of State participation in industry and the conditions in which private enterprise should be allowed to operate stated that there can be no doubt that the State must play a progressively active role in the development of industries. However under the present condi tions, the mechanism and resources of the State may not permit it to function forthwith in Industry as widely as may be desirable. The Policy declared that for some time to come, the State could contribute more quickly to the in crease of national wealth by expanding its present activi ties wherever it is already operating and by concentrating on new units of production in other fields. On these considerations the Government decided that the manufacture of arms and ammunition, the production and control of atomic energy and the ownership and management of railway transport would be the exclusive monopoly of the Central Government. The establishment of new undertakings in Coal, Iron and Steel, Aircraft manufacture, Ship building, manufacture of telephone telegraph and wireless apparatus and mineral oil were to be the exclusive responsibility of the State except where in national interest the State itself finds it necessary to secure the co operation of private enterprise subject to control of the Central Government. The policy resolution also made mention of certain basic industries of importance the planning and regulation of which by tile Cent 838 ral Government was found necessary in national interest. Among the eighteen industries so mentioned as requiring such Central control. heavy chemicals and fertilisers stood included. In order to carry out the objective of the Policy Reso lution the Industries (Development and Regulation) Act of 1951 was enacted which, according to its objects and rea sons, brought under central control the development and regulation of a number of important industries the activi ties of which affect the country as a whole and the develop ment of which must be governed by economic factors of all India import. Section 2 of the Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule. Chemicals and Fertilisers find a place in the First Schedule as Items 19 and 18 respectively. If an analysis of the declarations in the Policy Resolu tions and the Act is undertaken, we find that the activity of producing chemicals and fertilisers is deemed by the State to be an industry of vital public interest, whose public import necessitates that the activity should be ultimately carried out by the State itself, in the interim period with State support and under State control, private corporations may also be permitted to supplement the State effort. The argument of the applicants on the basis of this premise was that in view of this declared industrial policy of the State, even private corporations manufacturing chemi cals and fertilisers can be said to be engaged in activities which are so fundamental to the Society as to be necessarily considered government functions. Sukhdev vs Bhagat Ram, Ramanna Shetty and Ajay Hasia (supra). It was pointed out on behalf of the applicants that as Shriram is registered under the InduStries Development and Regulation Act 1951, its activities are subject to extensive and detailed control and supervision by the Government. Under the Act a licence is necessary for the establishment of a new industrial undertaking or expansion of capacity or manufacture of a new article by an existing industrial undertaking carrying on any of the Scheduled Industries included in the First Schedule of the Act. By refusing licence for a particular unit, the Government can prevent over concentration in a particular region or over investment in a particular industry. Moreover, by its power to specify the capacity in the licence it can also prevent over devel opment of a particular industry if it has already reached target capacity. Section 18 G of the Act empowers the Gov ernment to control the supply, distribution, price etc. of the articles manufactured by a scheduled 839 industry and under Section 18A Government can assume manage ment and control of an industrial undertaking engaged in a scheduled industry if after investigation it is found that the affairs of the undertaking are being managed in a manner detrimental to public interest and under Section 18AA in certain emergent cases, take over is allowed even without investigation. Since Shriram is carrying on a scheduled industry, it is subject to this stringent system of regis tration and licensing. It is also amenable. to various directions that may be issued by the Government from time to time and it is subject to the exercise of the powers of the Government under Sections 18A, and 18G. Shriram is required to obtain a licence under the Facto ries Act and is subject to the directions and orders of the authorities under the Act. It is also required to obtain a licence for its manufacturing activities from the Municipal authorities under the Delhi Municipal Act, 1957. It is subject to extensive environment regulation under the and as the factory is situated in an air pollution control area, it is also subject to the regulation of the Air (Prevention and Control of Pollution) Act, 1981. It is true that control is not exercised by the Government in relation to the internal management policies of the Company. However, the control is exercised on all such activities of Shriram which can jeop ardize public interest. This functional control is of spe cial significance as it is the potentiality of the fertiliz er industry to adversely affect the health and safety of the community and its being impregnated with public interest which perhaps dictated the policy decision of the Government to ultimately operate this industry exclusively and invited functional control. Along with this extensive functional control, we find that Shriram also receives sizable assist ance in the shape of loans and overdrafts running into several crores of rupees from the Government through various agencies. Moreover, Shriram is engaged in the manufacture of caustic soda, chlorine etc. Its various units are set up in a single complex surrounded by thickly populated colonies. Chlorine gas is admittedly dangerous to life and ' health. If the gas escapes either from the storage tank or from the filled cylinders or from any other point in the course of production, the health and wellbeing of the people living in the vicinity can be seriously affected. Thus Shriram is engaged in an activity which has the potential to invade the right to life of large sections of people. The question is whether these factors are cumulatively sufficient to bring Shriram within the ambit of Article 12. Prima facie it is arguable that when the States ' power as economic agent, economic entrepreneur and allocator of economic benefits is subject to the limitations of fundamental rights. (Vide 840 Eurasian Equipment and Chemicals Ltd. vs State of West Bengal, ; , Rashbehari Panda vs State, , Ramanna Shetty vs International Airport Authori ty, (supra) and Kasturilal Reddy vs State of Jammu & Kash mir; , why should a private corporation under the functional control of the State engaged in an activity which is hazardous to the health and safety of the community and is imbued with public interest and which the State ultimately proposes to exclusively run under its industrial policy, not be subject to the same limitations. But we do not propose to decide this question and make any definite pronouncement upon it for reasons which we shall point out later in the course of this judgment. We were during the course of arguments, addressed at great length by counsel on both sides on the American doc trine of State action. The learned counsel elaborately traced the evolution of this doctrine in its parent country. We are aware that in America since the Fourteenth Amendment is available only against the State, the Courts, in order to thwart racial discrimination by private parties, devised the theory of State action under which it was held that wherever private activity was aided, facilitated or supported by the Slate in a significant measure, such activity took the colour of State action and was subject to the constitutional limitations of the Fourteenth Amendment. This historical context in which the doctrine of State action evolved in the United States is irrelevant for our purpose especially since we have Article 15(2) in our Constitution. But it is the principle behind the doctrine of State aid, control and regulation so impregnating a private activity as to give it the colour of State action that is of interest to us and that also to the limited extent to which it can be Indian ized and harmoniously blended with our constitutional juris prudence. That we in no way consider ourselves bound by American exposition of constitutional law is well demos trated by the fact that in Ramanna Shetty, (supra) this Court preferred the minority opinion of Douglas, J. in Jackson vs Metropolitan Edison Company, ; as against the majority opinion of Rehnquist, J. And again in Air India vs Nargesh Mirza, ; this Court whilst preferring the minority view in General Electric Company Martha vs Gilbert, ; said that the provisions of the American Constitution cannot always be applied to Indian conditions or to the provisions of our Constitution and whilst some of the principles adumbrated by the American decisions may provide a useful guide, close adherence to those principles while applying them to the provisions of our Constitution is not to be favoured, be cause the social conditions in our country are different. The learned counsel for Shriram stressed the inapposite 841 ness of the doctrine of State action in the Indian context because, according to him, once an authority is brought within the purview of Article 12, it is State for all in tents and purposes and the functional dichotomy in America where certain activities of the same authority may be cha raterised as State action and others as private action cannot be applied here in India. But so far as this argument is concerned, we must demur to it and point out that it is not correct to say that in India once a corporation is deemed to be 'authority ', it would be subject to the consti tutional limitation of fundamental rights in the performance of all its functions and that the appellation of 'authority ' would stick to such corporation, irrespective of the func tional context. Before we part with this topic, we may point out that this Court has throughout the last few years expanded the horizon of Article 12 primarily to inject respect for human rights and social conscience in our corporate struc ture. The purpose of expansion has not been to destroy the raison d 'eter of creating corporations but to advance the human rights jurisprudence. Prima facie we are not inclined to accept the apprehensions of learned counsel for Shriram as well founded when he says that our including within the ambit of Article 12 and thus subjecting to the discipline of Article 21, those private corporations whose activities have the potential of affecting the life and health of the peo ple, would deal a death blow to the policy of encouraging and permitting private entrepreneurial activity. Whenever a new advance is made in the field of human rights, apprehen sion is always expressed by the status quosits that it will create enormous difficulties in the way of smooth function ing of the system and affect its stability. Similar appre hension was voiced when this Court In Ramanna Shetty 's case (supra) brought public sector corporations within the scope and ambit of Article 12 and subjected them to the discipline of fundamental rights. Such apprehension expressed by those who may be affected by any new and innovative expansion of human rights need not deter the Court from widening the scope of human rights and expanding their reach ambit, if otherwise it is possible to do so without doing violence to the language of the constitutional provision. It is through creative interpretation and bold innovation that the human rights jurisprudence has been developed in our country to a remarkable extent and this forward march of the human rights movement cannot be allowed to be halted by unfounded appre hensions expressed by status quoists. But we do not propose to decide finally at the present stage whether a private corporation like Shriram would fall within the scope and ambit of Article 12, because we have not had sufficient time to consider and reflect on this question in depth The hearing of this case before us 842 concluded only on 15th December 1986 and we are called upon to deliver our judgment within a period of four days, on 19th December 1986. We are therefore of the view that this is not a question on which we must make any definite pro nouncement at this stage. But we would leave it for a proper and detailed consideration at a later stage if it becomes necessary to do so. We must also deal with one other question which was seriously debated before us and that question is as to what is the measure of liability of an enterprise which is en gaged in an hazardous or inherently dangerous industry, if by reason of an accident occurring in such industry, persons die or are injured. Does the rule in Rylands vs Fletcher apply or is there any other principle on which the liability can be determined? The rule in Rylands vs Fletcher was evolved in the year 1866 and it provides that a person who for his own purposes being on to his land and collects and keeps there anything likely to do mischief if it escapes must keep it at his peril and, if he falls to do so, is prima facie liable for the damage which is the natural consequence of its escape. The liability under this rule is strict and it is no defence that the thing escaped without that person 's wilful act, default or neglect or even that he had no knowledge of its existence. This rule laid down a principle of liability that if a person who brings on to his land and collects and keeps there anything likely to do harm and such thing escapes and does damage to another, he is liable to compensate for the damage caused. Of course, this rule applies only to non natural user of the land and it does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the thing which escapes is present by the consent of the person injured or in certain cases where there is statutory authority. Vide Halsbury Laws of England, Vol. 45 para 1305. Considerable case law has developed in England as to what is natural and what is non natural use of land and what are precisely the circumstances in which this rule may be displaced. But it is not necessary for us to consider these decisions laying down the parameters of this rule because in a modern industrial society with highly developed scientific knowledge and technology where hazardous or inherently dangerous indus tries are necessary to carry out part of the developmental programme. This rule evolved in the 19th Century at a time when all these developments of science and technology had not taken place cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure. We need not feel inhibited by this rule which was evolved in this context of a totally different kind of 843 economy. Law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country. As new situations arise the law has to be evolved in order to meet the chal lenge of such new situations. Law cannot afford to remain static. We have to evolve new principles and lay down new norms Which would adequately deal with the new problems which arise in a highly industrialised economy. We cannot allow our judicial thinking to be constricted by reference to the law as it prevails in England or for the matter of that in any other foreign country. We no longer need the crutches of a foreign legal order. We are certainly prepared to receive light from whatever source it comes but we have to build up our own jurisprudence and we cannot countenance an argument that merely because the new law does not recog nise the rule of strict and absolute liability in cases of hazardous or dangerous liability or the rule as laid down in Rylands vs Fletcher as is developed in England recognises certain limitations and responsibilities. We in India cannot hold our hands back and I venture to evolve a new. principle of liability which English courts have not done. We have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazardous or inherently dan gerous industries which are concommitant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liability merely because it has not been so done in England. We are of the view that an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and nondelegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part. Since the persons harmed on account of the hazardous or inherently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous prepara tion of substance or any other related element that caused the harm must be held strictly liable for causing such harm as a part of the social cost for carrying on the hazardous or 844 inherently dangerous activity. If the enterprise is permit ted to carry on an hazardous or inherently dangerous activi ty for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activity as an appropriate item of its over heads. Such hazardous or inherently dangerous activity for private profit can be tolerated only on condition that the enter prise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherently dangerous activ ity regardless of whether it is carried on carefully or not. This principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards. We would therefore hold that where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on account of an acci dent in the operation of such hazardous or inherently dan gerous activity resulting, for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher (supra). We would also like to point out that the measure of compensation in the kind of cases referred to in the preced ing paragraph must be co related to the magnitude and capac ity of the enterprise because such compensation must have a deferent effect. The larger and more prosperous the enter prise, the greater must be the amount of compensation pay able by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise. Since we are not deciding the question as to whether Shriram is an authority within the meaning of Article 12 so as to be subjected to the discipline of the fundamental right under Article 21, we do not think it would be justi fied in setting up a special machinery for investigation of the claims for compensation made by those who allege that they have been the victims of oleum gas escape. But we would direct that Delhi Legal Aid and Advice Board to take up the cases of all those who claim to have suffered on account of oleum gas and to file actions on their behalf in the appro priate court for claiming compensation against Shriram. Such actions claiming compensation may be filed by the Delhi Legal Aid and Advice Board.within two months from 845 today and the Delhi Administration is directed to provide the necessary funds to the Delhi Legal Aid and Advice Board for the purpose of filing and prosecuting such actions. The High Court will nominate one or more Judges as may be neces sary for the purpose of trying such actions so that they may be expeditiously disposed of. So far as the issue of reloca tion and other issues are concerned the writ petition will come up for hearing on 3rd February, 1987. A.P.J. Petition dis posed of.

The petitioners, in this writ petition under article 32, sought a direction for closure of the various units of Shriram Foods & Fertilizers 820 Industries on the ground that they were hazardous to the community. During the pendency of the petition, there was escape of oleum gas from one of the units of Shriram. The Delhi Legal Aid and Advice Board and the Delhi Bar Associa tion filed applications for award of compensation to the persons who had suffered harm on account of escape of oleum gas. A Bench of three Hon 'ble Judges while permitting Shriram to restart its power plant as also other plants subject to certain conditions, referred the applications for compensa tion to a larger Bench of five Judges because issues of great constitutional importance were involved, namely, (1) What is the scope and ambit of the jurisdiction of the Supreme Court under article 32 since the applications for compensation are sought to be maintained under that Article; (2) Whether article 21 is available against Shriram which is owned by Delhi Cloth Mills Limited, a public company limited by shares and which is engaged in an industry vital to public interest and with potential to affect the life and health of the people; and (3) What is the measure of liabil ity of an enterprise which is engaged in an hazardous or inherently dangerous industry, if by reason of an accident occurring in such industry, persons die or are injured. Does the rule in Rylands vs Fletcher, (1866 Law Report 1 Excheq uer 265) apply or is there any other principle on which the liability can be determined. Disposing of the applications, HELD: 1. The question whether a private corporation like Shriram would fall within the scope and ambit of article 12 so as to be amenable to the discipline of article 21 is left for proper and detailed consideration at a later stage if it becomes necessary to do so. [844F G] Rajasthan Electricity Board vs Mohan Lal, ; ; Sukhdev vs Bhagwat Ram, ; ; Ramanna Shetty vs International Airport Authority, ; ; Ajay Hasia vs Khalid Mujib, ; ; Som Prakash vs Union of India, ; ; Appendix I to Industrial Policy Resolution, 1948; Industries (Develop ment and Regulation) Act, 1951; Delhi Municipal Act, 1957 ; Air (Prevention and Control of Pollution) Act, 1981; Eurasian Equipment and Chemicals Ltd. vs State of West Bengal, ; ; Rasbehari Panda vs St.ate, ; ; Kas turi Lal Reddy vs State of Jammu & Kashmir, ; , referred to. 821 2. The Delhi Legal Aid and Advice Board is directed to take up the cases of all those who claim to have suffered on account of oleum gas and to file actions on their behalf in the appropriate Court for claiming compensation and the Delhi Administration is directed to provide necessary funds to the Board for the purpose. [844G H; 845A] 3.(i) Where there is a violation of a fundamental or other legal right of a person or class of persons who by reason of poverty or disability or socially or economically disadvantaged position cannot approach a Court of law for justice, it would be open to any public spirited individual or social action group to bring an action for vindication of the fundamental or other legal right of such individual or class of individuals and this can be done not only by filing regular writ petition under article 226 in the High Court and under article 32 in this Court, but also by addressing a letter to the Court. [828B C; E F] 3.(ii) Even if a letter is addressed to an individual Judge of the Court, it should be entertained, provided of course it is by or on behalf of a person in custody or on behalf of a woman or a child or a class or deprived or disadvantaged persons. [829B C] 3.(iii) Letters addressed to individual Justices of this Court should not be rejected merely because they fail to conform to the preferred form of address nor should the Court adopt a rigid stance that no letters will be enter tained unless they are supported by an affidavit. If the Court were to insist on an affidavit as a condition of entertaining the letters the entire object and purpose of epistolary jurisdiction would be frustrated because most of the poor and disadvantaged persons will then not be able to have easy access to the Court and even the social action groups will find it difficult to approach the Court. [828H; 829B] Bandhua Mukti Morcha vs Union of India & Ors., ; ; S.P. Gupta vs Union of India, [1981] (Suppl) SCC 87 and Union for Democratic Rights & Ors. vs Union of India, [1983] 1 SCR 456, relied upon. 4.(i) Article 32 does not merely confer power on this Court to issue direction, order or writ for enforcement of the fundamental rights but it also lays a constitutional obligation on this Court to protect the fundamental rights of the people and for that purpose this Court has all inci dental and ancillary powers including the power to forge new remedies and fashion new strategies designed to enforce the fundamental rights. It is in realisation of this constitu tional obligation that this Court 822 has, in the past, innovated new methods and strategies for the purpose of securing enforcement of the fundamental rights, particularly in the case of the poor and the disad vantaged who are denied their basic human rights and to whom freedom and liberty have no meaning. [827F 828A] 4.(ii) The power of the Court is not only injunctive in ambit, that is, preventing the infringement of fundamental right but it is also remedial in scope and provides relief against a breach of the fundamental right already committed. [830A B] 4.(iii) The power of the Court to grant such remedial relief may include the power to award compensation in appro priate cases. The infringement of the fundamental right must be gross and patent, that is incontrovertible and exfacie glaring and either such infringement should be on a large scale affecting the fundamental rights of a large number of persons or it should appear unjust or unduly harsh or op pressing on account of their poverty or disability or so cially or economically disadvantaged position to require the person or persons affected by such infringement to initiate and pursue action in the Civil Courts. [830D; E F] 4. (iv) Ordinarily a petition under article 32 should not be used as a substitute for enforcement of the right to claim compensation for infringement of a fundamental right through the ordinary process of Civil Court. It is only in exceptional cases that compensation may be awarded in a petition under article 32. [830F G] 4.(v) The applications for compensation in the instant writ petition are for enforcement of the fundamental right to life enshrined in article 21 of the Constitution and while dealing with such applications the Court cannot adopt a hyper technical approach which would defeat the ends of justice. The Court must look at the substance and not the form. Therefore, the instant applications for compensation are maintainable under article 32. [827A B] Bandhua Mukti Morcha vs Union of India & Ors. , ; ; S.P. Gupta vs Union of India, [1981] (Suppl.) SCR 87; Union for Democratic Rights & Ors. vs Union of India, [1983] 1 SCR 456 and Rudul Shah vs State of Bihar, AIR 1983 SC 1086, relied upon. The rule in Rylands vs Fletcher (supra) laid down a principle of liability that if a person who brings on to his land and collects and keeps there anything likely to do harm and such thing escapes and does 823 damage to another, he is liable to compensate for the damage caused. This rule applies only to non natural user of the land and it does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the thing which escapes is present by the consent of the person injured or in certain cases where there is statutory author ity. This rule evolved in the 19th century at a time when all these developments of science and technology had not taken place cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure. In a modern industrial society with highly de veloped scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to carry on as part of developmental programme, the Court need not feel inhibited by this rule merely because the new law does not recognise the rule of strict and absolute liability in case of an enterprise engaged in hazardous and dangerous activi ty. [842D G] Halsburry Laws of England, Vol. 45 Para 1305, relied upon. 6.(i) Law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country. Law cannot afford to remain static. The Court cannot allow judicial thinking to be constricted by reference to the law as it prevails in England or in any other foreign country. Although this Court should be prepared to receive light from whatever source it comes, but it has to build up its own jurisprudence, evolve new principles and lay down new norms which would adequately deal with the new problems which arise in a highly indus trialised economy. If it is found that it is necessary to construct a new principle of law to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concommitant to an industrial economy the Court should not hesitate to evolve such principles of liability merely because it has not been so done in England. [843A E] 6(ii) This Court has throughout the last few years expanded the horizon of article 12 primarily to inject respect for human rights and social conscience in corporate struc ture. The purpose of expansion has not been to destroy the raison d 'etre of creating corporations but to advance the human rights jurisprudence. The apprehension that including within the ambit of article 12 and thus subjecting to the discipline of article 21 those private corporations whose activities have the potential of affecting the life and health of the people, would deal a death blow to 824 the policy of encouraging and permitting private enterpre neurial activity is not well founded. It is through creative interpretation and bold innovation that the human rights jurisprudence has been developed in India to a remarkable extent and this forward march of the humanrights movement cannot be allowed to be halted by unfounded apprehensions expressed by status quoists. [841C E] 7.(i) An enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an abso lute non delegable duty to the community to ensure that if any harm results to anyone, the enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity must be conducted with the highest standards of safety and if any harm results on account of such activity the enterprise must be absolutely liable to compensate for such harm irrespective of the fact that the enterprise had taken all reasonable care and that the harm occurred without any negligence on its part. [843E G] 7.(ii) If the enterprise is permitted to carry on an hazardous or inherently dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such activity as an appropriate item of its overheads. The enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards. [844A B] 7.(iii) The measure of compensation in such kind of cases must be co related to the magnitude and capacity of the enterprise because such compensation must have a deter rent effect. The larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it for the harm caused on account of an accident in carrying on of the hazardous or inherently dangerous activity by the enterprise. [844E F] 8. The historical context in which the American doctrine of State action evolved in the united States is irrelevant for the purpose of Indian Courts, especially in view of article 15(2) of the Indian Constitution. But, it is the principle behind the doctrine of State aid, control and regulation so impregnating a private activity as to give it the colour of State action which can be applied to the limited extent to which it can be Indianised and harmoniously blended with Indian constitutional 825 jurisprudence. Indian Courts are not bound by the American exposition of constitutional law. The provisions of American Constitution cannot always be applied to Indian conditions or to the provisions of Indian Constitution and whilst some of the principles adumberated by the American decisions may provide a useful guide, close adherence to those principles while applying them to the provisions of the Indian Consti tution is not to be favoured, because the social conditions in India are different. [840D H] Ramanna Shetty vs International Airport Authority, ; ; Jackson vs Metropolitan Edison Co., ; ; Air India vs Nargesh Mirza, ; and General Electric Co. Maratha vs Gilbert, ; , relied upon.

tion (Civil) No. 7995 of 1981. (Under Article 32 of the Constitution of India). Krishnamani and M.K.D. Namboodary for the Petitioner. N.C. Sikri and Mrs. Madhu Sikri for the Respondents. The Judgment of the Court was delivered by KULDIP SINGH, J. The petitioner retired from the post of teacher in the Air Force Central School, New Delhi (herein after called the 'School ') on her attaining the age of 58 years. The School is a society registered under the Socie ties Registration Act, 1960. In this petition under Article 32 of the Constitution of India she claims that under the Delhi Education Code read with the Delhi Education Act, 1973 (hereinafter called the 'Act ') and the Delhi Education Rules, 1973 (hereinafter called the 'Rules ') the age of superannuation for the 414 teachers who joined service before the coming into force of the Act is 60 years and as such the management of the school acted arbitrarily in depriving her of two years of service and consequential benefits. The petitioner was initially appointed for a period of five years. On completion of the said period in 1961 the contract was renewed for a further period of five years. Thereafter she continued in service of the school on regular basis till the impugned retirement dated October 31,1981. The petitioner has averred that prior to coming into force of the Act the conditions of service of the teachers of the school provided 60 years as the age of superannua tion. The respondents have, however, denied the same and have stated that the school management was following the practice of retiring the teachers on attaining the age of 58 years with some exceptions where extensions were given upto the age of 60 years. The management has not produced any rules, bye laws or instructions to show that the age of superannuation of the school teachers was 58 years. With a view to provide uniformity and security of serv ice to the teachers of recognised schools, the Delhi Admin istration laid down model conditions of service including age of superannuation for the teachers/employees of the said schools and published the same as a code called the Delhi Education Code. It came into force with effect from February 15, 1965. Section 208 of the Code is as under: "Section 208. The normal age of retirement of an employee of an aided school (including the head of the School) shall be the date on which he attains the age of 60. But an employee may be retired any time between the age of 55 & 60 years on grounds of inefficiency, incompetence, or physical unfitness after he has been given a reasonable opportunity to show cause against the proposed retirement and after his representation, if any, has been duly consid ered." Section 8(1) of the Act and Rule 110 of the Rules which are relevant are as under: 8(i) "the administrator may make rules regulating the minimum qualifications for recruitment and conditions of service of employees of recognised private school. 415 Provided that neither the salary nor the right in respect of leave of absence, age of retirement and pension of an employee in the employment of an existing school at the commencement of this Act shall be varied to the disad vantage of such an employee." "Rule 110 Retirement Age: (1).Except where an existing employee is entitled to have a higher age of re tirement, every employee of a recognised private school, whether aided or not shall hold office until he attains the age of 58 years. " The school is not receiving any aid from the Government but it is recognised by the Delhi Administration. It is not disputed that the Act and the Rules are applicable to the teachers employed in the school and the management is legal ly bound to extend the protection of these provisions to them. The age of superannuation provided in Rule 110 of the Rules is 58 years except in the case of existing employees who were in service on April 1, 1973 the date of coming into force of the Act and in their case the higher age of retire ment to which they were entitled has been protected. The petitioner has specifically asserted in the petition that even though the school was not an aided school it had accepted the Delhi Education Code and made it applicable to its employees. It is stated that the management of the school has been retiring the teachers at the age of 60 years in terms of Section 208 of the Code. It is also mentioned that one Mr. P.R. Menon, Head of English faculty in the school retired on December 9, 1968 on attaining the age of 60 years. She has further stated that Mr. Dhawan, Sqdrn. Leader Lal and Mr. Sharma all joined the school as teachers before the enforcement of Delhi Education Code and have retired after coming into force of the Act and the Rules. All of them retired at the age of 60 years whereas the petitioner was made to retire at the age of 58 years arbi trarily and discriminately. In the counter affidavit the Chairman, Executive Committee of the school has stated as under: "The Delhi Administration formulated an Education Code by way of guidelines without any legal force as pro nounced by Hon 'ble Delhi High Court . " It is further stated: 416 "the management of the school was adhering the service conditions inclusive of age of retirement i.e. 58 years and the pay scales prescribed by the Delhi Administra tion, from time to time under Delhi Administration Act, the past practice of serving beyond the age of 58 years had been done away rather on coming into force of the Delhi Education Act as a matter of principle but for one exception of Shri B.L. Sharma the then Vice Principal who was given extension as an administrative expediency. " Learned counsel for the petitioner has contended that prior to the coming into force of the Act and the Rules, the management was following the Delhi Education Code which provided 60 years as the age of superannuation and as such under rule 110 of the Rules the petitioner has a statutory right to continue upto the age of 60 years. Mr. N .C. Sikri, learned counsel appearing for the management, however, contends that the school is being run by a private manage ment, there is no Government control in the management of the school and no aid of any kind is being given to the school. According to him, the management of the school is neither State nor an authority under Article 12 of the Constitution of India and as such no writ petition against the respondent management is maintainable. On merits he contends that Delhi Education Code has no force of law and as such the petitioner has no enforceable right much less under Article 32 of the Constitution of India. The Executive Committee which manages the school is headed by Air Force Officer Incharge Administration, Air Force Headquarters, New Delhi and consist of all high rank ing Air Force officers of the rank of Sqdrn. Leader to Air Marshal. The said membership is in their official capacity which indicates complete control over the school by the Air Force. It is, however, not necessary to decide in this case as to whether or not the school is a State or an authority under Article 12 of the Constitution of India. The recognised private schools in Delhi whether aided or otherwise are governed by the provisions of the Act and the Rules. The respondent management is under a statutory obli gation to uniformly apply the provisions of the Act and the Rules to the teachers employed in the school. When an au thority is required to act in a particular manner under a statute it has no option but to follow the statute. The authority cannot defy the statute on the pretext that it is neither a State nor an "authority" under Article 12 of the Constitution of India. 417 It is not necessary and we do not propose to go into the question in this case as to whether the petition is main tainable under Article 32 of the Constitution, because this petition has been pending in this Court since 1981. The petitioner 's claim is just. It will, therefore, be a traves ty of justice to send her to any other forum at this stage. In any case the petitioner seeks to enforce her statutory right under Section 8 of the Act read with Rule 110 of the Rules with a further contention that she has been discrimi nated in the matter of superannuation so much so that other teachers similarly situated were retired at the age of 60 years whereas the petitioner has been singled out and re tired at the age of 58 years. The respondent management has not produced any Rules or bye laws either framed by the management itself or otherwise to show that there was any uniform provision for retirement of teachers at the age of 58 years. The averments of the petitioner that Section 208 of the Delhi Education Code was being followed and the teachers were superannuated at the age of 60 years have not been specifically denied. Rather these averments have been tacitly admitted. Even otherwise every institution must frame and follow a uniform rule for superannuating its employees. The age of superannuation cannot be left to the whims of the employer to enable him to retire different employees at different ages. In the absence of any regulation, Bye laws or policy decision by the re spondent management regarding the age of superannuation, we accept the contention of the petitioner that prior to the coming into force of the Act and the Rules the management was following the Delhi Education Code which provided 60 years as the age of superannuation for the school teachers. In that view of the matter under Rule 110 of the Rules, the petitioner being an existing employee was entitled to be retired at the age of 60 years. The writ petition is, therefore, allowed and the order of the respondents retiring the petitioner at the age of 58 years is quashed. She having already attained the age of 60 years we direct the respondents to pay the petitioner salary and allowances for the period of two years. We further direct that all the post retirement benefits to which the petitioner is entitled be redetermined assuming the peti tioner to have retired at the age of 60 years. The arrears of salary and allowances be paid to the petitioner within three months from today. The respondent being an educational institution we direct the parties to bear their own costs. P.S.S Petition allowed.

The normal age of retirement of an employee of an aided school prescribed under section 208 of the Delhi Education Code, 1965 was 60 years. The proviso to section 8(1) of the Delhi Education Act, 1973, prohibited the administrator from varying the conditions of service of an employee of an existing school at the commencement of that Act to his disadvantage While fixing the retirement age of employees of recognised private schools at 58 years sub rule (1) of rule 110 of the Delhi Education Rules, 1973 protected the entitlement of existing employees to higher age of retire ment. The petitioner teacher, who had joined service before the coming into force of the Act, assailed her retirement on attaining the age of 58 years on the ground that under section 8 of the Act read with rule 110 of the Rules she had a statu tory right to continue upto the age of 60 years in terms of section 208 of the Code and that the management had acted arbi trarily and discriminately in depriving her of two years of service and consequential benefits. For the respondents it was contended that the management of the school was neither a State nor an authority under Article 12 of the Constitu tion and as such no writ petition against the respondent management was maintainable, and that the Education Code had no force of law and as such the petitioner had no enforce able right much less under Article 32 of the Constitution. Allowing the writ petition, the Court, HELD: 1. The petitioner 's claim is just. She was enti tled to be ,retired at the age of 60 years. [417A, E] 413 2. Prior to the coming into force of the Act and the Rules the management was following the Delhi Education Code which provided 60 years as the age of superannuation for the school teachers. The age of superannuation provided in Rule 110 of the Rules is 58 years except in the case of existing employees who were in service on April 1, 1973, the date of coming into force of the Act, and in their case the higher age of retirement to which they were entitled has been protected. The petitioner was an existing employee of the respondent management. [417E, 415D] 3. The respondent management was under a statutory obligation to uniformly apply the provisions of the Act and the Rules to the teachers employed in the school. When an authority is required to act in a particular manner under a statute it has no option but to follow the statute. The authority cannot defy the statute on the pretext that it is neither a State nor an "authority" under Article 12 of the Constitution of India. [416G H] 4. The petitioner having already attained the age of 60 years the respondents are directed to pay her salary and allowances for the period of two years. The post retirement benefits to which she is entitled be redetermined assuming her to have retired at the age of 60 years. The arrears of salary and allowances be paid to her within three months. [417F G]

vil Appeal No. 536 of 1962. Appeal from the judgment and decree dated March 26. 1958, of the High Court at Patna in First Appeal No. 340 of .1951. 147 Niren De, Additional Solicitor General, N.D. Karkhanis and B.R.G.K. Achar, for the appellant. Bishan Narain, P. D. Himmatsinghka section Murthy and B.P. Maheshwari, for the respondent. The judgment of the Court was delivered by Wanchoo, J. This is an appeal on a certificate granted by the Patna High Court. The respondent sued the Union of India as representing G.I.P. Railway, Bombay and E.I.R. Calcutta for recovery of damages for non delivery of 31 bales of piece goods, out of 60 bales which had been consigned to Baidyanathdham from Wadibundar. This consignment was loaded in wagon No. 9643 on December 1. 1947. It is not in dispute that the consignment reached Mughalsarai on the morning of December 9, 1947 by 192 On goods train. After reaching Mughalsarai, the wagon was kept in the marshaling yard till December 12, 1947. It wag sent to Baidyanadham by 214 On goods train from Mughalsarai at 6 40 p.m. on December 12, 1947 and eventually reached Baidyanathdham on December 21, 1947. The respondent who was the consignee presented the railway receipt on the same day for delivery of the consignment. Thereupon the railway delivered 29 bales only to the respondent and the remaining 31 bales were said to be missing and were never delivered. Consequently on August 311948, notice was g:yen under section 80 of the Civil Procedure Code and this was followed by the suit out of which the present appeal has arisen on November 20, 1948. The consignment had been booked under risk note form Z which for all practical purposes is in the same terms as risk note form B. The respondent claimed damages for non delivery on the ground that the non delivery was due to the misconduct of the servants of the railway, and the claim was for a sum of Rs. 36,461/12/ . The suit was resisted by the appellant and a number of defences were taken. In the present appeal we are only concerned with two defences. It was first contended that the suit was barred by section 77 of the Indian Railways Act, No. IX of 1890, (hereinafter referred to as the Act), inasmuch as notice required therein was not given by the respondent. Secondly it was contended that the consignment was sent under risk note form Z and under the terms of that risk note the railway was absolved from all responsibility for loss, destruction or deterioration of goods consigned thereunder from any cause whatsoever except upon proof of misconduct of the railway of its servants. and that the burden of proving such misconduct subject to certain exceptions was on the respondent and that the respondent had failed to discharge that burden. Further in compliance with the terms of the risk note, the railway made a disclosure in the written statement as to how the consignment was dealt with throughout the period it was in its possession or control. The case of the railway in this connection was that there was a theft in the running train between Mughalsarai and 148 Buxar on December 12, 1947 and that was how part of the con signment was lost. As the loss was not due to any misconduct on the part of the railway or its servants and as the respondent had not discharged the burden which lay on him after the railway had given evidence of how the consignment had been dealt with, there was no liability on the railway. On the first point, the trial court held On the basis of certain decisions of the Patna High Court that no notice under section 77 was necessary in a case of non delivery which was held to be different from loss. On the second point relating to the responsibility of the railway on the ' basis of risk note form Z, the trial court held that it had not been proved that the loss was due to misconduct of the railway or its servants. It therefore dismissed the suit. Then followed an appeal by the respondent to the High Court. The High Court apparently upheld the finding of the trial court on the question of notice under s.77. But on the second point the High Court was of opinion that there was a breach of the condition of disclosure provided in risk note Z under which the consignment had been booked, and therefore the appellant could not take advantage of the risk note at all and the liability of the railway must be assessed on the footing of a simple bailee. It therefore went on to consider the liability of the railway as a simple bailee and held on the ' evidence that the railway did not take proper care of the wagon at Mughalsarai and that in all probability the seals and rivets of the wagon had been allowed to be broken there and all arrangements had been completed as to how the goods would be removed from the wagon when the train would leave that station and this could only be done either by or in collusion with the servants of the railway at Mughalsarai. In this view of the matter the High Court allowed the appeal and decreed the suit with costs As the judgment was one of reversal and the amount involved was over rupees twenty thousand, the High Court granted a certificate. and that is how the matter has come up before us. We .shall first deal with the question of the notice. We are in this case concerned with the Act as it was in 1947 before its amendment by Central Act 56 of 1949 and Central Act No. 39 of 1961 and all references in this judgment must be read as applying to the Act as it was in 1947. Now section 77 inter alia provides that a person shall not be entitled to compensation for the loss, destruction or deterioration of animals or goods delivered to be carried ' by railway, unless his claim to compensation has been preferred in writing by him or on his behalf to the railway administration within six months from the date of the delivery of the animals or goods for carriage by railway. There was a conflict between the High Courts on the question whether non delivery of goods carried by railway amounted to less within the meaning of section 77. Some High Courts (including the Patna High Court) held that a case of non delivery was distinct from a case of loss and no notice under section 77 was necessary .in the case of non delivery. Other High Courts however took a contrary view and held that a case of non delivery also was a case of loss. This conflict has now been resolved by the decision of this Court in Governor General in Council vs Musaddilal (1) and the view taken by the Patna High Court has been overruled. This Court has held that failure to deliver goods is the consequence of loss or destruction and the cause of action for it is not distinct from the cause of action for loss or destruction, and therefore notice under section 77 is necessary in the case of non delivery which arises from the loss of goods. Therefore notice under section 77 was necessary in the present case. It is true that the respondent stated in the plaint in conformity with 'the view of the Patna High Court prevalent in Bihar that no notice under s.77 was necessary as it was a case of non delivery. But we find in actual fact that a notice was given by the respondent to the railway on April 10, 1948 to the Chief Commercial Manager, E.I.R. in which it was stated that 60 bales of cloth were booked for the respondent but only 29 bales had been delivered and the balance of 31 bales had not been delivered. Therefore the respondent gave notice that if the bales were not delivered to him within a fortnight, he would file a suit for the recovery of Rs. 36,461/12/ , and the details as to how the amount was arrived at were given in this notice. It is true that the notice was not specifically stated to be a notice under section 77 of the Act but it gave all the particulars necessary in a notice under that section. This notice or letter was sent within six months of the booking of the consignment. A similar case came up before this Court in Jetmull Bhojraj vs The Darjeeling Himalayan Railway Co. Ltd.(2) and this Court held that the letter to the railway in that case was sufficient notice for the .purpose of section 77 of the Act. 'Following that decision we hold that the letter in the present case which is even more explicit is sufficient notice for the purpose of S: 77 of the Act. We may add that the learned Additional Solicitor General did not challenge this in view of the decision in Jetmull Bhojraj 's case(2). This brings us to the second question raised in the appeal. We have already indicated that the High Court held that as the burden of disclosure which was on the railway had not been discharged there vas a breach of one of the terms of the risk note Z and therefore the risk note did not apply at all and the responsibility of the railway had to be assessed under ' section 72 (1) of the Act. This view of the law has been contested on behalf of the appellant and it is urged that after the risk note is executed either in form Z or in form B, the responsibility of the railway must be judged in accordance with the risk note even if there is some breach of the condition as to disclosure. It may be mentioned that risk note form Z and risk note form B are exactly similar in their terms insolar as the responsibility of the railway is concerned for risk note 150 form B applies to individual consignment while form Z is executed by a party who has usually to send goods by railway in large numbers. Risk note form Z is general in its nature and applies to all consignments that a party may send after its execution. It is proved that the consignment in this case was covered by risk note form Z. The main advantage that a consignor gets by sending a consignment under from Z or form B is a specially reduced rate as compared t3 the ordinary rate at which goods are carried by the railway and it is because of this specially reduced rate that the burden is thrown on the consignor in a suit for damages to prove misconduct on the part of the railway or its servants in the case of loss etc.of the goods, subject to one exception. On the other hand the argument on behalf of the respondent is that the view taken by the Patna High Court is right and it is the duty of the railway administration under the risk note, as soon as there is non delivery and a claim is made on the railway for compensation, to disclose how the consignment was dealt with throughout while it was in its possession or control and that its failure to do so results immediately in breach of the contract with the result that the responsibility of the railway has to be judged solely on the basis of section 72 (1) of the Act ignoring the risk note altogether. Section 72 (1) defines the responsibility of the railway administration for the loss, destruction or deterioration of animals or goods delivered to the administration to be carried by railway to be the same as that of a bailee under sections 152 and 161 of the , subject to other provisions of the Act. Sub section (2) of section 72 provides that an agreement purporting to limit the responsibility under section 72 (1) can be made subject to two conditions, namely, (i) that it is in writing signed by or on behalf of the person sending or delivering to the railway administration the animals or goods, and (ii) that it is in a form approved by the Governor General. Sub section (3) of section 72 provides that nothing in the common law of England or in the Carriers Act 1865 regarding the responsibility of common carriers with respect to carriage of animals or goods shall affect the responsibility as in this section defined of the railway administration. So the responsibility of the railway for loss etc. is the same as that of a bailee under the Indian Contract Act. But this responsibility can be limited as provided in section 72 (2). For the purpose of limiting this responsibility risk notes form B and form Z have been approved by the Governor General and where goods are booked under these risk notes the liability is limited in the manner provided thereunder. It is therefore necessary to set out the relevant terms of the risk note, for the decision of this case will turn on the provisions of the risk note itself. The risk note whether it is in form B or form Z provides that where goods are carried at owner 's risk on specially reduced rates, the owner agrees or undertakes to hold the railway administration 151 "harmless and free from all responsibility for any loss, deterioration or destruction of or damage to all or any of such consignment from any cause whatever, except upon proof that such loss, destruction, deterioration or damage arose from the misconduct on the part of the railway administration or its servants". "thus risk notes B and Z provide for complete immunity of the railway except upon proof of misconduct. But to this immunity there is a proviso and it is the construction of the proviso that arises in the present appeal. The proviso is in these terms: "Provided that in the following cases: (a) Non delivery of the whole of a consignment packed in accordance with the instruction laid .down in the tariff or where there are no instructions, protected otherwise than by paper or other packing readily removable by hand and fully addressed, where such non delivery is not due to accidents to train or to fire; (b) . . . "The railway administration shall be bound to disclose to the consignor how the consignment was dealt with throughout the time it was in its possession or control, and if necessary, to give evidence thereof before the consignor is called upon to prove misconduct, but, if misconduct on the part of the railway administration or its servants cannot be fairly inferred from such evidence, the burden of proving such misconduct shall lie upon the consignor". It is not in dispute that the present case comes under cl(a) of the risk note. An exactly similar provision in risk note form B came up for consideration before the Privy Council in Surat Cotton Spinning & Weaving Mills vs Secretary Of State for India in Council, ( ') and the law on the subject was laid down thus at pp.181 182: "The first portion of the proviso provides that the Rail way Administration shall be bound to disclose to the consignor 'how the consignment was dealt with through out the time it was in its possession or control, and, if necessary to give evidence thereof, before the consignor is called upon to prove misconduct '. In their Lordships ' opinion, this obligation arises at once upon the occurrence of either of cases (a) or (b), and is not confined to the stage of litigation. Clearly one object of the provision is to obviate, if possible, the necessity for litigation. On the other hand, the closing words of the obligation clearly apply to the litigious stage. As to the extent of the disclosure, it is confined to the period during which the (1) [1927] L.P LXIV: 152 consignment was within the possession or control of the Railway Administration; it does not relate, for instance, to the period after the goods have been the fatuously removed from the premises. On the other hand, it does envisage a precise statement of how the consignment was dealt with by the Administration or its servants. The character of what is requisite may vary according to the circumstances of different cases, but, if the consignor is not satisfied that the disclosure has been adequate, the dispute must be judicially, decided. As to the accuracy or truth of the information given, if the consignor is doubtful or unsatisfied, and considers that these should be established by evidence, their Lordships are of opinion that evidence before a Court of law is contemplated, and that as was properly done in the present suit, the Railway Administration should submit their evidence first at the trial. "At the close of the evidence for the Administration two questions may be said.to arise, which it is important to keep distinct. The first question is not a mere question of.procedure, but iS whether they have discharged their obligation of disclosure, ' and, in regard to this, their Lordships are of opinion that the terms of the Risk Note require a step in procedure, which may be said to :be Unfamiliar in the practice of the Court; if the consignor is not satisfied with the ' disclosure made their Lordships are clearly of opinion that is for him tO say so, and to call on the Administration to fulfill their obligation .Under the contract, and that the Administration should then have the opportunity to meet the demands of the consignor before their case is closed; any question as to whether the consignor 's demands go beyond the obligation should be then determined by the Court. If the Administration fails to take the opportunity to satisfy the demands of the consignor so far as endorsed by the Court, they will be in breach of their contractual obligation of disclosure. "The other question which may be said to arise at this stage is whether misconduct may be fairly inferred from the evidence of the Administration; if so, the consignor is absolved from his original burden of proof. But, in this case, the decision of the Court may be given when the evidence of both sides has been completed. It is clearly for the Administration to decide for themselves whether they have adduced all the evidence which they consider desirable in avoidance of such fair "inference of misconduct". They will doubtless keep in mind the provisions of s.114 of the Indian Evidence Act". With respect we are of opinion that this exposition of the law relating to risk note B applies also to risk note Z and we accept it 153 as correct. Thus the responsibility of the railway. administration to disclose to the consignor how the consignment was dealt with thrOughOut the time it Was in its possession or control arises at once under the agreement in either of the cases (a) or (b) and is not confined to the stage of litigation. But we are not prepared to accept the contention on behalf of the respondent that this responsibility to make full disclosure arises immediately the claim is made by the consignor and if the railway immediately on such claim being made does not disclose all the facts to the consignor, there is immediately a breach of this term of the contract contained in the risk note. It is true that the railway is bound to disclose to the consignor how the Consignment was dealt with throughout the time it was in its possession even before any litigation starts; but we are of opinion that such disclosure is necessary only where the consignor specifically asks the railway to make :the disclosure. If no such disclosure is asked for, the administration need not make it before the ' litigation. In the present case there is ' no proof that any disclosure was asked for in this behalf by the consignor at any time before the, suit was filed. Therefore if the railway did not disclose how the consignment was dealt with throughout before the suit was filed, it cannot be said to have committed breach of this term of the contract. The disclosure envisages a precise statement of how the consignment was dealt with by the railway or its servants. if the disclosure is asked for before the litigation commences and is not given or the disclosure is given but it is not considered to be sufficient by the consignor, the dispute has to be judicially decided and it is for the court then to say if a suit is brought whether there has been Ia breach of this term ' of the contract. After this, comes the stage where the consignor or the consignee ' being dissatisfied brings a suit for compensation. At that stage evidence has to be led by the railway in the first instance to substantiate the disclosure which might have been made before the litigation to the Consignor or which might have been made in the written statement in reply to the suit. When the railway administration has given its evidence in proof of the disclosure and the plaintiff is not satisfied with the disclosure made in the evidence, the plaintiff is entitled to ask the court to call upon the railway to fulfil its obligation under the contract and the railway should then .have the opportunity of meeting the demands of the plaintiff before its case is closed. Thus in addition to the evidence that the railway may adduce on its own and in doing so the railway has necessarily to keep in mind the provisions of section 114 of the Indian Evidence Act, the plaintiff can and should draw the attention of the court if he feels that full disclosure has not been made. , In .that case he can ask the court to require the railway to make further disclosure and should tell the court what further disclosure he wants. It is then for the court to decide whether the further disclosure .desired by the plaintiff should be made by the railway, and if the court decides that such further disclosure 154 should be made the railway has to make such further disclosure as the court orders it to make on the request of the plaintiff. If the railway fails to take the opportunity so given to satisfy the demands of the plaintiff, endorsed by the court, the railway would be in breach of its contractual obligation of disclosure. It is at this stage therefore that the railway can be truly said to be in breach of its contractual obligation of disclosure, and that breach arises because the railway failed to disclose matters which the court on the request of the plaintiff asks it to disclose. The question then is what is the effect of this breach. It is remarkable that the Privy Council did not lay down that as soon as the breach is made as above the risk note comes to an end and the responsibility of the railway is that of a bailee under section 72 (l) of the Act. In the observations already quoted, the Privy Council has gone on to say that after this stage is over, the question may arise whether misconduct may be fairly inferred from the evidence of the railway. It seems to us therefore that even if there is a breach of the term as to full disclosure it does not bring the contract to an end and throw the responsibility on the railway as if the case was a simple case of responsibility under section 72(1) of the Act; the case is thus not assimilated to a case where the goods are carried at the ordinary rates at railway risk. The reason for this seems to be that the goods have already been carried at the reduced rates and the consignor has taken advantage of that term in the contract. Therefore, even though there may be a breach of the term as to complete disclosure by the railway the consignor cannot fall back on the ordinary responsibility of the railway under section 72 (1) of the Act as if the goods had been carried at railway 's risk at ordinary rates, for he has derived the advantage of the goods having been carried at a specially reduced rates. The risk note would in our opinion continue to apply and the court would still have to decide whether misconduct can be fairly inferred from the evidence of the railway, with this difference that where the railway has been in breach of its obligation to make full disclosure misconduct may be more readily inferred and section 114 of the Indian Evidence Act more readily applied. But we do not think that the conditions in the risk note can be completely ignored simply because there has been a breach of the condition of complete disclosure. The view of the Patna High Court that as soon as there is breach of the condition relating to complete disclosure the risk note can be completely ignored and the responsibility of the railway judged purely on the basis of section 72 (1) as if the goods were carried at the ordinary rates on railway 's risk cannot therefore be accepted as correct. We may point out that in Surat Cotton Spinning and Weaving Mills Limited 's case, (I) the plaintiffs wanted the guard of the train to be examined and he was undoubtedly a material witness. Even so the witness was not examined by the railway. Finally therefore the Privy council allowed the appeal with these observations at p. 189: "While their Lordships would be inclined to hold that the respondent, by his failure to submit the evidence of Rohead, was in breach of his contractual obligation to give the evidence necessary for disclosure of how the consignment was dealt with, they are clearly of opinion that the failure to submit the evidence of Rohead, in the circumstances of this case, entitles the court to presume, in terms of section 114 (g) of the Evidence Act, that "Rohead 's evidence, if produced, would be unfavorable to the respondent, and that, in consequence, misconduct by complicity in the theft of some servant, or servants of the respondent may be fairly inferred from the respondent 's evidence". These observations show that even though there may be a breach of the obligation to give full disclosure that does not mean that the risk note form Z or form B can be ignored and the responsibility of the railway fixed on the basis of section 72 (1) as a simple bailee. If that was the effect of the breach, the Privy Council would not have come to the conclusion after applying section 114 (g) of the Evidence Act in the case of Rohead that misconduct by complicity in the theft of some servant or servants of the railway may be fairly inferred from the railway 's evidence. The appeal was allowed by the Privy Council after coming to the conclusion that misconduct by the servant or servants of the railway might be fairly inferred from the evidence including the presumption under section 114(g) of the Evidence Act. It seems to us clear therefore that even if there is a breach of the obligation to make full disclosure in the sense that the railway does not produce the evidence desired by the plaintiff in the suit even though the request of the plaintiff is endorsed by the court, the effect of such breach is not that the risk note is completely out of the way, the 'reason for this as we have already indicated being that the consignor has already taken advantage of the reduced rates and therefore cannot be allowed to ignore the risk note altogether. But where there is a breach by the railway of the obligation to make full disclosure the court may more readily infer misconduct on the part of the railway or its servants or more readily presume under section 114 (g) of the Evidence Act against the railway. This in our opinion is the effect of the decision of the Privy Council in Surat Cotton Spinning and Weaving 'Mills Limited 's case(1). As we have already said we are in respectful agreement with the law as laid down there. So far as the present appeal is concerned, there was no de by the consignor for disclosure before the suit. Even after the suit was filed there was no statement by the respondent at any (1) [1937] L.R. 64 I.A. 176. 156 stage that the disclosure made by the appellant in the evidence was in any way inadequate. The respondent never told the court after the evidence of the railway was over that he was not satisfied with the disclosure and that the railway be asked to make further disclosure by producing such further evidence as the respondent wanted. In these circumstances it cannot be said in the present case that there was any breach by the railway of its responsibility to make full disclosure. In the circumstances we are of opinion that the risk note would still apply and the court would have to decide whether misconduct on the part of the railway can be fairly inferred from the evidence produced by it. If the court cannot fairly infer misconduct from the evidence adduced by the railway, the burden will be on the respondent to prove misconduct. that burden, if it arises, has clearly not been discharged for the respondent led no evidence on his behalf to discharge the burden. We therefore turn to the evidence to see whether from the evidence produced by the railway a fair inference of misconduct of the railway or its servants can be drawn on the facts of this case. It is not in dispute in this case that the wagon containing the consignment arrived intact at Mughalsarai on December 9, 1947. Besides there is evidence of Damodar Prasad Sharma, Assistant Trains Clerk, Mughalsarai, P.W. 14, who had the duty to receive trains at the relevant time that 192 Dn. goods train was received by him on line No. 4 and that there were two watchmen on duty on that line for examining the goods train and they kept notes of the same. He also produced the entry relating to the arrival of the train and there is nothing in the entry to show anything untoward with.this wagon when the train arrived at Mughalsarai. His evidence also shows that the train was sent to the marshaling yard on December 11, 1947. Finally there is the evidence of Chatterji (P.W. 8) who is also an Assistant Trains Clerk. It was his duty to make notes with respect to goods trains which left Mughalsarai. He stated that this wagon was sent by train No. 214 on December 12, 1947 in the evening. He also stated that the wagon was in good condition and produced the entry relating to this wagon. It appears however from his evidence that rivets and seals are examined by the watch and ward staff and they keep record of it. Apparently therefore he did not actually inspect the wagon before it left though he says that it was in good condition. The relevance of his evidence however is only this that in his register showing the dispatch of trains there is no entry to the effect that there was any thing wrong with this wagon when it was dispatched. The most important evidence however is of the guard of the train, Ram Prasad Ram (P.W. 2). He stated that before the train started from Mughalsarai he patrolled both sides of it and the place from where the train started was well lighted and watch and ward staff also patrolled the area. He also stated that the rivets and seals of all the wagons in the train were checked at Mughal sarai and there was apparently nothing wrong with them. Now if 157 the evidence of the guard is believed it would show that the wagon containing the consignment was intact at Mughalsarai upto the time 214 goods train including this wagon left Mughalsarai. If so there would be no reason to hold that anything was done to the wagon before the train left Mughalsarai. It may be mentioned that the trial court accepted the evidence of the guard while the High Court was not prepared to believe it. On a careful consideration of the evidence of the guard we see no reason why his evidence should not be believed. It is obviously the duty of the guard to see that the train was all right, when he took charge of it. It appears that in discharge of his duty the guard patrolled the train on both sides and looked at rivets and seals to see that they were intact. It is, however, urged that the guard 's evidence does not show that the seals which he found intact were the original seals of Wadibundar and the possibility is not ruled out that the original seals might have been tampered with and new seals put in while the train was in the marshaling yard at Mughalsarai for two days, as the evidence of the watch and ward staff had not been produced. It would perhaps have been better if the evidence of the watch and ward staff had been produced by the railway; but if the evidence of the guard is believed that the seals and rivets were intact when the train left Mughalsarai, the evidence of the watch and ward staff is ' not necessary. It is true that the guard does not say that the seals were the original seals of Wadibundar but it appears from the evidence of Jagannath Prasad (P.W. 9) who was the Assistant Station Master at Dildarnagar that he found when the train arrived there that the northern flapdoors of the wagon were open while southern flapdoors were intact with the original seals. This evidence suggests that the original seals could not have been tampered with when the train left Mughalsarai and that the guard 's evidence that seals and rivets were intact shows that nothing had happened to the wagon while it was at Mughalsarai. Further it is also in evidence that there is ample light in the marshalling yard at Mughalsarai and that watch and ward staff is posted there as well. So the chances of tampering with the seals and rivets in the marshalling yard in the circumstances are remote. As such the evidence of the guard that the seals and rivets were intact when he left with the train on the evening of December 12, would apparently exclude the possibility that there was any tampering with the wagon before it left Mughalsarai. It is true that on the last day when the evidence for the railway was recorded and the guard had been recalled for further cross examination it was suggested to him that the railway servants at Mughalsarai had removed the bales and were responsible for the theft. He however denied that. But it is remarkable that if the respondent was dissatisfied with the evidence of the guard which was to the effect that the wagon was all right when he left Mughalsarai with the train on December 12, it did not ask the court to order the railway to produce the evidence of the watch and ward staff with respect to this wagon while it was in the marshalling yard at Mughalsarai. The respondent could ask for such disclosure. If the court L/B(D)2SCI 12 158 had accepted the request and the railway had failed to produce the evidence of the watch and ward staff it may have been possible to use section 114 of the Evidence Act and hold that the watch and ward staff having not been produced their evidence, if produced, would have gone against the railway. But in the absence of any demand by the respondent for the production of the watch and ward staff which he could ask for, we see no reason why the statement of the guard to the effect that seals and rivets of the wagon were intact when he left Mughalsarai with the train should not be accepted. In the absence of any demand by the respondent for the production of watch and ward staff his mere suggestion that the railway servants at Mughalsarai might have committed the theft cannot be accepted. There is the further evidence of the guard as to what happened between Mughalsarai and Buxar. It appears between these two stations the train stops only at Dildarnagar. The evidence of the guard however is that the train suddenly stopped between the warner and home signals before it reached Dildarnagar. He therefore got down to find out what the trouble was. He found that the hosepipe between two wagons had got disconnected and this resulted in the stoppage of the train. The evidence further is that the hosepipe was intact when the train started from Mughalsarai. He made a note of this in his rough memo book which was produced. It is noted by him that the northern flap door of this wagon was open. He reconnected the hosepipe and went up to Dildarnagar. There he reported the matter to the station staff. His further evidence is that there were three escorts with the train and that they were guarding the train when the train was standing between the warner and the home signals before it reached Dildarnagar. Nothing untoward was reported to him by these escorts. It was at this stop between the two signals that the guard noticed that the rivets and seals of this wagon on one side had been broken. The case of the railway is that there was theft in the running train between Mughalsarai and Buxar and that is how part of the consignment was lost. The evidence of the guard does suggest that something happened between Mughalsarai and Dildarnagar and then between Dildarnagar and Buxar. In addition to this the evidence of the station staff at Dildarnagar is that the flapdoors of this wagon were found open when the train arrived at Dildarnagar. The contents were not checked at Dildarnagar as there was no arrangement for checking at that station. The wagon was resealed at Dildarnagar, and the fact was noted in the station master 's diary. It may be mentioned that the evidence of the station staff was that the wagon was resealed though the guard says that it was riveted also at Dildarnagar. The entry in the guard 's rough memo however is only that the wagon was resealed. The guard certainly says that it was rivetted also at Dildarnagar but that is not supported by the station staff and the entry in the guard 's rough memo. It seems that the statement of the guard may be due to some error on his 159 part. That may also explain why, when the train arrived at Buxar, the flapdoor again was found open, for it had not been rivitted at Dildarnagar. Then the evidence of the Buxar station staff is that the northern flapdoors of this wagon were open when the train arrived at Buxar. It was then resealed and rivetted and was detached for checking. The checking took place on December 14th at Buxar. It was then found that one side had the original seals of Wadibun dar while the other side had the seals of Buxar. On checking the wagon, 27 bales were found intact, covering of one bale was torn and one bale was found loose and slack. This evidence asto what happened between Mughalsarai and Buxar thus makes it probable that there was theft in the running train between Mughalsarai and Buxar and that may account for the loss of part of the consignment. It is however contended on behalf of the respondent that no evidence was produced from Mughalsarai asto what happened while the wagon was in the marshalling yard and that the seal book which is kept at every railway station containing entries of resealing when a wagon is resealed was not produced from Mughalsarai and an adverse inference should be drawn from this non production. We are however of opinion that the evidence of the guard to the effect that the seals were intact when he left Mughalsarai with the train is sufficient to show that the wagon was in tact with the original seals when it left Mughalsarai and there fore it is not possible to draw any adverse inference from the non production of the watch and ward staff or the seal book of Mughalsarai in the circumstances of this case. It would have been a different matter if the respondent had asked for the production of the seal book as well as the evidence of the watch and ward staff. But the respondent contented itself merely with the suggestion that a theft might have taken place at Mughalsarai which was denied by the guard and did not ask the court to order the railway to produce this evidence. In these circumstances in the face of the evidence of the guard and the fact that one seal on the southernside of the door was of the original station. we do not think that it is possible to draw an adverse inference against the railway on the ground that the evidence of the watch and ward staff and the seal book at Mughalsarai were not produced. The seal book would have been of value only if the wagon had been resealed at Mughalsarai but there is in our opinion no reason to think that the wagon had been resealed at Mughalsarai after the evidence of the guard that he found the seals and rivets intact when he left Mughalsarai with the train. On a careful consideration of the evidence therefore we are of opinion that a fair inference cannot be drawn from the evidence of the railway that there was misconduct by the railway or its servants at Mughalsarai during the time when the wagon was there. If the evidence of the guard is accepted, and we do accept it, there can be no doubt that the loss of the goods took place be case of theft in the running train between Mughalsarai and 160 Buxar. There is no evidence on behalf of the respondent to prove misconduct and as misconduct cannot fairly be inferred from the evidence produced on behalf of the railway, the suit must fail. We therefore allow the appeal, set aside the judgment and decree of the High Court and restore that of the Additional Subordinate Judge. In the circumstances of this case we order parties to bear their own costs throughout. Appeal allowed.

Out of a consignment of 60 bales of piece goods despatched by the Railway, under risk note Form Z, only 29 bales were delivered to the respondent who was the consignee. By sending the consignment thus, the consignor got a specially reduced rate but the burden was thrown on him, of proving misconduct on the part of the railway or its servants, if there was a loss of goods. The risknote also imposed an obligation on the Railway, to disclose how the consignment was dealt with by it, during the time the consignment was in its possession or control. The respondent wrote a letter to the Chief Commercial Manager of the Railway stating that 60 bales were booked but only 29 bales had been delivered, and that a suit for damages would be filed. The letter was sent within 6 months of the booking of the consignment ,and contained the details as to how the amount of damage was arrived at. Later on, a notice was given under section 80 of the Civil Procedure Code, 1908, and a suit was filed for damages. But, before the filing of the suit, there was no demand by the consignor for a disclosure as to how the consignment was dealt with by the Railway throughout the period it was in its possession or control. The Railway however, made a disclosure in its written statement as. to how the consignment was, dealt with throughout that period. Its defence was that, there was a theft in the running train and that was how part of the consignment was lost and not due to any misconduct on the part of the Railway or its servants. Even after the suit was filed and evidence let in at the trial, by the railway there was no statement by the respondent at any stage that the disclosure made by the Railway in the written statement or in the evidence, was in any way inadequate. The resplendent never told the court after the evidence of the Railway w.as over, that he was net satisfied with the disclosure and that the Railway should be asked to make a further disclosure. The suit was dismissed by the trial court but decreed on appeal, by the High Court. In the appeal to the Supreme Court it was contended that, (i) the, suit was barred by section 77 of the Indian Railways Act, 1890, inasmuch as notice required therein was not given by the respondent, and (ii) under the terms of the risk note the Railway was absolved from all responsibility for the less of the goods consigned thereunder, from any cause whatsoever. except upon proof of misconduct of the Railway or its servants, that the burden of proving such misconduct was on the respondent and that the respondent had failed to discharge the burden. HELD: (i) A notice under section 77 of the Act is necessary in the case of non delivery which arises from the loss of goods. Though the letter, written by the respondent to the Chief Commercial Manager, was not specifically stated to be a notice under the section it gave all 'the 'particulars necessary for such a notice and it was also given within time prescribed. Therefore, the letter was sufficient notice for the purpose of the Act, [149 D F] 146 Governor General in Council vs Musaddilal [1961]3 S.C.R. 647 and Jatmull Bhojraj vs The Darjeeling Himalayan Railway Co.Ltd. ; , followed. (ii) The view of the High Court, that there was a breach of the condition relating to complete disclosure, and that on such breach the risk note could be completely ignored and the responsibility of the Railway judged purely on the basis of section 72(1) of the Act, as if the goods were consigned at the ordinary rates on the Railway 'srisk, was not correct. [154 H] The responsibility of the railway administration to disclose to the consignor as to how the consignment was dealt with throughout the time it was in its possession or control arises at once, under the risk note, in either of the cases referred to therein, and is not confined to the stage of litigation. But such disclosure is necessary only where a consignor specifically asks the railway to make the disclosure. If no such disclosure is asked for, the administration need not make it before the litigation. Therefore, if the Railway did not make the disclosure, before the suit was filed, it could not be said to have committed a breach of the term of the contract [153 A D] The disclosure envisages a precise statement of how the consignment was dealt with by the railway or its servants. If the disclosure is asked for before litigation commences and is not given, or the disclosure is given but it is not considered to be sufficient by the consignor, the dispute has to be judicially decided and it is for the court to say, if a suit is filed, whether there .has been a breach ,of the term. At that stage, evidence has to be led by the railway in the first instance to substantiate the disclosure which might have been made before the litigation, to, the consignor, or which might have been made in the written statement. When the administration has given its evidence in proof of the disclosure, if the plaintiff is not satisfied with the disclosure made in evidence, he is entitled to ask the court to call upon the railway to fulfill its obligation under the contract, and the railway should then have the opportunity of meeting the demands of the plaintiff. It is then for the court to decide whether the further disclosure desired by. the plaintiff should be made by the railway, and if the court decides that it should be made, the railway has to make such further disclosure as the court orders. If the railway fails to take that opportunity to satisfy the demands of the plaintiff endorsed by the court, the railway, at that stage, would be in breach of its contractual obligation of disclosure. [153 E 154 B] The effect of the breach however is not to bring the contract to an end and throw the responsibility on the railway, as if the case was a simple case of responsibility under s.72(1). The risk note would continue to apply and the court would have to decide whether the misconduct can be fairly inferred from the evidence of the railway, with the difference that, where the railway has been in breach of its obligation to make full disclosure, misconduct may be more readily inferred and section 114 of the Evidence Act more readily applied. But the conditions of the risk note cannot be completely ignored, simply because there has been a breach of the condition of complete disclosure.[154 D G] Surat Cotton Spinning & Weaving Mills vs Secretary of State for India in Council [1937] 64 I.A. 176, applied.

Appeal No. 36 of 1967. Appeal by special leave from the judgment and order dated August 25, 1966 of the Punjab High Court, Circuit Bench at Delhi in Letters Patent Appeal No. 36 D of 1966. Bishan Narain, R. Mahatingier and Ganpat Rai, for the appellant. R. H. Dhebar and section P. Nayar, for respondent Nos. 1 and 3. In 1943 he mortgaged the said property with possession in favour of one K. B. Bunyad Hussain but obtained a lease thereof at the same time from the mortgagee and continued to reside therein as tenant. In November 1949, the mortgagee left for Pakistan a whereupon the Custodian of Evacuee Property under the (hereinafter referred to as the Administration Act) declared him to be an evacuee and his interest in the said property as the mortgagee as evacuee, property. The appellant alleged that sometime in November 1949 the 853 Custodian forcibly dispossessed him and either allotted or let out, or allowed the said premises to be occupied by certain persons. In 1954, the appellant made an application to the Competent Officer under the (hereinafter referred to as the Separation Act) for separating his interest as the mortgagor and tenant in the said property. In those proceedings a sum of Rs. 1,45,735/ was ultimately held to be due as the mortgage debt under the said mortgage. The appellant claimed that he was entitled to obtain vacant possession of the said property against payment by him of the mortgage debt. The claim was rejected on the ground that there was no agreement between the appellant and the Custodian for getting the vacant possession and also on the ground that the Competent Officer, under the Separation Act, had no power to direct the Custodian to hand over to the appellant vacant possession. From that time onwards the appellant made diverse applications to the Competent Officer and the Appellate Officer under the Separation Act for obtaining vacant possession against payment of the mortgage debt. In one such application made in 1958 he alleged that a compromise had been arrived at between him and the Custodian under which he would pay the, mortgage, debt and the Custodian thereupon would simultaneously hand over to him vacant possession. By his order dated March 23, 1959, the Appellate Officer, however, held that no such compromise had been entered into by the Custodian and that the correspondence between the appellant and that authority merely indicated that what was agreed to was that upon the appellant lodging certain verified claims an open portion shown as A, B, C and D in the plan of the property would be handed over to him. On this finding the Appellate Officer dismissed the appellant 's application as he had neither paid the mortgage money nor put in the verified claims as suggested in the said correspondence and confirmed the order of the Competent Officer under which the property had been ordered to be sold in the absence of any agreement with the ' Custodian or the payment of the mortgage debt. The appellant then filed a writ petition in the High Court of Punjab (in the Circuit Bench at Delhi) for quashing the said order of sale and for a direction to the Competent Officer to hand over vacant possession against payment by him of the mortgage debt. A learned Single Judge dismissed the petition holding that the Competent Officer had no jurisdiction to order such vacant possession against the Custodian or against the tenants or allottees inducted on the property by the Custodian. The Letters Patent appeal against that judgment and order was also dismissed. The appellant then filed the present appeal after obtaining special leave from this Court. 854 It is not disputed that until the time when the Competent Officer passed his order for sale of the property and the Appellate Officer confirmed it the appellant had not paid the mortgage amount, nor was there any agreement between him and the Custodian where under the latter would hand over vacant possession of the property against payment of the mortgage debt. However, it is conceded by counsel for respondents 1 and 3 that the appellant has since then paid the entire mortgage debt and the Competent Officer has under section 10 of the Separation Act accepted that amount. Two questions on these facts, therefore, arise, for deter mination; (1) whether the order for sale passed by the Competent Officer and confirmed by the Appellate Officer was rightly passed although the appellant had repeatedly offered to pay the mortgage debt on condition, however, that he would be given vacant possession at the same time, and (2) assuming that the Competent Officer had no power to direct the Custodian to hand over vacant possession, what was the effect of the repayment of the mortgage debt by the appellant since then and the acceptance thereof by the Competent Officer. The rights in the property in question which vested in the Custodian were those of the mortgagee on his being declared an evacuee and his rights as such mortgagee in the property in question as evacuee property. Under the the interest which the Custodian could claim was the interest in the property transferred to the mortgagee for securing repayment of the money advanced by him. Since the mortgage was usufructuary, the mortgagee, and after his having been declared an evacuee, the Custodian, could claim and retain possession till the mortgage debt was paid and the mortgage was discharged. If the property is let out in the meantime, the mortgagee and those claiming his interest therein are entitled to receive the rents and profits accruing front the property in lieu of interest or towards part payment of the mortgage debt. Under section 60 of that Act, the mortgagor has a right at any time after the principal amount has become due to require the mortgagee on payment or tender of the mortgage debt (a) to deliver to him the mortgage deed and all other documents relating to the mortgaged property which are in the mortgagee 's possession or power, (b) to deliver possession where the mortgagee is in possession of the mortgaged property and (c) to retransfer the mortgaged property to him or to such third person as he may direct at his cost. Under section 76, the mortgagee in possession. has to manage the property as a person of ordinary prudence would manage it if it were his own. Under section 83, the mortgagor, provided his right of redemption is not barred, may deposit in the court where he might have instituted a suit for redemption to the account of the mortgagee the mortgage debt then due. The court thereupon has to issue a notice to the mort 855 gagee and on the mortgagee stating the amount due to him and his willingness to accept the money so deposited in full discharge of the mortgage debt, pay the amount to the mortgagee on his depositing the mortgage deed and all other documents relating to the mortgaged property. Where the mortgagee is in possession of the property, the court before paying the amount has to ask him to deliver possession thereof to the mortgagor. When the mortgagor has tendered or deposited in court the. mortgage debt together with interest thereon and has done all that is to be done by him to enable the mortgagee to take such amount out of court, and a notice, as aforesaid, has been served on the mortgagee under section 83 interest ceases to run. If the mortgagee thereafter refuse& to accept the amount so deposited or to deliver the mortgage deed and other documents or possession of the property where it is in his possession, the remedy of the mortgagor is to file a suit for redemption. The position, therefore, is that upon the mortgage being paid off, the mortgagor is entitled to have the property restored to him free from the mortgagee 's security. The repayment of the debt would be made against delivery of possession and of the mortgage deed and other documents, and these have to be simultaneous transactions. A tender of the mortgage deed or a deposit thereof in court conditional upon the mortgagee than and there delivering possession or executing reconveyable, if required, and handing over the deeds would be a good tender so that if it were to be refused interest would cease running. It follows that a mortgagee is not permitted to deal with the property in such a way that upon discharge of the debt the property cannot be restored. [see Fisher. & Lightwood 's Law of Mortgage (8th ed.) p. 482]. Is the position of a mortgagor any the different than under the by reason of the evacuee property legislation ? In other words, could not the appellant have tendered to the Competent Officer the mortgage amount due by him on condition that he should be given physical and not merely symbolical possession of the mortgaged property. Upon the mortgagee being declared an evacuee and his interest as such mortgagee in the premises in question evacuee property, his interest in the mortgaged property vested under section 8 of the Administration Act in the Custodian from the date of the notice issued under section 7 of the Act. Under section 8 (4) any person in possession of the mortgaged property would be deemed thenceforth to be holding the property on behalf of the Custodian and would be bound on demand by him to surrender possession to him. The Act having under section 4 an overriding effect on any other law for the time being in force or any instrument having effect by virtue of any such Act, the Custodian, under the powers conferred on him by, section 10, could take all such measures he might consider necessary, 856 for securing, administering, preserving and managing any evacuee property including transferring "in any manner whatsoever" the evacuee property "notwithstanding to the contrary contained in any law or agreement relating thereto". Under s.12, the Custodian is empowered, notwithstanding anything contained ,in any other law for the time being in force, to cancel any allotment, terminate any lease or amend the terms of such lease or agreement under which any evacuee property is held or occupied by a person whether such allotment, lease or agreement was granted or entered into before or after the commencement of the Act. Under sub section 3, he is authorised to eject such person and take possession, if such person fails to surrender possession on demand made by him in the manner provided by section 9 i.e., by even using such force as would be necessary for taking possession. It is conceded by the respondents that under these powers the Custodian had taken over posses sion of the mortgaged property and the property has since then been in possession of persons who were either allotted portions of it or, who were inducted therein as tenants by the Custodian. It is also conceded that the Custodian has refused, notwithstanding demands made by the appellant, to evict these persons from the property and hand over vacant possession to the appellant even on the appellant tendering the mortgage amount. This was presumably done by reason of the fact that though section 12 empowers him ' to cancel an allotment or a tenancy made or created by him, r. 14(2) of the Administration of Evacuee Property (Central) Rules, 1950 lays down that in the case of a lease or an allotment granted by the Custodian he may evict a person on a ground justifying eviction of a tenant under a law relating to the Rent Control or for any violation of the conditions of the lease or allotment. From the provisions dealing with the vesting of the evacuee property, the powers of the Custodian, appeals and revisions from his order and the overriding nature of the provisions of the Act it is clear that the Administration Act is a self contained code. In 1951, Parliament passed the , LXIV of 1951 (hereinafter referred to as the Separation Act). The statement of objects and reasons shows that it was passed on account of the difficulty of administering evacuee properties in which there were both evacuee and non evacuee interests and to solve the hardship felt by non evacuees, who by reason of such properties being in possession of the Custodian, were unable to obtain satisfaction of their claims in view of the prohibitive provisions of the Administration Act and in particular its section 17. The Act, as its long title declares, was passed for the separation of interests of evacuees from those of non evacuee persons in composite properties. Sections 4 and 5 of the Act provide for the appointment of Competent Officers and their jurisdiction. Sec. 7 provides for submission of claims by a person claiming interest in 857 a composite property. (e) of sub section 2 requires that where a claim is made by a mortgagor the total amount due on the mortgage debt and the particulars necessary to determine the same should be set out in such a claim. Sec. 8 provides for an inquiry to be made by the Competent Officer and provides that the order to be made by him shall contain, amongst other things, the amount due to the evacuee in a case where the claim is made by a mortgagor. Sub section 2 of section 8, however, provides that where the Custodian has determined that the property in question or any interest therein is evacuee property, such determination is binding on the competent officer. The proviso to that sub section lays down that nothing contained in sub section 2 shall debar the competent officer from determining the mortgage debt in respect of, such property or any interest therein or from separating the interest of the evacuee from that of the claimant under section provides that notwithstanding anything to the contrary in any law or contract or any decree or order of the civil court or other authority, the competent officer may, subject to any rules that may be made in this behalf, take all such measures as he may consider necessary for the purpose of separating the interest of the evacuee from those of the claimant in any composite property and in particular may "(b) in the case of any claim of a mortgagor or a mortgagee, (i) pay to the Custodian or the claimant the amount payable under the mortgage debt and redeem the mortgaged property; or (ii) sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof; or (iii) partition the property between the mortgagor and the mortgagee having regard to the share to which the mortgagee would be entitled in lieu of his claim;" Cl. (c) empowers him to adopt a combination of all or some of these measures. The proviso to the section provides that in any case where the claimant is a mortgagor and tenders the amount due, the competent officer shall accept the same in full satisfaction of the mortgage debt. The competent officer, by virtue of the proviso, is thus under an obligation, where the claimant is a mortgagor and tenders the mortgage amount due, to accept such amount in full satisfaction of the mortgage debt and thereupon interest on the mortgage amount would cease to run. Under cl. (b), he is also empowered in such a case to redeem the mortgaged property. The argument was that where the mortgage amount is tendered by the mortgagor and the competent officer accepts it in satis 858 faction of the debt due under the mortgage, the mortgage debt is satisfied, interest thereon ceases to run and the mortgage is discharged. Consequently, there would be no question of the com , petent officer adopting any of the measures provided in sub cls. (ii) and (iii) of cl. (b) of the section, that is to say, there could be no occasion for him either to sell the property for satisfaction of the mortgage debt or to partition the property between the mortgagor and the mortgagee, as, on satisfaction of the mortgage debt the mortgage is discharged and the mortgagee 's interest in the mortgaged property ceases or comes to an end. The only measure which in that event he can adopt would be that, under cl. (b) (i), i.e, to pay to the Custodian the mortgage debt and redeem the mortgaged property. It was said that that being the position under section 10, the appellant was entitled to tender the mort. gage amount in satisfaction of the debt due under the mortgage on condition that the mortgage should be redeemed and possession of the property given to him. The Competent Officer in the proceedings before him under section 7 was bound to accept the mortgage amount and redeem the mortgaged property. The argument would be valid if section 10 had been untrammelled and the powers given therein to the Competent Officer were not made subject to the rules which may be made under the Act. The Legislature, it seems had a purpose in making the powers contained in section 10 and their exercise by the Competent Officer subject to the rules. It must have been aware of (i) that the Administration Act is, as aforesaid, a self contained code, (ii) that the Custodian appointed thereunder is not an authority subject to the power or control of the Competent Officer, and (iii) that the Administration Act, by sections 10 and 12 thereof, confers several powers on the Custodian including the power to transfer the property vested in him. He can therefore, create a lease or grant allotment and thus induct on the property tenants or allottees. Under section 12 of that Act the Custodian has been empowered to cancel or terminate a lease or allotment. But no such power is conferred on the Competent Officer either under section 10 or under any other section of the Separation Act, nor have the powers of the Custodian been made subject to the powers of the Competent Officer or his orders. On the other hand, it would appear from a reading of the provisions of the Separation Act that the object of enacting it was to enable non evacuees to have their interests separated in composite pro perties and to grant power to the competent officer to achieve that object. But we do not find anywhere in either of the two Acts any provision by which the Custodian is made subject to the, power or control of the Competent Officer or enabling the Competent Officer to pass any order which would curtail or otherwise affect the powers of the Custodian. It would seem that the two Acts have different objects and schemes and the authorities established under them are independent of each other. The powers conferred 859 on the Competent Officer had, therefore, to be so provided that they could be exercised in harmony and consistently with the pro ' visions of the Administration Act and the duties and functions of the Custodian thereunder. It was for that reason that the Legislature laid down in section 10 of the Separation Act that the powers conferred Thereunder on the Competent Officer were to be subject to the rules made under that Act. Had it not been so, there would have resulted a conflict in the exercise of the respective powers given to the Custodian and the Competent Officer by the two. Acts, and consequently, are in the smooth working out of the provisions of the two Acts. Rule II B of the Rules made under the Separation Act pro vides that a Competent Officer "having regard to the provisions of the proviso to section 10 of the Act" shall, for the purpose of separating the evacuee interest from other interests in a composite property, adopt any of the measures in the order of preference set out therein. (b) of that rule provides that in the case of a claim by a mortgagor or a mortgagee (1) where both the Custodian and claimant agree, the Competent Officer can exercise the powers. conferred on him under sub cl. (i) or sub cl. (iii) of cl. (b) of section 10 of the Act and (ii) where there is no such agreement, he can sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof. The effect of this rule read in conjunction with section 10 of the Act, however harsh it may apparently seem to be, is that though the Competent Officer has to accept the mortgage amount tendered by a mortgagor and thus discharge the mortgage debt and interest thereupon ceases to run on the principal amount and though he can adopt any one of the measures set out in section 10, including redemption of the mortgage, he cannot order such redemption and direct the Custodian to deliver vacant possession of the property in the absence of an agreement between the Custodian and the mortgagor claimant. It follows that in the absence of such agreement the mortgagor claimant cannot demand from the Competent Officer that the latter should accept the mortgage amount tendered by him and direct simultaneous delivery of possession of the mortgaged property. The power to redeem the mortgaged property being subject to rule II B (b), the only thing that the Competent Officer can at the most do is to order symbolical possession, but he cannot direct the Custodian to give vacant possession. The reason is clear, for, such an order would in effect be an order directing the Custodian to cancel the leases or allotments granted by him and eject the tenants or allottees from the property. Such an order would at once be in conflict with r. 14 of the Administration of Evacuee Property (Central) Rules, 1950. That rule provides that while, exercising his power under section 12 of that Act, namely, the power to cancel or vary the terms of a lease or allotment, the Custodian, 860 in the case of a lease or allotment granted by him, can evict a person only on any of the grounds justifying eviction of a tenant under any rent control law for the time being in force in the State concerned or for any violation of the conditions of the lease or the allotment. 4 of that rule further lays down that before cancelling or varying the terms of the lease or before evicting any less the Custodian must serve a show cause notice on such lessee and afford him a reasonable opportunity of being heard. If the Custodian is satisfied on hearing the concerned lessee that he is not liable to eviction under a rent control Act in force in the State where the property is situate or has not contravened any of the provisions of the lease, he cannot cancel the lease nor can he evict the lessee except only as provided by cl. (5) of that rule on the ground that such eviction is necessary or expedient for the preservation or proper administration or management of such property or for carrying out any other object of the Act. He, therefore, cannot evict a tenant or an allottee on the ground that it is necessary to do so for the separation of an interest of a non evacuee mortgagor as that would not be one of the purposes of the Administration Act. The result which emerges from the discussion of the relevant provisions of the two Acts and the rules thereunder made is (i) that though the Competent Officer must accept the mortgage amount when tendered by a mortgagor and the mortgage debt thereupon would be satisfied, he cannot exercise the power to redeem the mortgaged property and order the Custodian to deliver up its vacant possession to the mortgagor in the absence of any ' :agreement between the mortgagor and the Custodian, and (ii) that in exercising his jurisdiction under section 10 the Competent Officer cannot direct the Custodian to cancel or vary the terms of the leases or allotments made or granted by him, firstly because he has no such power under section 10 or any other provision of the Separation Act, and secondly, because such an order would amount to compelling the Custodian to act in a manner contrary to the provisions of the aforesaid r. 14. The exercise of the power to redeem being subject to the rules, it would not be competent for the Competent Officer, by reason of r. II B (b), to order delivery of possession by the Custodian in the absence of an agreement between him and the mortgagor claimant. In view of this position, the appellant could not have insisted that he would tender or pay the mortgage debt only against delivery of vacant possession of the property in the absence of any agreement between him and the Custodian. The only thing which, the Competent Officer could do in the circumstances was to accept the mortgage amount whereupon interest would cease to run. It is not in dispute that the appellant, insisting as he was 861 all throughout upon being given vacant and not merely symbolical possession, did not actually tender or make payment of the mortgage debt. The mortgage debt, therefore, remained outstanding. The mortgage also stood intact, and therefore, the only measure which the Competent Officer could adopt and which in fact he, adopted was to order sale of the property and satisfy the mortgage debt from the sale proceeds thereof. The order which he passed and which was confirmed by the Appellate Officer was in the circumstances then prevailing validly and competently made. The appellant 's grievance against it, therefore, could not be sustained. [of in this connection the position of an auction purchaser as decided in Ek Nawas Khan vs The Competent Officer(1)]. But it is conceded that since the passing of the said order the appellant has, paid up the full mortgage amount and the Competent Officer has, as he was bound to do under section 10, proviso, accepted that amount. Presumably that amount has been paid by him to the Custodian. Therefore, the mortgage debt is no longer outstanding. Though this event has happened after the impugned order was passed,, we must in fairness take notice of the fact that the mortgage debt is no longer outstanding and the mortgaged property is now free from the mortgagee 's security, and therefore, from the interest vested in the Custodian. It is true that the Com petent Officer, as already stated, can adopt any of the three measures set out in section 10(b) of the Separation Act or adopt a combination of all or some, of them, but as emerging from the discussion, above, he cannot redeem the property and order delivery of vacant possession in the absence of an agreement between the Custodian and the appellant. That is quite clear. But the order of sale passed by him and confirmed by the Appellate Officer also cannot secondly, because he can order sale only for satisfaction of the mortgage debt and for distribution of the sale proceeds thereof ' between the mortgagor and the mortgagee. There being now no question of the satisfaction of the mortgage debt since it now stands satisfied and the property being now freed from the mortgagee 's security, the order for sale ' cannot stand and cannot be allowed to stand. At the same time the Competent Officer cannot order the Custodian to deliver vacant possession although the appellant has paid the mortgage amount and the Competent Officer has accepted it in satisfaction of the mortgage debt. In view of sections 10 and 12 of the Administration Act, the powers and duties of the Custodian thereunder and under the rules made under that Act, the provisions of section 10 of the Separation Act and r. II B of the rules made thereunder, the only thing that could be offered and given to the appellant was symbolical possession of the property. Such a result, no doubt, would be inconvenient, and may even (1) A.T.R. 1960 All. 862 appear to be harsh and unfair as the appellant would be driven to file proceedings for eviction of tenants and allottees now in possession of the property. (see The All India Film Corporation Ltd. vs Raja Gyan Nath) (1). In view of the payment of the mortgage amount by the appellant and the acceptance of it by the Competent Officer, the order directing sale has now become untenable and has, therefore, to be set aside. The mortgage stands discharged and the Competent Officer is bound to direct symbolical possession of the mortgaged property to the appellant. To this extent the appeal succeeds. The order for costs of the appeal would ordinarily follow the result, but in view of the fact that the Competent Officer was entitled to pass the order of sale in the circumstances then prevailing it is fair and equitable, though his order is set aside, that the parties should bear their own costs. V.P.S Appeal allowed in part. (1) (1970] 2 S C.R. 581.

The appellant executed a usufructuary mortgage of his house and continued to reside in it as a tenant under a lease obtained from the mortgagee. In 1949, the mortgagee left for Pakistan. He was declared an evacuee and his mortgagee interest in the mortgaged property vested in the Custodian under section 8 of the . Under section 12, the Custodian evicted the appellant and allotted it to others as tenants. In spite of demands by the appellant and the appellant tendering the mortgage amount, the Custodian refused to hand over vacant possession of the house to the appellant. The appellant applied to the Competent Officer under the . The Officer determined the mortgage debt due from the appellant and the appellant claimed vacant possession against tender of payment by him of the amount. The Officer rejected the claim and ordered the sale of the property under s.10(b)(ii) of the Separation Act, for satisfaction of the mortgage debt. Thereafter, the appellant paid the entire mortgage debt and the Competent Officer accepted the amount. On the question whether the appellant was entitled to vacant possession and have the order of sale set aside, HELD:(1) Section 4 of the gives to that Act an overriding effect in relation to any other law for the time being in force, and hence the law under the Transfer of Property set, is not applicable. Though s.12 of the Act empowers the Custodian to cancel an allotment or a tenancy, created by him, under r.14(2) of the Administration of Evacuee Property (Central) Rules, 1950, the Custodian can evict a person only on a ground justifying eviction of a tenant under a law relating to rent control or for any violation of the conditions of the lease or allotment. The Custodian could not, therefore, give vacant possession of the property to the appellant on his tender of payment of the mortgage amount. [855 H; 856 A B, D F] (2) The , was passed on account of the difficulty of administering evacuee properties in which there were both evacuee and non evacuee interests and to resolve the hardship felt by non evacuees, who by reason of such properties being in the possession of the Possession were unable to obtain satisfaction of their claims in view of the prohibitive provisions of that Act. But there is no provisions by which the Custodian is made subject to the power or control of the Competent Officer or which enables the Competent Officer 852 to pass an order which would curtail or otherwise affect the powers of the Custodian. Though under s.10(b)(i) of the Separation Act, the Competent Officer can pay to the Custodian the mortgage debt and redeem the mortgaged property, his power is subject to the rules made under that Act. [856 F G; 858 B C, G H] (3) Reading the relevant provisions namely, section 12 of the and r. 14 of the Rules made thereunder, and section 10 of the Separation Act and r. 11B of the rules made thereunder, together, the position is : (i) that though the Competent ' Officer must accept the mortgage amount when tendered by a mortgagor and the mortgage debt is thereupon satisfied, he cannot exercise the power to redeem the mortgaged property and order the Custodian to deliver up its vacant possession to the mortgagor in the absence of any agreement between the mortgagor and the Custodian; (ii) that the Competent Officer can order sale only for satisfaction of the mortgage debt and for distribution of the sale proceeds between the mortgagor and mortgagee. Since in the present case, the mortgage amount had been paid by the appellant and accepted by the Competent officer, the order directing sale is unten able and should be set aside; and (iii) that in exercising his jurisdiction under section 10, the Competent Officer cannot direct the Custodian to cancel or vary the terms of the leases or allotments made or granted by him. Therefore the Competent Officer can direct only symbolical possession of the mortgaged,property to be given to the appellant, however, harsh and unfair it may apparently be. [860 D G; 861 B, E H; 862 A C] The All India Film Corporation vs Raja Gyan Nath, referred to.

Appeal No. 108 of 1954. Appeal from the judgment and decree dated March 21, 1952, of the Calcutta High Court in Appeal from Appellate Decree No. 971 of 1950, arising out of the judgment and decree dated August 29, 1950, of the Court of District Judge of Zillah Burdwan in Title Appeal No. 247/16 of 1948 against judgment and decree dated September 25, 1948, of the Court of Additional Sub Judge, 1st Court, Burdwan, in Title Suit No. 7 of 1946/27 of 1947. 1311 N. C. Chatterjee and Sukumar Ghose, for the appellant. J. N. Banerjee and P. K. Ghose, for the respondents. September 18. The Judgment of the Court was delivered by VENKATARAMA AIYAR J. This is an appeal by the plaintiff against the judgment of the High Court of Calcutta in a second appeal which, in reversal of the judgments of the Courts below dismissed his suit, which was one in ejectment. The suit property is a Mahal of the extent of 84 Bighas 18 Cottas situated within lot Ahiyapur village, which is one of the villages forming part of the permanently settled estate of Burdwan Zamindari. This village was granted by the Maharaja of Burdwan in Patni settlement to the predecessors in title of defendants I to 7. The exact date of this grant does not appear, but it is stated that it was sometime prior to the enactment of the Bengal Patni Taluks Regulation, 1819 (Bengal Regulation VIII of 1819), hereinafter referred to as the Regulation, and nothing turns on it. The Mahal with which this litigation is concerned, had been at or prior to the permanent settlement set apart as Chaukidari Chakaran lands; that is to say, they were to be held by the Chaukidars for rendering service in the village as watchmen. In 1870, the Village Chaukidari Act, 1870 (Ben. VI of 1870), hereinafter referred to as the Act, was passed, and section 48 of that Act provides that all Chaukidari Chakaran lands assigned for the benefit of any village shall be transferred to the zamindar of the estate in the manner and subject to the provisions contained in the Act. Under section 50, the Collector is authorized to make an order transferring those lands to the Zamindar after determining the assessment payable thereon, and section 51 enacts that: " Such order shall operate to transfer to such zamindar the land therein mentioned subject to the amount of assessment therein mentioned, and subject 1312 to all contracts theretofore made, in respect of, under, or by virtue of, which any person other than the zamindar may have any right to any land, portion of his estate, or tenure, in the place in which such land may be situate. " In accordance with the provisions aforesaid, the suit properties were transferred to the Maharaja of Burdwan, and on June 3,1899, he granted the same to the predecessors in title of defendants I to 7, who at that time held the Patni interest in respect of lot Ahiyapur. Under the grant which has been marked as exhibit B, the yearly rental for the area was fixed at Rs. 126 8 as., out of which Rs. 84 4 as., had to be paid to the Panchayat within the 7th of Baisakh for being credited to the Chaukidari Fund and the balance of Rs. 42 4 as., was to be paid to the Zamindar within the month of Chaitra. Exhibit B also provides that in default of payment of kist the lands are liable to be sold in proceedings taken under the Bengal Regulation VIII of 1819. Acting under this clause, the Maharaja applied under section 8 of the Regulation to bring the suit lands to sale for realisation of arrears, and at the auction held on May 15, 1937, himself became the purchaser. On February 13, 1941, he granted the lands again on Patni to the appellant, who filed the suit, out of which the present appeal arises, in the Court of the Subordinate Judge, Burdwan, to recover possession thereof from the defendants alleging that they had trespassed thereon. The respondents contested the suit on the ground that, in fact, there were no arrears of rent due under Exhibit B, and that the sale was therefore void. The Subordinate Judge held that there were arrears of rent due from the respondents, and that further as they had not sued to set aside the sale under section 14 of the Regulation within the time limited by law, they could not set up its invalidity as a defence to the action in ejectment. The defendants preferred an appeal against this judgment to the District Court of Burdwan, and there raised a new contention that under the grant, Exhibit B, the suit lands became part of lot Ahiyapur, and that a sale of those lands was 1313 illegal as being a sale of a portion of the Patni. The District Judge after observing that the point was taken for the first time, held on a construction of Exhibit B that it created a new Patni, and that it could therefore be brought to sale, and he also held that section 14 of the Regulation operated as a bar to the validity of the sale being questioned on the ground that the rent claimed was not, in fact, due. He accordingly dismissed the appeal. The respondents took the matter in second appeal to the High Court, and that was heard by a Bench consisting of Das Gupta and Lahiri JJ. who differed from the District Judge both on the construction of Exhibit B and on the bar of limitation based on section 14 of the Regulation. They held that the effect of Exhibit B was merely to make the suit lands part and parcel of the Patni lot Ahiyapur, and that, therefore, the sale of those lands only was bad, as being a sale of a part of the Patni. They further held that as such a sale was void, section 14 of the Regulation had no application. They accordingly allowed the appeal, and dismissed the suit. It is against this judgment that the present appeal has been brought on a certificate granted by the High Court under article 133(1)(a). Mr. N. C. Chatterjee for the appellant urged the following contentions in support of the appeal: (1) The defendants did not raise either in the written statement or during the trial, the plea that under the sanad, Exhibit B, the Chaukidari Chakaran lands comprised therein became part of the Patni settlement of lot Ahiyapur, and, in consequence, their sale was bad as being of a part of the Patni, and the learned Judges should not have allowed that point to be raised in appeal. (2) Exhibit B properly construed must be held to create a new Patni distinct from lot Ahiyapur, and its sale is therefore valid. (3) Assuming that the sale is invalid as being of a part of a tenure, the only right of the defendants was to sue to have it set aside, as provided in section 14 of the Regulation, and that not having been done, it is not open to them to attack it collaterally in these proceedings. We see no substance in the first contention. It is 1314 true that the defendants did not put forward in the trial Court the plea that the effect of Exhibit B was to incorporate the suit lands in lot Ahiyapur Patni, and that, in consequence, the sale was illegal as being of a part of the Patni. On the other hand, the written statement proceeds on the view that Exhibit B created a new Patni unconnected with lot Ahiyapur, and the only defence raised on that basis was that no arrears of rent were due under Exhibit B, and that the sale was therefore invalid. But the true nature of the grant under Exhibit B is a matter to be decided on a construction of the terms of the document, and that is a question of law. It is argued for the appellant that it would be proper in determining the true character of the grant under Exhibit B to take into account surrounding circumstances, that to ascertain what those circumstances are, it will be necessary to take evidence, and that, in consequence, a question of that kind could not be permitted to be agitated for the first time in appeal. But it is well settled that no evidence is admissible on a question of construction of a contract or grant, which must be based solely on the terms of the document, there being no suggestion before us that there is any dispute as to how the contents of the document are related to existing facts. Vide Balkishen Das vs Legge (1) and Maung Kyin vs Ma Shwe La (2). It should, moreover, be mentioned that when the defendants sought to raise this contention in their appeal in the District Court, no objection was taken by the plaintiff thereto. Under the circumstances, the learned Judges were right in allowing this point to be taken. This contention must therefore be rejected. The next point for determination is as to the true character of the grant under Exhibit B, whether it amounts to a new Patni with reference to the Chaukidari Chakaran lands as contended for by the appellant, or whether it incorporates those lands in the Patni of lot Ahiyapur, so as to make them part and parcel of the lands comprised therein, as is maintained by the respondents. To appreciate the (1) (1899) L.R. 27 I.A. 58, 65. (2) (1917) L.R 44 I.A. 236, 243. 1315 true position, it is necessary to examine what the rights of the Zamindar and of the Patnidar were with respect to Chaukidari Chakardan lands at the time of the grant, Exhibit B. These lands had been originally set apart as remuneration for the performance of services by the village chaukidars as watchmen, and for that reason when the village was granted to the Zamindar in permanent settlement, the income therefrom was not taken into account in fixing the jama payable by him, though they passed to him under the permanent settlement. Then came the Village Chaukidari Act, and under that Act the Government put an end to the services of the Chaukidars as village watchmen, resumed the lands and imposed assessment thereon, and, subject to it, transferred them to the Zamindar; and where the Zamindar had already parted with the village in which the lands were situate, by granting Patni, it became necessary to define the rights of the Zamindar and the Patnidar with reference to those lands. Dealing with this matter, section 51 of the Act provides that the title of the Zamindar on resumption and transfer by the Government shall be subject to " all contracts theretofore made ". Under this section, the Patnidar would be entitled to the Chaukidari Chakaran lands in the same right and on the same terms on which lie held the village in which they are situate. The nature of this right has been the subject of consideration in numerous authorities, and the law on the subject is well settled. In Ranjit Singh vs Maharaj Bahadur Singh (1), it was held by the Privy Council that though the reservation under section 51 is of rights under contracts made by the Zamindar and the word " contract " primarily means a transaction which creates personal obligations, it might also refer to transactions which create real rights, and that it was in that sense the word was used in section 51, and that accordingly the Patnidar was entitled to institute a suit against the Zamindar for possession of those lands and was not obliged to suit for specific performance. But this does not mean that the Patnidar is (1) (1918) L.R. 45 I.A. 162. 167 1316 entitled to hold the lands free of all obligations. He is under a liability to pay to the Zamindar the assessment due thereon, when it is fixed under section 50, and also a share of profits. Vide Bhupendra Narayan Singh vs Narapat Singh (1), where it was held by the Privy Council that when Chaukidari Chakaran lands included in a Patni settlement had been resumed and transferred to the Zamindar under section 51 of the Act, he is entitled to the payment of a fair and equitable rent in respect thereof, and that the fixing of the rent is a condition to the Patnidar being put in possession. Vide also Rajendra Nath Mukherjee vs Hiralal Mukherjee (2) and Gopendra Chandra vs Taraprasanna (3). These being the rights and obligations of the Zamindar and the Patnidar under section 51 of the Act, a grant of the Chaukidari Chakaran lands by the former to the latter serves, in fact, two purposes. It recognises that the grantee is entitled to hold those lands by virtue of his title as Patnidar of the village of which they form part, and it fixes the amount payable by him on account of assessment and share of profits. The question then arises as to what the exact relationship is in which the new grant stands to the original Patni grant. Now, when section 51 of the Act recognises and saves rights which had been acquired under contract with the Zamindar, its reasonable implication is that the rights so recognised are the same as under the contract, and that, in consequence, the settlement of the Chaukidari Chakaran lands in Patni must be taken to be a continuance of the Patni of the village in which they are included. But it is open to the parties to agree that the Chaukidari Chakaran lands should form a new and distinct Patni, and the result of such an agreement will be that while the grantee will hold those lands in Patni right, that is to say, the tenure will be permanent, heritable and alienable so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there is any default in the (1) (1925) L.R. 52 I.A. 355. (2) (3) Cal. 1317 payment thereof are concerned, the now grant will be an entity by itself independent of the original Patni. That that could be done by agreement of parties is well settled, and is not disputed before us. If that is the true position, then the real question to be considered is, what is the agreement of parties with reference to the Chaukidari Chakaran lands, whether they are to be constituted as an independent Patni or whether they should be treated as a continuation of the original Patni or an accretion thereto, and the answer to it must depend on the interpretation to be put on the grant. It is now necessary to refer to the material terms of Exhibit B under which the Chaukidari Chakaran lands were granted to the predecessors of respondents I to 7. It begins by stating that the Patnidars of lot Ahiyapur appeared before the Zamindar and ,prayed for taking Patni settlement of the said 84 Bighas 18 Cottas of land at a yearly rental of Rs. 126/8 as.", and then provides how the amount is to be paid. Then there is the following clause, which is important: "You will pay the rent etc., Kist after Kist according to the Kistbandi in accordance with law, and if you do not pay the same, I will realise the arrears together with interest and costs by causing the aforesaid lands to be sold by auction by instituting proceedings under Regulation VIII of 1819 and other laws which are in force or will come into force. " Then follow provisions relating to the transfer by the Patnidars of " the aforesaid lands ", succession by inheritance or by will to " the aforesaid lands " and the registration of the name of the transferee or successor in the Sherista, and it is expressly stated that "so long as the name of the new Patnidar is not recorded in the Sherista, the former Patnidar whose name is recorded in the Sherista will remain liable for the rent, and on a sale of the Mahal by auction on institution of proceedings against him under Regulation VIII of 1819 or any other law that will be in force for realisation of arrears of rent, no objection thereto on the Part of the new Patnidar can be entertained." 1318 Then ,there are two clause on which on the respondents rely, and they are in these terms: " If in future it transpires that any other persons besides yourselves have Patni rights in the Patni interest of the, said lot Ahiyapur, such persons shall have Patni rights in these Chakaran lands also to the same extent and in the same manner as they will be found to have interests in the Patni of the aforesaid lot, and if for the said reason any person puts forward any claim against the Raj Estate and the Raj Estate has to suffer any loss therefor, you will make good the said claim and the loss without any objection. If in future the Patni interest in the said lot Ahiyapur be transferred for liability for arrears of rent or if the same comes to an end for any reason, then your Patni interest in these Chakaran lands also will be transferred or will come to an end alongwith the original Patni ,simultaneously. " It is on these two clauses that the learned Judges in the Court below have based their decision that the intention of the par ties was to treat the suit lands as part of the Patni of lot Ahiyapur. Now, it cannot be disputed that the two clauses aforesaid afford considerable support to the conclusion to which the learned Judges have come. The first clause provides that if besides the grantee under Exhibit B there were other persons entitled to Patni rights in lot Ahiyapur, those persons also shall have Patni rights in Chaukidari Chakaran lands to the same extent as in Patni Ahiyapur. That clearly means that the rights conferred on the grantees under Exhibit B have their roots in the Patni lot of Ahiyapur. Likewise, the provision in the last clause that the grantees will lose their rights to the Chaukidari Chakaran lands if their interest in Ahiyapur Patni was sold clearly suggests that the grant under Exhibit B is to be an annexe to the grant of Ahiyapur. As against this, the appellant argues that the other clauses in Exhibit B quoted above strongly support his contention, and that when the document is read as a whole, it unmistakably reveals an intention to treat the suit lands as a distinct Patni. We must now 1319 refer to these clauses. Exhibit B begins by reciting that the grantees desired to take a Patni settlement of 84 Bighas 18 Cottas, which is some indication, though not very strong, that it is to be held as a distinct entity. We have then the clause which provides that when there is default in the payment of kist, the lands are liable to be sold in proceedings instituted under the Regulation. Now, the law had long been settled that a sale of a portion of a Patni is bad, but that if by agreement of all the parties interested different portions thereof are held under different sadads, which provide for sale of those portions for default in pay ment of kist payable respectively thereon, then each of those sanads might be held to have created a separate Patni in respect of the portion comprised therein. Vide Mohadeb Mundul vs Mr. H. Cowell(1) and Monomothonath Dev and another vs Mr. G. Glascott (2). When, therefore, the Zamindar and the Patnidar agreed under Exhibit B that the lands comprised therein could be sold under the Regulation when there was default in payment of kist fixed therefor, they must clearly have intended that those lands should be constituted into a distinct Patni. Otherwise, the clause will be inoperative and void, and indeed, the learned Judges in the Court below have, on that ground, declined to give any effect to it. Now, it is a settled rule of interpretation that if there be admissible two constructions of a document, one of which will give effect to all the clauses therein while the other will render one or more of them nugatory, it is the former that should be adopted on the principle expressed in the maxim " ut res magis valeat quam per eat ". What has to be considered therefore is whether it is possible to give effect to the clause in question, which can only be by construing Exhibit B as creating a separate Patni, and at the same time reconcile the last two clauses with that construction. Taking first the provision that if there be other persons entitled to the Patni of lot Ahiyapur they are to have the same rights in the land comprised in Exhibit B, (2) (1873) 20 Weekly Reporter 275. 1320 that no doubt posits the continuance in those persons of the title under the original Patni. But the true purpose of this clause is, in our opinion, not so much to declare the rights of those other persons which rest on statutory recognition, but to provide that the grantees tinder the document should take subject to those rights. That that is the purpose of the clause is clear from the provision for indemnity which is contained therein. Moreover, if on an interpretation of the other clauses in the grant, the correct conclusion to come to is that it creates a new Patni in favour of the grantees thereunder, it is difficult to see how the reservation of the rights of the other Patnidars of lot Ahiyapur, should such there be, affects that conclusion. We are unable to see anything in the clause under discussion, which militates against the conclusion that Exhibit B creates a new Patni. Then there is the clause as to the cesser of interest of the grantees in the Chaukidari Chakaran lands when their title to lot Ahiyapur comes to an end, and according to the respondents, this shows that under Exhibit B the Chaukidari Chakaran lands are treated as part and parcel of the Ahiyapur Patni. If that were so, a sale of lot Ahiyapur must carry with it the Chaukidari Chakaran lands, they being ex hypothesi, part and parcel thereof, and there was no need for a provision such is is made in the last clause. But that clause would serve a real purpose if the Patni under Exhibit B is construed as separate from that of lot Ahiyapur. In that view, when the major Patni of lot Ahiyapur is sold, the intention obviously is that the minor Patni under Exhibit B, should not stand out but be extinguished, a result which could be achieved only by a special provision. We should finally refer to the clauses in Exhibit B providing for transfer of or succession to the Chaukidari Chakaran lands and for the recognition of such transferee or successor as a Patnidar of those lands. It is clear from these provision,s that such a transferee or successor is to hold the lands as a Patnidar, different from the Patnidar of lot Ahiyapur. Reading these clauses along with the last clause, it seems clear that the intention of the parties 1321 was that while a transfer of the Ahiyapur Patni by sale should extinguish the title of the holders of the Chaukidari Chakaran lands a transfer of these lands would have no effect on the title to the lot Ahiyapur Patni. Construing Exhibit B, as a whole, we are of opinion that the intention of the parties as expressed therein was that the Chaukidari Chakaran lands should be held as a distinct Patni. We must now refer to the decision on which the learned Judges in the Court below have relied in support of their conclusion. In Kanchan Barani Debi vs Umesh Chandra (1), the facts were that the Maharaja of Burdwan had created a Patni of lot Kooly in 1820. The Chaukidari Chakaran lands situated within that village were resumed under the Act and transferred to the Zamindar who granted them in 1899 to one Syamlal Chatterjee in Patni on terms similar to those in Exhibit B. In 1914 the Patni lot Kooly was sold under the Regulation, and purchased by Sint. Kanchan Barani Debi. She then sued as such purchaser to recover possession of the Chaukidari Chakaran lands. The defendants who represented the grantees under the Patni settlement of 1899 resisted the suit on the ground that the sale of Patni Kooly did not operate to vest in the purchaser the title in the Chaukidari Chakaran lands, as they formed a distinct Patni. Dealing with this contention, B. B. Ghose J. who delivered the judgment of the Court, observed : concerned to alter the terms of the original patni if they chose to do so; and what we have to see is whether that was done. In order to do that, we have to examine the terms of the pattah by which the Chaukidari Chakaran lands were granted to Syamlal Chatterjee." The learned Judge then refers to the two clauses cor responding to the last two clauses in Exhibit B, and comes to the conclusion that their effect was merely to, restore the position as it was when the original Patni was created, and that, in consequence, the purchaser was entitled to the Patni as it was created in 1820, (1) A.I.R. 1925 Cal. 807, 1322 and that the plaintiff was entitled to the possession of the Chaukidari Chakaran lands as being part of the Patni. Now, it is to be observed that in deciding that the Chaukidari Chakaran lands granted in 1899 became merged is lot Kooly, as it was in 1820, the learned Judge did not consider the effect of the clause providing for sale of those lands as a distinct entity under the provisions of the Regulation when there was default in the payment of ret payable thereon under the deed, and that, in our opinion, deprives the deci sion of much of its value. In the result, we are unable to hold that the two clauses on which the learned Judges base their conclusion are really inconsistent with the earlier clauses which support the view that the grant under Exhibit B is of a distinct Patni. Nor do we agree with them that the earlier clause providing for the sale of the Chaukidari Chakaran lands in default of the payment of jama, should be construed so as not to override the later clauses. If, in fact, there is a conflict between the earlier clause and the later clauses and it is not possible to give effect to all of them, then the rule of construction is well established that it is the earlier clause that must override the later clauses and not vice versa. In Forbes vs Git (1), Lord Wrenbury stated the rule in the following terms : " If in a deed an earlier clause is followed by a later clause which destroys altogether the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails. In this case the two clauses cannot be reconciled and the earlier provision in the deed prevails over the later. " We accordingly hold that Exhibit B created a new Patni and that the sale of the lands comprised therein is not bad as of a portion of a, Patni. We are conscious that we are differing from the learned Judges of the Court below on a question relating to a local tenure on which their opinion is, by reason of the special knowledge and experience which they have of it, entitled to the greatest weight. It is also true that the decision in Kanchan Barani Debi vs (1) ,259. 1323 Umesh. Chandra (1) has stood now for over three decades, though it is pertinent to add that its correctness does not appear to have come up for consideration in any subsequent decision of the Calcutta High Court, prior to this litigation. But then, the question is one of construction of a deed, and our decision that the effect of an agreement of the kind in Exhibit B was to constitute the Chaukidari Chakaran lands into a distinct Patni will not result in any injustice to the parties. On the other hand, the rule that a portion of a Patni should not be sold being one intended for the benefit of the Patnidars, there is no reason why an agreement entered into by them with the Zamindars providing for the sale of a portion, thereof which is really to their advantage, should not be given effect to. Having anxiously considered the matter, we have come to the conclusion that Exhibit B creates a distinct Patni, that the sale thereof on May 15, 1937, is valid, and that the plaintiff has therefore acquired a good title to the suit lands under the grant dated February 13, 1941. In this view, it is unnecessary to express any opinion on the point that was the subject of considerable argument before us as to whether it is open to the defendants to raise the invalidity of the sale held on May 15, 1937, in answer to this action, they not having taken steps to have set it aside, as provided in section 14 of the Regulation. In the result, the appeal is allowed, the judgment of the lower Court reversed and that of the District Judge restored, with costs throughout. Appeal allowed. (1) A.I.R. 1925 Cal.

The lands in question are situate in lot Ahiyapur which is one of the villages forming part of the permanently settled estate of Burdwan and had been set apart as Chaukidari Chakaran lands to be held by the Chaukidars for rendering service in the village as watchmen. At the time of the permanent settlement the income from these lands was not taken into account in fixing the jama payable on the estate. Some time before the enactment of the Bengal Patni Taluks Regulation, 1819, the entire village of Ahiyapur was granted by the then 1310 Zamindar of Burdwan, to the predecessors in title of the defendants on Patni settlement. In 1870 the Village Chaukidari Act came into force and acting under the provisions of that Act the Government put an end to the services of the Chaukidars resumed the lands and imposed an assessment thereon, and, subject to it, transferred the lands to the Zamindar. On June 3, 899, the Zamindar granted the suit lands on Patni to the predecessors in title of the defendants who were the then holders of the village in Patni. In proceedings taken by the Zamindar under the provisions of the Bengal Patni Taluks Regulation, 1819, the suit lands were brought to sale for arrears of rent and purchased by him. On February I3, 1941, the Zamindar sold the lands to the appellant who sued to recover possession thereof from the defendants. The defendants resisted the suit on the ground, inter alia, that the effect of the grant of the Chaukidari Chakaran lands on June 3, 1899, was to make them part and parcel of the Patni settlement of the village of Ahiyapur and that, in consequence, the sale of those lands, apart from the village of Ahiyapur, was bad as being a sale of a portion of the Patni. Held, that when the Zamindar made a grant of the Chaukidari Chakaran lands which formed part of a village which had previously been settled in Patni, it was open to the parties to agree that those lands should form a new and distinct Patni and the result of such an agreement would be that while the grantee would hold those lands in Patni right, that is to say, that the tenure would be permanent, heritable and alienable, so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there was a default in the payment thereof were concerned, the new grant would be a distinct Patni, independent of the original Patni. Held, further, that construing the grant dated June 3, 899, as a whole, the intention of the parties as expressed therein was that the Chaukidari Chakaran lands were to be treated as a distinct Patni and that, therefore, the sale of the lands for arrears of rent was valid.

Appeal No. 598 of 1962. Appeal from the judgment and order dated March 18, 1961 of the Maharashtra High Court (Nagpur Bench) at Nagpur in Special Civil Application No. 30 of 1960. WITH Civil Appeals Nos. 695 and 700 of 1962. Appeals from the judgment and orders dated October 12, 1961 and March 18, 1961 of the Madhya Pradesh High Court in Misc. Petitions Nos. 122 of 1961 and 319 of 1960 respectively. 949 M. C. Setalvad and section Shaukat Hussain, for the appellant (in C.A. No. 598/62). W. section Barlingay and A. G. Ratnaparkhi, for respondent No. 1 (in C.A. No. 598 of 1962). section G. Patwardhan, Udai Pratap Singh and M. section Gupta, for the appellant (in C.A. No. 695/62). A. N. Goyal, for respondent No. 1 (in C.A. No. 695/ 62). N. Shroff, for respondent No. 2 (in C.A. No. 695/62). M.C. Setalvad and M. section Gupta, for the appellant (in C.A. No. 700/62). G. section Pathak, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondents Nos. 1 to 4 and 6 to 9 (in C.A. No. 700/62). N. Shroff, for respondent No. 10 (in C.A. No. 700/62). March 3, 1964. The Judgment of the Court was delivered by AYYANGAR, J. These three appeals which are on certificates of fitness granted by the High Courts the first by the High Court of Bombay at Nagpur and the two others by the High Court of Madhya Pradesh raise a common question as regards the construction of article 277 of the Constitution and the validity of certain terminal taxes imposed by the respective appellant municipal authorities under notifications issued under Ch. IX of the C.P. & Berar Municipalities Act, 1922, subsequent to the coming into force of the Constitution, and so have been heard together. Civil Appeal 598 of 1962 is an appeal from the High Court of Bombay at Nagpur and has been filed by the Municipal Committee of Amravati against a decision of the High Court allowing the 1st respondent 's petition under articles 226 and 227 of the Constitution. The Municipal Committee of Amravati has been established under the 950 C.P. & Berar Municipalities Act, 1922 (C.P. & Berar Act II of 1922) hereinafter referred to as the Act. Chapter IX of the Act deals with the imposition, assessment and collection of taxes which might be imposed by the Municipal Committee. Section 66 specifies the taxes which, subject to the provisions of the Chapter, the Committee may from time to time impose. Its first sub section specifies in its several clauses 15 varieties of taxes and among them is cl. (o) which reads: "The terminal tax on goods or animals imported into or exported from the limits of the municipality provided that terminal tax under this clause and an octroi under cl. (e) shall not be in force in any municipality at the same time , ' The other sub clauses which are relevant for the considera tion of the question arising in the appeal are sub cls. (2),(3) and (4) of section 66 and they read : (2) The State Government may, by rules made under this Act, regulate the imposition of taxes under this section, and impose maximum amounts of rates for any tax. (3) The first imposition of any tax specified in subsection (1) shall be subject to the previous sanction of the State Government. (4) Subject to the control of the State Government, a committee may abolish any tax already imposed and specified in sub section (1) clauses (a) to (in) inclusive, or may, within the limits imposed under sub section (2), vary the amount or rate of any such tax : Provided that in the case of any municipality indebted to the Government, the abolition of any tax or a reduction in the amount or rate thereof shall be subject to the previous sanction of the State Government. " 951 Section 67 lays down the procedure for the imposition of taxes and it provides : "67. (1) A committee may, at a special meeting, pass a resolution to propose the imposition of any tax under section 66. (2) When such a resolution has been passed, the committee shall publish, in accordance with rules made under this Act, a notice defining the class of persons or description of property proposed to be taxed, the amount or rate of the tax to be imposed and the system of assessment to be adopted. (3) (4) (5) The State Government, on receiving such proposals, may sanction or refuse to sanction the same, or sanction them subject to such modifications as it may think fit, or return them to the committee for further consideration. (6) No modification affecting the substance shall be made under sub section (5), unless and until the modification has been accepted by the committee at a special meeting. (7) (8) A notification of the imposition of a tax under this section shall be conclusive evidence that the tax has been imposed in accordance with the provisions of this Act. " The procedure for the variation of the taxes is to be found in section 68 and it reads "68. (1) A committee may, at a special meeting, pass a resolution to propose the abolition of any tax already imposed, or a variation in the amount or rate thereof. (2) 952 (3) If the proposal is to increase the amount or rate of any tax, the committee shall publish, in the manner prescribed by rules made under this Act, a notice showing in detail the effects of the proposal. (4) Any inhabitant of the municipality objecting to the proposed increase may, within thirty days from the publication of the notice, submit his objection in writing to the committee. (5) The committee shall take the proposal and all objections received thereto )into consideration at a special meeting, and may modify the proposals as it may think fit, and may pass a final resolution on the proposal. (6) If the proposal requires the previous sanction of the State Government under the provisions of section 66, sub section (4) or sub section (5), the committee shall forward it to the State Government and it shall be dealt with in the manner provided in section 67, sub sections (4), (5) and (6). (7). . . . (8). . . . (9) The publication in the manner prescribed of the abolition or variation of any tax under this section shall be conclusive proof that such abolition or variation has been made in accordance with the provisions of this Act." From even before the constitution of the municipality under the Act and at a time when the municipal committee was governed by the Berar Municipal Law of 1886 which was in force prior to the Act and whose taxation provisions were continued by the Act of 1922, a terminal tax on goods imported by road or rail had been imposed by the Munici pality by virtue of a notification dated August 10, 1916 on several specified kinds of goods. This notification exempted silver, bullion and coin from the operation of this tax. This was superseded by a notification of June 2, 1921 under which the Schedules were modified and the terminal tax 953 imposed was confined to goods imported into or exported out of the Municipal area by rail. The notification of June 1921 was amended from time to time by other items being added and the rates being increased but no change was effected in the taxes imposed after 1936. Under the scheme of the distribution of taxing powers between the provinces and the Central Government under the Government of India Act, 1935 terminal taxes on goods carried by rail were assigned exclusively to the Federal Centre under item 58 of List I to Sch. VII, but the validity of the levy and collection of the terminal tax in force, before the 1st April, 1937 was continued by section 143 of the Government of India Act, 1935 and it was by virtue of this continuance that these taxes were continued to be levied after April 1, 1937 Their continuance after January 26, 1950 when after the repeal of the Government of India Act, 1935, the Consti tution came into force with the same scheme of distribution of taxing power on the relevant item identical with that under the Government of India Act, was by reason of article 277 which was practically in the same terms as section 143 of the Government of India Act, 1935. The taxes imposed by the pre Constitution notification could, therefore, be legally levied and collected even after the Constitution came into force. Subsequent to January 26, 1950 there was a notification on December 1, 1959, under which to the list of goods liable to terminal tax imported into or exported out of the Municipal area, not merely by rail, but also by road were added three new items silver and silver jewellery, gold and gold jewellery, and precious stones, and these three specified items were subjected to the tax at the same rates as had been imposed on other articles by the notifications which were in force from before the Constitution. Before the notification was issued the procedure indicated by section 67 was gone through and the Government accorded their sanction to the rules made by the Municipal Committee for the imposition of the tax on the newly added articles. The validity of the tax imposed by this notification was challenged by the 1st respondent who was carrying on business within Amravati municipality in gold, silver and precious stones, 954 on the ground of legislative incompetency which had not been saved by Article 277 of the Constitution, in a petition under Article 226. The learned Judges of the High Court by a majority accepted the contention raised by the respondent and allowed the petition but granted a certificate of fitness and hence this appeal. The facts of the other two appeals are nearly similar but we shall refer to them after dealing with the, common question which arises in these appeals. It is common ground that the right to levy a terminal tax is now vested in the Union Parliament under Entry 89 of the Union List which reads : "Terminal taxes on goods or passengers carried by railway, sea or air; taxes on railway fares and freights", so that if the levy by the appellant of the terminal tax on the newly added items, and the same principle would apply to an increase in the rate of the duty, had to rest on the independent taxing power of the State, the same would have to be struck down for want of legislative competence. Besides it is necessary to add that whereas under the notifications in force prior to 1st April 1937 when Part III of the Government of India Act was brought into force, articles imported into or exported out of the municipal area by road were not subject to the tax, and that state of affairs continued till long after the Constitution came into force, a terminal tax was imposed by the impugned notification of December 1959 on goods imported or exported by road a tax which it was not open to the State to impose even with the aid of article 277. But ignoring this feature of the impugned notification, insofar as it brought in goods carried by road within the scope of the terminal tax, it is admitted that the validity of the imposition cannot be justified if it was a fresh imposition. What is, however, urged in support of the validity of the imposition is that the same is saved by article 277 which runs: "277. Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the 955 Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List. continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law. " If learned Counsel for the appellant is right in his contention 'that the impugned tax which he is now seeking to sustain, 'was the tax which "was being lawfully levied" by the municipality before the commencement of the Constitution he would certainly be well founded in the submission that the fact that the terminal taxes are under the distribution ,of taxing powers under the Constitution assigned to the Union would make no difference for the valid continuance of the levy. The question, therefore, is whether this was the tax which was being levied by the municipal authority before the Constitution and for whose continuance the Article provides. The first submission of Mr. Setalvad for the appellants was that this condition would be satisfied whenever a ,terminal tax (without reference either to the article on which it was levied or the rate) was being lawfully levied by the municipality prior to the commencement of the ,Constitution and as in this case admittedly a terminal tax was being levied on certain articles that condition was satisfied. His argument was that the words 'tax or duty ' in the opening part of article 277 should be read as meaning a tax or duty under a specified legislative Entry, and if such a tax or duty was being levied before the commencement ,of the Constitution other duties of the same type or falling within the same category might be imposed after the Constitution notwithstanding that such duties or taxes were mentioned in the Union List by reason of the words "shall continue to be levied". Secondly, he said that the word 'levy ' meant not merely the ascertainment, i.e., assessment and collection of the tax but included its imposition, i.e., also the charging and if that expression were understood in that wide sense it would comprehend a case where other 956 items than those originally specified were brought into the fold of the taxing provision. The learned Attorney General who appeared for the State and supported Mr. Setalvad, however, went a step further and submitted that it was not even necessary that a terminal tax should be actually imposed and was being collected prior to the Constitution, but that it was sufficient if the State enactment had vested in the municipality a power to levy such a tax. The argu ment of the learned Attorney General has to be rejected as lacking any substance, for on no construction, wide or narrow, of the expression 'levy ' in the phrase 'continue top be levied ' can such a case be comprehended. From the mere fact that a State enactment has authorised a municipality to levy a tax it cannot be said that a tax which had never been imposed was "being lawfully levied" by the municipality, not to speak of the tax etc. collected being "applied to the same purposes" before the commencement of the Constitution as contemplated by the concluding portion of the Article. Coming next to what one might term the narrower submission of Mr. Setalvad we do not find it possible to agree with it either. His first submission may be expanded thus : The expression "taxes, duties, cesses" with which article 277 opens, has to be read in the context of Part XII in which the Article occurs and so read has to be understood as referring to the class or category of taxes which were levied and collected by the State, municipality etc. before the commencement of the Constitution. In other words, the reference here is to the entries in the legislative lists which permit such taxes to be levied, and so read and taken in conjunction with the circumstance that the Article is one designed to prevent the dislocation of the finances of the State or other local authorities, the terms of the Article would be satisfied and the legislative power to continue to levy the tax would be conferred "notwithstanding that the tax, etc. are mentioned in the Union List". This argument, in our opinion, proceeds on ignoring the terms of article 277. If, as is admitted, the sole object sought to be achieved by this provision for "continuance" is to avoid dislocation of the finances of the State and local authorities, 957 by depriving them of the revenues which they were deriving at the commencement of the Constitution, it would mean that the intention was to permit the existing range of taxes to be continued, not that the Article conferred on them authority to expand the range of their taxation by subjecting new items to taxation or by increasing the rates of duty. This consideration apart, it is not possible to read the words "notwithstanding that the taxes etc. are mentioned in the Union List" as conferring an unlimited legislative power to impose what in effect the argument involves new taxes, though of the same type or nature as existed before the Constitution. The question of the proper construction of section 143(2) of the Government of India Act, 1935 which is for all practical purposes identical with article 277 came up for consideration before this Court in Rama Krishna Ramanath vs The janpad Sabha, Gondia(1). There it was submitted on behalf of the respondent local authority that by virtue of section 143 (2) of the Government of India Act the Provincial Legislature was vested with a plenary power to legislate in respect of every tax which was being lawfully levied by local authorities prior to the commencement of the Government of India Act. This Court rejected that contention and observed "Section 143 (2) which is a saving clause and obviously designed to prevent a dislocation of the finances of Local Governments and of local authorities by reason of the coming into force of the provisions of the Government of India Act distributing heads of taxation on lines different from those which prevailed before that date, cannot be construed as one conferring a plenary power to legislate on those topics till such time as the Central Legislature intervened. Such a construction would necessarily involve a power in the Provincial Legislature to enhance the rates of taxation a result we must say from which Mr. Sanyal did not shrink, but having regard to the language of the section (1) [1962] Supp. 3 S.C.R. 70. 958 providing for a mere continuity and its manifest purpose this construction must be rejected. " No doubt, even the words "continue to be levied and to be applied to the same purposes" might import and imply a limited legislative power in the State. The scope of this limited power was also examined by this Court in the same case and it was stated : "In the context the relevant words of the sub section could only mean 'may continue to be levied if so desired by the Provincial Legislature ' which is indicated by or is implicit in the use of the expression 'may ' in the clause 'may be continued until provision to the contrary is made by the Federal Legislature. ' This would therefore posit a limited legislative power in the Province to indicate or express a desire to continue or not to continue the levy. If in the exercise of this limited power the Province desires to discontinue the tax and effects a repeal of the relevant statute the repeal would be effective. Of course, in the absence of legislation indicating a desire to discontinue the tax, the effect of the provision of the Constitution would be to enable the continu ance of the power to levy the tax but this does not alter the fact that the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy subject to the overriding power of the Central Legislature to put an end to its continuance and it is on the basis of the existence of this limited legislative power that the right of the Provincial Legislature to repeal the taxation provision under the Act of 1920 could be rested. Suppose for instance, a Provincial Legislature desires the continuance of the tax but considers the rate too high and wishes it to be reduced and passes an enactment for that purpose, it cannot be that the legislation is incompetent and that the State Government 959 must permit the local authority to levy tax at the same rate as prevailed on April 1, 1937 if the latter desired the continuance of the tax. If such a legislation were enacted to achieve a reduction of the rate of the duty, its legislative competence must obviously be traceable to the power contained in words 'may continue to be levied ' in section 143 (2) of the Government of India Act. " Dealing next with the import of the words 'may continue to be levied ' the same was summarised in these terms : (1) The tax must be one which was lawfully levied by a local authority for the purpose of a local area, (2) the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised 'and the purposes for which the utilization is to take place continue to be the same, and (3) the rate of the tax is not enhanced nor its incidence in any manner altered, so that it continues to be the same tax. It is obvious that if these tests were applied the submission on behalf of the appellant cannot be accepted. But authority apart, we cannot, even if this decision were put aside, accede to the construction for which Mr. Setalvad contends. It is not disputed that in ultimate analysis the answer to the question raised should turn on the meaning of the word 'levied ' in the phrase 'continue to be levied ' which is the operative word conferring a power. Mr. Setalvad submits that 'levied ' is a word of wide and varying import and includes in its denotation not merely the actual collection of the tax, but the imposition in the sense of the creation of the charge by the statute, as well as the ascertainment of the amount due from the tax payer. Mr. Setalvad is right, for before a tax can be collected from any tax payer, its quantum must be ascertained and assessed, and for this to be lawfully done there must be legislative sanction in other words an imposition of the charge because it is the charge under the Statute that is quantified ' by the authorities acting under the taxing enactment. The acceptance of this construction however does not lead to the result desired, for what can "continue to be levied" is what "was being lawfully levied" in the same sense of the, 960 word "levied", prior to the Constitution. Admittedly, there was no imposition of the charge now sought to be recovered prior to the Constitution, i.e., the Act did not impose the charge by section 66 but merely enabled the Municipal Committee by appropriate procedure to impose the tax. If, of course, this power had been availed of and a charge had been imposed it would be a different matter. So long as the Municipal Committee did not pass the necessary resolutions and impose the tax there was no charge levied on the commodity, so that it could not be said that the tax "was being lawfully levied" before the commencement of the Constitution. The words "was being lawfully levied ' obviously mean "was actually levied" and it would not be sufficient to satisfy those words that the Municipal authority could lawfully levy the tax, but had not availed itself of that power. There is another circumstance to which also reference may be made. The last portion of article 277 uses the words "continue to be levied" and "to be applied to the same "purposes". By reason of this collocation between the concept of the levy and of application of the proceeds of the tax , the Constitution makers obviously intended the word 'levy ' to be understood as including the collection of the ,tax, for it is only when a tax is collected that any question of its application to a particular purpose would arise. It is apparent that if the word "levied" were understood in the sense which Mr. Setalvad contends, there could be no "application" of the proceeds of the tax to the same pur poses as at the commencement of the Constitution. For ex concessis at that date there were no proceeds to be applied. In this connection learned Counsel for the respondent referred us to the decision in Chuttilal vs Bagmal and Balwantrai(1) where the relationship between the levy and the application of the tax has been referred to as an aid to the construction of the expression "continue to be levied" in article 277. We find ourselves in agreement with the views there expressed. The decision of the High Court is, therefore, correct and "the appeal fails. (1) I.L.R. [1956] Madhya Bharat 339. 961 CIVIL APPEAL No. 695 OF 1962. In this appeal a notification was issued under sub sections (5) and (7) of section 67 of the C.P. & Berar Municipalities Act, 1922, on December 9, 1960 imposing a terminal tax on gun powder imported into or exported out of the municipal area by rail. It is admitted that previous to the Constitution there was no tax imposed on gun powder. The position in this case is, therefore, identical with that in Civil Appeal No. 598 of 1962 which we have just disposed of and it follows that this appeal also fails and should be dismissed. CIVIL APPEAL No. 700 OF 1962. In Civil Appeal 700 of 1962 the original notification imposing terminal taxes in respect of goods coming into or going out of the municipal area by rail was one dated March 17, 1926 which was operative from April 1, 1926. This was amended by a notification under section 67 (5) of the C.P. Berar Municipal Act, 1922 dated September 23, 1960 by which new articles were included to the list of items imported into or exported from the municipal area by rail subject to the terminal tax and besides the rate of tax on the previously existing items was also increased. It was this inclusion of new articles for the levy of terminal tax by the notification of 1960 and the increase in the rate of duty on articles, already subjected to tax, that was impugned in the writ petition filed by the respondent before the High Court. On our reasoning on the basis of which we have dismissed Civil Appeal 598 of 1962 it would follow that this appeal should also fail. We can see no difference between the inclusion of new items and the increase in the rate of duty because if there is an increase it would not be a mere continuance of the duty which had been lawfully levied which is the only purpose and function of article 277. The judgment of the High Court allowing the writ petition of the respondent was therefore correct. In the result, ;all the three appeals fail and are dismissed with costs of the contesting respondent or respondents. in each appeal. Appeals dismissed.

A terminal tax on goods imported by road or rail was imposed by the Amravati Municipality by virtue of a notification dated August 10, 1916. This notification exempted silver, bullion and coins from the operation of this tax. When terminal taxes on goods imported by rail were assigned exclusively to the Federal Centre under the Government of India Act, 1935, the municipality was authorised by section 143 to continue to levy the terminal taxes which were actually levied before the enforcement of the Act. Likewise, the terminal taxes imposed by the pre Constitution notification were allowed to be levied and collected even after the Constitution came into force by virtue of article 277 of the Constitution. In 1960, the Municipality levied terminal taxes on three new items, viz., silver and silver jewellery, gold and gold jewellery and precious stones. In a writ petition filed under article 226 of the Constitution, the validity of the newly imposed terminal tax was challenged by the respondent who was carrying on business, within the limits of the Municipality, in gold, silver and precious stones on the ground of legislative incompetence. The writ petition was granted by the High Court and the appellant came to this court after obtaining a certificate of fitness from the High Court. Dismissing the appeal: Held: The newly imposed terminal taxes on silver and silver jewellery, gold and gold jewellery and precious stones had never been imposed by the Municipality and hence it could not be said that those were "being lawfully levied" by the Municipality and "applied to the same purposes" before the commencement of the Constitution as required by article 277 of the Constitution. article 277 was not intended to confer an unlimited legislative power to impose what in effect were new taxes, though of the same type or nature as existed before the Constitution. Rama Krishna Ramanath vs The Janpad Sabha, Gondia, [1962] Supp. 3 S.C.R. 70 and Chuttilal vs Bagmal and Balwantrai, I.L.R. [1956] M.B. 339. referred to.

Appeal No. 572 of 1966. Appeal by special leave from the Award dated September 2, 1964 of the Industrial Tribunal, Madras in industrial Dispute No. 19 of 1964. B. R. Dolai, E. C. Agarwala, Champat Rai, Kartar Singh Suri, Ambrish Kumar and P.C. Agrawala, for the appellant. H. R. Gokhale, M.R. Narayanaswamy Iyer and R. Ganapathy Iyer, for the respondent. The Judgment of the Court was delivered by Hidayatullah, J. The Industrial Tribunal, Madras by its award, September 2, 1964, has held that the management of the Gymkhana Club, Madras is not liable to pay bonus to its workmen for the year 1962 as the Club is not 'an industry '. The Madras Gymkhana Club Employees Union now appeals to this Court by special leave. The Madras Gymkhana Club is admittedly a members ' club and not a proprietary club, On December 31, 1962 its membership was about 1200 with 800 active members. The object of the club is to provide a venue for sports and games and facilities for recreation and entertainment. For the former, it maintains a golf course, tennis courts, rugby and football grounds and has made arrangement for billiards, pingpong and other indoor games. As part of the latter activities it arranges dance, dinner and other parties and runs a catering department, which provides and refreshments not 745 only generally but also for dinners and parties on special occasions. The club employs six officers (a Secretary, a Superintendent and four Accountants and Cashiers), twenty clerks and a large number of peons, stewards, butlers, gate attendants, etc. Its catering department has a separate managerial, clerical and other staff. Altogether there are 194 employees. The affairs of the club are managed by a Committee,elected annually. Two of the members of the Committee work as Hony. Secretary and Hony. Treasurer res pectively. The membership of the club is varied. There are resident members, non resident members, temporary members, garrison members, independent lady members, etc. The resident members pay an entrance fee of Rs. 300 and Rs. 20 per month as subscription. Garrison members and independent lady members do not pay any entrance fee and their subscription is Rs. 10 per month. Guests, both local and from outside, are admitted 'subject to certain restrictions as to the number of days on which they can, be invited to the club. The club runs tournaments for the benefit of members and for exhibition to non members. The income and expenditure of the club are of the order of four and a quarter lakh rupees, its movable and immovable properties are worth several lakh rupees and its wage bill is between one and two lakh rupees. The question in this appeal is whether the respondent club can be said to be an industry for the application of the . The Tribunal, after considering many decisions rendered by this Court and also by the High Courts in India, came to the conclusion that the club was not an industry and the claim for bonus on behalf of its employees was therefore unsustainable. The appellant union contends that the decision of the Tribunal is not correct and that the club must be treated as an industry for the application of the Act. As we are concerned primarily with the question whether the club comes within the definition of 'industry ' as given in the , we may begin by reading that definition and other provisions which have a bearing upon the question. The was passed to make provision for the investigation and settlement of industrial disputes and for certain other purposes appearing in the Act. The emphasis in the Act is primarily upon the investigation and settlement of industrial disputes. The expression "industrial despute" is defined by section 2(k) as follows: "industrial dispute" means any dispute or difference between employers and employers or, between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person". 746 A "Industry" is defined in cl. (j) as follows: "industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen". The word "employer" is defined by cl. (g) of the section as: "employer means (i) in relation to an industry carried on by or under the authority of any department of the Central Government or a State Government, the authority prescribed in this behalf, or where no authority is prescribed, the head of the department , (ii) in relation to any industry carried on by or on behalf of a local authority, the chief executive officer 'of that authority;" "Workman" is defined by cl. (s) of the section and " means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual supervisory, technical or clerical, work for hire Cr reward. whether the terms of employment be expressed or implied, and for the purpose of any proceeding under this Act in relation to an industrial dispute, includes any person who has been dismissed, discharged Or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person (i) who is subject to the , or the , or the Navy (Discipline) Act, 1934: or (ii) who is employed in the police service or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who, being employed in a supervisor capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature. " These definitions have been before this Court on many occa sions and we have reached a point when one can say that at least some attributes of "industry" and "industrial disputes" may be taken as well established. These cases concerned such diverse institutions and establishments as municipalities, hospitals, solicitor 's 747 firm and university. Any enquiry to determine the application of the definitions to new establishments cannot overlook the settled view. We find it convenient to say a few words about the earlier decisions of this Court, before embarking upon an analysis of the definitions in relation to a members ' club. The earliest case in this Court involved a dispute between a Municipality and its employees (D.N. Banerjee vs P.R. Mukherjee & Ors.)(1). The Municipality wag held to be an industry and the dispute was held to be an industrial dispute. This Court observes that the non technical or ordinary meaning of 'industry ' is "an undertaking where capital and labour co operate with each other for the purpose of producing wealth in the shape of goods, machines, tools, etc." and for making profits, and an industry in this sense includes agriculture, horticulture etc. The Court points out that this is too wide and that every aspect of employer employee connection does not result in an industry. Holding, however, that municipal activity cannot be truly regarded as business or trade, this Court considers whether it can be an 'undertaking '. The suggestion that the word 'undertaking ' takes its colour from the other four words in the first part of the definition is not accepted. It is said that this interpretation renders the word superfluous and the latter part of the definition unnecessary. Therefore, this Court includes non profit undertakings in the concept of industry even if there is no private enterprise. Referring to the inclusion of public utility services in the scheme of the Act it is held that a dispute in a public utility service is an industrial dispute, and the fact that the enterprise is financed by taxation and not by capital is considered irrelevant. In formulating these dicta the Court is obviously influenced by the analysis of an industrial dispute by Isaacs and Rich. in Federated Municipal & Shire Council Employees of Australia vs Melbourne Corporation(2). "Industrial disputes occur when, in relation to operations in which capital and labour ate contributed in co operation for the satisfaction of human wants and desires, those engaged in cooperation dispute as to the basis to be observed, by the parties engaged, respecting either a share of the produce or any other terms and conditions of their cooperation. The question of profit making may be important from an income tax point of view, as in many municipal cases in England; but. from an industrial dispute point of view, it cannot matter whether the expenditure is met by fares from passengers or from rates. " In the second case (Baroda Borough Municipality vs Work men(3) a claim for bonus by municipal employees was rejected on (1) ; (2) ; (3) 748 the ground that the bonus formula was inapplicable. The Court, however, went on to observe: "It is now finally settled by the decision of this Court in ; , that a municipal undertaking of the nature we have under consideration is an "industry" within the meaning of the word in section 2(j) of the and that the expression "industrial dispute" in that Act includes disputes between the municipality and their employees in branches of work that can be regarded as analogous 'to the carrying on of a trade or business." (emphasis added). These two cases lay down that for an activity to be an in dustry it is not necessary that it must be carried on by private enterprise or must be commercial or result in profit. It is sufficient if the activity is analogous to the carrying on of a trade or business and involves cooperation between employers and employees. This result is reached by extending the meaning of 'undertaking ' to cover adventures, not strictly trade or business but objects very similar. The definition of 'employer ' in our Act clearly shows that a local authority may become an employer if it carries on an industry. This means that a municipality, 'if it indulges in an activity which may be properly described as industry, may be involved in an industrial dispute. Local bodies are primarily subordinate branches of governmental activity. They function for public purposes but some of their activities may come within the calling of employers although the municipalities may not be trading corporations. Local authorities take away part of the affairs of Government in local areas and they exercise the powers of regulation and subordinate taxation. They are ' political sub divisions and agencies for the exercise of governmental functions. But if they indulge in municipal trading or business or have to assume the calling of employers they are employers whether they carry on or not business commercially for purposes of gain or profit. The activity of the municipality in the first two cases was not attempted to be brought within the expressions business and trade. The term 'undertaking ' was held to cover it. In the third case (Corporation of City of Nagpur vs Employees (1) the need to consider 'trade and, business ' arose directly. The question then was whether and to what extent the Corporation of Nagpur was an industry under the C.P. & Berar Industrial Disputes Settlement Act, 1947 That Act included a definition of industry which was different. It included "(a) any business, trade manufacturing or mining undertaking or calling of employers (1) ; 749 (b) any calling, service, employment, handicraft or indus trial occupation or avocation of employees and (c) any branch of an industry or a group of industries." In this definition the qualifying words 'manufacturing or mining ' limited the word 'undertaking ' and it could not be given the wide meaning given earlier. This Court did not attempt to bring municipal activity within the word 'undertaking ' but brought it within the expression 'trade and business '. The Court observed that there was nothing in the earlier cases to show that a municipal activity was held excluded, from those words. As a matter of fact it did (see p. 308). Of course, there was nothing to show that this Court on the earlier two occasions thought it even remotely possible. In the Nagpur Corporation 's(1) case the Court proceeded to consider whether a corporation could be legitimately said to be carrying on business or trade or calling. It found the definition to be "very clear" and "not susceptible of any ambiguity", and observed that all the words were very wide and that even if the meaning could be cut down by the aims and objects of the C.P. & Berar Act as disclosed in the preamble, the main object, namely, social justice demanded a wide meaning. The Court distinguished between (a) regal and (b) municipal functions of the corporation and found the latter analogous to business or trade because they were not regal and the activity was organised and service was rendered. To distinguish between a regal function and a, municipal function the test applied was: Can the service be performed by an individual or firm for remuneration? This test was not applied in one later case but is not enlightening because there is hardly any activity which private enterprise cannot carry on. As Mr. Gomme in his Principles of Local Government (1897) observes: "Any municipal service can be made to pay dividends on private capital if only the means of levying a revenue are granted to private owners. " Even war can be financed and waged by commercial houses. They manufacture ammunition and war equipment and can carry on war with mercenaries. Even the infra structures of Adam Smith can be provided by private enterprise. The East India Company did both. It is not a little surprising that except in one case in which there is a passing reference to it, the Corporation of City of Nagpur case(1) has not been referred to in the later cases of this Court. The later cases of this Court view the matter a little differently and formulate further tests. Of the tests, the first is that the activity must be organised as business or trade is ordinarily organised. This is to be taken with the earlier test that 'undertaking ' must be analogous to business, trade or calling. It will be seen that these do not widen the meaning of 'undertaking ' but tend to narrow it. The second is that the activity need not necessarily be preceded by procurement of capital in the business sense nor must (1) ; 750 profit be a motive. So long as relationship of employer and workmen is established with a view to production of material goods or material services, the activity must be regarded as an undertaking analogous to trade or business. We shall now review the cases in which these tests are established '. In the State of Bombay vs Hospital Mazdoor Sabha(1) it is held that a hospital run by government is included in the definition of 'industry '. It is recognised that the first part of the definition contains the statutory meaning and the second part means "an enlargement of it by including other items of industry". As a matter of fact these are not other items of industry but aspects of occupation of employees which are intended to be an integral part of an industry for purposes of industrial disputes. It is, however, recognised in the case that a line must be drawn to exclude some callings, services and undertakings. It is hold that domestic, personal or casual services are not included and examples are given of such services. The meaning of industry a,,, ` an economic activity ' involving investment of capital and systematically carried on for profit for the production or sale of goods by the employment of labour is again discarded because profit motive and investment of capital are considered unessential. Another test reaffirmed is to enquire 'can such activity be carried on by private individual or group of individuals? Answering that a hospital can be run by a private party for profit, it is held that a hospital is an industry even if it is run by Government without profit. Who conducts the activity or whether it is for profit, are considered irrelevant questions. It is, however, again emphasised that an under taking to be an industry must be analogous to trade or business. It is, therefore, laid down that an activity systematically or habitually undertaken for the production or distribution of goods or for rendering material services to the community at large or a part of such community with the help of employees is an undertaking. In this way, the connection between trade and business on the one hand and undertaking on the other is established which seems to indicate that the expression 'undertaking ' must take its colour from the other expressions. An industry is thus said to involve cooperation between employer and employees for the object of satisfying material human needs but not for oneself nor for pleasure nor necessarily for profit. These dicta are based on the observations of Isaacs, J. quoted earlier and in a later case (The Federated State School Teachers ' Association of Australia vs The State of Victoria and Others(2). In the next case Ahmedabad Textile Industry Research As sociation vs State of Bombay(3) the question was whether an Association for research maintained by the textile industry and employing technical and other staff was industry. The case repeated the tests stated in the Hospital(1) case and applied them. It was held (1) ; (2) ; (3) ; 751 that the Association was providing material services to a part of the community, was carried on with the help of employees, was organised in a manner in which trade or business is organised and there was co operation between employers and employees. For the first time a fresh test was added that as the employees had no rights in the results of their labour or in the nature of business and trade the partnership is only association between the employer and employee. However, in the next case of National Union of Commercial Employees vs M. R. Meher(1) where the employees of a firm of solicitors demanded bonus and the case satisfied the tests so far enumerated, a new test was added that the association of capital and labour must be direct and essential. The service of a solicitor was regarded as individual depending upon his personal qualifications and ability, to which the employees did not contribute directly or essentially. Their contribution, it was held, bad no direct or essential nexus with the advice or services. In this way learned profes sions were excluded. In the next two cases the difficulty of laying down tests from case to case was felt. In Harinagar Cane Farm vs The Stale of Bihar(2) a cane farm was purchased by a sugar factory and worked As a department for supply of sugar cane. The agricultural operations were held to be an industry on the facts but it was held that agriculture under all circumstances could not be called an industry. This Court reversed its method of looking for the tests from other cases and referred to them only after it had reached its conclusion observing that the Court must refrain from laying down unduly broad or categorical propositions. In the next case (University of Delhi and Anr. vs Ramnath(3) the question was whether bus drivers employed by the University were workmen. The concept of service was narrowed and it was held that the educational institutions were not an industry. Their aim was education and the teachers ' profession was not to be assimilated to industrial workers. This Court again stated that it must not be understood as laying down a general proposition. The changes made in the meaning of the expressions used in the definition of industry in the Act, disclose a procrustean approach to the problem. The words must mean something definite, but some of the tests were found unsatisfactory to cover new cases as the creation of new tests clearly shows. For example, the emphasis resulting from the extension of the definition in its latter part to include services of employees, received little recognition in the later cases. Too much insistence upon partnership between employers and employees is evident in the Solicitor 's(1) case and (1) [1962] Supp. 3 S.C.R. 157. (2) ; (3) ; 752 too little in the Association(1) case. And yet it is impossible to think that this test is universal. What partnership can exist between the Company and/or Board of Directors on the one hand and the menial staff employed to sweep floors on the other? What direct and essential nexus is there between such employees and production? This proves that what must be established is the existence of an industry viewed from the angle of what the employer is doing and if the definition from the angle of the employer 's occupation is satisfied, all who render service and fall within the definition of workman come within the fold of industry irrespective of what they do. There is then no need to establish a partnership as such in the production of material goods or material services. Each person doing his appointed task in an Organisation will be a part of the industry whether he, attends to a loom or merely polishes door handles. The fact of employment as envisaged in the second part is enough provided there is an industry and the employee is a workman. The learned professions are not industry not because there is absence of such partnership but because viewed from the angle of the employer 's occupation, they do. not satisfy the test. A solicitor earns his livelihood by his own efforts. If his work requires him to take help from menials and other employees who carry out certain assigned duties, the character of the solicitor 's work is not altered. What matters is not the nexus between the employee and the product of the employer 's efforts but the nature of the employer 's occupation. If his work cannot be described as an industry his workmen are not industrial workmen and the disputes arising between them are not industrial disputes. The cardinal test is thus to find out whether there is an industry according to the denotation of the word in the first part. The second part will then show what will be included from the angle of employees. We shall now apply this approach to the definition in the light of the earlier decisions of this Court in so, far as they are consistent and then determine whether the club in this case can come within the meaning of 'industry ' as determined by us. The definitions have been set out by us earlier in this judgment. The definitions are inter related and are obviously knit together. Stated broadly the definition of 'industrial dispute ' contains two limitations. Firstly, the adjective Industrial ' relates the dispute to an industry as defined in the Act and, secondly, the definition expressly states that not disputes and differences of an sorts but only those which bear upon the relationship of employers and workmen and the terms of employment and conditions of labour are contemplated. As such dispute may arise between different parties, the Act equally contemplates disputes between employers and employers or between employers and workmen or between workmen and workmen. The definition of the expression 'industrial dispute ' further shows that certain disputes can never be considered under the Act. For example, disputes between Government (1) ; 753 and an industrial establishment or between workmen and non workmen are not the kind of disputes of which the Act take notice. The word 'employer ' is not specifically defined but merely indicates who is to be considered an employer for purposes of an industry carried on by or under authority of a department of Government and by or on behalf of a local authority. This definition gives little assistance because it is intended to operate in relation to an activity properly describable as an industry and this takes one back to the definition of 'industry '. The definition of 'workman ' is a little better. Although it again refers one back to an industry, it gives some guidance. Workman means any person employed to do skilled or unskilled manual, supervisory, technical or clerical work for hire or reward. The expression, however, does not include persons employed in some named services of Government. Even in an industry those employed mainly: in a managerial or administrative capacity and supervisors drawing more than live hundred rupees as wages or exercising functions mainly of a managerial nature, are also to be left out of the definition. In this way the general nature of the dispute, the parties to the dispute and the contents of the dispute are, therefore, reasonably clear. A dispute must however be an industrial dispute or, as the several definitions already noticed say, must arise in relation to an industry. This is where the difficulty begins because the statutory definition of 'industry ' has led to some divergence of views in the Labour Tribunals, the High Courts and even in this Court. The definition of 'industry ' is in two parts. In its first part it means any business, trade, undertaking, manufacture or calling of employers. This part of the definition: determines an industry by reference to occupation of employers in respect of certain activities. These activities are specified by five words and they determine what an industry is and what the cognate expression 'indus trial ' is intended to convey. This is the denotation of the term or what the word denotes. We shall presently discuss what the words "business, trade, undertaking manufacture or calling". comprehend. The second part views the matter from the angle of employees and is designed to include something more in what the term primarily denotes. By the second part of the definition any calling, service, employment, handicraft or industrial occupation or avocation of workmen is included in the concept of industry. This part gives the extended connotation. If the activity can be described as an industry with reference to the occupation of the employers, the ambit of the industry, under the force of the second part, takes in the different kinds of activity of the employees mentioned in the second part. But the second part standing alone cannot define 'industry '. An industry is not to be found in every case of employment or service. An individual who employs a cook gets service from his employee whose avocation is to serve as a cook but as the activity of the individual is neither business, nor trade, nor an 754 undertaking, nor manufacture, nor calling of an employer, there is no industry. By the inclusive part of the definition tile labour force employed in an industry is made an integral part of the industry for purposes of industrial disputes although industry is ordinarily something which employers create or undertake. The definitions in the are borrowed from other statutes. The definition of 'industrial dispute ' is taken from an Act of 1906 (6 Edw. VII c. 47) and slightly modified. There the definition ran " any dispute between employers and workmen, which is connected with the employment, or non employment, or the terms of the employment or with the conditions of labour, of any person". Our definition only adds to the list of disputes one between employers and employers. Similarly, the latter part of the definition of 'industry ' which has caused us some trouble is taken from section 4 of the Commonwealth Conciliation and Arbitration Act which inclu des in the concept of industry " any calling, service, employment, handicraft or industrial occupation or avocation of employers on land and water. " Decisions rendered on these definitions (and some others very similar) have naurtally influenced opinion making in this Court. The Australian cases in particular have been subrosa all the time. The difficulty in using Australian cases with a text book approach is perhaps not quite noticed. The term 'industrial dispute ' which the Australian High Court was defining was from section 51(XXXV) of the Constitution Act. There was no definition of the expression and it was recognised that the common understanding of that expression was not what was meant but something different. In a great body of cases the problem presented its many facets and the approach was pragmatic. Higgins, J. in, 26 Com. L. R. cautioned against giving a crystallised meaning to the expression. He observed: "It is not necessary or, as I think, desirable that we should, in answering the specific question asked of us, commit ourselves to a final, exhaustive definition of a popular phrase as that in question." (p. 574). In the Harinagar Cane Farm(1) and the University(2) cases this Court also made a similar observation. In the former it was observed: "We have referred to these decisions only to emphasise the point that this Court has consistently refrained from laying down unduly broad or categorical propositions. ". (1) ; (2) 2 S.C.R, 703. 755 The attempt to avoid generalisations (however commendable) has one disadvantage. In Australia the Courts were dealing with, the problem without a definition and thought that they should move cautiously to avoid hardening any particular view too far. We have all the terms except 'employer ' defined by the statute. Our task is to give meanings to the words which are intended to lay down the full connotation. Taking each operation by itself and determining on the basis of facts whether it is an industry without attempting to pin point whether it is a business, or a trade, or an undertaking, or manufacture. or calling of employers, is to ignore somewhat the guidance afforded by the statute through its own dictionary. Therefore, while we accept the views expressed uniformly we think any view which seems contradicted by later decisions because it was unrelated to the words of the definitions should not be allowed to harden. We also take the opportunity of relying a little more on the guidance from the Act. The principles so far settled come to this. Every human activity in which enters the relationship of employers and employees, is not necessarily creative of an industry. Personal services rendered by domestic and other servants, administrative services of public officials, service in aid of occupations of professional men, such as doctors and lawyers, etc. employment of teachers and so on may result in relationships in which there are employers on the one side and employees on the other but they must be excluded because they do not come within the denotation of the term 'in dustry '. Primarily, therefore, industrial disputes occur when the operation undertaken rests upon cooperation between employers and employees with a view to production and distribution of material goods, in other words, wealth, but they may arise also in cases where the cooperation is to produce material services. The normal cases are those in which the production or distribution is of material goods or wealth and they will fall within the expressions trade, business and manufacture. The word 'trade ' in this context bears the meaning which may be taken from Halsbury 's Laws of England, Third Edn. 38 p. 8 (a) exchange of goods for goods or goods for money; (b) any business carried on with a view to profit, whether manual, or mercantile, as distinguished from the liberal arts or learned professions and from agriculture; and business means an enterprise which is an occupation as distinguished from pleasure. Manufacture is a kind of productive industry in which the making of articles or material (often on a large scale) is by physical labour or mechanical power. Calling denotes the following of a profession or trade. These words have a clear signification and are intended to lay down definite tests. Therefore the principal question (and the only 756 legitimate method) is to see where under the several categories mentioned, a particular venture can be brought. Of these categories 'undertaking ' is the most elastic. According to Webster 's dictionary, 'undertaking ' means 'anything undertaken or 'any business, work or project which one engages in or attempts, as an enterprise '. It is this category which has figured in the cases of this Court. It may be stated that this Court began by stating in Banerji 's case(2) that the word 'undertaking ' is not to be interpreted by association with the words that precede or follow it, but after the Solicitor 's(2) and the University(3) cases, it is obvious that liberal arts and learned professions, educational undertakings and professional services dependent on the personal qualifications and ability of the donor of services are not included. Although business may result in service the service is not regarded as material. That is how the service of a Solicitor firm is distinguished from the service of a building corporation. Otherwise what is the difference between the services of a typist in a factory and those of another typist in a Solicitor 's office or the service of a bus driver in a municipality and of a bus driver in a University? The only visible difference is that in the one case the operation is a part of a commercial establishment producing material goods or material services and in the other there is a non commercial undertaking. The distinction of an essential or direct connection does not appear to be so strong as the distinction that in the one case the result is the production of material goods or services and in the other not. It is, therefore, clear that before the work engaged it can be described as an industry, it must bear the definite character of 'trade ' or 'business ' or 'manufacture ' or 'calling ' or must be capable of being described as an undertaking resulting in material goods or material services. Now in the application of the Act, the undertaking may be an enterprise of a private individual or individuals. On the other hand, it may not. It is not necessary that the employer must always be a private individual who carries on the operation with his own capital and with a view to his own profit. The Act in terms contemplates cases of industrial disputes where the Government or a local authority or a public utility service may be the employer. The expansion of Governmental or municipal activity in fields of productive industry is a feature of all developing welfare states. This is considered necessary because it leads to welfare without exploitation of workmen and makes the production of material goods and services cheaper by eliminating profits. Government and local authorities act as individuals do and the policy of the Act is to put Government and local authorities on a par with private individuals. But Government (1) ; (2) [1962] Supp. 3 S.C.R. 157. (3) ; 757 cannot be regarded as an employer within the Act if the operations are governmental or administrative in character. The local authorities also cannot be regarded as industry unless they produce material goods or render material services and do not share by delegation in governmental functions or functions incidental thereto. There is no essential difference between educational institutions run by municipalities and those run by universities. And yet a distinction is sought to be made on the dichotomy or regal and municipal functions. Therefore, the word 'undertaking ' must be defined as "any business or any work or project which one engages in orattempts as an enterprise analogous to business or trade. " This is the test laid down in Banerji 's case(1) and followed in the Baroda Borough Municipality case(2). Its extension in the Corporation case(3) was unfortunate and contradicted the earlier cases. Next where the activity is to be considered as an industry, it must not be casual but must be distinctly systematic. The work for which labour of workmen is required, must be productive and the workmen must be following an employment, calling or industrial avocation. The salient fact in this context is that the workmen are not their own masters but render service at the behest of masters. This follows from the second part of the definition of industry. Then again when private individuals are the employers, the industry is run with capital and with a view to profits. These two circumstances may not exist when Government or a local au thority enter upon business, trade. manufacture or an undertaking analogous to trade. The labour force includes not only manual or technical work men but also those whose services are necessary or considered ancillary to the productive labour of others but does not include any one who, in an industrial sense, will be regarded, by reason of his employment or duties. as ranged on the side of the employers. Such are persons working in a managerial capacity or highly paid supervisors. Further the words are 'industrial dispute ' and not 'trade dispute '. Trade is only one aspect of industrial activity; business and manufacture are two others. The word also is not industry in the abstract which means diligence or assiduity in any task or effort but a branch of productive labour. 'This requires cooperation in some form between employers and workmen and the result is directly the product of this association but not necessarily commercial. The expressions 'terms of employment ' and 'Conditions of labour ' indicate the kind of conflict between those engaged in in dustry on opposite but cooperating sides. These words take in dispute as to the share in which the receipts in a commercial venture (1) ; (2) (3) ; L/P(N)78CI 9(a) 758 shall be divided and generally cover hours of work and rest, recognition of representative bodies of workmen, payment for piece work, wage ordinary and overtime, benefits, holidays, etc. The definition takes in disputes between employees and employees such as demarcation disputes and disputes between employers and employers such as wage warfare in an area where labour is scarce and disputes of a like character. The whole paraphernalia of settlement, conciliation, arbitration (voluntary as well as compulsory) agreements, awards etc. shows that human labour has value beyond what the wages represent and therefore is entitled to corresponding 'rights in an industry and employers must give them their due. Industry is the nexus between employers and employees and it is this nexus which brings two distinct bodies together to produce a result. We do not think that the test that the workmen must not share in the product of their labours adopted in one case can be regarded as universal. There may be occasions when the workmen may receive a share of the produce either as part of their wages or as bonus or as a benefit. This ends discussion of what is an industry. We are now in a position to consider whether the Madras Gymkhana Club fulfills the tests laid down by this Court and accepted here by us. in sup. port of the claim on behalf of the Employees Union, our attention was drawn to two decisions of the Calcutta High Court relating to the Bengal Club Ltd.(1) and Royal Calcutta Golf Club(2). Both decisions are by a learned single Judge. They were cases of incorporated companies running clubs for profit and as business. There are, however, observations which are clearly obiter, that even a non proprietary members ' club is an industry. Founding itself on those observations the Union contends that the club in the present case must also be treated as an industry. In fine the claim is based on the following considerations (a) that the club is organised as an industry is organised on a vast scale with multifarious activities, (b) that facilities of accommodation, catering, sale of alcoholic and non alcoholic beverages, games etc. are provided, (c) that the club runs parties at which guests are freely entertained and (d) that the club has established reciprocal arrangements with other clubs for its members. In our opinion none of these considerations is sufficient to establish that the club is an industry within the We, cannot go by the size of the club or the largeness of its membership or the number or extent of there activities. We have to consider the essential character of the Club activity in relation to the definition of industry. As we said before, the definition is in two parts. The first part which we called the denotation or the meaning of the word shows what an industry really is and the (1) A.I.R. 1956. (2) A.I.R. Cal. 759 second, part contains the extended connotation to indicate who will be considered an integral part of the industry on the side of employees. Beginning with the second part, it may at once be conceded that the activity of the club is conducted with the aid of employees who follow callings or avocations. Therefore if the activity of the employers is within the realm of industry, the answer must be in favour of the Union. But the first part of the definition it may also be said that the club does not follow a trade or business. Its activity cannot be described as manufacture and the running of clubs is not the calling of the members or its managing committee. The only question is, is it an undertaking? Here the appearances are somewhat against the club. It is not of any consequence that there is no profit motive because that is considered immaterial. It is also true that the affairs of the club are, organised in the way business is organised. and that there is production of material and other services and in a limited way production of material goods mainly in the catering department. But these circumstances are not truly representative in the case of the club because the services are to the members themselves for their own pleasure and amusement and the material goods are for their consumption. In other words, the club exists for its members. No doubt occasionally strangers also take benefit from its services but they can only do so on invitation of members. No one outside the list of members has the advantage of these services as of right. Nor can these privileges be bought. In fact they are available only to members or through members. If today the club were to stop entry of outsiders, no essential change in its character vis a vis the members would take place. In other words, the circumstance that guests are admitted is irrelevant to determine if the club is an industry. Even with the admission of guests being open the club remains the same. that is to say, a member 's self serving institution. No doubt the material needs or wants of a section of the community is catered for but that is not enough. This must be done as part of trade or business or as an undertaking anlogous to trade or business. This element is completely missing in a members ' club. It is contended that, although there is no incorporation as such, the club has attained an existence distinct from its members. It may be said that members come and members go but the club goes on for ever. That is true in a sense. We are not concerned with members who go out. The club belongs to members for the time being on its list of members and that is what matters. Those members can deal with the club as they like. Therefore, the club is identified with its members at a given point of time. Thus it cannot be said that the club has an existence apart from the members. 760 It is said that the case of the club is indistinguishable from the Hospital(1) case. That case is one which may be said to be on the verge. There are reasons to think that it took the extreme view of an industry. We need not pause to consider the Hospital(1) case because the case of a members ' club is beyond even the confines established by that case. In our judgment the Madras Gymkhana Club being a members ' club is not an industry and the Tribunal was right in so declaring. The appeal fails and is dismissed but we make no order about costs. G. C. Appeal dismissed.

The respondent is a non proprietary members ' club. It is organised on a vast scale with multifarious activities providing a venue for sports and games, and facilities for recreation, entertainment and for catering of food and refreshment. Guests are admitted but on the invitation of members. It has 194 employees with a wage bill between one lakh and two lakh rupees. For the year 1962, the employees claimed bonus but the Industrial Tribunal held that the club was not an 'industry ' within the meaning of the , and rejected the claim of the employees% In appeal to this Court. Held: (1) The definitions of industrial dispute 'employer ' and 'workman ' show that an industrial dispute can only arise in relation to an 'industry '. The definition of 'industry ' is in two parts, the first, from the point of view of employers and the second, from the angle of employees. In its first part it means any 'trade, business, undertaking, manufacture or calling of employers '. This part determines an industry by reference to occupation of employers in respect of those activities specified by the five words and they determine what an 'industry ' is, and what the cognate expression 'industrial ' is intended to convey. But the second part standing alone cannot define 'industry '. If the existence of an industry viewed from the angle of what the employer is doing is established, all who render service and fall within the definition of 'workman ' come within the fold of industry ' irrespective of what they do. Thus, the cardinal test is to find out whether there is an industry according to the denotation of the word in the first part. [753 A 754 H]. Taking the words in the definition of 'industry ' the word 'trade ' means exchange of goods for goods or goods for money, or, any business carried on with a view to profit, whether manual or mercantile as distinguished from the liberal arts or learned professions and from agriculture. The word 'business ' means an enterprise which is an occupation as distinguished from pleasure. and 'manufacture ' is a kind of productive industry in which the making of articles or material, often on a large scale, is by physical labour or mechanical power. The word 'calling ' denotes the following of a profession or trade. [756 F H]. The word 'undertaking ' has figured in the cases of this Court. In D. N. Banerjee vs P. R. Mukherjee, [1953] S.C.R. 302 it was observed that the word is not to be interpreted by association with the words that precede or follow it in the definition of 'industry '. But the settled view of this Court is: that primarily industrial disputes occur, when the operation undertaken rests upon cooperation between employers and employees with a view to production and dis tribution of material goods, in other words, wealth, but they may 743 arise also in cages where the cooperation is to produce material services. For an 'undertaking ' to be an industry, it is not necessary that it must be carried on with capital by private enterprise or that it must be commercial or result in profit but there must be systematic activity and it must be analogous to the carrying on of a trade or business involving co operation between employers and em ployees. But every human activity in which the relationship of employers and employees enters, is not necessarily creative of an industry. Personal services rendered by domestic and other servants, administrative services of public officials . services in aid of occupations of professional men such as doctors and lawyers etc. , employ ment of teachers and so on, may result in relationships in which there are employers on the one side and employees on the other, but they have been excluded because they do not come within the connotation of the term 'industry ' as the service rendered is not a material service. Therefore, the word 'undertaking ', though elastic, must take its colour from other expressions used in the definition of 'industry ', and must be defined as any business or any work or project resulting in material goods or material services and which one engages in or attempts as an enterprise analogous to business or trade. L740 D; 756 D F; 758 D E; 757 B C; 758 B C]. In the present case, the activity of the club is conducted with the aid of employees who follow callings or avocations. But taking the first part of the definition and the essential character of the club, the activity of the club cannot be described as a 'trade ' business or manufacture ' and the running of clubs is not the 'calling ' of the respon dent club or its managing committee. Also, the club has no existence apart from its members. It exists for its members though occasionally strangers also take benefit from its services. Even with the admission of guests, the club remains a members ' self serving institution. Though the material needs or wants of a section of the community is catered for it is not done as part of trade or business or as an undertaking analogous to trade or business. Therefore, the Tribunal was right in holding that the respondent club was not an industry. [760 A H]. Baroda Borough Municipality vs Workmen , referred to Observations contra in Bengal Club Ltd. vs Shantiranjan Som maddar & Anr. A.I.R. 1956 Cal. 545 and Royal Calcutta Golf Mazdoor Union vs State of West Bengal, A.I.R. 1956 Cal. 550, disapproved. (2) The case of State of Bombay vs Hospital Mazdoor Sabha, ; so far as it relied on the test, namely; could the activity be carried on by a private individual or group of individuals for the purpose of holding that running a Government hospital was an industry must be held. to have taken an extreme view of what is an industry. This test is not enlightening because, there is hardly any activity which private enterprise cannot carry on. [751 D E; 761 A; 750 E F]. (3) In Corporation of City of Nagpur vs Employees. ; this Court relied upon the same test with an unfortunate result. The Court held that the municipal functions of the Corporation, including running a primary school, were covered by the words 'trade and business ' in C.P. & Berar Industrial Disputer. Settlement Act, 1947, since those functions were not regal, the activity was organised, service was rendered, and the functions could not be performed by an individual or firm for remuneration, while, in University of Delhi vs Ramnath [1964] 2 S.C.R. 703, this Court held that educational institutions were not 'industry '. [750 B G; 758 A B]. 744 (4) The fresh test laid down in Ahmedabad Textile Industry Research Association vs State of Bombay, ; that, to be an 'industry ', the employees therein must not share in the product of their labour cannot be regarded as universal, because, there are occasions when the workmen receive a share of the produce as part of their wages or as bonus or as a benefit. [759 C]. (5) The additional test laid down in National Union of Commercial Employees vs Meher (The Solicitor case) [1962] Supp. 3 S.C.R. 157, that, to be an 'industry ' the association of capital and labour must be direct and essential cannot also be regarded as universal because, what partnership can exist between the Board of Directors of a Company on the one hand and the menial staff employed to sweep floors on the other? [753 A]. (6) In Harinagar Cane Farm vs State of Bihar, ; and in the University case this Court observed that it must refrain from laying down unduly broad or categorical propositions. But the attempt to avoid generalizations his one disadvantage, because, taking each operation by itself and determining on the basis of facts whether it is an industry without attempting to pin point whether it is a 'business, or a trade, or an undertaking or manufacture, or calling of employers ' is to ignore the guidance afforded by the sta tute through its dictionary and to rely upon decisions dealing with the problem without a definition. [755 H; 756 A C].

Civil Appeal No. 93 of 1951. Appeal from the Judgment and Decree of the Bombay High Court (Chagla C.J. and Bhagwati J.) dated 6th Septem ber, 1949, in Appeal No. 16 of 1949, arising out of the Judgment dated ' 2nd February, 1949, of a Single Judge of the same High Court (Tendolkar J .) in Miscellaneous Application No. 223 of 1948. The facts of the case and arguments of counsel are stated fully in the judgment. C.K. Daphtary, Solicitor General for Indict (G. N. Joshi, with him)for the appellant. N.C. Chatterjee (R. M. Hajarnavis, with him) for the respondent. November 23. The Judgment of the Court was delivered by BOSE J. The question here is whether an order should issue under section 45 of the Specific Relief Act against the appellant, who is the Commissioner of Police, Bombay. The respondent, Gordhandas Bhanji, wanted to build a cinema house on a plot of land at Andheri in the year 1945. At that date Andheri did not form a part of Bombay and under the. rules then in force it was necessary to obtain permis sion from the District Magistrate of that area in the form of a No Objection Certificate. Accordingly, the respondent made the necessary application on the 12th of September, 1945. Permission.was refused on the 30th of September, 1945, on the ground that the public of the locality objected and also because there was already one cinema theatre at Andheri and so it was not necessary to have another "for the present. " On the 1st of October, 1945, Andheri became a part of Greater Bombay and the jurisdiction to grant or refuse a license was transferred to the Commissioner of Police, Bombay. The respondent accordingly put in a second applica tion on the 21st of November, 1945, and 138 addressed it to the Commissioner of Police. After some correspondence this was also turned down on the 19th of March, 1946, "owing to public opposition. " Nothing daunted, the respondent applied again on the 1st of April, 1946, and asked for a "reopening" of his case. One of the grounds given was that "The Government of Bombay are giving very careful atten tion and affording all reasonable facilities to develop the Greater Bombay into a model one. A modern cinema, there fore, of the type I propose to build is indispensable. " In view of that, not unnaturally, the Commissioner of Police appears to have consulted the Government of Bombay, for he wrote to the respondent on the 25th of April, 1946, saying that "the whole question of considering and approving sites for cinemas is under the consideration of the Government of Bombay," and he promised that "when a decision is arrived at, your application will be examined. " It seems that somewhere about this time a Cinema Adviso ry Committee was constituted by Government. We have not been enlightened about the scope and extent of its powers but it is evident from its nomenclature that its functions were purely advisory. Five members of this Committee appear to have inspected the site on the 12th of May, 1947, and after prolonged discussion they reached the conclusion that "in view of the location of four schools near by the site, this site is unsuitable for the purpose required and therefore it should be rejected. " A note was drawn up to that effect and the matter was ordered to be placed on the agenda of the next meeting of the Committee "for final decision." This final decision has not been placed on record but the Commissioner of Police tells us in his affidavit that within a month the Committee advised that the application should be granted. Accordingly, the Commissioner accorded the necessary permission by his 139 letter dated the 14/16th of July, 1947. There is no refer ence here to the recommendations of the Advisory co Commit tee and. though they may have weighed, and rightly, with the Commissioner there is nothing on the face of the letter to indicate that the decision was not that of the Commis sioner himself given in bona fide exercise of the discretion vested in him. We refer to this because the Commissioner has stated in his affidavit that I was fully satisfied that the petitioner 's application should be refused, but that it was only at the instance of the Cinema Advisory Committee that I granted the said per mission on the 14th of July, 1947. " That, however, would not affect the validity of his order. There is no suggestion that his will was overborne or that there was dishonesty or fraud in what he did. In the absence of that, he was entitled to take into consideration the advice thus tendered to him by a public body set up for this express purpose, and he was entitled in the bona fide exercise of his discretion to accept that advice and act upon it even though he would have acted differently if this important factor had not been present to his mind when he reached a decision. The sanction accorded on the 16th of July, 1947, was therefore a good and valid sanction. This sanction occasioned representations to Government presumably by the "public" who were opposing the scheme. Anyway, the Commissioner wrote to the respondent on the 19/20th September, 1947, and direct him "not to proceed with the construction of the cinema pending Government orders." Shortly after, on the 27/30th September, 1947, the Commissioner sent the respondent the following communica tion: "I am directed by Government to inform you that the permission to erect a cinema at the above site granted to you under this office letter. dated the 16th July, 1947, is hereby cancelled. " 140 It will be necessary at this stage to determine whether this was a cancellation by the Commissioner of on his own authority acting in the exercise of some power which was either vested in him or of which he bona fide believed himself to be possessed, or whether he merely acted as a post office in forwarding orders issued by some other au thority. We have no hesitation in reaching the conclusion that this is not an order of cancellation by the Commission er but merely intimation by him of an order passed and made by another authority, namely the Government of Bombay. An attempt was made by referring to the Commissioner 's affidavit to show that this was really an order of cancella tion made by him and that the order was his.order and not that of Government. We are clear that public orders, public ly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to hum they are addressed and must be construed objectively with reference to the language used in the order itself. Turning now to the language used, we are clear that by no stretch of imagination can this be construed to be an order which in effect says : "I, so and so, by virtue of the authority vested in me, do hereby order and direct this and that. " If the Commissioner of Police had the power to cancel the license already grant ed and was the proper authority to make the order, it was incumbent on him to say so in express and direct terms. Public authorities cannot play fast and loose with the powers vested in them, and persons to whose detriment orders are made are entitled to know with exactness and precision what they are expected to do or forbear from doing and exactly what authority is making the order. 141 But if there is ambiguity or doubt in the language used here a glance at the surrounding circumstances will dispel it. What was the position at the time ? Permission was first refused and then granted, then suspended and the respondent was told to await, not the Commissioner 's orders, but those of Government. Then comes the letter in question which conveys those orders. So also there is the conduct of the Commissioner not long after. The respondent 's solicitors placed the same construction on the order of the 30th Sep tember as we do and asked the Commissioner how Government could interfere with a permission granted by him. They said on the 18th November 1947 : "Our client has been advised that the authority to grant permission is in you acting in consultation with the Adviso ry Board. It is difficult to understand how the Government can interfere with the permission granted by you." The Commissioner 's reply dated 3/4th December, 1947, was: "I write to inform you that permission granted to your client was cancelled under the orders of the Government who may be approached. " We are clear that this roundabout language would not have been used if the order of cancellation had been that of the Commissioner. We do not mean to suggest that it would have been improper for him to take into consideration the views and wishes of Government provided he did not surrender his own judgment and provided he made the order, but we hold on the material before us that the order of cancellation came from Government and that the Commissioner acted only as a transmitting agent. It is next necessary to determine whether the Government of Bombay had the power to cancel a license once issued. That depends on a consideration of the Rules. They are framed under section 22 (1) (f) (i) (g) and (h) of the City of Bombay Police Act, 1902. They regulate the "licensing, controlling, keeping and regulation" of places. of public amusement in 19 142 the City of. Bombay. Rule 8 applies to any person desirous of "erecting"a cinema, building. There is, in our opinion, a distinction of principles between the erection and use of buildings for purely private and residential purposes and those intended to be used as places of public amusement. Considerations arise regarding the latter which would not be applicable to the former, among them the right to withdraw or modify a license once issued. Ordinarily, a man can do what he likes with his property subject of course to specific laws regulating his use of it, there fore in the case of a private residence he would in a general way have a right to build if he complies with all the rules and regulations and restrictions which may be imposed by law, and if permission is withheld when all the conditions are fulfilled he would normally have a right to demand that the necessary permission be given. But that sort of consideration does not apply to a place intend ed to be used for public performances. There, questions affecting the safety, convenience, morality and welfare of the public must be given overriding precedence and it is.usual in these cases, on grounds of public concern, to vest some public authority with a discretion to grant or refuse such licences and to modify or cancel ones already granted. It is necessary to bear this distinction in mind when construing the present rules. 'Therefore, when Rule 8 speaks of "erecting" such premises, it must be borne in mind that the rule is not a mere building rule affecting the erection of a building in the abstract but applies to a building intended to be used for a particular purpose and the license applied for is not merely for permission to build but also to use structure, when erected, for a partic ular purpose affecting the public at large and the residents of the locality in particular. Rule 8 falls under Part II which is headed : "Preliminaries to obtaining license for premises. " These preliminaries include (a) the making of an application in writing to the Commis sioner of Police, and 143 (b)the giving of a certain notice as a preliminary to the application. This notice has to be in the form prescribed in Schedule A and has to be maintained on a certain board "until the application has been dealt with by the Com missioner" and the rule prescribes that " no application shall be considered before the expira tion of one fortnight after the receipt by the Commissioner of a copy of the notice etc. " Schedule A shows 'that the object of the notice is to enable the Commissioner to receive objections to the pro posed erection. The rest of the rules in Part II specify the matters which the application shall contain and the documents which must accompany it including plans and specifications of the proposed building. Part III prescribes various structural details with which the building must conform. They include fire resist ing material for the roof, stage staircases and dressing rooms of a certain type, seating arrangements, Corridors, exits and so forth. This part of the rules would apply to a building already in existence but not yet licensed for public performance as well as to one which has yet to be erected. Part IV relates to the "Use of cinematograph Apparatus and other optical Lan terns. " The rules prescribed there are mainly for purposes of health and safety. Parts V and VI do not concern us. They prescribe spe cial rules for Circuses and for exhibitions of Boxing and Wrestling. Then comes Part VII which is material for present pur poses. It is headed "Licenses". Rule 237 prescribes that "The person being the owner, tenant or occupier of such premises and the person who proposes to give any public performance, entertainment or exhibition on 144 such premises shall each take out a license under these rules" Then follows a sub heading "Licenses for Premises" and under that come Rules 238 to 257. Rule 23S prescribes that : "No such premises shall be opened, or kept open for use as a place of public amusement unless the person being the owner, tenant or occupier thereof shall have obtained from the Commissioner the necessary license. " Rule 248 invests the Commissioner with "absolute discretion in refusing any license etc. if such place appears to him likely to cause obstruction, inconvenience, annoyance, risk, danger or damage to resi dents or passers by in the vicinity of such premises. " Then follows Rule 250 which is crucial here. It says : "The commissioner shall have power in his absolute dis cretion at any time to cancel or suspend any license granted under these Rules. " After Rule 257 comes a second sub heading entitled "Per formance License" and Rules 258 to 28:3 set out the require ments relating to the holding of performances as distinct from the requirements relating to the building or premises in or on which they are to be held. The rest of the rules do not concern us. It is clear to us from a perusal of these rules that the only person vested with authority to grant or refuse a license for the erection of a building to be used for pur poses of public amusement is the Commissioner of Police. It is also clear that under Rule 250 he has been vested with the absolute discretion at any time to cancel or suspend any license which has been granted under the rules. But the power to do so is vested in him and not in the State Govern ment and can only be exercised by him at his discretion. No other person or authority can do it. It was argued that Rule 250 did not apply to licenses to erect buildings but only referred to other matters 145 such as their maintenance and the kind of performances to be given in them. We are unable to agree. The preamble to the rules states that the Rules are for the "licensing, controlling, keeping and regulation" of places of public amusement in the City Bombay. Part II which deals with the erection cinema houses nowhere autho rises the issue of a license but it does indicate that a license is necessary. For instance, the heading states that the rules which follow in Part II are only the "prelimi naries to obtaining license for premises" and Rule 21 sets out that "Before a license is granted. for such premises" certain certificates must be produced. All of which indi cates that a license is necessary. But the only provision the actual issue of the license is in Part VII, and Rules 237 and 238 in that part require the owner, tenant or occu pier of premises intended to be used for a cinema house for public amusement to take out a license as well as for the person who proposes to give a public performance on such premises. In our opinion, Rule 250 does authorise the can cellation of a license already issued but the only person who can effect the cancellation is the Commissioner of Police. It was contended that this would work great hardship in some cases and that if money had already been expended on the building an estoppel at least would arise. No question of estoppel has been raised here, so that is not a question we need consider nor need we answer the converse question whether an estoppel would hold good in the face of a law enacted for the public good on grounds of public policy; also whether there can be an estoppel when a person builds knowing the risk he runs of cancellation at any time under Rule 2S0. The next question is whether an order in the nature of a mandamus can issue under section 45 of the Specific Relief Act. It is necessary to emphasise that the present case does not fall either under article 32 (2) or article 226(1) of the Constitution. We are confined here to section 45 of the Specific Relief Act. 146 The jurisdiction,conferred by. that section is very spe cial in kind and is strictly limited in extent though the am but of the powers exercisable within those limited is wide. Among the limitations imposed are the following: First, the order can only direct some specific act to be done or some specific ,act to be forborne. It is not possible therefore to give a mere declaratory relief as under section 42. Next, because of the proviso, the order can only be made if the doing or the for bearing is clearly recumbent upon the authority concerned under any law for the time being in force. And thirdly, there must be no other specific and adequate legal remedies available to the applicant. Now applying these rules to the present case, the appli cant must show what specific act he wants to. be done or to be forborne. That can only be gathered from the petition. The reliefs specifically sought there are (1) an order directing the Commissioner to withdraw the cancellation and/or (2) directing him to grant permission for the erec tion of a cinema. Taking the second. first, it is evident from the rules that there is no specific law which requires the Commission er to grant a license on the fulfillment by the petitioner of certain conditions. He is vested with a discretion to grant or to refuse a license and all that the law requires is that he should exercise that discretion in good faith. But that he has done. In the exercise of that discretion he granted a license and that license still holds good because, on the view we have taken, there has been no valid order of cancellation. Accordingly, this relief cannot be granted. Turning next to the first relief, that cannot be grant ed in the form in which it is sought because the rules vest the Commissioner with an absolute discretion to cancel at any time a license once granted. There is no specific law which compels him to forbear from canceling a license once granted in fact that would be an impossibility; still less is there any law which compels him to withdraw a cancella tion already effected: that would fetter the absolute dis cretion 147 vested in him by Rule 250. Therefore, this relief cannot be granted in the way it is asked for. But we are of opinion that we are free to grant the respondent a modification of that relief in a different form. It is to be observed that the petitioner did ask that he be granted "such further and other relief as the nature and circumstances of the case may require. " We have held that the Commissioner did not in fact exercise his discretion in this case and did not cancel the license he granted. He merely forwarded to the respondent an order of cancellation which another authority had pur ported to pass. It is evident from these facts that the Commissioner had before him objections which called for the exercise of the discretion regarding cancellation specifi cally vested in him by Rule 250. He was therefore bound to exercise it and bring to bear on the matter his own inde pendent and unfettered judgment and decide for himself whether to cancel the license or reject the objections. That duty he can now be ordered to perform under section 45. It was objected as to this that there is no specific law which compels him to exercise the discretion. Rule 250 merely vests a discretion in him but does not require him to exercise it. That is easily met by the observations of Earl Cairns L.C. in the House of Lords in Julius vs Lord Bishop of Oxford(i), observations which have our full and respect ful concurrence : "There may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so. " The discretion vested in the Commissioner of Police under Rule 250 has been conferred upon him for public rea sons involving the convenience, safety, (1) 5 App. 214 at 222, 223. 148 morality and welfare. of the public at large. An ena bling power of this kind conferred for public reasons and for the public benefit is, in our opinion, coupled with a duty to exercise it when the circumstances so demand. It is a duty which cannot be shirked or shelved nor can it be evaded; performance of it can be compelled under section 45. It was then objected that performance cannot be com pelled for another reason. Section 45, it was said, is limited to duties which must be performed or forborne "under any law for the time being in force," and it was argued that this means statute law. There is authority for this point of view, but we see no reason for limiting the clear words of the section or for reading into it matter which is not there. The provision is a beneficent one to compel the performance of public duties by public officers. It is intended to open up a swift and summary remedy to the subject against, on the one hand, certain kinds of abuse or excesses on the part of public officers or, on the other, of laziness, incompetence, inertia or inaction on their part. We can see no reason why statutory duties should be placed on any different plane from other duties enjoined by any other kind of law, especially as some. statutory duties are slight or trivial when compared to certain other kinds of duties which are not referable to a statutory provision. In our opinion, the words "any law" are wide enough to embrace all kinds of law and we so hold. The only other point we need consider is whether "the applicant has no other specific and adequate legal remedy. " It was contended on behalf of the appellant that the re spondent could have ignored the so called order of cancella tion if he considered it was of no effect; alternatively, he had the specific legal remedy of suing for an injunction which could have accorded him adequate relief. In our opinion. the first is neither a specific nor an adequate legal remedy. Here is an order purporting to 149 emanate from the State Government itself served on the respondent by a responsible public officer. Whether, the order is his order or an order of the State Government it is obviously one which primarily compels obedience as a matter of prudence and precaution. It may in the end prove to be ineffective, as has happened in this case, but it would be wrong to expect a person on whom it is served to ignore it at his peril however much he may be legally entitled to do so. Also, the very fact that this order was served on him, especially when it followed on the Commissioner 's letter of the 19/20th September, 1947, indicated that objections of a serious nature which it was the Commissioner 's duty to consider had been raised. The respondent had a right to expect the Commissioner to make up his mind and reach a decision, otherwise it left him in a state of uncertainty. If he commenced to build, the Commissioner would have a right to take action under Rule 250 and tell him to stop, and at best that would involve the respondent in a long and expensive litigation which he might or might not win. We are clear that he had a right to be told definitely by the proper legal authority exactly what he might or might not do, so that he could adjust his affairs. We are clear that the dangerous course of ignoring an official order at one 's peril is not the kind of adequate and specific legal remedy contemplated by section 45. Next, as regards the relief of injunction. We do not say that would not be a proper and adequate remedy in certain cases. Each case must necessarily depend on its own facts and we have no intention of laying down any hard and fast rule. But we do not think that would be adequate to meet the exigencies of the present case. In the first place, a suit, if lodged, would require notice under section 80 of the Civil Procedure Code as it would be a suit against a public officer in his official capacity, and that would at once import delay; so would the long drawn out procedure of civil litigation with its concomitant appeals. In a commer cial undertaking of the kind we have here, inordinate delay might well spell ruin to the project. Large sums of money have necessarily to be tied up 20 150 so long as the matter remains in abeyance, the prices of land and materials are constantly rising and there is in the vicinity a rival theater which is all the while acquiring reputation and goodwill, two undefinable but important considerations in commercial undertakings. It is therefore desirable that questions of the kind we have here should be decided as soon as may be It may be that any one of those considerations taken separately might not be enough to fulfil this requirement of section 45, but considered cumu latively we are of opinion that the applicant has no other adequate remedy in tiffs case. In any event, there are many cases of a similar nature in which section 45 has been applied without objection despite the fact that an injunc tion could have been sought. We need only cite a decision of the Judicial Committee of the Privy Council (A1cock, Ashdown & Co. vs Chief Revenue Authority, Bombay) (1) where Lord Phillimore says at page 233 : "To argue that if the Legislature says that a public officer, even a revenue officer, shall do a thing, and he without cause or justification refuses to do that thing, yet the Specific Relief Act would not be applicable, and there would be no power in the Court to compel him to give relief to the subject, is to state a proposition to which their Lordships must refuse assent." Their Lordships then issued an order under section 45. Lastly, it was urged that the petition is incompetent because the provisions of section 46 of the Specific Relief Act have not been complied with, namely, the petitioner has not shown that he made a demand for justice and that it was denied. The demand and denial which section 46 requires are matters of substance and not of form. In our opinion, there was a substantial demand here and it is clear that there was a denial. Soon after the order of cancellation was intimat ed to the petitioner he instructed his solicitors to write to the Commissioner and enquire (1) 50 I.A. 227 at 233. 151 why the permission granted had been so arbitrarily can celled. This was on the 18th November, 1947. The reply dated 3/4th December, 1947, was that the cancellation was under the orders of Government and that they should be approached in the matter. Government was approached. The petitioner 's solicitors wrote to the Home Minister on the 9th December, 1947, and said : "Our client has not been informed of any reasons which had moved the Government to direct the cancellation of the permission. Our client was really entitled to be heard in the matter. Our client desires to present his case before you and he shall feel obliged if you give him an interview. " The Secretary to the Home Department replied on the 12th of January, 1948, that the Commissioner was directed to cancel the permission in view of numerous protests which Government received. This was replied to on the 16th of February, 1948, and the petitioner 's solicitors said : "Our client feels that he has not been treated fairly and that justice has been denied to him." The only reply to this was : "I am directed to inform you that Government does not wish to add anything to the reply already given to you." The correspondence read as a whole contains a clear demand for justice and a denial. It is true the actual demand was not made to the Commissioner nor was the denial by him but he clearly washed his hands of the matter by his letter of the 3rd/4th December, 1947, and referred the petitioner to Government under whose orders he said he was acting. The demand made to Government and the denial by them were therefore in substance a demand made to the Commission er and a denial by him. In any event, an evasion or shelving,of a demand for justice is sufficient to operate as a denial within the meaning of section 46. In England the refusal need not be in so many words All that is necessary is to 152 show that the party complained of has distinctly deter mined not to do what. is demanded (See 9 Halsbuy 's Laws of Eng land, Hailsham edition, page 772). And in the United States of America a demand is not required "where it is manifest it would be but an idle ceremony" (See Ferris on Extraordinary Legal Remedies, page 281). The law in India is not differ ent except that there must be a demand and a denial in substance though neither need be made in so many words The requirements of section 46 were therefore fulfilled. The result is that in substance" the appeal fails though it will be necessary to effect a modification of the High Court 's order. The High Court directed the Commissioner of police to "Withdraw the order of cancellation passed by him. " We have held that he did not make the order and that even if he did, a direction of that sort would not lie because of the discretion vested in him by Rule 250. The following will accordingly be substituted for what the High Court has ordered: The Commissioner of Police be directed to consider the requests made to him for cancellation of the license sanc tioned by his letter dated the 14/16th of July, 1947, and, after weighing all the different aspects of the matter, and after bringing to bear his own unlettered judgment on the subject, himself to issue a definite and unambiguous order either canceling or refusing to cancel the said license in the exercise of the absolute discretion vested in him by Rule 250 of the Rules for Licensing and Controlling Theaters and Other Places of Public Amusement in Bombay City, 1914. As the appeal fails except for the slight modification indicated above, the appellant will pay the respondent 's costs. Decree modified.

An application by the respondent for permission to build a cinema on a site within the City of Bombay was rejected by the Commissioner of Police, Bombay. The respondent applied for reconsideration of his application and the Commissioner, acting on the advice of the Cinema Advisory Committee, granted the application on the 16th July, 1947, though he indicated in an affidavit flied later that but for this advice he would have refused the application again. Subse quently, under instructions from Government the Commissioner sent the following communication to the respondent: "I am directed by Government to inform you that the permission to erect a cinema at the above site granted to you under the office letter dated 16th July, 1947, is hereby canceled. " The respondent applied to the High Court of Bombay for an order under section 45 of the Specific Relief Act directing the Commissioner of Police, Bombay, to withdraw the cancellation and to grant permission for the erection of the cinema, and the High Court directed the Commissioner of Police "to withdraw the order of cancellation passed by him." The Commissioner of Police appealed to the Supreme Court. Held, (i) that there was nothing in the letter dated 16th July, 1947, to indicate that the decision was not that of the Commissioner himself given in the bona fide exercise of the discretion vested in him. The sanction was not conse quently invalid merely because the Commissioner decided to accept the advice of the Cinema Advisory Committee even though without that advice he would not have granted the permission. (ii) There was no valid cancellation of the license because (a), the order of cancellation communicated to the respondent 'was one made by the Government of Bombay and not by the Commissioner on his own authority;he acted in the matter only as a transmitting agent; (b), under the rules framed under 136 section 22 (1) (f), (1) (g) and (n) of the City of Bombay Police Act 1902 the Government of Bombay had no power to cancel of license once issued. The only person vested with authority to grant or refuse a license for the erection of a building to be used for purposes of public amusement is the Commissioner of Police. (iii) The relief sought by the respondent of an injunction to direct the Commissioner of Police to grant permission for the erection of a cinema could not be granted because he had already granted permission and there was no valid order of cancellation. (iv) The other relief asking for an injunction directing the commissioner to withdraw the cancellation also could not be granted because Rule 250 vests the Commissioner with an absolute discretion in the matter. (v) Though there was no specific provision of law compel ling the Commissioner to exercise the discretion vested in him under Rule 250, inasmuch as the enabling power vested by Rule 250 was vested in the Commissioner for the welfare of the public at large it was coupled with a duty to exercise it when the circumstances so demanded. The Commissioner could consequently be ordered under section 45 of the Specific Relief Act to exercise his discretion and decide whether the licence should or should not be cancelled. (vi) The words "any law" in section 45 do not mean statutory law alone but embrace all kinds of law whether referable to a statutory provision or otherwise. Therefore the perform ance of duties under the rules can be compelled under the provi sions of section 45. (vii) There was no other specific and adequate legal remedy open to the respondent within the meaning of section 45 for though the respondent could have ignored the so called order of cancellation , he could only have done so. at his peril as it purported to emanate from the State Government and was served by a public officer. The remedy of injunction was not a proper and adequate remedy in the circumstances of the present case. (viii) The petition was not incompetent under section 46 of the Specific Relief Act as there had been a demand of justice and a denial thereof within the meaning of the section in the circumstances of the case. (ix) Public orders, publicly made, in exercise of a statu tory authority cannot be construed in the light of explana tions subsequently given by the officer making the order of what he meant or of what was in his mind, or what he intend ed to do. As such orders are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed ' they must be construed objec tively with reference to the language used in the order itself. 137 Julius vs Lord Bishop of Oxford (5 App. Cas, 214), Alcock, Ashdown & Co vs Chief Revenue Authority (50 I .A. 227) referred to.

Appeal No. 375 of 1959. Appeal from the Judgment and Order dated the 12th August, 1958, of the Assam High Court in First Appeal No. 11 of 1958. L. K. Jha and Sukumar Ghose, for appellants Nos. 1 to 3. G. section Pathak and Naunit Lal, for respondents Nos. 1 and 2. 1960. October 27. The Judgment of the Court was delivered by WANCHOO J. This is an appeal on a certificate granted by the Assam High Court in an election matter. An election was held in the double member constituency of Goalpara to the Assam Legislative Assembly. Nomination papers were filed on the 19th January, 1957, by a number of persons including Anirara Basumatari (hereinafter called the appellant). He was a candidate for the seat reserved for scheduled tribes. The nomination paper of the appellant was rejected by the returning officer on the ground that he was disqualified under section 7(b) of the Representation of the People Act, No. XLIII of 1951, (hereinafter called the Act). The polling took place on February 25,1957, and Khagendranath and H%kim Chandra Rabha were elected, the latter being a member of a scheduled tribe. Thereupon an election petition was filed by an elector challenging the election of the two successful candidates on a number of grounds. of these grounds, however, only two are now material, namely, (1) that the nomination paper of the appellant was wrongly rejected, and (2) that a corrupt practice was committed by the successful candidates inasmuch as voters were carried on mechanically propelled vehicles to the polling booths. The election tribunal held on the, first point that the nomination 135 paper of the appellant had been improperly rejected. On the second point it hold that the corrupt practice alleged had not been proved. In the result, the election was set aside. Thereupon there was an appeal by the two successful candidates to the High Court. The High Court was of the view that the nomination paper of the appellant was properly rejected; further on the question of corrupt practice the High Court agreed with the conclusion of the tribunal. In the result the appeal was allowed and the election petition was ordered to be dismissed. There was then an application to the High Court for a certificate to appeal to this Court which was granted; and that is how the matter has come up before us. The main contention on behalf of the appellant is that the High Court was wrong in coming to the conclusion that the nomination paper of the appellant was properly rejected under section 7(b) of the Act. That provision lays down that a person shall be disqualified for being chosen as a member of either House of Parliament or of the Legislative Assembly or Legislative Council of a State if he is convicted by a court in India of any offence and sentenced to imprisonment for not less than two years, unless a period of five years, or such less period as the Election Commission may allow in any particular case, has elapsed since his release. The appellant in this case was convicted under section 4(b) of the Explosive Substances Act No. VI of 1908, and sentenced to three years rigorous imprisonment on July 10, 1953. The nomination paper in this case was filed in January 1957 and the election was held in February 1957 and therefore five years had not elapsed since his release. But though the appellant was sentenced to three years ' rigorous imprisonment, his sentence was remitted by the Government of Assam on November 8, 1954, under section 401 of the Code of Criminal Procedure and he was released on November 14, 1954. The contention of the appellant before the election tribunal was that in view of this remission his sentence in effect was reduced to a period of less than two years and therefore he could not be said to have incurred disqualification within the meaning of s.7(b). This contention 136 was accepted by the tribunal and that is why it held that the nomination paper of the appellant was improperly rejected. When the case came to be argued in the High Court on behalf of the successful candidates, two arguments were addressed in support of the plea that the nomination paper of the appellant was properly rejected. In the first place, it was urged that in view of the provisions of Articles 72, 73, 161 and 162 of the Constitution read with section 401 of the Code of Criminal Procedure, the State Government had no authority to remit the sentence of the appellant; and secondly even if the remission was properly granted it would not affect the sentence imposed by the Court, though the appellant might not have had to undergo part of the sentence after the date of the remission order. The High Court did not decide the question as to the power of the State Government to grant remission in this case as it had not full materials before it because the matter was not raised before the tribunal, though it was inclined to the view that the State Government might not have such power. But the High Court was of the opinion that a remission of sentence did not have the same effect as a free pardon and did not have the effect of reducing the sentence passed on the appellant from three years to less than two years, even though the appellant might have remained in jail for less than two years because of the order of remission. What section 7(b) lays down is that there should be a conviction by a court in India for any offence and a sentence of imprisonment for not less than two years in order that a person may be disqualified for being chosen as a member of either House of Parliament or of Legislative Assembly or of Legislative Council of a State. In terms, therefore, the provision applies to the case of the appellant for he was convicted by a court in India and sentenced to imprisonment for more than two years. Further the period of five years had not expired after his release. The appellant had applied to the Election Commission for removing the disqualification but it had refused to do so. The main question therefore that falls for consideration is 137 whether the order of remission has the effect of reducing the sentence in the same way in which an order of an appellate or revisional criminal court has the effect of reducing the sentence passed by the trial court to the extent indicated in the order of the appellate or revisional court. Now it is not disputed that in England and India the effect of a pardon or what is sometimes called a free pardon is to clear the person from all infamy and from all consequences of the offence for which it is granted and from all statutory or other disqualifications following upon conviction. It makes him, as it were, a new man: (See Halsbury 's Laws of England, Vol. VII, Third Edition, p. 244, para 529). But the same effect does not follow on a mere remission which stands on a different footing altogether. In the first place, an order of remission does not wipe out the offence; it also does not wipe out the conviction. All that it does is to have an effect on the execution of the sentence; though ordinarily a convicted person would have to serve out the full sentence imposed by a court, he need not do so with respect to that part of the sentence which has been ordered to be remitted. An order of remission thus does not in any way interfere with the order of the court; it affects only the execution of the sentence passed by the court and frees the convicted person from his liability to undergo the full term of imprisonment inflicted by the court, though the order of conviction and sentence passed by the court still stands as it was. The power to grant remission is executive power and cannot have the effect which the order of an appellate or revisional court would have of reducing the sentence passed by the trial court and substituting in its place the reduced sentence adjudged by the appellate or revisional court. This distinction is well brought out in the following passage from Weater 's " Constitutional Law" on the effect of reprieves and pardons vis a vis the judgment passed by the court imposing punishment, at p. 176, para 134: " A reprieve is a temporary suspension of the 18 138 punishment fixed by law. A pardon is the remission of such punishment. Both are the exercise of executive functions and should be distinguished from the exercise of judicial power over sentences. The judicial power and the executive power over sentences are readily distinguishable, ' observed Justice Sutherland, 1 To render a judgment is a judicial function. To carry the judgment into effect is an executive function. To out short a sentence by an act of clemency is an exercise of executive power which abridges the enforcement of the judgment but does not alter it qua judgment '. " Though, therefore, the effect of an order of remission is to wipe out that part of the sentence of imprisonment which has not been served out and thus in practice to reduce the sentence to the period already undergone, in law the order of remission merely means that the rest of the sentence need not be undergone, leaving the order of conviction by the court and the sentence passed by it untouched. In this view of the matter the order of remission passed, in this case though it had the effect that the appellant was re. leased from jail before he had served the full sentence of three years ' imprisonment and had actually served only about sixteen months ' imprisonment, did not in any way affect the order of conviction and sentence passed by the court which remained as it was. Therefore the terms of section 7(b) would be satisfied in the present case and the appellant being a person convicted and sentenced to three years ' rigorous imprisonment would be disqualified, as five years had not passed since his release and as the Election Commission had not removed his disqualification. We may now refer to a number of cases on which reliance has been placed on behalf of the appellant. In Venkatesh Yeshwant Deshpande vs Emperor (1), Bose, J. (as he then was), observed as follows at p. 530: " The effect of an order of remission is to wipe out the remitted portion of the sentence altogether and not merely to suspend its operation; suspension (1) A.I.R. 1938 Nag. 139 is separately provided for. In fact, in the case of a pardon in England statutory and other disqualification following upon conviction are removed and the pardoned man is enabled to maintain an action against any person who afterwards defames him in respect of the offence for which he was convicted. That may not apply in full here but the effect of an order of remission is certainly to entitle the prisoner to his freedom on a certain date. " It is urged that if the effect of an order of remission is to wipe out the remitted portion of the sentence altogether it means that the sentence is reduced to the period already undergone and the order of remission has the same effect as an order of an appellate or revisional court reducing the sentence to the period already undergone. That case, however, dealt with a different point altogether, namely, whether a remission having been granted and having taken effect it could be cancelled thereafter. It was in that context that these observations were made. Even so, the learned judge was careful to point out that there was a difference between a pardon and a remission and the effect of an order of remission is to entitle the prisoner to his freedom on a certain date. That case is no authority for the view that the order of remission amounts to changing the sentence passed by a competent court and substituting therefor the sentence of imprisonment already undergone up to the date of release following the order of remission. Reference was also made to a number of election cases in which the view which has been urged on behalf of the appellant seems to have been taken. We may refer to only one of them, namely, Ganda Singh vs Sampuran Singh (1), which has specifically dealt with this point. In that case an order was passed by the Maharaja of Nabha granting amnesty to all political prisoners detained or convicted under the Punjab Public Safety Act, 1947, as applied to Nabha State, and releasing them unconditionally. The same order also provided for grant of remission to persons convicted for offences other than political offences on (1) 140 a certain scale. The successful candidate in that case was sentenced to more than two years ' rigorous imprisonment under the Punjab Public Safety Act, as applied to Nabha State, and was thus a political prisoner. He was therefore released before he had served two years imprisonment. The main plank of the election petition in that case was that the successful candidate was disqualified under section 7(b) of the Act in view of his conviction and sentence and the election tribunal held that remission by government (executive authority) has the same effect as an order passed by a court of law in appeal or on revision and that under section 7 of the Act the court has to look to the amount of sentence imposed on a person and it made no difference whether the sentence was reduced by a court of law on appeal or by revision or by the powers of the government reserved for it under section 401 of the Code of Criminal Procedure, as, the effect in both cases was the same. We are of opinion that this view is incorrect, though perhaps on the facts of that case the order of the tribunal was right for it seems that political prisoners had been granted a pardon by the Ruler of Nabha and not a mere remission under section 401 of the Code of Criminal Procedure. We cannot agree that remission by government has the same effect as an order passed by a court of law in appeal or on revision. It is true that under section 7(b) of the Act one has to look at the sentence imposed; but it must be a sentence imposed by a court. Now where the sentence imposed by a trial court is varied by way of reduction by the appellate or revisional court, the final sentence is again imposed by a court; but where a sentence imposed by a court is remitted in part under section 401 of the Code of Criminal Procedure that has not the effect in law of reducing the sentence imposed by the court, though in effect the result may be that the convicted person suffers less imprisonment than that imposed by the court. The order of remission affects the execution of the sentence imposed by the court but does not affect the sentence as such, which remains what it was in spite of the order of remission. It is also well to remember that 141 section 7(b) speaks of the conviction and sentence passed by a court of law; it does not speak of the period of imprisonment actually suffered by the convicted person. The other election cases to which our attention was drawn by the learned counsel for the appellant are similar and they are all in our opinion wrongly decided. We are therefore of opinion that the High Court was right in the view that the nomination paper of the appellant was properly rejected. The next contention on behalf of the appellants is that both the High Court and the tribunal were wrong in holding that a corrupt practice within the meaning of section 100(1)(b) read with section 123(5) had not been proved in this case. The case of the appellant was that voters were carried by mechanically propelled vehicles to the polling booths by Birendra Kumar Nath who was in charge of the electioneering campaign on behalf of the Congress Party and Bholaram Sarkar who was president of the Primary Congress Committee of Dhupdhara. The successful candidates were both contesting the election as nominees of the Congress Party and therefore these two persons who carried electors in mechanically propelled vehicles to the polling booths did so as agents of the successful candidates and with their consent. The High Court as well as the election tribunal hold that though Birendra Kumar Nath and Bholaram Sarkar might be deemed to be the agents of the successful candidates for purposes of the election and though the hiring of mechanically propelled vehicles by the agents for conveyance of electors to polling booths had been proved, there was no proof that this was done with the consent, express or implied, of the successful candidates. The High Court pointed out that consent, express or implied, of the candidates was necessary for purposes of section 100(1) (b) and was of the view that on the facts proved in this case such consent could not be inferred and the circumstances did not convincingly lead to an inference that the corrupt practice in question was committed with the knowledge and consent of the successful candidates. In view of this concurrent finding of the High Court and the 142 tribunal on this question, namely, whether there was consent, express or implied, of the successful candidates to the commission of this corrupt practice, it is in our opinion idle for the appellant now to contend that there was consent express or implied, as required by section 100(1)(b). The inference whether there was consent or not from the facts and circumstances proved is still an inference of fact from other facts and circumstances and cannot be a question of law as urged by learned counsel for the appellant. Reference in this connection may be made to Meenakshi Mills, Madurai vs The Commissioner of Income tax, Madras(1), where it was held that a finding of fact, even when it is an inference from other facts found on evidence, is not a question of law and that such an inference can be a question of law only when the point for determination is a mixed question of law and fact. In the present case the only question is whether the corrupt practice was committed with the consent of the candidates, whether express or implied, and the question whether such consent was given in the circumstances of this case is a question of fact and not a mixed question of law and fact and therefore the finding of the High Court as well as the tribunal that there was no consent, either express or implied, in our opinion, concludes the matter. There is no force in this point either. The appeal therefore fails and is hereby dismissed with costs. Appeal dismissed.

The appellant 's nomination paper for election to the Assam Legislative Assembly was rejected by the Returning Officer on the ground of disqualification under section 7(b) of the Representation of the People Act, 195, in that he had been convicted and sentenced to three years ' rigorous imprisonment under section 4(b) of the Explosive Substances Act (VI of 1908) and five years had not expired after his release. The appellant had applied to the Election Commission for removing the said disqualification but it had refused to do so. The appellant 's sentence was, however, remitted by the Government of Assam under s 401 of the Code of Criminal Procedure and the period for which he was actually in jail was less than two years. The Election Tribunal held that the nomination paper had been improperly rejected and set aside the election but the High Court taking a contrary view, dismissed the election petition. Held, that the High Court was right in holding that the appellant was disqualified under section 7(b) of the Representation of the People Act and that his nomination paper had been rightly rejected. That section speaks of a conviction and sentence by a Court and an order of remission of the sentence under section 401 of the Code of Criminal Procedure, unlike the grant of a free pardon, cannot wipe out either the conviction or the sentence. Such order is an executive order that merely affects the execution of the sentence and does not stand on the same footing as an order of Court, either in appeal or in revision, reducing the sentence passed by the Trial Court. Venkatesh Yeshwant Deshpande vs Emperor, A.I.R. 1938 Nag. 513, distinguished. Ganda Singh vs Sampuran Singh, , over ruled. Held, further, that an inference as to whether a successful candidate was a consenting party to the corrupt ractice under 134 section 100(i)(b) of the Act from facts found on evidence was a question of fact and not a mixed question of fact and law. Meenakshi Mills, Maduyai vs The Commissioner of Income tax, Madyas, ; , referred to.

Appeal No. 9 of 1964. Appeal from the judgment and order dated September 9, 1964 of the Patna High Court in Election Appeal No. 2 of 1963. C.B. Agarwala, L.M. Sarma and D.N. Mukherjee, for the appellant. Sarjoo Prasad and K.K. Sinha, for the respondent No. 1. The Judgment of the Court was delivered by Dass Gupta, J. The appellant Brij Mohan Singh and the resportdent Priya Brat Narain Sinha were among the candidates who contested the Aurangabad Constituency seat for the Bihar Legislative Assembly at the General Election held in 1962. The polling took place on February 21, 1962. The appellant received a majority of votes and was declared elected. The respondent Priya Brat Babu who was the sitting member was defeated on April 9, 1962, he filed a petition challenging the validity of the appellant 's election. He prayed for a declaration that the election of the appellant Brij Mohan Singh be declared void and that he (Priya Brat Narain Sinha) be declared to have been duly elected to the Bihar Legislative Assembly from the Aurangabad Constituency. Among the grounds on which the appellant 's election was challenged were these three : (1) That the appellant was born on October 15, 1937 and was thus under 25 years of age on the date of filing the nomination papers and therefore disqualified under article 137 of the Constitution from being a member of the Bihar Legislative Assembly; (2) That he held subsisting contracts under the Bihar Government in his individual and personal capacity and was thus disqualified under section 7(d) of the Representation of the People Act; (3) That the appellant, and with his consent, his party men Rameshwar Prasad Singh and others (whose names are mentioned) were directly responsible for publication and distribution of copies of leaflets containing direct insinuations and aspersions against the respondent 's personal character, these being false to the knowledge of the appellant. The Election Tribunal held on a consideration of the oral and documentary evidence produced before it that none of these or the other grounds on which the validity of the election was challenged had been established. Accordingly, the Tribunal dismissed the petition. 863 On appeal, the High Court of Judicature at Patna set aside the judgment and order of the Election Tribunal and made an order setting aside the election of the appellant Brij Mohan Singh to the Bihar Legislative Assembly. The High Court however refused the respondent 's prayer to be declared duly elected. Against this order of the High Court the present appeal has been preferred on a certificate granted by the High Court under article 133(1)(b) of the Constitution. The only grounds that appear to have been pressed before the High Court were the three which we have mentioned above. The High Court agreed with the Election Tribunal that the allegation that the appellant held a contract under the Government in his personal capacity had not been established. As regards the other two grounds the High Court disagreed with the Election Tribunal. The High Court held that the appellant was below the age of 25 years on the date of filing the nomination and was therefore not qualified to be a candidate for the Bihar Legislative Assembly. The High Court also held that the appellant had published a leaflet exhibit 10 containing attacks upon the personal character of the respondent and was thus guilty of a corrupt practice within the meaning of section 123(4) of the Representation of the People Act. As already stated, the High Court set aside the election of the appellant. The findings of the High Court on the question of age and also on the question of publication of the document exhibit 10 have been challenged before us. It was also urged that in any case the pamphlet exhibit 10 did not amount to an attack on the personal character of the respondent. [After considering the evidence his Lordship concluded that it was not proved that the appellant had committed any corrupt practice or that he was below twenty five years on the date of filing of nomination papers. On the question whether an entry made in an official record maintained by an illiterate public servant, by some one else at his request is relevant under section 35 of the Evidence Act his Lordship held:] On an examination of the physical appearance on the hathchitha and the entries made therein, the evidence of the Chowkidar and the circumstances under which this document was ultimately produced before the Tribunal we are inclined to agree with the view of the Election Tribunal that this is a genuine document which was maintained by the Chowkidar in the discharge of his official duty. If the document had been manufactured to assist the appellant we do not think it likely that the Chowkidar would have refused to produce it readily when summoned to do so. The fact 864 that a warrant of arrest had to be executed against him is a convincing circumstance that the Chowkidar was unwilling to produce it. We are not impressed by the argument of Mr. Sarjoo Prasad that the omission of the Chowkidar to produce the document in obedience to the summons and the issue of warrant of arrest to secure its production were all pre arranged to create an atmosphere for the acceptance of the document as genuine. The appellant 's lawyers before the Election Tribunal could not possibly have been sure that the Tribunal would in the last resort issue a: warrant of arrest. It is not likely that they would take such risk so that ' the document might not come at all. In our opinion, this document is genuine and is the book that was maintained by the Chowkidar for noting the births in his Ilaka during the years 1934 to 1936. The entry therein showing the birth of a son to Sarjoo Singh on October 15, 1935 can however be of ' no assistance to the appellant unless this entry is admissible in evidence under the Evidence Act. If this entry had been made by the Chowkidar himself this entry would have been relevant under section 35 of the Evidence Act. Admittedly, however, the Chowkidar himself did not make it. Mr. Agarwal tried to convince us that when an illiterate public servant is unable to make an entry himself and he gets the entry made by somebody else this should be treated as an entry made by the public servant. This argument must be rejected. The reason why an entry made by a public servant in a public or other official book, register, or record stating a fact in issue or a relevant fact has been made relevant is that when a public servant makes it himself in the discharge of his official duty, the probability of its being truly and correctly recorded is high. That probability is reduced to a minimum when the public servant himself is illiterate and has to depend on somebody else to make the entry. We have therefore come to the conclusion that the High Court is right in holding that the entry made in an official record maintained by the illiterate Chowkidar, by somebody else at his request does not come within section 35 of the Evidence Act. It is not suggested that the entry is admissible in evidence under any other provision of the Evidence Act. The entry in the hath chitha has therefore to be left out of consideration in coming to a conclusion about the appellant 's age. Appeal allowed.

The appellant and respondent were rival candidates for election to the Bihar Legislative Assembly. The appellant obtained a majority of votes and was declared elected. This election was challenged by the respondent on the ground that the appellant had not attained the age of 25 years on the date of filing the nomination papers and was on that account disqualified under article 173 of the Constitution from being a member of the Assembly; that he held subsisting contracts under the Bihar Government in his individual and personal capacity and was thus disqualified under section 7(d) of the Representation of the People Act and that he and his party men were directly responsible for publication and distribution of copies of leaflets entitled "Bagula Neta Se Hoshiar" containing direct insinuations and aspersions against the personal character of the respondent, those being false to the knowledge of the appellant. The Election Petition was dismissed by the Election Tribunal. The respondent appealed to the High Court. The High Court came to the conclusion that the allegation that the appellant held Governpapers and that the appellant was. gulty of a corrupt practice in the appeal and set aside the election of the appellant on the ground that he was below the age of 25 on the date of filling the nomination papers and that the appellant was guilty of. a corrupt practice in that he had published the offending leaflets. With certificate ' of fitness granted by the High Court the appellant appealed to this Court. Allowing the appeal: HELD: (i) The burden of proving that appellant had not attained the age of 25 years on the date of has nomination was on the respondent and he had failed to prove that and hence the election of the appellant could not be set aside on that ground. The entry made in an official record maintained by an illiterate Chowkidar, by somebody else at his request, does not come within Section 35 of the Evidence Act. (ii) The respondent had not been able to prove the publication of the leaflets by the appellant or has agent or by any other person with the consent of the appellant o.r of his election agent, and hence the Election Tribunal was right in coming to the conclusion that the commission of any corrupt practice by appellant under section 123(4) had not been proved.

N: Criminal Appeal Nos. 657 58 of 1986. From the Judgment and Order dated 13.2.1986 of the High Court of Bombay in Criminal Application No. 120 of 1984. Dr. L.M. Singhvi, Ram Jethmalani, Dalveer Bhandari, Mrs. Madhu Bhandari, S.S. Khanduja, A.M. Khanwilkar and A.S. Bhasme for the Appearing parties. The Judgment of the Court was delivered by RANGANATH MISRA, J. Both the appeals are by special leave and are directed against the same judgment of the Bombay High Court on an application under section 482 of the Code of Criminal Procedure. The High Court by the impugned decision quashed the prosecution against two of the four accused persons. The two accused persons whose prosecution has not been quashed are appellants in Criminal Appeal No. 657 of 1986 while the complainant assails the decision of the High Court quashing the prosecution of the two accused persons in Criminal Appeal No. 658 of 1986. Rajamata Smt. Vijaya Raje Scindia of Gwalior created a trust on 23rd of February, 1966, known as "Srikrishna Madhava Trust" with four trustees in all including the settler, the other three trustees being Mr. Madhavrao Jiwajirao Scindia, Col. Eknath Trimbak Patil and Kumar Shanbhajirao Chandrojirao Angre. Madhavrao is the son of the settler while the other two, though residents of Gwalior, are not members of the family. 'Vijay Vilas ' a large house located in the Bombay city constituted a part of the trust property. Russi Homi Awary and Damodar Rangrppa Shenoy, respondents in Criminal Appeal No. 658 of 1986, were employed as Secretary and Manager respectively of the Trust between 1976 and 1982. Flat No. 15 of 'Vijay Vilas ' was in the occupation of the Sushiladevi Kathait on tenancy basis. In June, 1981, the said tenant surrendered the tenancy and on 9th of June, 1981, the 933 Secretary issued a certificate to the effect that the tenancy had terminated. On 31st of March, 1982, the said Secretary issued another certificate to the effect that the aforesaid tenancy terminated with effect from 1st April, 1980, after the entire rental liability had been liquidated. On the allegation that the two officers of the Trust in conspiracy with trustee Madhavrao and his wife Smt. Madhavi had created documents showing tenancy in respect of that flat in favour of Smt. Madhavi, a complaint was filed by trustee Angre in the Court of the Metropolitan Magistrate, 28th Court, Esplanade, Bombay on 27th July, 1983. Summons were directed to be issued against the four persons referred to above for offences punishable under sections 406, 467 read with sections 34 and 120 B of the Indian Penal Code. The accused persons challenged the proceedings before the High Court by filing an application under section 482 of the Code and prayed for quashing of the criminal case. By the impugned order dated 13th February, 1986 the High Court quashed the proceedings so far as accused Nos. 2 and 4 were concerned but sustained the order of the Metropolitan Magistrate in regard to the remaining two accused persons. Hence these appeals have been filed as already stated. The settler and the accused being mother and son, an attempt was made to bring about a settlement but that having failed the appeals have been heard on merit and are being disposed of by this common judgment. Dr. Singhvi,, learned counsel appearing for the accused appellants has contended that the criminal proceedings are without any basis and if at all, a civil wrong may be said to have been caused. According to him, the trust deed authorised trustee Madhavrao to look after the affairs of the Trust. The flat had been tenanted at a particular rent when the tenant vacated; and a new tenant had to be inducted it being the common case that the flat was intended for tenancy Madhavi wanted to be the tenant and at the rate of rent which the outgoing tenant was paying, a new tenancy was created. Under the law applicable to tenancies in Bombay, a higher rent is not chargeable and as such no higher amount of rent could be claimed by the Trust in regard to the flat. The wife of the trustee is an independent person having her own income and the tenancy in favour of Madhavi cannot be considered to be creating an interest in favour of the trustee. Dr. Singhvi further relied upon a lawyer 's notice issued on behalf of the trust calling upon Madhavi to surrender the tenancy in favour of the Trust failing which action was threatened. Madhavi volunteered to surrender the tenancy and thus there was really no 934 justification, according to Dr. Singhvi, for initiating criminal proceedings. In the facts and circumstances of the case narrated above, the appellants ' counsel contended that there was no mens rea for the offences as alleged and at the most it amounted to a civil wrong. He argued that the mother and the son had fallen out and on that score the machinery of the Court should not be permitted to be utilised for private vengeance. Mr. Jethmalani, appearing for the complainant, on the other hand, maintained that it was a clear case of breach of trust and according to him every breach of trust would simultaneously be a civil wrong and a criminal offence and if summons have been issued by the Metropolitan Magistrate on the basis of the complainant 's allegations, no objection could be taken at the preliminary stage. It is appropriate that the complainant should be given an opportunity to establish his case by leading evidence. He relied upon the provisions of section 53 of the Indian Trust Act which provides: "No trustee, and no person who has recently ceased to be a trustee, may, without the permission of a principal Civil Court of original jurisdiction, buy or become mortgagee or lessee of the trust property or any part thereof; and such permission shall not be given unless the proposed purchase, mortgage or lease is manifestly for the advantage of the beneficiary. " We have considered the relevant documents including the Trust deed as also the correspondence following the creation of the tenancy. We have also kept in view the submissions advanced on behalf of the parties by their respective counsel. We have further taken into consideration the natural relationship between the settler and the son and his wife and the fall out. The legal position is well settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to 935 continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage. Mr. Jethmalani has submitted, as we have already noted, that a case of breach of trust is both a civil wrong and a criminal offence. There would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. We are of the view that this case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offences are wanting. Several decisions were cited before us in support of the respective stands taken by counsel for the parties. It is unnecessary to refer to them. In course of hearing of the appeals, Dr. Singhvi made it clear that Madhavi does not claim any interest in the tenancy. In the setting of the matter we are inclined to hold that the criminal case should not be continued. Criminal Appeal No. 657 of 1986 is allowed and the criminal prosecution against the two appellants being Madhavrao and Russi Homi Avari is quashed. In view of what we have stated above, Criminal Appeal No. 658 of 1986 has to fail and is dismissed. N.P.V. Appeal dismissed.

% A trust with the settler, her son and two others, as trustees was created. Part of the trust property included a large house. Respondents in Criminal Appeal No. 658 of 1986, were employed as Secretary and Manager of the trust between 1976 and June, 1981. On a complaint filed in the court of the Metropolitan Magistrate by one of the trustees alleging that these two officers, in conspiracy with one of the trustees, son of the settler, and his wife, had created documents showing tenancy in respect of a flat of the large house, forming part of the trust property, in favour of the aforesaid trustee 's wife, summons were directed to be issued against the aforesaid four accused for offences punishable under sections 406 and 467 read with section 34 and 120B of the IPC. The accused persons challenged the proceedings before the High Court which quashed the proceedings against two of the accused, but sustained the order of the Magistrate against the other two accused, appellants in Civil Appeal No. 657 of 1986. 931 Appeals against the aforesaid order were filed in this Court both by the two accused, whose prosecution was not quashed, as also the complainant. On behalf of the accused appellants, it was contended that the trust deed authorised the trustee to look after the affairs of the trust, but the tenancy in favour of the trustee 's wife could not be considered as creating an interest in favour of the trustee as the wife was an independent person having her own income, that there was no mens rea involved for initiating criminal proceedings and, at the most it amounted to a civil wrong, and that the court machinery should not be permitted to be utilised for private vengeance as the mother and the son had fallen out. On behalf of the complainant it was urged that in view of section 53 of the , it was a clear case of breach of trust and that every breach of trust would simultaneously be a civil wrong and a criminal offence, and an opportunity should be given to the complainant to establish his case by leading evidence, and that no objection could be taken at the preliminary stage. Allowing the appeal of the accused and dismissing the appeal of the complainant, the Court, ^ HELD: When a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations, as made, prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage. [934G H; 935A] A case of breach of trust may be both a civil wrong and criminal offence. But there would be certain situations where it would predominantly be a civil wrong and may or may not amount to criminal offence. The instant case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offence are wanting. [935B C] 932 Having regard to the relevant documents, including the trust deed and the correspondence following the creation of the tenancy and taking into consideration the natural relationship between the settler and the son and his wife and the fall out and the fact that the trustee 's wife does not claim any interest in the tenancy, the criminal case should not be continued. The criminal proceedings against the appellants accused are quashed. [934F; 935C D]

ivil Appeal No. 1870 of 1982. From the Judgment and Order dated 2.9.1981 of the Punjab and Haryana High Court in R.S.A. No. 1556 of 1980. V.M. Tarkunde and Prem Malhotra for the Appellant. S.C. Mohanta, Mahavir Singh and C.V. Subba Rao for the Respondents. The Judgment of the Court was delivered by DUTT, J. In this appeal by special leave the appellant, a Bus Conductor of the Haryana Roadways, has challenged the validity of the order of termination of his service on the ground of failure of the punishing authority to give any reason for the impugned order in violation of the principles of natural justice. A charge was levelled against the appellant that he did not issue tickets to nine passengers, although he had taken the fare from each of them. A disciplinary proceeding was started against the appellant. The 1059 Enquiry Officer, after considering the allegations consti tuting the charge, the plea of the appellant in defence and the evidence adduced by the parties including the appellant, held that the charge against the appellant was proved. The punishing authority agreed with the findings of the Enquiry Officer and by the impugned order terminated the service of the appellant. Aggrieved, the appellant filed a suit challenging the legality of the order of termination. It was contended by the appellant that as no reason was given in the impugned order, it was illegal and invalid being opposed to the principles of natural justice. The Trial Court overruled the said contention and also held that the Civil Court had no jurisdiction to entertain and try the suit. Accordingly, the Trial Court dismissed the suit. On appeal, the learned Additional District Judge held in disagreement with the Trial Court and, in our opinion, rightly that the Civil Court had jurisdiction to entertain and try the suit. The learned Additional District Judge, however, held that the impugned order was a non speaking order not containing any reason and, as such, it was in valid. In that view of the matter, the learned Additional Judge allowed the appeal, set aside the judgment of the Trial Court and the impugned order of termination of service of the appellant and decreed the suit. The State of Haryana took the matter to the High Court in a second appeal. The High Court affirmed the finding of the learned Additional District Judge as to the jurisdiction of the Civil Court, but set aside his finding that the impugned order was a non speaking order. The High Court took the view that the impugned order was quite legal and valid. Upon the said findings. the High Court allowed the appeal and set aside the judgment and decree of the learned Addi tional District Judge. Hence this appeal by special leave. It has been urged by Mr. Tarkunde, learned Counsel appearing on behalf of the appellant, that the punishing authority has not applied his mind before passing the im pugned order, which is apparent from the fact that he had not given any reason in justification of the impugned order. Counsel submits that non application of the mind and failure to give any reason by the punishing authority vitiated the impugned order of termination and, accordingly, it should be set aside. It has been pointed out by the High Court that the punishing 1060 authority has passed a lengthy order running into seven pages mentioning therein the contents of the charge sheet, the detailed deposition of the witnesses, as accorded by the Enquiry Officer, and the findings of the Enquiry Officer. The explanation submitted by the appellant has also been reproduced in the impugned order. Thereafter, the punishing authority stated as follows: "I have considered the charge sheet, the reply filed to the charge sheet, the statements made during enquiry, the report of the Enquiry Officer, the show cause notice, the reply filed by the delinquent and other papers and that no reason is available to me on the basis of which reliance may not be placed on the report of the Enquiry Officer. Therefore, keeping these circumstances in view, I termi nate his service with effect from the date of issue of this order. " In view of the contents of the impugned order, it is difficult to say that the punishing authority had not ap plied his mind to the case before terminating the services of the appellant. The punishing authority has placed reli ance upon the report of the Enquiry Officer which means that he has not only agreed with the findings of the Enquiry Officer, but also has accepted the reasons given by him for the findings. In our opinion, when the punishing authority agrees with the findings of the Enquiry Officer and accepts the reasons given by him in support of such findings, it is not necessary for the punishing authority to again discuss evidence and come to the same findings as that of the En quiry Officer and give the same reasons for the findings. We are unable to accept the contention made on behalf of the appellant that the impugned order of termination is vitiated as it is a non speaking order and does not contain any reason. When by the impugned order the punishing authority has accepted the findings of the Enquiry Officer and the reason given by him, the question of non compliance with the principles of natural justice does not arise. It is also incorrect to say that the impugned order is not a speaking order. There is, therefore, no substance in the appeal. The appeal is dismissed. There will, however, be no order as to costs. In view of the fact that it is the first offence of the appellant, who is said to be the father of five minor chil dren and has no other means of livelihood, the respondent may consider the re employment of the appellant to the post of Conductor or to any other post, to which he may be found to be suitable. N.P.V. Appeal dismiss.ed.

The service of the appellant, a bus conductor, was terminated consequent upon the enquiry conducted into alle gations of non issue of tickets to nine passengers, though fare was collected from each of them. A suit filed by the appellant, contending that the order of termination was illegal and void and was opposed to the principles of natu ral justice, as no reason was given in the order, was dis missed by the trial court. It was also held that the Civil Court had no jurisdiction to entertain and try the suit. The Additional District Judge, on appeal, held that the Civil Court had jurisdiction to entertain and try the suit and set aside the impugned order of termination as invalid as it was a non speaking order not containing any reason. In second appeal, the High Court affirmed the finding of the Additional District Judge as to the jurisdiction of the Civil Court, but set aside his finding that the impugned order was a non speaking order and held that it was quite legal and valid. In the appeal to this Court it was contended on behalf of the appellant that the punishing authority had not ap plied his mind before passing the impugned order, which was apparent from the fact that he had not given any reason in justification thereof and this had vitiated the impugned order of termination. Dismissing the appeal, this Court, HELD: When the punishing authority agrees with the findings of the Enquiry Officer who accepts the reasons given by him in support of such findings, it is not neces sary for the punishing authority to again 1058 discuss evidence and come to the same findings as that of the Enquiry Officer and give the same reasons for the find ings. [1060E] In the instant case, it is difficult to say that the punishing authority had not applied his mind. The punishing authority has placed reliance upon the report of the Enquiry Officer, which means he has not only agreed with the find ings of the Enquiry Officer but also accepted the reasons given by him for the same. When the punishing authority has accepted the findings of the Enquiry Officer and the reasons given by him, the question of non compliance with the prin ciples of natural justice does not arise. [1060E F] It cannot be said that the impugned order is not a speaking order and is vitiated. [1060F] [In view of the fact that it is the first offence of the appellant, who is said to be the father of five minor chil dren and has no other means of livelihood, the respondent may consider the re employment of the appellant to the post of Conductor or to any other post, to which he may be found to be suitable.] [1060G H]

Appeal No. 529 of 1963. Appeal by special leave from the judgment and order dated September 24, 1958, of the Madhya Pradesh High Court in Misc. Petition No. 82 of 1958. I. N. Shroff, for the appellant. M. C. Setalvad B. Narayanaswamy, J. B. Dadachanji, Ravinder Narain and O. C. Mathur, for respondent No. 1. M.S.K. Sastri and M. section Narasimhan, for respondent No. 2. March 25, 1964. The judgment of the Court was delivered by DAS GUPTA, J. Two main questions arise in this appeal. The first is whether section 42(1)(g) of the Central Provinces and Berar Industrial Disputes and Settlement Act, 1947 prohibits an employer from taking action against a workman for participation in an illegal strike before it is so declared under section 41 of the Act. The second question is whether in an application made under section 16(3) of the Act the Labour Commissioner has jurisdiction to decide the legality or illegality of the strike. On September 21, 1956 the first respondent in this appeal, the Burhanpur Tapti Mills Ltd., served a charge sheet on one of the employees Sulemankhan Mullaji, who is the second res pondent in the appeal alleging that he had instigated workers of the Weaving Department to go on an illegal strike earlier that day. After holding an enquiry into the matter the Manager came to the conclusion that the charge had been established being of opinion that this constituted misconduct under cl. 25(b) of the Standing Orders. Thereafter, the Manager ordered Sulemankhan to be summarily dismissed without notice and without compensation in lieu of notice. Sulemankhan made an application against this order to the Labour Commissioner, Madhya Pradesh under section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947. The Labour Commissioner was of opinion that the authority to decide the legality of a strike had been entrusted by section 41 of the Act by the legislature to the State Industrial Court or the District Industrial Court. He also held that before a strike had been held by either of these authorities to be illegal the employer had no right to take any action against his workmen on his own view that a strike was illegal. The Labour Commissioner further held that there was no legal evidence to prove the allegations against Sulemankhan and that in inflicting the punishment of dismissal the Manager had not paid due regard to sub cl. 4 of cl. 26 of the Standing Orders. Accordingly, he ordered 486 the reinstatement of Sulemankhan with full wages from the date of dismissal to the date of reinstatement. The revision application by the first respondent proved un successful. The State Industrial Court, which is the revisional authority, disagreed with the Labour Court 's view that the employer could not take action before a decision from the State Industrial Court or the District Industrial Court declaring the strike to be illegal had been obtained. Being however of opinion that the enquiry had not been held in accordance with the Standing Order in cl. 26(2) and also that in awarding the punishment the Manager had not taken into consideration the matters mentioned in the Standing Orders in cl. 26(4), the Industrial Court concluded that the Labour Commissioner was justified in examining the evidence for itself. It further held that the finding of fact given by the Labour Commissioner could not be challenged in revision. The final conclusion of the State Industrial Court, as already indicated, was that the order of reinstatement made by the Labour Commissioner was fully justified. Against this order the employer (the first respondent) moved the High Court of Madhya Pradesh under article 226 of the Constitution. The High Court indicated its view that though the Labour Commissioner may not have the jurisdication to decide the question of illegality of a strike, it may decide the question incidentally for the purposes mentioned in section 16 of the Act if in an enquiry under section 16 a question is raised that the dismissal was wrongful as there was no incitement of an illegal strike under cl. 25(b) of the Standing Orders. After expressing this view the High Court, however, added the words: "That aspect of the matter need not be considered because the strike instigated here was not held to be a legal strike. " The High Court was of opinion that the Industrial Court had fallen into an error in thinking that the charge sheet served on the workmen was defective. It also held that neither the Labour Commissioner nor the State Industrial Court had any jurisdiction to examine the findings of the domestic tribunal as an appellate authority and to come to a contrary conclusion on the same evidence. Accordingly, the High Court quashed the orders of the Labour Commissioner and the State Industrial Court. The present appeal has been preferred by the Labour Commissioner, Madhya Pradesh, No appeal has been preferred by the workman himself. It is therefore unnecessary for us to consider in this appeal the correctness or otherwise of the High Court 's decision on the merits of the case. What we have to decide, as already indicated is whether sec. 42 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947 487 stood in the way of the employer taking action against a workman for participation in an illegal strike before it had been declared to be so under section 41; and secondly, whether when there has been no such decision the Labour Commissioner has jurisdiction to decide the question of legality or illegality of the strike in an application made to him under section 16 of the Act. The relevant provisions of section 42 which require consideration for a decision of the first question are that: "No employer shall dismiss, discharge, suspend or reduce any employee or punish him in any other manner solely by reason of the cir cumstance that the employee has participated in a strike which is not "rendered illegal" under any provision of this Act. " The provisions of the Act rendering a strike illegal are set out in section 40. Prima facie it appears that it is only where the strike in which an employee has participated does not come within any of the provisions of section 40 that the employer is prohibited from taking action against him. The prohibition operates only when a strike is not "rendered illegal" under any provisions of the Act. That, it is urged by the respondent employer, is the same thing as saying that the prohibition operates only where the strike is not illegal within the meaning of the provisions of section 40 of the Act. The argument on behalf of the appellant is that the words "rendered illegal" in section 42 (1)(g) should properly be construed as "held illegal". It has to be noticed in this connection that section 41 of the Act provides a machinery under which not only the State Government but any employer or employee can approach the State Industrial Court or a District Industrial Court for a decision whether a strike or a lockout of which notice has been given or which has taken place is illegal. According to the appellant, it is only after on such an application the State Industrial Court or a District Industrial Court has decided that a strike is illegal, that the employer can take action. We are unable to see any justification for such a construction. It is clear to us that the phrase "rendered illegal" in section 42(1)(g) has been deliberately used in contradistinction to the words "held illegal" used in sections 43, 44 and 45. Section 43 provides penalty on an employer who " declares a lockout which is held by the State Industrial Court or the District Industrial Court to be illegal". Section 44 provides penalty against an employee "who goes on a strike or who joins a strike which is held by the State Industrial Court or the District Industrial Court to be illegal". Section 45 provides penalty for instigation or incitement to or participation or acting in furtherance of a strike or lockout "which is held to be illegal by the State Industrial Court or the District Industrial Court". When the legislature used the words "held illegal" by the State Industrial Court or the District Industrial Court in sections 43, 44 and 45 but used different phraseology, 488 viz., "rendered illegal" in section 42(1`)(g) the conclusion is irresistible that this was done deliberately. The reason for this is not far to seek. However, quickly the State Industrial Court or the District Industrial Court may act on an application under section 41 the decision on the legality or otherwise of a strike is bound to take a considerable time. It would be an impossible position for industrial management if after notice has been given of a strike or a strike has started which the employer considers to be illegal within the meaning of section 40 he should be compelled to stay his hand and wait till a State Industrial Court or a District Industrial Court has given a declaration on the question. It also appears clear that these authorities are not bound to give a decision on an application by the employer. The Section runs thus: Court shall, on a reference made by the State Government, and may, on an application by any employer or employee concerned or by a representative of the employees concerned or by the Labour Officer, decide whether any strike or lockout or any change of which notice has been given or which has taken place is illegal. " it has to be noticed that while on a reference by the State Government the State Industrial Court or a District Industrial Court "shall" decide the question of legality of the strike or lockout, it "may" decide the question on an application by the employer or employee or any other person mentioned in the section. The use of the word "shall" in connection with the action to be taken on a reference by the State Government and "may" in connection with the action on an application by others in the same section compels the conclusion that on an application by anybody other than the State Government, the State Industrial Court or a District Industrial Court may also refuse to take action. The suggested construction of the words "rendered illegal" as "held illegal" might therefore have the curious result that even though the strike is in fact illegal within the meaning of section 40 of the Act no action can at any time be taken against an employee for participation in it. We have accordingly come to the conclusion that the words "rendered illegal" does not mean "held illegal" and the employer is free to take action against the employee as soon as he thinks that the strike in which he has participated comes within the provisions of section 40 of the Act. When the employer takes such action against the employee by dismissing, discharging, removing or suspending him, it will be open to the employee to apply to the Labour Commissioner for reinstatement and payment of compensation for loss of 489 wages. This is provided in section 16(2) of the Act. Section 16(3) provides that if on receipt of such application the Labour Commissioner after such enquiry as may be prescribed finds that the dismissal, discharge, removal or suspension was in contravention of any of the provisions of this Act or in contravention of a Standing Order made or sanctioned under this Act or was for a fault or misconduct committed by the employee more than six months prior to the date of such dismissal, discharge, removal or suspension, he may direct reinstatement of the employee or other relief. The question has been raised whether when the order of dismissal, discharge, removal or suspension purports to have been made for participation in or instigation to an illegal strike it is open to the Labour Commissioner to decide the question of illegality of a strike. On behalf of the appellant it has been suggested that exclusive jurisdiction to decide the question of legality or illegality of a strike has been given by the Act to the two authorities, viz., the State Industrial Court or a District Industrial Court, as mentioned in section 41. There is no doubt that section 41 which has been set out above empowers the State Industrial Court or a District Industrial Court to decide the question of legality of a strike on a reference by the Government, or application by employer or employee or others mentioned in the section. Mr. Shroff argues that it could not have been the intention of the legislature to have two parallel bodies the Labour Commissioner as well as the State Industrial Court or a District Industrial Court having jurisdiction to decide such a matter. For, as he points out, it may well be that while on an application under section 16(3) the Labour Commissioner holds that the strike was not illegal the contrary view may be taken by the State Industrial Court or the District Industrial Court on an application under section 41 or vice versa. This argument is plausible at first sight. There is, however, one great difficulty in accepting it. That consists in the fact, already pointed out, that the State Industrial Court or a District Industrial Court is not bound to give any decision at all on application by any party other than the State Government. There being thus cases where the authorities mentioned in section 41 may refuse to decide the question of legality or illegality of a strike, it is not possible to say that exclusive jurisdiction is given by section 41 to these authorities to decide the question of legality or illegality of a strike. It is reasonable to held therefore that for performing its functions under section 16(3) of the Act the Labour Commissioner has jurisdiction to decide the question of legality or illegality of a strike when that question is raised before it. The appeal is accordingly dismissed. No order as to costs. Appeal dismissed.

An employee was summarily dismissed by the respondent employer after holding an enquiry on the allegation that he had instigated workers to go on an illegal strike. The employee applied under section 16 of Central Provinces and Berar Industrial Disputes Settlement Act to the Labour Commissioner, who held that authority to decide the legality of a strike had been entrusted by section 41 of the Act to the State Industrial Court or the District Industrial Court and that before a strike had been held by either of these authorities to be illegal the employer had no right to take any action against his workmen on his own view that a strike was illegal and ordered the reinstatement of the employee with full wages. The revision application by the respondent employer to the State Industrial Court proved unsuccessful through it disagreed with the Labour Court 's view that the employer could not take action before a decision from the State Industrial Court or the District Industrial Court declaring the strike to be illegal had been obtained. Thereafter, the employer moved the High Court under article 226. The High Court was of the view that though the Labour Commissioner may not have the jurisdiction to decide the question of illegality of a strike, it may decide the question incidentally for the purposes mentioned in section 16 if in an enquiry such a question is raised, and quashed the orders of the Labour Commissioner and the State Industrial Court. On appeal preferred by the Labour Commissioner in this Court. Held: (i) The employer is free to take action against the employee as soon as he thinks that the strike in which he has participated comes within the provisions of section 40 of the Act. The phrase "rendered illegal" in section 42(1)(g) has been deliberately used in contradistinction to the words "held illegal" used in sections 43, 44 and 45. It would be an impossible position for industrial management if after notice has been given of a strike or a strike ha,,, started which the employer considers to be illegal within the meaning of section 4o he should be compelled to stay his hands and wait till a State Industrial Court or a District Industrial Court has given a declaration on the question. The use of the word "shall" in section 41 in connection with the action to be taken on a reference by the State Government and "may" in connection with the action on an application by others in the same section compels the conclusion that on an application by anybody other than the State Government, the State Industrial Court or a District Industrial Court may also refuse to take action. 485 (ii) For performing its functions under section 16(3) of the Act the Labour Commissioner has jurisdiction to decide the question of legality or illegality of a strike when that question is raised before it.

ns Nos. 89 to 92 and 94 of 1968. Petitions under article 32 of the Constitution of India for enforcement of the fundamental rights. M.K. Ramamurthi, for the petitioners (in all the petitions). Niren De, Solicitor General and R.N. Sachthey, for the respondent (in all the petitions ). The Judgment of the Court was delivered by Hidayatullah, C.J. These are five writ petitions under Article 32 of the Constitution of India by persons detained under the (4 of 1950) by virtue of orders passed by the District Magistrate Tripura on February 2, 1968. These detenus (and another since released) were arrested on February 11, 1968. State Government was informed of the fact of deten sup. CI/68 5 564 tion on February 13, and the grounds of detention were communicated to the detenus on February 15. State Government gave the approval on February 19 and telegraphically communicated to the Central Government the fact of the detention on February 22 under section 3(4). On March 11, the Advisory Board considered the cases. The present petitions were filed on March 12, 1968. The Advisory Board made its report to the State Government under section 10 of the Act on April 17, 1968. On April 26, 1968, the State Government made the order detaining the petitioners for a period of one year. This detention is challenged before us. The petitions were argued by Mr. Ramamurthy together. The law points raised by him in these cases were common and will be dealt with together. Part of the facts were also common although some special features were pointed out in some cases. We propose to deal with the common,points of law and facts together and then to consider the special facts separately. The points of law were (1 ) that the detention was illegal as the report of the District Magistrate was not submitted forthwith as required by section 3(3) of the Act, (2) that the detention was again illegal as the order of approval of State Government under section 3 (3) was not communicated to the petitioners, (3) that the detention was illegal as the State Government had not reported the fact to the Central Government as soon as possible and without avoidable delay. The common points of fact are that the grounds were vague and the detention was for a collateral purpose and mala fide. The order of detention in each case was made on the 9th of February. The arrest and detention commenced from the 11th. The communication .was on February 13. Section 3 (3) of the Act lays down: "3. The Central Government or the State Government may (1) (3) When any order is made under this section (by an officer mentioned in sub section (2) he shall forthwith report ' the act to the State Government to which he is subordinate together with the grounds on which the order has been made and such other particulars as in his opinion (have a bearing on the matter, and no such order made after the commencement of the Preventive Detention (Second Amendment) Act, 1952, shall remain in force for more than twelve days after the making thereof unless in the meantime it has been approved by the State Government). " 565 The question is whether the detention became illegal because 4 days were allowed to pass from the order of detention and 2 days from the date of arrest. The third sub section quoted above uses the word 'forthwith '. , Explaining this word Maxwell in Interpretation of Statutes (Eleventh Edn.) at p. 341 observes as follows: "When a statute requires that 'something shall be done "forthwith", or "immediately" or even "instantly", it should probably be understood as allowing a reasonable time for doing it. " The word 'forthwith ' in section 3 (3) and the phrase 'as soon as may be ' used in the fourth sub section were considered in Keshav Nilkanth Joglekar vs The Commissioner of Police, Greater Bombay(1). In that case the delay was of 8 days. Giving proper meaning to the expression it was observed: "We agree that "forthwith" in section 3 (3) cannot mean the same thing as "as soon as may be" in section 7, and that the former is more preemptory than the latter. The difference between the two expressions lies, in our opinion, in this that while under section 7 the time that is allowed to the authority to send the communication to the detenu is what is reasonably convenient, under section 3 (3) what is allowed is only the period during which he could not, without any fault of his own, send the report. " The delay of 8 days was held explained thus: "What happened on the 16th and the following days are now matters of history. The great city of Bombay was convulsed in disorders, which are among the worst that this country has witnessed. The Bombay police had a most difficult task to perform in securing life and property, and the authorities must have been working at high pressure in maintaining law and order. It is obvious that the Commissioner was not sleeping over the orders which he had passed or lounging supinely over them. The delay such as it is, is due to causes not of his making, but to causes to which the activities of the petitioners very largely contributed. We have no hesitation in accepting the affidavit, and we hold that the delay in sending the report could not have been avoided by the Commissioner and that when they were sent by him, they were sent "forthwith" within the meaning of section 3(3) of the Act. " In the present case the delay is much shorter. The 10th and 1 ith of February were close holidays. The communication was (1) ; at pages 658 660. 566 on the 13th. Thus there was only delay because the report was not made on the 12th. Explaining the delay the District Magistrate in his affidavit says: "I say that 10th February, 1968 was a holiday, being the second Saturday of the month and 11th February, 1968 was Sunday. I say that serious reports about the activities of the Mizo National Front and Sangkrak Party, which are tribal groups of hostiles who had set up an independent Government and were indulging in subversive acts against the local Govern. ment and were committing dacoities, murder, arson etc. particularly aimed at non tribals, were received at that time which kept me extremely busy during those days. Besides this, I also say that I was in the midst of paddy procurements and there was very heavy rush of work in my office in those days. I say that 10th and 11th February, 1968, being holidays and order being communicated on the ' 13th to the State Government, was communicated "forthwith" as required by law. " In our judgment even if the meaning from the ruling is applied with strictness, the delay was explained sufficiently. The District Magistrate was hard put to for time and the surrounding circumstances explain the very short delay. A much larger delay was held in this Court not to militate against section 3 (3) and we think there is less room for interference in this case than existed in the former case. We accordingly reject the first of .the law The second point has no force. There is no provision in the Act that such an approval must be communicated to the detenu. The argument is that this must be implied from the object of the Act. The detaining authority is answerable to the State Government, Sub section (3 ) gives validity to the order for a period of 12 days even without approval. The approval was done within the time and began to operate as soon as made. It was contended that the approval ought to have been communicated to the detenu and without this communication the detention could not be legal. Reliance was placed upon certain cases to show that persons affected by an order must be communicated that order if it is to be effective. In Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer and another(1) (a case under the Land Acquisition Act 1894) it was held that the award of the Collector must be communicated, and that this was an essential requirement of fair play and natural justice. The Court was considering a question of limitation Which ran 'from the date of the Collector 's (1) [1962] 1 S.C.R. 676. 567 award ' in the proviso to section 18 and was not prepared to construe those words in a literal or,mechanical way. The reason which prevailed for making a distinction between an order passed and an order communicated do not obtain here. In Bachhittar Singh vs The State of Punjab(1) an order of dismissal of a public servant passed by the Minister on the file was not communicated and it was held 'that it was only provisional fill communicated. This case is not in point. The next case Biren ' Dutta and others vs Chief Commissioner of Tripura and another(2) deals with detention under the Defence of India Rules 1962 rules 30(1)(b) and 30A(8). The reason of rule 30A(8) was stated by this Court to be that it is in the nature of an independent decision and further detention can be justified only if the decision is recorded as required by the rule, and it must be in writing clearly and unambiguously to indicate the decision. It was further observed that the decision must be communicated. This case is really no authority in the context of the present ease. Section 3 (3 ) of the does not specify that the order of approval is anything more than an administrative approval by the State Government. If this be so the necessity of communication of the approval does not arise with that strictness as does the decision under Rule 30A(8) of the Defence of India Rules. The Solicitor General on that occasion conceded this position. The dispute then narrowed to the question whether article 166 applied. This point was not decided by this Court but basing itself on the admission that the deeision to continue the detention must be in writing, this Court considered whether there was substantial compliance with this requirement. A brief memorandum was produced which merely recorded that a decision was reached. This Court held that the memorandum could not reasonably be said to. include a decision that the detention of the detenus was thought necessary beyond six months. Sueh orders were held not to contain a written record of the decision with appropriate reasons. In our opinion the provisions of the cannot be equated to those of the Defence of India Act and the Rules. While we are of opinion that even in detention under the it would be fair to inform the detenu of all the stages through which his detention passes and a provision to that effect should be included in it, we are not satisfied that in view of the state of the existing law we can import the strict rule here. The scheme of the is merely to approve the original detention by the District Magistrate and the continued detention after 12 days is not under any fresh order but the same old order with the added approval and what the detenu can question if he be so minded, is the original detention and not the approval thereof. (See in this connection also (1) [1962] Supp. 3 S.C.R. 713. (2) ; 568 Mohammed Afzal Khan vs State of Jammu & Kashmir(1). We accordingly consider the ruling inapplicable. It is next contended that the State Government was also guilty of undue and unreasonable delay in reporting to the Central Government. The State Government communicated the decision on February 22. State Government received the communication from the District Magistrate on February 13, and approved the action on February 19. The communication to the Central Government on February 22 was not so much delayed that it is not covered by the expression 'as early as may be ' explained by this Court in Keshav Nilkanth Joglekar vs The Commissioner of Police Greater Bombay 's(2) case. Mr. Ramamurthy desired us to calculate the time from February 9 but we do not think that is possible. Time can only be calculated from the moment the matter reached the State Government. The State Government took a week to consider these cases and it is reasonable to think that there might be a few more cases which are not before us. Having reached the decision on the February 19, the action of the State Government in communicating the matter to the Central Government on February 22 cannot be said to be so delayed as to render the detention illegal. Various things have to be done before the report to the Central Government can be made and a gap of 3 days is understandable. We see no forces in this point. This brings us to the merits of the detention. Here the charge is that the grounds furnished to the detenus were vague and the detention itself mala fide. The grounds are practically the same except for very minor changes to which attention will be drawn when we deal with individual cases. We may set down the grounds of detention from Petition No. 89 of 1968 as sample. "You are being detained in pursuance of the Detention order made under sub clauses (ii) and (iii) of clause (a) of sub section (1) of section 3 as you have been acting in manner prejudicial to the maintenance of public order and supplies essential to the community as evidenced by the particulars given below : 1. That you have been instigating the loyal villagers particularly the tribals living in and around the Forest Reserve areas to damage the forest plantation and to do Jhuming in Reserve Forest areas in violation of forest laws. Towards the end, you have been attending a number of secret meetings in which it was decided to urge the public to start campaign against the Forest Department and to destroy the forest plantation. That you have by your activities created resentment against (1)[1957] S.C.R. 63. (2) 1950 S.C.R. 569 the forest ,departments and the Forest Laws under Teliamura P.S. thereby endangering the maintenance of public order. That you have been instigating the loyal cultivators from delivering the paddy to the Government which has been requisitioned under the Tripura Foodgrains Requisition Order for the maintenance of sup plies of foodgrains to the people in lean months. You have been instigating and inciting the people to offer organised and violent resistance against the paddy procurement staff. Towards this end, you have been attending a number of secret meetings in which it was decided to urge the public to start campaign against the procurement of paddy. You have been directly in 'citing the people in a number of mass meetings also. That you have by your speeches and activities induced the people of certain areas to offer violent resistance to paddy procurement thereby preventing the Government from maintaining supplies essential to the community during times of need. The above reports are evident from the facts that on 12 11 67 you artended a mass meeting at Kalyanpur, a secret meeting on 13 11 67 at Asha rambari, again mass meetings at Teliamura on 28 11 67 at Moharchhara Bazar on 16 12 67, on 6 1 68 at Telia mura and on 21 1 68 at Stable ground, Agartala. Because of your activities and incitement, on 2 2 68 the procurement staff were offered a strong and violent resistance by an unruly mob at Chalitabari P section Telia mura. " It is submicted that the grounds do not give anydetails since no particulars of time, place and circumstances have been mentioned, and relevant and irrelevant matters have been included. Reference is made to two cases decided recently by this Court in which the grounds were found insufficient. They are: Rameshwar Lal Patwari vs State of Bihar(x) and Motilal Jain vs State of Bihar & Others(2). We find no such vagueness in the grounds as was found established in the two cases. The grounds begin by stating generally what the activities were. They consisted of instigation of tribal people to practise jhuming and preventing the authorities from delivering paddy to Government under the procurement schemes. This instigation it is said was through mass and secret meetings and resulted in violent resistance to Government. Having said this the grounds then specify the places where and the dates on which the meetings were held and the date on which and place at which the resistance took place. In our judg (1) ; (2) ; 570 ment more detailed information was not necessary to give .the detenus an opportunity to make their representations. The grounds here are specific and very unlike those in the cases relied upon. We reject the contention. As regards mala fides and collateral purpose alleged to be the real reason, the averment is that the detention was ordered to prevent the detenus from actively campaigning for the Panchayat elections that were to take place on the 19th and 20th February, 1968. This has been denied and looking to the circumstances of this area which are notorious there is no doubt in our minds that the affidavit of the District Magistrate is reliable. This ends the submissions which are common to these five cases. We now pro ceed to discuss individual objections. Writ Petition 89 of 1968. There is no special objection in Writ Petition 89 of 1968 beyond what has been discussed above and it is accordingly dismissed. Writ Petition 90 of 1968: Here too there is no special ground urged before us and the petition is accordingly dismissed. Writ Petition 91 of 1968: The first objection is that there is a mistake of identity. The petitioner claims to be Dasrath s/o Kfishna Deb whereas in the order of detention and other papers is described as Dasrath s/o the Late Krishna Chandra Deb Barrna. It is also submitted that Krishna Chandra Deb is alive and, there fore, the order of detention concerned some other person. It is denied by the District Magistrate that the order was not passed against the present detenu himself. The addition of Barma is explained by the District Magistrate as a popular suffix to the name. The District Magistrate has further said that in Tripura it is usual to have Barma in addition to Deb in the surname and that this ground of identity has been raised for the first time in this Court. The address of the petitioner is accurate and the I father 's name is also correct. Nothing much turns on the fact that the father was described as dead. The petitioner ha.s not objected till he reached this Court and the authorities would hardlybe expected to hold a wrong man and let the real man go free. We reject this contention. The next contention concerns the discrepancy in the dates of meetings and what happened as a result of his activitiesand incitement. The two sets of dates may be put side .by side: Meetings Result 25 11 67 18 6 67 16 12 67 21 6 67 26 12 67 24 6 67 27 12 67 25 6 67 30 12 67 23 12 67 3 1 68 21 1 68 571 It is argued that the results in all but two dates could not follow activities which were later. The explanation is simple. The results were said to be because of the activities of the peritioner. The mention of dates of meetings is merely some evidence to show the kmd of activity. We are concerned with preventive detention. Ordinarily what we have to satisfy ourselves about is the satisfaction of the authority and the absence of mala fides and whether all the opportunities of making representation were given. There were enough instances cited of the conduct on which detention was ordered for the petitioner to make an effective representation. The situation in this area was already bad and the later activities would not make it any better. We do not think that the detention suffers from any defect. The petition will be dismissed. Writ Petition 92 of 1968. The objection here is of the same character as in Writ Petition 89/91. An additional complaint here is that he is supposed to ' have instigated people to go on strike and prevented the motor drivers and rickshaw pullers from plying their vehicles on the ' roads and. government employees from going to office and threatened individual shop keepers to keep their shops closed, but no details are supplied. It is submitted that this brings the case within the rulings of this Court. We think this case is distinguishable from the case of a black marketer who is charged with having sold contraband articles or at higher prices or hoarded goods. General allegations there without concrete instances would be difficult to represent against. Here the matter is different. It is an integrated conduct of instigation against law and order which is being charged. Several aspects of it are mentioned. They range from jhuming in forests and resistance to procurement to arranging for strikes. Instances Of mass and secret meetings are furnished and the ramifications of conduct in other directions are mentioned. In these circumstances the petitioner is expected to represent against the instances and if he convinces that he took no part in the agitation, the other aspects of his activity will be" sufficiently answered. A_case of this type stands on slightly different footing from the cases of black marketing earlier decided by this Court. In our judgment no successful ground has been ' made out and the petition must fail. It will be dismissed. Writ Petition 94 of 1968. The petitioner in this case has complained that the order of detention and the grounds supplied to him were in English and he knows only Bengali and Tripuri. He refers to Harikisan vs The State of Maharashtra & Others(1). In that case the detenu had" asked for a Hindi translation and had been denied that facility. (1) [1962] 2 Supp. S.C.R. 918. 572 We find that this objection was taken here but no request was. made at any earlier time. The original petition did not contain any such objection. It was raised for the first time in the rejoinder. The petitioner does not seem to have suffered at all. He has filed the petition in English and questioned the implications of the language of the order and the grounds. Of course, he had the assistance of the other detenus who know English. If there had been the slightest feeling that he was handicapped, we would have seriously considered the matter but in his case it appears that this point was presented not to start with but after everything was over. We cannot entertain such a belated complaint. The petition will be dismissed. In conclusion all the petitions fail and will be dismissed. G.C. Petitions dismissed.

The petitioners were arrested and detained on February 11, 1968 under the by the orders of the District Magistrate, Tripura. They challenged their detention on the following among other grounds: (i) that the District Magistrate passed the orders of detention on February 9, 1968 but made his 'report to the State Government only on February 13 and therefore the report was not made 'forthwith ' as required by section 3(3),; (ii) that the State Government did not communicate the approval to the detenus and without such communication the order could not be effective; (iii) that the State Government recorded its approval under section 3(3) on February 19 but communicated it to the Central Government only on February 22 and this was not done 'as soon as may be ' within the meaning of section 3(4); (iv) that the grounds supplied were vague; (v) that the detention order was mala fide. One of the petitioners also relied on 'the fact that the grounds were supplied to him in English which he did not understand. HELD: (i) The word 'forthwith ' has been interpreted by this Court in Joglekar 's case to mean the period during which the detaining authority could not "without any fault of his own" send the report. In the present case the order of detention passed on February 9 was communicated to the State Government on February 13 but the District Magistrate in his affidavit had explained that he was occupied with urgent official work and that 10th and 11th were holidays. Thus the 're was delay only because the report was not made on the 12th. Even if the meaning from the 'ruling in Joglekar 's case is applied strictly, the delay was explained sufficiently. [565 C; 566A, D] Keshav Nilkanth Joglekar vs The Commissioner of Police Greater Bombay, ; at p. 658 60, applied. (ii) There is no provision in the Act that the approval under section 3(3) must be communicated to the detenu. Section 3(3) does not specify that the order of approval is anything more than an administrative aproval by the State Government. If this be so the necessity of communication of the approval does not arise with that strictness as does the decision under r. 30A (8) of the Defence of India Rules. Although it may be fair even under the to inform the detenu of all the stages through which his detention passes, and it may be desirable to have a provision to that effect included in it, the existing state of the law did not justify the importation of the strict 'rule to cases under this Act. D, G] 563 The scheme of the is merely to approve the original detention by the District Magistrate and the continued detention after 12 days is not under any fresh order but the same old order with the added approval, and what the detenu can question is the original detention and not the approval thereof. [567 H] Raja Harish Chandra Raj Singh vs Deputy Land Acquisition Officer [1962] 1 S.C.R. 676, Bachhittar Singh vs State of Punjab,[1962] Supp. 3 S.C.R. 713 and Biren Dutta & Ors. vs Chief Commissioner of Tripura & Anr. , [19641 8 S.C.R. 295, distinguished. (iii) The State Government having reached its decision on February 19, its communication under section 3(4) to the Central Government on February 22 was not so delayed that it is not covered by the expression 'as early as may be ' which was explained in Joglekar 's case to mean 'what is reasonably convenient '. Various things have to be done before the report to the Central Government can be made and a gap of 3 days is understandable. [568 D] (iv) The grounds in the present case had been supplied to the detenu with sufficient particularity to enable them to make an effective representation. The cases of Rameshwar Lal Patwari and Motilal Jain were distinguishable. [569 F 570 A] Rameshwar Lal Patwari vs State of Bihar, ; and Motilal Jain vs State of Bihar, ; distinguished. (v) On the facts and circumstances of the case the allegation of mala fides against the detaining authority could not be accepted. [570 B] (vi) The objection that the grounds of detention were given in a language which the detenu did not understand was raised in this Court for the first time. The Court could not entertain this belated complaint especially when the detenu did not seem to have suffered at all for this reason. If there was the slightest feeling that he had been handicapped the court would have seriously considered the matter. [572 A B] Harikisan vs State of Maharashtra & Ors., [1962] 2 Supp. S.C.R. 918, referred to.

Appeal No. 1627 of 1967. Appeal by special leave from the Award dated March 31, 1967 of the Industrial Tribunal, Andhra Pradesh in Industrial Dispute No. 55 of 1965. H. R. Gokhale and D. N. Gupta, for the appellant. M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for the respondents. The Judgment of the Court was delivered by Hegde, J. This appeal has been brought to this Court by special leave. It arises from the decision ' of the Industrial Tribunal, 9 Andhra Pradesh, Hyderabad. The only question that arises for decision is whether on the basis of the material on the record there was any justification for framing a gratuity scheme for appellant 's staff. The admitted facts are these : The appellant concern is hav ing about 500 looms. ' It has a subscribed capital of a little over 3 5 lakhs. Its built up reserve is over thirty lakhs. In three out of the six years during the period 1960 65 it has suffered substantial losses. Out of the remaining three years, in one year it made a profit of about Rs. 45,000 in another year about Rs. 13,000 and in 1962 over rupees twelve lakhs. The annual expenses of the appellant 's concern under the head 'salaries, wages and bonus ' are nearly 47 lakhs. It was found by the tribunal that the appellant concern and the Nellimarla Jute Mills are sister concerns. Both of them are under a single management, viz., M/s. Mcleod and Company, Calcutta. They are located in the same region, the distance between the two being about 25 miles. In Nellimarla Jute Mills a gratuity scheme for the staff is in existence and that in addition to provident fund benefits. Our attention was not invited to any material on record to show that these findings are not correct. In the appellant concern also there is a provident fund scheme for the staff. The appellant in its counter affidavit filed before the tribunal admitted that it had always been the policy of the management to introduce identical terms of employment for the workmen at Nellimarla and Chitavalsah. From the material before us it is not possible to find out the financial position of the Nellimarla mills. We ascertained from the learned counsel for the appellant that the appellant concern had made a profit of over a lakh of rupees in 1966. The tribunal has found and that finding was not challenged before us that the additional burden to be borne by the appellant as a result of the gratuity scheme framed by it is about Rs. 3,000 per year. On behalf of the appellant two contentions were advanced in opposition to the proposed gratuity scheme. They are (1) the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justification to frame the impugned scheme, and (2) in view of the losses incurred by the appellant during the years 1960 65., no additional burden should have been cast on it by introducing a gratuity scheme. So far as the Wage Board recommendations is concerned, it pertains to the jute industry as a whole. After taking into consideration the 'importance of the jute industry for. the national L4Sup. Cl/68 2. 11 Burhanpur Tapti Mills Ltd. vs B. T. Mills Mazdoor Sangh [(1965) ". . there are two general methods of fixing the terms of a gratuity scheme. It may be fixed on the basis of industry cum region or on the basis of units. Both, systems are admissible but regard must, be had to the surrounding circumstances to select the right basis. Emphasis must always be laid upon the financial position ,of the employer and his profit making capacity whichever method is selected, and it must be further seen "whether the industrial court was right in appraising the financial condition and the profit making capacity of the company A scheme for gratuity no doubt imposes a burden on the finances of the concern but the pressure is ex facie distributed over the years for it is limited to the number of retirements each year. The employer is not required to provide the whole amount at once. He may create a fund, if he likes and pay from the interest which accrues on a capitalised sum determined actuarially. This is one of providing the money. Ordinarily the payment is made each year to those who retire. To judge whether the financial position would bear the strain the average number of retirements per year must be found out. This is one part of the inquiry. The next part of the inquiry is to see whether the employer can be expected to bear the burden from year to year. The present condition of his finances, the past history and the future prospects all enter into the appraisal of. his ability." In Calcutta Insurance Co. Ltd. vs Their Workmen(1), this Court observed "On the financial aspect 'of a gratuity scheme, we were referred to the case of Wenger & Co. vs Their workment [(1963) II LIJ 403]. There it was observed by this Court that the problem of the burden imposed by the gratuity scheme could be looked at in two ways. one was to capitalise the burden on actuarial basis. which would show theoretically that the burden would be very heavy; and the other was to look at the scheme in its practical aspect and find out how many employees retire every year on the average. According to this Court, it was this practical approach which ought to be 'taken into account." (1) ; 12 In the light of the principles noted above and on the material placed before the tribunal it is not possible to hold that the tribunal 's conclusion was without any just basis. For the reasons mentioned above this appeal fails and the same is dismissed with costs. G.C. Appeal dismissed.

The appellant was a jute mill. The Industrial Tribunal framed a gratuity scheme for its workers. It was challenged by the appellant before this Court in an appeal under article 136 of the Constitution. Two contentions were urged, namely : (i) that the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justi fication to frame the impugned scheme; (ii) in view of the losses incurred by the appellant during the years 1960 65, no additional burden should have been cast on it by introducing a gratuity scheme. HELD : (i) The Wage Board 's recommendation pertained to the jute industry as a whole and not to any individual industrial unit. It cannot be understood as recommending that there should be no gratuity scheme for the employees in any particular unit in that industry. What was relevant to find out was whether the appellant could bear the additional burden. [10 B] (ii) The Tribunal recommended the gratuity scheme after taking into consideration the financial position of the appellant as well as the fact that in a sister concern such a scheme was in existence. The losses suffered by the appellant were considered by the Tribunal to be a passing phase. What is of essence is the profit making capacity of the concern. In determining that question one has to take into consideration the paid up capital of the company, its reserves, its earnings in the past and its future prospects. A practical view of the question has to be taken. [10 D, G] In the light of these principles and on the material placed before the Tribunal it was not possible to hold that the Tribunal 's conclusion was without any just basis. [12 A] National Iron & Steel Co. Led. & Ors. vs State of West Bengal & Anr. ; and Calcutta Insurance Co. Ltd. vs Their Workmen, ; , relied on.

ivil Appeal No. 3342 of 1979. From the Judgment and Order dated 28.4.1978 of the Allahabad High Court in Second Civil Appeal No. 300 of 1975. O.P. Rana and Raju Ramachandran for the Appellant. Vivek Ghambir and Praveen Kumar for the Respondent. The Judgment of the Court was delivered by PATHAK, CJ. This is a landlord 's appeal by special leave arising out of a suit for ejectment. The respondent 's father B.M. Paul, was the tenant of the premises in question. On his death he left behind the re spondent, his mother, brothers and sisters who in herited the tenancy. A notice under section 106 of the terminating the tenancy was addressed to the respondent and was served on him. It was not addressed and served on the other tenants. A suit for ejectment was filed by the appellant against the respondent. The validity of the notice to quit was challenged by the respondent. It was contended that notice should have been addressed to all the members of the family and served on them, and in the absence of notice to all the suit was incompetent. The trial court upheld the validity of the notice relying upon the decision of the Allahabad High Court in Shrimati Vishnawati vs Bhag wat Vithu Chowdhry, on the footing that the defendants were joint tenants and constituted a single unit and therefore notice to one of the defendants was sufficient to determine the tenancy. The view proceeded on the basis that the heirs of the original tenant held the tenancy as joint tenants. When the matter ultimately came to the High Court in second appeal, the High Court took the view that as heirs of the deceased tenant they held the tenancy as tenants in common and not as joint tenants. Accordingly, the High Court said, notice to quit should have been served on each one of the successor tenants. In that view, the High Court allowed the appeal and 771 dismissed the suit. The High Court relied on Ramesh Chand Bose vs Gopeshwar Prasad Sharrna, AIR 1977 'Allahabad 38 where it was held that a tenancy was a heritable property right and the heirs of the deceased tenant became tenants themselves. In this appeal the entire question is whether the notice addressed to the respondent alone is a valid notice. It is now well settled that on the death of the original tenant, subject to any provision to the contrary either negativing or limiting the succession, the tenancy rights devolve on the heirs of the deceased tenant. The incidence of the tenancy are the same as those enjoyed by the original tenant. It is a single tenancy which devolves on the heirs. There is no division of the premises or of the rent payable therefor. That is the position as between the landlord and the heirs of the deceased tenant. In other words, the heirs succeed to the tenancy as joint tenants. In the present case it appears that the respondent acted on behalf of the ten ants, that he paid rent on behalf of all and he accepted notice also on behalf of all. In the circumstances, the notice served on the respondent was sufficient. It seems to us that the view taken in Ramesh Chand Bose (supra) is erroneous where the High Court lays down that the heirs of the deceased tenant succeed as tenants in common. In our opinion, the notice under section 106 of the served by the appellant on the respondent is a valid notice and therefore the suit must succeed. In the result, the appeal is allowed, the judgment and decree of the High Court are set aside and the judgment and decree of the First Appellate Court are restored. There is no order as to costs. P.S.S. Appeal allowed.

The respondent inherited tenancy of the demised premises alongwith his mother, brothers and sisters from their fa ther. A notice under section 106 of the terminating the tenancy was served on him. It was followed by a suit for ejectment against him. Upholding the validity of the said notice, the trial court took the view that the heirs of the original tenant held the tenancy as joint tenants and, therefore, notice to one of the defendants was sufficient to determine the tenan cy. Allowing the appeal therefrom, the 'High Court took the view that as heirs of the deceased tenant they held the tenancy as tenants incommon and not as joint tenants. There fore, the notice to quit should have been served on each one of the successor tenants. Allowing the appeal by special leave, the Court, HELD: The notice under section 106 of the Transfer of Proper ty Act served by the appellant on the respondent was a valid notice. [771E] On the death of the original tenant, subject to any provi sion to the contrary either negativing or limiting the succession, the tenancy rights devolve on the heirs of the deceased tenant. The incidence of the tenancy are the same as those enjoyed by the original tenant. It is a single tenancy which devolves on the heirs. There is no division of the premises or of the rent payable therefor. The heirs thus succeed to the tenancy as joint tenants. [771C] In the instant case, the respondent acted on behalf of the tenants, he paid rent on behalf of all and accepted notice also on behalf of all. In the circumstances, the notice served on the respondent was sufficient. The suit must, therefore, succeed. [771D] 770 Shrimati Vishnawati vs Bhagwat. Vithu Chowdhry, , affirmed. Ramesh Chand Bose vs Gopeshwar Prasad Sharma, AIR 1977 Allahabad 38, overruled.

Appeal No 320 of 1955. Appeal by special leave from the judgment and order dated October 19, 1954 of the Labour Appellate Tribunal of India at Bombay in Appeal No. 76 of 1954. H. J. Umrigar, E. J. Muharir and Rameshwar Nath, for the appellant. section W. Dhabe and R. A. Govind, for the respondent. November 6. The Judgment of the Court was delivered by VENKATARAMA AYYAR J. The Central Provinces Transport Services Ltd., Nagpur, was, at the material dates, a public limited company, and the respondent was employed as a mechanic therein. In June 1950, goods belonging to the Company were stolen, 958 and suspicion fell on the respondent. There was an enquiry into the matter, and that resulted in his dismissal on June 28, 1950, on the ground of gross negligence and misconduct. He was then prosecuted on a charge of theft, but that ended in his acquittal on March 3, 1952. Thereafter, be applied to the Company to be reinstated, and failing to get redress, filed on October 1, 1952, an application before the Labour Commissioner under section 16(2) of the Central Provinces and Berar Industrial Disputes Settlement Act XXIII of 1947, hereinafter referred to as the Act, for reinstatement and compensation. The Company resisted the claim on the ground, inter alia, that as the applicant had been dismissed on June 28, 1950, he was not an employee on the date of the applica tion, that accordingly there was no "industrial dispute touching the dismissal of an employee" as required by section 16, sub sections (1) and (2) of the Act, and that, in consequence, the proceedings under that section were incompetent. The Assistant Labour Commissioner, before whom the matter came up for hearing, agreed with this contention, and dismissed the application. The respondent preferred a revision against this order to the Provincial Industrial Court ,under a. 16(5) of the Act, and by its order dated February 5, 1954, that Court held that a dismissed employee was an employee as defined in section 2(10) of the Act, that a dispute by such an employee was an industrial dispute within section 2(12) of the Act,. and that the application under section 16(2) of the Act was therefore maintainable. In the result, the order of dismissal was set aside and the matter remanded for enquiry on the merits. Against that order, the Company appealed to the Labour Appellate Tribunal, which by its order dated October 19, 1954, affirmed the decision of the Provincial Industrial Court, and dismissed the appeal. The Company has preferred the present appeal against this order under article 136. Pending the appeal to this Court, the Company went into liquidation and has been taken over by the State of Madhya Pradesh, and is now being run under the name of Central Provinces Transport Services (under 959 Government ownership), Nagpur. On the application of the respondent, the record has been suitably amended. The point for decision in this appeal is whether an application for reinstatement and compensation by a dismissed employee is maintainable under section 16 of the Act. That section, so far as is material to the Present question, runs as follows: "(1) Where the State Government by notification so directs, the Labour Commissioner shall have power to decide an industrial dispute touching the dismissal, discharge, removal or suspension of an employee working in any industry in general or in any local area as may be specified in the notification. "(2) Any employee, working in an industry to which the notification under sub section (1) applied may within six months from the date of such dismissal, discharge, removal or suspension, apply to the Labour Commissioner for reinstatement and payment of compensation for loss of wages". The argument of Mr. Umrigar for the Appellant is that it is a condition prerequisite to the entertainment of an application for reinstatement under this section that there should be an industrial dispute touching the dismissal of an employee, that there was none such in this case, because the respondent was not an employee on the date of the application, having been dismissed long prior thereto and further because his dispute was an individual and not an industrial dispute. It will be convenient at this stage to refer to the relevant provisions of the Act, as they stood on the material dates. Section 2(10) defines an employee as follows: "employee" means any person employed by an employer to do any skilled or unskilled manual or clerical work for contract or hire or reward in any industry and includes an employee discharged on account of any dispute relating to a change in respect of which a notice is given under section 31 or 32 whether before or after the discharge". Section 2(12) defines "industrial dispute" as meaning 960 "any dispute or difference connected with an industrial matter arising between employer and employee or between employers or employees". Under section 2(13), "industrial matter" means "any matter relating to work, pay, wages, reward, hours, privileges, rights or duties of employers or employees, or the mode, terms and conditions of employment or refusal to employ and includes questions pertaining to (a) the relationship between employer and employee, or to the dismissal or non employment of any person. ') It is not disputed that a question of reinstatement is an industrial matter as defined in section 2(13) of the Act. The controversy relates to the question whether it is an industrial dispute as defined in section 2(12) of the Act ' The contention of the appellant is that it does not fall within that definition., because the further condition prescribed by section 2(12) that it must be between an employer and employee is not satisfied. It was argued by Mr. Umrigar that when the respondent was dismissed on June 28, 1950, his employment came to an end, and that he could not thereafter be termed an employee, as that word is ordinarily understood, that it could not have been the intention of the legislature to include in the definition of an employee even those who had ceased to be in service. , as otherwise there was no need for the further provision in section 2(10) that discharged employees would in certain cases be employees; and that, in any event, the inclusive portion of the definition would, on the principle Expressio unius est exclusive alterius, operate to exclude all exemployees, other than those mentioned therein. The question whether a dismissed employee is an employee as defined in section 2(10) of the Act must be held to be practically concluded by the decision of the Federal Court in Western India Automobile Association vs Industrial Tribunal, Bombay(1). There, the point for determination was whether a claim for reinstatement by a dismissed workman was an industrial dispute as defined in section 2(k) of the XIV of 1947. It was held that the definition in section 2(k) including as it did, all disputes or (1) 961 differences in connection with employment or non employment of a person was sufficiently wide to include a claim for reinstatement by a dismissed workman. Counsel for the appellant sought to distinguish that decision on the ground firstly, that it was given on a. statute different from what we are concerned with in this appeal, and secondly, that the reference there, included other items of dispute, which un doubtedly fell within the Act, and the question of reinstatement took its complexion from those items. We do not see any force in. either of these contentions. Section 2(12) and section 2(13) of the Act are substantially in pari materia with section 2(k) of Act XIV of 1947, and the ratio of the decision in Western India Automobile Association vs Industrial Tribunal, Bombay (supra) will be as much applicable to the one enactment as to the other. , Nor does it make any difference that there were comprised in the reference other items which fell within the definition under section 2(k), because if the Government had no jurisdiction under the Act to refer the question of reinstatement of dismissed employee for adjudication, ' then the to that extent, be treated as a nullity,reference must, and it would be immaterial that it was intravires as regards the other items of dispute. We are also unable to accede to the contention of the appellant that the inclusive clause in section 2(10) of the Act, is an indication that the legislature did not intend to include within that definition those who had ceased to be in service. In our opinion, that clause Was inserted ex abuNdanti cautela to repel a possible contention that employees discharged under sections 31 and 32 of the Act would not fall within section 2 (10), and cannot be read as importing an intention generally to exclude dismissed employees from that definition. On the other hand, section 16 of the Act expressly provides for relief being granted to dismissed em ployees by way of 'reinstatement and compensation, and that provision must become useless and inoperative, if we are to adopt the construction which the appellant seeks to put on the definition of employee in section 2(10). We must accordingly bold agreeing with 125 962 the decision in Western India Automobile Association V. Industrial Tribunal, Bombay (supra) that the definition of "employee" in the Act would include one who has been dismissed and the respondent cannot be denied relief only by reason of the fact that he was iiot in employment on the date of the application. It was next contended that even assuming that the respondent was an "employee" as defined in section 2 (10) of the Act, his dimissal could not be held to be an industrial dispute as defined in section 2(12), because that term properly meant that the dispute was one between employer on the one hand and the industry represented by its workmen as a class on the other, and that a dispute between the employer and a single employee would be an individual dispute and would therefore be outside the purview of a. 2(12). It was argued in support of this contention that the object of all tabour legislation was not so much to deal with individual rights of workmen, for the enforcement of which there was an appropriate forum in the ordinary courts of the land as to regulate the relation between capital and labour, treating them as distinct entities, so that public peace and order might not be disturbed and production might not suffer, and for that end, to recognise the right of labour to speak and act as a body for the protection of its common interests and to provide a machinery for speedy settlement of disputes which that body might raise; and that it could not have been the intention of the legislature, where the above considerations did not operate, to interfere with the normal relations between employer and employee under the law and to provide an additional forum to the employee to vindicate his rights. Reliance was placed in support of this contention on decisions of the Madras, Calcutta and Patna High Courts and of Industrial Tribunals. The question whether a dispute by an individual workman would be an industrial dispute as defined i section 2(k) of the Act XIV of 1947, has evoked considerable conflict of opinion both in the High Courts and in Industrial Tribunals, and three different views have been expressed thereon: (I) A dispute which concerns 963 only the rights of individual workers, cannot be held to be an industrial dispute. That was the opinion expressed in Kandan Textiles vs Industrial Tribunal(1). There, Rajamannar C. J. observed that though the language of the definition in section 2(k) was wide enough to include such a dispute, the provisions of section 18 suggested that something more than an individual dispute between a worker and the employer was meant by an industrial dispute. The other learned Judge, Mack J., was more emphatic in his opinion, and observed that the Act was "never intended to provide a machinery for redress by a dismissed workman". It became, however, unnecessary to decide the point, as the court came to the conclusion that the reference it self was bad for the reason that there was no material on which the Government could be satisfied that there was a dispute. The views expressed in Kandan Textiles vs Industrial Tribunal (supra) were approved in Manager, United Commercial Bank Ltd. V. Commissioner of Labour(2); but here again, the observations were obiter, as the point for decision was whether a right of appeal conferred by section 41 of the Madras Shops and Establishments Act XXXVI of 1947 was taken away by implication by Act XIV of 1947. The question, however, arose directly for decision in J. Chowdhury vs M. C. Banerjee(3), in which the order of the Government referring the dispute of a dismissed employee to the adjudication of a Tribunal was attacked as incompetent, and it was held by Mitter J., following the observations in Kandan Textiles V. Industrial Tribunal (supra) that the dispute in question was not an industrial dispute, and that the reference was, in consequence, bad. (11)A dispute between an employer and a single employee can be an industrial dispute as defined in section 2(k). That was the decision in Newspapers Ltd., Allahabad vs State Industrial Tribunal, U.P. (i). In that case a reference of a dispute by a dismissed employee and the award of the Tribunal passed on that refer (1) A.I.R. (2) A.I.R. 1951 Mad. 141. (8) (4) A.I.R. 1954 All. 516, 964 ence were attacked as bad on the ground that the dispute in question was not an industrial dispute within section 2(k) of Act XIV of 1947, and it was held by Bhargava J., that an industrial dispute could come into existence even if the parties thereto were only the employer and a single employee and that the reference and the award were, in consequence, valid. A similar decision was given by a Full Bench of the Labour Appellate Tribunal in Swadeshi Cotton Mills Company Ltd. vs Their Workmen(1). (III) A dispute between an employer and a single employee cannot per se be an industrial dispute, but it may become one if it is taken up by the Union or a number of workmen. That was held by Bose J., in Bilash Chandra Mitra vs Balmer Lawrie & Co.(2), by Ramaswami and Sarjoo Prosad JJ., in New India Assurance Co. vs Central Government Industrial Tribunal(3) and by Balakrishna Ayyar J., in Lakshmi, Talkies, Madras vs Munuswami and others(4) and by the Industrial Tribunals in Gordon Woodroffe & Co. (Madras). Ltd. vs Appa Rao(5) and Lynus & Co. vs Hemanta Kumar Samanta(6). The preponderance of judicial opinion is clearly in favour of the last of the three views stated above, and there is considerable reason behind it. Notwithstanding that the language of section 2(k) is wide enough to cover a dispute between an employer and a single employee, the scheme of the does appear to contemplate that the machinery provided therein should be set in motion, to settle only disputes which involve the rights of workmen as a class and that a dispute touching the individual rights of a workman was not intended to be the subject of an adjudication under the Act, when the same bad not been taken up by the Union or a number of workmen. If that were the correct position, the respondent was not entitled to apply under section 16(2) of the Act as the workmen in the industry had not adopted his dispute as their own and chosen to treat it as (1) (3) A.I.R. 1953 Patna 321. (5) (2) A.I.R. 1953 Cal. 613. (4) (6) 965 their ' casus belli with the Company. But then, we are directly concerned in this appeal not with the XIV of 1947 but with the Central Provinces and Berar Industrial Disputes Settlement Act XXIII of 1947, and in the view which we take of the rights of the respondent under that statute, there is no Deed to express a final opinion on the question whether a dispute simpliciter between an employer and a workman would be an industrial dispute within 9. 2(k) of Act XIV of 1947. Now, the Central Provinces and Berar Industrial Disputes Settlement Act XXIII of 1947 with which we are concerned, is not in pari materia with Act XIV of 1947. It no doubt covers the ground occupied by that Act, and contains provisions relating to arbitration, adjudication, awards, strikes and lock outs. But it contains more. It enacts in Ch. IV provisions which are intended to regulate the contract of employment between employer and workmen, a subject which is covered by a distinct piece of Central legislation, Industrial Employment (Standing Orders) Act XX of 1946. The object of that Act was, as appears from the preamble thereto, "to require employers in industrial establishments formally to define conditions of employment under them", whereas the object of the XIV of 1947 is, as set out in its preamble, "to make provision for the investigation and settlement of industrial disputes and for certain other purposes". Thus, even though the two enactments are pieces of what is termed labour legislation, their objects and their vision are different. While Act XIV of 1947 may be said to be primarily concerned with disputes of labour as a class Act XX of 1946 is directed to getting the rights of an employee under a contract defined. Now, as the Central Provinces and Berar Industrial Disputes Settlement Act XXIII of 1947 covers the ground occupied by both Act XX of 1946 and Act XIV of 1947, it would be proper to interpret the expression "industrial dispute" therein in a sense wider than what it bears in Act XIV of 1947, so as to cover not only disputes of workmen as a class but also their individual disputes. 966 And this view receives considerable support from other provisions of the Act. Section Al enacts that an ap plication under that section can be made either by an employer or employee concerned or by a representative of the employees concerned. Section 2(24) defines "representative of employees" as meaning a union or where there is no union, persons elected by the employees not exceeding five. Thus, there is a clear recognition of the rights of an individual employee as distinguished from a class of employees, to move for redress. It is argued by Mr. Umrigar that this re cognition is only for the purpose of section 41 and that no inference can be drawn therefrom that the employee has a similar right to apply under section 16(2). But the importance of section 41 consists in this that it indicates that the Act has in contemplation the enforcement of individual rights of workmen also. Then we have section 53, which runs as follows: "Save with the permission of the authority holding any proceeding under this Act, no employee shall be allowed to appear in such proceeding except through the representative of employees: Provided that where only a single employee is concerned he may appear personally". , This section again recognises the rights of employees to agitate their individual rights under the provisions of the Act. Section 16 is intended, in our opinion, to enable an employee to enforce his individual rights when there is an order of dismissal, discharge, removal or suspension, and in the context, "industrial dispute" must be interpreted as including the claim of an employee who has been dismissed, for reinstatement and compensation. The view taken by the Industrial Court and the Labour Appellate Tribunal as to the meaning of "industrial dispute" in the Central Provinces and Berar Industrial Disputes Settlement Apt XXIII of 1947" is therefore correct, and this appeal must be dismissed with costs. Appeal dismissed. APPENDIX Reference to the memory of late Dr. Bijan Kumar Mukherjea, Ex Chief Justice of India, by the Judges and members of the Bar of the Supreme Court of India assembled at a meeting on February 23, 1956. section R. DAS, C.J. Mr. Attorney General we have met here today under the shadow of death to mourn the passing away of one who only the other day was our Chief Justice and beloved leader. He had been ailing for some time but we did not anticipate that his end was so near. Therefore, when the melancholy news came suddenly over the wires, my colleagues and I felt a severe shook as all of you must also have done. We have assembled here today to pay our respectful homage to the memory of our departed leader. Bijan Kumar Mukherjea was born on August 15 ' 1891. His father late R. D. Mukherjea was a Sanskrit ' scholar. He was a Vakil of the Calcutta High Court but used to practice at Hooghly. Mukherjea had his early education at Hooghly and thereafter at Calcutta. He obtained his Master 's Degree in History. In B.L. and M.L. examinations he topped the list of successful candidates and secured University gold medals. He was Ananth Deb Research Prizeman. Bijan Kumar Mukherjea was enrolled as a Vakil o the Calcutta High Court on the Appellate Side on January 9, 1914. Shortly thereafter Sir Ashutosh Mookerjee, who had an eye for discovering talents, offered him a lectureship in the University Law College. This was a great help to the struggling junior and indeed, changed the whole course of his life and career, for the stipend, meager as it was, enabled him to struggle at the Bar of the Calcutta High Court instead of moving to Patna where a new High Court had recently been set up. His rise at the Bar was not meteoric but was a steady one. He passed through the hard trial but momentary disappointments or set backs did not dim his enthusiasm or dishearten him. While practising at the Bar, he 126 968 secured his Doctorate in Law. His academic distinctions and studious habit stood him in good stead. His scholarly erudition, good grounding in legal principles and deep insight into human nature soon brought him to the forefront of the profession. To his legal learning and forensic skill was added a graceful style of advocacy ,Which was entirely his own. His merit was soon recognised and in or about 1934 he was appointed the junior Government Pleader and within two years the senior Government Pleader. True to tradition he was elevated to the High Court Bench in 1936 Distinguished as an Advocate he became greater as a Judge. His sweet temper and amiable disposition endeared him to his colleagues as well as to the members of the Bar and particularly to the junior members. I am happy to bear testimony to his kindness, courtesy and consideration for his colleagues for I had the privilege of sitting with him on the Bench of the Calcutta High Court. In 1947 he served on the Boundary Commission. In 1948 Bijan Kumar Mukherjea along with Shri Mehr Chand Mahajan, who happily is with us, was called upon to serve as a Judge of the Federal Court. He readily responded to the call of duty and came all the way to New Delhi leaving at Calcutta his only son to whom he had been both a father and a mother. In the midst of his work on the Bench, he could find time to prepare and deliver his Tagore Law Lectures on the Hindu Law of Endowments. On the retirement of Shri Mahajan on December 23, 1954, Mukherjen, became the the fourth Chief Justice of this Court. He brought with him here his profound legal scholarship, a clear thinking and rational mind and a burning sense of justice. The Law Reports will bear testimony to his sound erudition, and his masterly grasp of the fundamental principles which lie at the root of our legal system. His judgments had a freshness and a compactness and were not mere collections of precedents. He delved deep into the foundations of the law and analysed the underlying principles with clarity and precision. By his judgments he made 969 priceless contributions to our legal literature. As a Judge he shed lustre on the High Court at Calcutta as well as on this Court. His energy was not confined to law only. He was closely associated with the Scout movement in Bengal. He was a profound Sanskrit scholar and earned the degree of Saraswati. Perhaps he imbibed his Sanskrit scholarship from his revered father. He became President of the Bengal Sanskrit Association. He was also a Fellow of the Calcutta University. He was also a good student of philosophy. He had sensitive and fine literary tastes and he could recite from memory long passages from Tagore 's works as well as from the works of Sanskrit and English poets. He was an essentially religious main with a scrupulously chaste character. He was pure in thought, word and deed. Mukherjea was loved and respected because of his deep human sympathy, piety and the nobility of his character. He drew people towards him and radiated a serenity on all who came into contact with him. I have heard more than one person say that on returning home after a visit to Mukherjea he felt that he had returned as a better man. He was ailing and undergoing suffering and pain and death must have brought relief and deliverance to him. But by his premature retirement and death our Court and country have lost an illustrious Chief Justice, an erudite scholar, a sound jurist and above all, a great gentleman and we, who had the privilege of working with him and sharing our joys and sorrows with him, have lost a brilliant colleague, a respected leader and a lovable friend. We mourn his death as a personal loss and we pay our respectful homage and sincere tribute of appreciation and affection to the memory of the great departed soul. May his soul rest in eternal peace. We also offer our sincere sympathies to his son who is an Advocate of this Court. M. C. Setalvad, Attorney General of India. My Lords, The Bar respectfully associates itself with all that has fallen from my Lord the Chief Justice. 970 His ill health followed by his painful illness which led to his premature retirement made us all feel that he would not be with us for long. Yet when the news of the end came, so endearing was his personality and so great his kindness to everyone who came it contact with him, that all of us were deeply touched. Rarely has one the privilege of appearing before a Judge with such a deep knowledge of fundamental principles in all branches of the law and an unfailing and quick grasp of legal issues. Whether it was a question relating to Hindu Religious Endowments, a subject in which he had made extensive research, or a constitutional question or a question of the law of contract his piercing intellect and analytical mind immediately perceived the points that arose, the Counsel had to be prepared to deal with a series of searching questions on all the legal aspects which arose. His erudition in law is writ large in the numerous judgments delivered by him scattered over the reports of this Court during the last six years. His masterly exposition of the doctrine of equality before the law in Cheranjitlal 's case and his analysis of the law of frustration of contract with a view to show that in India it had its roots not in the theory of a term implied by the parties but in a positive statutory provision, are landmarks in the development of our law of the Constitution and our law of contract. Truly did Justice Douglas of the United States speak in his recently delivered Tagore ' Law Lectures of the march of. legal doctrine from Marshall to Mukherjea. Nor were his interests confined to the sphere of law. He was a keen student of philosophy and literature, had a profound knowledge of Sanskrit and was deeply interested in all literary and cultural problems. He had a prodigious memory and even a few minutes with him gave one glimpses of many an interesting event in the history and politics of Bengal. Great as a Judge and a learned scholar, he was, I think, even greater as a man. Simple and unassuming, gentle and kind, frank and outspoken, he won the affection of all who. came to know him. A few months 971 ago, a member of the Bar was brought before a Bench over which he presided to answer a charge of misconduct which he admitted. Considering the question of punishment, the late Chief Justice asked Counsel assisting the Court whether it would be just to punish the Advocate with a year 's suspension when he had a family dependent on his professional earnings. That was a question truly characteristic of him and showed his kindly heart. We at the Bar voice our deep grief at the sad demise of a great and distinguished Chief Justice and extend our warm sympathies to his bereaved family.

In June, 1950, goods belonging to the appellant company were stolen and as the result of an enquiry the respondent was dismissed on the ground of gross negligence and misconduct. He was prosecuted on a charge of theft but was acquitted in March, 1952, and thereupon he made an application before the Labour Commissioner 957 for reinstatement and compensation under section 16(2) of the Central Provinces and Barar Industrial Disputes Settlement Act, 1947. It was contended for the appellant that the application was not main tainable because (1) the respondent was not an employee on the date of the application, having been dismissed long prior thereto and (2) his dispute was an individual and not an industrial dispute Held, (1) that the definition of "employee" in section 2(10) of the Act includes one who has been dismissed and has ceased to be in service, and that the inclusive clause therein was inserted ex abundanti cautela to repel a possible contention that employees discharged under sections 31 and 32 of the Act would not fall with Ins. 2(10) and cannot be read as importing an intention generally to exclude dismissed employees from that definition. Western India Automobile Association vs Industrial Tribunal Bombay ([1949] F.C.R. 321), relied on. (2) that a dispute between an employer and an employee who has been dismissed and who makes a claim for reinstatement and compensation, would be an industrial dispute within the meaning of section 2(12) of the Act, and section 16 enables the employee to enforce his individual rights against an order of dismissal, discharge, removal or suspension. Quaere, whether a dispute simpliciter between an employer and a workman would be an industrial dispute within section 2(k) of the (XIV of 1947).

o. 1354 of 1968, Appeal from the judgment and order dated February 3, 1967 of the Mysore High Court in T.R.C. No. 1 of 1965. section T. Desai, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for ,the appellant. 233 C. K. Daphtary, V. Krishnamurthy, V. Srinivasan, section Swarup, B. Datta, P. C. Bhartari, J. B. Dajachanji, O. C. Mathur and Ravinder Narain, for the respondents. The Judgment of the Court was deliverd by Shelat, J. This appeal, by certificate, is directed against the judgment of the High Court of Mysore dated February 3, 1967 whereby it answered in the negative the question referred to it under section 64(1) of the , XXXIV of 1953. The question was : "Whether on the facts and in the circumstances of the case, the entire property held by the deceased valued at Rs. 12,23,794/ was chargeable lo estate. duty ?" The said property comprised shares and securities of the value of Rs. 25,778/ , and immovable properties at Bangalore and Madras respectively valued at Rs. 5,42,500/ and Rs. 6,10,100/ . The assessment in question pertained to the estate of Hajee Mahomed Hussain Sailt, the father of the two respondents, who died at Bangalore on March 22, 1955 leaving the said properties. The said Hajee Mahomed Hussain and the respondents belonged to Cutchi Memon sect amongst the Muslims. The respondents claimed that Cutchi Memons at one time were Hindus residing in Sind, that some four or five hundred years ago they were converted to Islam like the members of another such sect, the Khojas that they migrated thence to Cutch and from there spread themselves to Bombay, Madras and other places. Their case was that despite their conversion, the Cutchi Memons retained a large part of Hindu law as their customary law, including its concept& of joint family property, the right of a son by birth in such pro perty and its devolution by survivorship. Further neither the Cutchi Memons Act, XLVI of 1920, nor the Muslim Personal Law (Shariat) Application Act, XXVI of 1937, nor the Cutchr Memons Act, X of 1938 applied to them. That being the posi tion, there was no question of the passing of the said properties to them on the death of their father as envisaged by section 3 of the, Act or its being applicable to them or the said properties, the, said properties having come to them under the Hindu Law rule devolution of joint family property by survivorship. Their case was that only one third of the said properties, that is, the undivided share of their deceased father, could be properly said to have passed to them on his death and to be assessable under the Act. The Deputy Controller rejected these contentions as also the evidence led by the respondents in support thereof and assessed 10 L120 SupCI/72 234 duty at Rs. 2,05,996.41 P. on the basis that the entire estate valued by him at Rs. 12,23,794/ was assessable. The respondents filed two separate appeals, both of which were rejected by the Central Board of Revenue by its order dated December 30, 1961, and as aforesaid, at the instance of the respondents referred to the High Court the aforesaid question. In support of their contentions, the respondents had produced before the Deputy Controller the following documents as evidence of the Hindu law being their customary law : (i) O.P. No. 47 of 1909 A petition before the High Court of Madras and the High Court 's order thereon. (ii) O.P. 188 of 1927 A petition before the High Court of Madras and the High Court 's order thereon. (iii) O.P. 79 of 1928 A petition before the High Court of Madras and the High Court 's order thereon. (iv) O.P. 1 of 1930 A petition before the High Court of Madras and the High Court 's order thereon. (v) The judgment of the High Court of Madras in Civil 'Revision Petition No. 1727 of 1930. (vi) The Judgments of the same High Court in Siddick Hajee Aboo Bucker Sait vs Ebrahim Hajee Abuo Bucker Sait(1), and Abdul Sattar Ismail vs Abdul Hamid Sait. (2) These were produced to show that the rules of Hindu law were consistently acquiesced in and applied to their family and the other Cutchi Memons settled in Madras. They also relied on the fact that the High Court had issued letters of administration to them although they had paid succession duty only on one third of the said estate. The Deputy Controller held that neither the said evidence, nor the fact of their having paid succession duty on one third of the said estate only concluded the issue before him, viz., that the rules of Hindu law, including the rules as to joint family property and its devolution by survivorship constituted the customary law of Cutchi Memons in Madras and Bangalore. He rejected their contention That as they had settled down first in Madras and then in Bangalore sometime between 1928 and 1930, and as a large part of the ,state was situate in Madras, he should prefer the Madras, as against the Bombay view. namely, that he rules of Hindu law applicable to Cutchi Memons governed matters of succession and inheritance only. His view was that as there was only one solitary decision of the High Court of (1) A.I.R. 1921 Mad. 571. (2) A.I.R. 1944 Mad. 235 Madras in favour of the respondents ' contention as against a large number of decision of the Bombay High Court which limited the application of Hindu law to matters of succession and inheritance, the Bombay view was the correct one. As regards the orders and decisions produced by the respondents, he held that they would not assist the respondents as in none of them the question raised by them was specifically dealt with by the High Court. In support of their appeals the respondents, in addition to the aforesaid evidence, also produced a partition deed of 1906 between one Hussain Hajece Ouseph Sait and his two sons, which inter alia recited that the said Hajee Hussain Sait and his six brothers had formed a joint family governed by Hindu law. The different petitions and the orders thereon set out earlier, and ranging from 1909 to 1930 showed, (1) that the respondents ' family was in Madras till about 1930 when its members partly shifted their activities to Bangalore, and (2) that in all these petitions the stand taken by the members of the respondents ' family was that the family properties were treated as joint family properties. The Board, however, rejected this evidence stating that no weight could be given to it, since a custom followed by one, particular family would not "convert that family into a coparcenary governed by the Hindu law of survivorship", and dismissed the appeals. As aforesaid, the High Court upheld the respondents ' contentions and answered the question referred to it against the Revenue. On behalf of the Controller of Estate Duty, the following points were raised : (i) that the concept of joint family did not apply to Cutchi Memons, and that a Cutchi Memon 's son did not acquire any interest by birth in the property inherited by his father from his ancestors, (ii) that in any case there was no scope for raising any such contention after the enactment of 'he Shariat Act of 1937, and thereafter of the . (iii) that the High Court of Mysore should have preferred the view taken by the Bombay High Court and followed by the old Mysore High Court in Elia Sait vs Dharavva,(1) and (iv) that the findings recorded by the Board were binding on the High Court. (1) 236 After some argument, Mr. Desai conceded that his contention as to the Shariat Act could not be pressed and gave up that part of his second proposition. As regards his 4th proposition, the issues before the High Court were questions of law and therefore here was no question of the High Court being bound by the Boaid 's findings. That leaves proposition 1, part of proposition 2 and proposition 3 of Mr. Desai for our determination. It is a rule of Mahomedan law, the correctness of which is not capable of any doubt, that it applies not only to persons who are Mahomedan by birth but by religion also. Accordingly, a person converting to Mahomedanism changes not only his religion but also his personal law. Mitar Sen Singh vs Maqbul Hasan Khan(1). Such a rigid rule, however, applies to cases of individual conversions, for, in cases of wholesale conversion of a case or a community, it is recognised that the converts might remain a part of their original personal law according to Their hitherto held habits, traditions and the surroundings. This principle was laid down in Fidahusein vs Mongbibai(2), where the question arose whether a Khoja of the Shia Ishna Ashari sect could dispose of the whole of his property by testamentary disposition. Tracing the history and the conversion of Khojas from its previous decisions, the High Court held that the conversion of Khojas to the Shia Imami Ismaili sect was not a case of individual conversions but of a mass or community conversion, and that in such a case it could be properly presumed that such converts might retain a portion of their original personal law according to their social habits and surroundings. They, therefore, retain their personal law unless they consciously adopt another. The High Court deduced the following principle (p. 402): "A Hindu convert residing in India is governed by his personal law unless he renounces the old law and accepts the new one, except where a statutory provision is made. His intention to renounce the old law is to be inferred : (a) if he attaches himself to a class which follows a particular law, or (b) if he observes some family usage or custom derogatory to the old law. " The question as to which personal law, sects among the Muslims, such as the Khojas and the Memons, would be subject to in matters of property, succession and inheritance arose in Bombay as early as 1847. In Hirbae vs Sonabae ( 3 ) commonly called the Khoja and Memon cases, the Supreme Court of Bom (1) [1930] 57 I.A. 313. (2) (3) Perry 's Oriental Cases, 110 (1853). 237 bay was called upon to determine the claim of two sisters in the estate left by their father, who had died intestate without leaving any male issue, The claim was resisted on the ground that in the Khoja community the custom was that females were excluded from any share in their father 's es ate, and were entitled only to maintenance and marriage expenses. A suit raising precisely the same question was also before the Court between members of Cutchi Memons sect. Both the suits were tried together and disposed of by Sir Erskine Perry, C.J., by a common judgment in which he held the custom put forward before him as proved. On that finding he held : "I am, therefore, clearly of the opinion that the effect of the clause in the Charter is not to adopt the text of the Koran as law any further than it has been adopted in the laws and usages of the Muhammadans who came under our sway, and if any class of Muhammadans, Muhammadan dissenters, as they may be called, are found to be in possession of any usage, which is otherwise valid as a legal custom and which does not conflict with any express law of the English government, they are just as much entitled to the protection of this clause as the most orthodox society can come before the Court." The learned Chief Justice held that the Khojas who had settled down in Cutch, Kathiawar and Bombay were converted as a caste to Islam some three or four hundred years ago, but had retained on their conversion the Hindu law as to inheritance and succession. As to Cutchi Memons also, he held that they had originally settled down in Cutch from where they spread in western India; that originally Lohanas, they too were converted to Islam some three or four hundred years ago. Though a little more orthodox Muslims than the Khojas and more prosperous, they had yet retained the Hindu law of succession, excluding females from inheritance, who were entitled only to maintenance and marriage expenses. (pp. 114 115). A few years hence, Sausse, C.J., following this decision held in Gangbai vs Thavar Mulla(1) that the Khoja caste, "although Muhammadan in religion, has been held to have adopted, and to be governed by Hindu customs and laws of inheritance,". Three years later, in In the Goods of Mulbai,(2) Couch, C J. observed that the law by which the Khojas were governed was not, properly speaking, "Hindu law, but probably that law modified by their own customs". In yet another similar case during that year, In the Advocate General of Bombay ex relations Daya (2) (1) 238 Muhammad and other(1), commonly known as the Agha Khan 's case, the question was not as regards the rules of succession and inheritance, but whether the Khojas were to be considered as orthodox Sunnis or Ismailia Shias. Arnould, J., once again considered the history of their conversion, their religious book called 'Dashavatar ' (the ten incarnations) and came to the conclusion that Khojas represented "the dissidence of dissent" in its most extreme form; the Ismailias being dissenters from the main body of Shias, as these in turn were dissenters from the main body of orthodox Islam". (Wilson 's Anglo Muhammadan Law, 33 34 (6th ed.). From these premises, Westropp, C.J., took a step forward in Shivji Hassam vs Datu Mavji Khoja(2) and held that Hindu law applied to the Khojas in all matters relating to property, succession and inheritance, the Khojas having retained that part of their personal law to which till their conversion they were accustomed. Similarly, In the Goods of Rahimbhai Aloobhai(3), after referring to the previous decisions, Sargeant, J., declared that the Khoias for the last twenty five years at least had been regarded by the court in all questions of inheritance as converted Hindus, who originally retained the Hindu law of inheritance, which had since been modified by special customs, and that a uniform practice had prevailed during 'that period of apply ing Hindu law lo them in all questions of inheritance, save and except when such a special custom had been proved. The consequence of such a proposition was that the burden of proof lay on the person who set up such a special custom derogatory to the Hindu Law. In Rahimathai vs Hirbai, ( 4 ) Westropp, C.J., once again declared : "It is a settled rule that in the absence of proof of a special custom to the contrary Hindu law must regulate the succession to property among Khojas", and dealing with a question such as that of maintenance to be awarded to a Khoja widow, he held that in the absence of a special custom to the contrary, that question also must be governed by Hindu law. In Karamali vs Sherbanoo ( 5 ) , rules of Hindu law were applied as between the widow of a deceased Khoja and his brothers, the Court holding the widow to be entitled to maintenance only and the property of the deceased going to the brothers who had lived jointly with 'heir deceased brother. Thus, from 1847 to 1905 the Bombay High Court consistently treated the Khojas as being governed by the rules of Hindu law in matters of property, succession and inheritance. (1)(1866) (2) (3) (4) Bom. (5) Bom. 85. 239 With regard to the Cutchi Memons, whom Sir Erskine Perry had clubbed together with the Khojas, Westropp, C.J., in In the Matter of Haji Ismail Haji Abdullah(1) held them not to be regarded as Hindus for the purposes of the Hindu Wills Act, XXI of 1870, and added : " We know of no difference between Cutchi Memons and any other Muhammadans except that in one point connected with succession it was proved to Sir Erskine Perry 's satisfaction that they observed a Hindu usage which is not in accordance with Muhammadan Law. " But in Ashabai vs Haji Tyeb Haji Rahimtulla (2) , where the plaintiffs, the widow and the daughter of the deceased Haji Adam, a Cutchi Memon, sought to recover properties alleging them to be the ancestral properties of Haji Adam, which his father could not dispose of by will, Sargeant, C.J., ruled that there was no partition between Haji Ismail and his son Haji Adam, and that the ancestral property absolutely vested in Haji Ismail on his son 's death. He further held that the jewels of one of the females of the family were treated as stridhan property to which the Hindu law of succession to such sridhan property would apply. The same judicial trend also appears in Abdul Cadur Haji Mohamed vs Turner(3) where Cutchi Memons were held to be subject to Hindu law in matters of inheritance. In Mahomed Siddick vs Haji Ahmed (4 ) the contention expressly raised was that the Mitakshara doctrine of sons acquiring interest by birth in ancestral properties did not apply to Cutchi Memons, and that the earlier decisions limited the Hindu law to govern matter , of inheritance and succession only. Scott, C.J., dealing with this contention held : "Vested rights, accruing at birth have been acquired by sons under the law hitherto governing the community, and it would not be just to interfere with Those rights on account of this recent change of opinion. I use the word ' recent ' advisedly, because the community hitherto by their practice have acquiesced in the application of Hindu law " In the next case, which came before the High Court, the High Court.changed its view and reversing the judgment of Jardine. J., held that the rule of Hindu law applicable to the Khoias applied only to matters of inheritance and succession and that the further rule of 'he sons having a right by birth in the ancestral property and consequently having a right to demand partition of it did not apply. The High Court, however, noted that such a right did (1)( 1881)I.L.R. Bom.459. (2) Bom. 115. (3) Bom. 158 (4) Bon. 1 240 prevail in Cutch and Kathiawar from where the Khoias had spread themselves to Bombay. (see Ahmedbhoy vs Cassum bhoy(1). But, contrary to what he had held in that case, the same learned Chief Justice (Sargeant, C.J.) in In the Matter of Haroon Mahomed(2), a case of Cutchi Memons, held that in the case of a family trading concern the members of the family would be governed by the Hindu Law and stated the position of Cutch Memons Thus : "The appellant is a Cutchi Memon, and belongs to the same family as the other persons who have been made insolvents. As Cutchi Memons the rules of Hindu Law and custom apply to them, and the position of the appellant with regard to the family property must be deter mined by the same considerations as would apply in the case of a member of a joint and undivided Hindu family". Mossa Haji vs Haji Abdul(3) is yet another instance where the High Court held that in the absence of a special custom as to succession the Hindu Law of inheritance would apply to Cutchi Memons, and therefore, when a Cutchi Memon widow dies issueless, her property would be governed by the Hindu Law as to stridhan. A year later, in Haji Noor Mahomed vs MaCleod ( 4 the rule of devolution of property by survivorship was applied to parties who were Cutchi Memons in the matter of a family firm, save that somewhat contrary to it, the principle of relationship between the manager and the members of the family was held not to apply. The above analysis shows that barring one or two stray deci sions, the general trend of judicial opinion in Bombay was that both the Khoias and the Cutchi Memons retained, despite their conversion, considerable portion of their personal law and that the rules of Hindu law were accepted by them as customary law in matters of property, inheritance and succession, including rules as to joint family property, the right of a son therein by birth and the devolution thereof by survivorship. In Jan Mahomed vs Dutta Jaffar(5), Beaman, J., after an elaborate analysis of the previous decisions dealing with both Khoias and Cutchi Memons, struck for the first time a vote of dissent and laid down two propositions : (1) that the invariable and general presumption was that Mahomedans were governed by the (1) 8891 I.L.R. I Bom. 534 (2) Bom. 197 (4) Bom. (5) Bom. 241 Mahomedan law and usage and that it lay upon a party setting up a custom in derogation of that law to prove it strictly, and (2) that in matters of simple succession and inheritance, it was to be taken as established that these two matters among Khoias and Cutchi Memons were governed by Hindu Law "as ,applied to separate and self acquired property". He added that he limited his second proposition to separate and self acquired property to take the sting out of the earlier judgments and "effectively prevent its further extension in all directions upon the basis of the Hindu law of the joint family having been established to be the law of the Khojas and Memons". (p. 511) In an equally out spoken dissent in relation to Cutchi Memons, he deprecated in the Advocate General vs jimbabai(1), after yet another analysis of the earlier judicial trend, the habit of treating the Khoias and Cutchi Memons alike, as if they were on precisely the same footing and urged the necessity of deciding the cases of Cutchi Memons on the customs proved in respect of them rather than the customs prevailing among the Khoias, and observed (p. 190) : " While there are many peculiar features in the sectarianism of the Khoias, strongly marking them off from orthodox Mahomedanism, the Cutchi Memons, except for the historical fact that they were originally Hindoos, and were converted four hundred or five hundred years ago to Mahomedanism, are, at the present day, strict and good Moslems." He dissented from Mahomed Sidick vs Haji Ahmed(2) and held that the pro position there laid down, that not only Hindu law applied to Cutchi Memons in matters of inheritance and succession but that the concept of joint family property also governed them, was open to objection, since such a rule could rest only upon proved customs, that no custom of that kind had ever been proved and that Scott, C.J., had based his conclusion only on the case law. His conclusion was that the only thing which could be said with certainty was that the Cutchi Memons had acquired by custom the power of disposing of the whole of their properly by will, but that it was not proved before him and never had been proved affirmatively that they had ever adopted as part of their customary law the Hindu law of be joint family as a whole or the distinction in that law between ancestral property as against self accquired property and that the Cutchi Memons were subject by custom to Hindu law of succession and inheritance as it would (1) Bom. (2) Bom. 1, 242 apply to the case of an intestate separate Hindu possessed of self acquired property and no more. The dissent of Beaman, J., received approval from another learned single Judge in Mangaldas vs Abdul Razak(1) and finally from the Appellate Bench of the High Court in Haji Oosman vs Haroon Salah Mahomed,(2) and therefore, the law as laid down by Beam, an, J., may be taken as finally settled so far as the Bombay High Court is concerned. The Appellate Bench of the High Court summed up the position thus : "There was a time when it was assumed that the Hindu law of joint property applied to Cutchi Memons; Ashabai vs Haji Tyeb Haji Rahimtulla(3) and Mahomed Sidick vs Haji Ahmed.(4) But these decisions are now obsolete and the application of Hindu law is now res tricted to cases of succession and inheritance as it would apply in the case of an intestate separate Hindu possessed of self acquired property. " The Revenue would be correct in the position taken by them, were the view finally settled in Bombay to apply to Cutchi Memmons settled in Madras and elsewhere also. But the High Court of Madras has adopted a view different from the later trend of opinion in the Bombay High Court. In section Haji Aboo Bucker Sait vs Ebrahim Hajee Aboo Bucker Sait,(5) Kumaraswamy Sastri, J., after an analysis of the case law in Bombay, came to the conclusion that since the Khojas and the Cutch Memons spread themselves from Cutch and Kathiawar, where they had originally settled down and where they had lived in Hindu Kingdoms with Hindu surroundings and traditions, there was nothing surprising that they retained the rules of Hindu law in general not only in matters of succession and inheritance but also concepts, such as, the joint family property and its devolution by survivorship. According to him, at the time of their conversion, the Cutchi Memons were Hindu governed by the Mithakshara system of joint and undivided family together with its rule of survivorship. "I find it difficult", he said, "to assume that the Cutchi Memons on their conversion were so enamoured of the Hindu Law of inheritance that they adopted it, but were so dissatisfied with the laws of the joint family that they discarded the rules as to coparcenary and the son 's interest in the property of his grandfather." Since there were no reported decisions on the position of the Cutchi Memons who had settled down in Madras, the learned Judge had the High Court 's record searched. As a (1) [1914] 1613om. L.R. 224.(2) Bom. (3) Bom. (4) Bom 1. (5) A.I.R. 1921 Mad. 243 result of that search, he found several suits filed by and against the Cutchi Memons wherein they were consistently treated as members of an undivided family governed by the rules applicable to the members of the Hindu joint families and decrees had been passed in those suits on that footing. Even as regards the parties before him, he found that till the filing of the suit, which he was trying, they had regulated their affairs upon the basis that the Hindu law of the joint family applied. On the premise that the Cutchi Memons in Madras had regulated succession and inheritance according to Hindu law, including its principle of devolution of property by survivorship, he held that the Hindu law of coparcenary and joint family applied to the Cutchi Memons settled in Madras. In Abdul Satlar Ismail vs Abdul Hamid Sait,(1) Leach, C.J., referred to this decision with approval and the distinction therein made between self acquired property which a Cutchi Memon could dispose of by a will without the restriction of the one third under the Mahommedan Law, on the one hand, and joint family property which he could not so dispose of. 507 to 508). In Abdul Hameed Sait vs The Provident Investment Company Ltd. ,(2) where a suit was filed by a Cutchi Memon so challenging a court sale in pursuance of a mortgage decree against his father, the parties, presumably on the basis of section Haji Aboo Bucker Sait (3) proceeded on the assumption that the rules of Hindu law governed them. (P. 942) That this Position continued in Madras even after the Shariat Act, 1937 came into force, except in regard to matters dealt with by section 2 thereof, is clear from Abdurahiman vs Avoomma, (4 ) where a Division Bench of that High Court differed from the sweeping conclusion of Basheer Ahmed Saved Sayeed, J., in Avisumma vs Mavomoothy Umma(5) and held that that Act applied, as its section 2 clearly said, only to property left intestate and which was capable of devolving on the heirs of the deceased and that that Act did not make the Mahomedan Law applicable in all matters relating to Muslims nor did it abrogate the custom and usage in respect of matters other than those specified in section 2 of the Act. The Act, therefore, would not apply to property except that which was capable of devolution on intestacy to the heirs of the deceased holding such property. (see also Mariyumnia vs Kunhaisumma(6) and Lakshmanan vs Kamal ( 7 ). Indeed, no decision of the Madras High Court holding a view contrary to, the one held in section Haji Aboo Bucker Sait 's case (a) was shown to US. On the contrary, there are, as seen above, decisions referring to that decision with approval. It may, therefore, be taken for (1) k. I.R. 1944 Mad. (2) I.L.R. (3) A.I.R. 1921 Mad. 571.(4) A.I.R. 1956 Mad. 244. (5) A.I.R. 1953 Mad. 425.(6) 1958 Ker. Law Times 627 (7) A.I.R. 1959 Kr. 67 (F.B.). 244 the time being that the view prevailing in that Court is the one of Kumaraswamy Sastri, J., in that decision. The records of past cases and the decisions of the High Court therein found by that learned Judge as also the past proceedings filed in the High Court by the members of the respondents ' family and orders passed thereon would seem to reinforce the reasoning and the conclusion arrived at by the learned Judge, in that, the parties in those proceedings would not have in filing those proceedings assumed that rules of Hindu law applied to them unless there was a pre vailing understanding that that was their customary law. That it is the law laid down by the High Court of Madras which must apply and govern the Cutchi Memons settled there is clear from Begum Noorbanu vs Deputy Custodian General of Revenue Property(1), where the Khoias settled in the former Hyderabad State were held to 'be governed by the law as laid down by the Privy Council of the then State, of Hyderabad. As to how surroundings in which a convert settles down affect the customary law to which he is accustomed till then can be seen from two highly illustrative decisions. The first is in Abdulrahim Haji Ismail Mithu vs Halimabai(2), a case of Memons who had settled down in Mombasa. Memons, it is stated there, began to migrate to Mombasa in the latter half of the 19th century. At the date of the suit, from which the appeal went up to the Privy Council, there were about a hundred Memon families settled in Mombasa. The question which arose in the suit was whether the respondent, the widow of one of them, was entitled, as against the appellant, the eldest son of the deceased by his first wife, lo one eighth share according to Mahomedan law or only to maintenance under Hindu law which applied to the Cutchi Memons in India. The respondent had led evidence to show that during the ten 'years Preceding 'he suit, there were at least eleven cases in which distribution of estates was according to Mahomedan law. 'The respondent 's contention was that the Cutchi Memons who migrated lo East Africa had settled down among Mahomedans there and bad adopted their customs and traditions, including as a Special custom the rule as to succession according to Mahomedan law, thus, diverting, from the rules of Hindu law, which in Cutch they had retained as their customary law upon conversion to Islam. The Privy Council held on these facts that : "Where a Hindu family migrate from one part of India to another. Primsa facie they carry with theme their personal law, and, if they are alleged to have become subject to a new local custom, this new custom must be affirmatively proved to have been adopted, but when such a family emigrate to another country, and being (1) A.I.R. 1965 S.C. 1937. (2) [1915 1916] L R. 43 1. A. 35. 245 themselves Mahomedans, settled among Mahomendans, the presumption that they have accepted the law of the people whom they have joined seems to their lordships to be one that should be much more readily made. All that has to be shown is that they have so acted as to raise the inference that they have cut themselves off from their old environments. The analogy is that of a change of domicile on settling in a new country rather than the analogy of a change of custom on migration with in India." (p.41). The second case is that of Khatubai vs Mahomed Haji Abu(1) where the dispute was regarding the estate of a Halai Memon who hailed from Porbandar and had settled down in Bombay. If succession to his estate was governed by Mahomedan law, the appellant, his daughter would get a share as against the respondent. Just as the Cutchi Memons came from Sind and settled down in Cutch, retaining, in spite of their conversion, Hindu law as their customary law, Halai Memons also came from Sind and settled down in Halai Prant in the then Kathiawar. Some of these proceeded to Bombay where they formed a sub sect known as the Bombay Halai Memons, who it was admitted, governed succession to their proper ties according to Mahomedan law. Therefore if the deceased had been in the proper sense of the word a Bombay Halai Memon, the question of succession lo property left by him would have been governed by Mahomedan law. But the concurrent findings of the courts here was that he was not a Bombay Halai Memon, but a Porbandar Memon. The question was, what customary law did Halai Memons follow in regard to succession to their properties ? From the evidence led by the parties, which consisted of judgments of Porbandar courts, and the oral evidence of some of the pleaders from Porbandar it appeared, as the Appellate Bench of the High Court held, that the Halai Memons of Porbandar, settled as they were amongst Hindus there. followed as their customary law Hindu law as regards succession and inheritance as against the Bombay Halai Memons who settled down amidst their co religionists in Bombay. Lord Dunedin took the Mombasa case as an illustration, for his dictum that if it was otherwise shown that the Kathiawar Halai Memons practised the Hindu law, excluding females from succession, it was equally easy to infer that the Bombay Memons, finding themselves among other Mahomedans who followed the Mahomedan law in its Purity, renounced the customs of the Hindu law of succession in favour of the orthodox tenets of their own religion. These two decisions show that the question as to which customary law is applicable turns really on the consideration as to (1) [1922 1922] L.R. 50 I.A. 108. 246 which law a community decides to have for regulating succession to the properties of its members depending upon amongst whom they settled down and the surroundings and traditions they found in that place. Thus, the Cutchi Memons, who settled down amongst Mahomedans when they went to Mombasa, in spite of their having originally regained Hindu law when they migrated to Cutch from Sind, accepted as their custom rules of Mahomedan law in Mombasa. Similarly, Halai Memons, although they had followed Hindu law when they migrated to Porbandar accepted Mahomedan law when they proceeded to Bombay and there settled down amongs, their co religionists. In the light of this reasoning it would appear from the view taken in section Haji Aboo Bucker Sait 's case(,) against which no other Madras view was shown to us, and especially as that view was supported also by the records of several other cases in that High Court, 'hat Cutchi Memons, who had settled down in Madras, had regulated their affairs, since they had settled down amidst Hindus, according to Hindu law not only in matters of succession and inheritance, but also in matters of their property including the Hindu concept of coparcenary and survivorship. That being the position, there is no question of our having to decide whether the Bombay view, as reflected in the decisions since Beaman, J., threw doubts on the dicta in the earlier decisions and the Madras view, as reflected in section Haji Aboo Bucker Sait 's case(1) or of having to prefer one against the other. We do not do so not only because it is not necessary but also because were we to do so at this day, it might perhaps have the result of upsetting a number of titles settled on the basis of the decisions of each of the two High Courts and perhaps elsewhere too. The conclusion, which we arrive at on consideration of the decisions referred to above is that 'he Cutchi Memons who proceeded either from Cutch or from Bombay to Madras and who, it ap pears, settled down amongst Hindus, Hindu surroundings and traditions there, regulated their affairs as regards their property, succession and inheritance according to the Hindu law which they had retained while in Cutch and to which they were already accustomed. It is true that some of the Cutchi Memons went over to the then State of Mysore either from Cutch or from Western India or Madras. As aforesaid, the family members of the deceased Haji Mahomed Hussain Sait settled down in Bangalore Civil Station sometime between 1928 and 1930. On the basis of that fact, reliance was placed on the decision of the then Rich Court of Mysore in Elia Sait vs Dharanavva(2) where the question for consideration was whether the custom of adoption recognised in the (1) A.I.R. (2) 247 Hindu Law prevailed also among the Cutchi Memons there. The High Court, it appears, had both the Bombay view, and the Madras view as expressed in section Haji Aboo Bucker 's case(1) but preferred the Bombay view as stated in Haji Oosman 's case(2). The High Court, however, gave no reasoning for that preference nor did it have before it, as appears from the decision itself, any evidence as to the customary law which the Cutchi Memons settled in Bangalore followed. That being so, that decision cannot be treated as a well considered judgment reflecting the position of the customary law applicable to Cutchi Memons who had set led down in the then Mysore State nor was it consequently binding on the High Court. The question next is, whether the subsequent legislation on which the Revenue relied changed in any way the position as laid down by Kumaraswamy Sastry, J ? The , XLVI of 1920 was an enabling Act as its long title and preamble indicate. Its second section provided that any Cutchi Memon, who had attained the age of majority and was at the time a resident in British India, could declare in he prescribed manner and before the prescribed authority that he desired to obtain the benefit of the Act, and thereafter such a declarant, his minor children and their descendants would, in matters of succession and inheritance, be governed by the Mahomedan law. It is nobody 's case that any such declaration was ever made to get the benefit of the Act. The Act, therefore, would have no operation upon the respondents. Then came the , X of 1938, which was passed, inter alia, to facilitate administration of justice by the civil courts under a uniform established Code for all Cutchi Memons in various parts of the country instead of "a wide field of custom and usage" which "has to be traversed for a proper determination of the case". The Act came into force as from November 1, provided that all Cutchi Memons, subject, however, to the provisions of section 3, shall in matters of succession and inheritance be governed by the Mahomedan law. Sec. 3, subject to which the foregoing section applied, is a saving provision and provides that nothing in the Act "shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of any such right or liability; and any such legal proceeding or remedy may be continued or enforced as if this Act had not been passed". In between the two Acts was enacted the Muslim Personal Law (Shariat) application Act, XXVI of 1937. We do not have to consider the effect of Ibis Act in view of Mr. Desai having in express terms stated that he was not relying upon it. (1) A.I.R. 1921. (2) Bom. 2 48 The , X of 1938 was not extended at first to the Civil Station area in Bangalore where the deceased and the members of his family had settled down and carried on business. Until 1947, that area was administered by the Viceroy in his capacity as the Crown representative. A number of Acts passed by the Central Legislature were extended by him to this area with or without modifications but not the . In 1948, after the said area was retroceded to Mysore, the Mysore Legislature passed the Retroceded (Application of Laws) Act, 1948 extending to the Civil Station area certain laws and enactments in force, in the princely State of Mysore. One of them was the Mysore , 1 of 1943, which was verbatitm the same as the Central Act, X of 1938, and contained only three sections. The first section gave the tide of the Act. The second section provided that subject to section 3, all Cutchi Memons shall in matters of succession and inheritance be governed by the Mahomedan law. Thus the option of being governed by the Mahomedan law contained in 1920 Act was replaced by a uniform and mandatory provision. But the third section, which is a saving provision, inter alia, provided that "nothing in this Act shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of such right or liability and any such proceeding or remedy may be, con tinued or enforced as if this Act had not been passed. " If the parties as aforesaid were governed in matters of pro perty, succession and inheritance by the rules of Hindu law including the rules as to joint family property, its distribution according to the rule of survivorship and the right of a son in it by birth, the High Court would be right in its view that the accountable persons, having been born lone before 1948, had already acquired a right by birth in the property held by their father, a right expressly saved by section 3 of the Act. There was, therefore, no question of that interest Passing to them on the death of their father as envisaged by section 3 of the . In this view, the judgement of the High Court under challenge has to upheld. The appeal, therefore, fails and is dismissed with costs. V.P.S. Appeal dismissed.

The Cutchi Memons had migrated from Cutch to Bombay, Madras and other places. They were originally Hindus and were converted to Islam three or four hundred years ago. 'Me family of the respondents originally settled in Madras, and between 1928 and 1930, went over to Mysore and settled down in the Bangalore Civil Station. The father of the respondents died in 1955 at Bangalore leaving properties which were sought to be charged to estate duty. The respondents claimed that they were governed by Hindu Law as their customary law including its concepts of joint family property, the right of a son by birth in such property and its devolution by survivorship and that therefore, only one third of the said properties, that is, the undivided share of their deceased father could be property said to have passed to them on his death and be assessable under the . The Deputy Controller of Estate Duty held that as there was only one solitary decision of the Madras High Court in favour of the respondents ' contentions as against a large number of decisions of the Bombay High Court which limited the application of Hindu Law to matters of succession and inheritance only, the Bombay view was the correct one. On a reference to the High Court, the High Court upheld the respondents ' contentions. Dismissing the appeal to this Court, HELD : (1) According to Mohamedan Law a person converting to Mohamedanism changes not only his religion but also his personal law. This rule, however, applied only to cases of individual conversions and not to wholesale conversions such as Khojas and Cutchi Memons. In such cases of wholesale conversion of a caste or community the converts might retain a part of their original personal law according to the hitherto held habits, traditions and the surroundings. [236C] (2) The view finally settled in Bombay is that the application of Hindu Law to Cutchi Memons is now restricted to cases of succession and inheritance as it would apply in the case of an intestate, and separate, Hindu, possessed of self acquired property. [241H] Haji Cosman vs Haroon Saleh Mahomed, Bom. 369, referred to. (3) But the Madras view, supported by the records of several cases in the Madras High Court, is that Cutchi Memons, who had settled down in Madras, had regulated their affairs, since they had settled down amidst 232 Hindus, according to Hindu Law not only in matters of succession and inheritance, but also in matters of their property including the Hindu concepts of coparcenary and survivorship. [246C D] Hajee Aboo Bucker Sait vs Ebrahim Hajee Aboo Bucker Sait, A.I.R. 1921 Mad. 571; Abdul Sattar Ismail vs Abdul Hamid Sait, A.I.R. 1944 Mad. 504; Abdul Hameed Sait vs The Provident Investment Company Ltd., I.L.R. ; Abdurahiman vs Avoomma, A.I.R. 1956 Mad. 244 and Begum Noorbanu vs Deputy Custodian General of Evacuee Property, A.I.R. 1965 S.C. 1937, referred to. (4) The question as to which customary law is applicable turns really on the consideration as to which law a community decides to have for regulating succession to the properties of its members depending upon amongst whom they had settled down and the surroundings and traditions they found in that place. That being the position, there is no question of preferring one view to another in the present case as between the Madras and Bombay views, because the Madras view applies to the respondents. [245H] Abdulrahim Haji Ismail Mithu vs Halimabai, (1915 1916) L.R., 43 I.A. 35 and Khatubai vs Mohamad Haji Abu, (1922 1923) L.R., 50 I.A. 108, applied. Ella Sait vs Dharanayya, , disapproved. (5) Moreover, if such preference is expressed by the Court now, it may have the result of upsetting a number of titles settled on the basis of the decisions of each of the two High Courts and perhaps elsewhere. (6) The Cutchi Memons Act (46 of 1920) does not apply to the respondents, because, the declaration under section 2 of the Act to get its benefit and be governed by Mahomedan Law had not been made by any one concerned. [247E] (7) The option of being governed by the Mahomedan Law contained in the 1920 Act was replaced by a uniform and mandatory provision, in the Cutchi Memons Act (10, of 19,38), which provided that all Cutchi Memons shall, in matters of succession and inheritance, be governed by the Mahomedan Law. But the 1938 Act was not extended to the Civil Station area in Bangalore where the deceased and the members of his family had settled down and carried on business. In 1948, when that area was retroceded to Mysore, the Mysore Legislature passed the Retroceded (Application of Laws) Act, 1948 extending to that area certain laws and enactments in force in the Princely State of Mysore, one of which was the Mysore Cutchi Memons Act, 1943, which was 'identical with 1938 Central Act. But section 3 of the 1943 Act provided that 'nothing in 'this Act shall affect any right acquired before its commencement etc. ' The respondents having been born. before 1948 (when the Act was made appli cable to them) had already acquired a right by birth in the property held by their father which right was expressly saved by section 3 of the 1943 Act. There was, therefore, no question of the passing of the properties to the respondents on the death of their father as envisaged by section 3 of the . [247H 248F]

Appeal No. 2555 of 1966. Appeal from the judgment 'and order dated March 16, 1966 of the Calcutta High Court in Income Tax Reference No. 76 of 1962. section C. Manchanda. G. C. Sharma, R. N. Sachthey and B. D. Sharma, for the appellant. A. K. Sen, T. A. Ramachandran and D. N. Gupta, for the respondent. 775 The Judgment of the Court was delivered by Shah, J. The respondent Company appointed one Harvey its Managing Director. Under the terms of agreement, Harvey was to retire on attaining the age of 55 years. The Company arranged to provide a pension to Harvey on retirement, and executed a deed of trust on September 16, 1948 appointing three trustees to carry out that object. The respondent Company set apart in 1948 Rs. 1,09,643/ and in each of the six subsequent years Rs. 4,364/ , and delivered the various amounts to the trustees who were authorised to take out a deferred annuity policy to secure an annuity of pound 720 per annum payable to Harvey for life. from the date he attained the age of 55 years, and in the event of his death before that date an annuity of pound 611.12 annually to his widow. In its return for the assessment year 1949 50 the Company claimed that in the computation of its taxable income Rs. 1,09,643/ paid in 1948 to the trustees under the deed of trust were allowable as an amount wholly and exclusively,expended for the purpose of its business. In the subsequent years of assessment the Company claimed allowance of the annual payment of Rs. 4,364/ . The Income tax Officer disallowed the claim. The Company disputed the decision and carried it to the Income tax Appellate Tribunal. The Tribunal submitted a statement of case to the High Court of Calcutta on the question whether the payments . 'constituted 'expenditure ' within the meaning of that word in section 10(2)(xv) of the Indian Income tax Act, 1922, in respect of which a claim for deduction can be made subject to the other conditions mentioned in that clause being satisfied". The High Court answered the question in the negative. The view taken by the High Court was confirmed by this Court in appeal: Indian Molasses Co. (P) Ltd. vs Commissioner of Income tax, West Bengal(1). This Court held that the expenditure deductible for income tax purposes is one towards a liability actually existing at the time, but a sum of money set apart which may be deemed appropriated to a purpose for which it was intended on the happening of a future event was not expended within the meaning of section 10(2)(xv) of the Act, until the event occurs, and since the Company had dominion through the trustees over the funds and there was a possibility of a trust resulting in its favour, by setting apart. the funds no "expenditure" within the meaning of section 10(2)(xv) of the Indian Income tax Act, 1922, may be deemed incurred. During the pendency of those proceedings the Company ar ranged to give an "enhanced pension" to Harvey and executed a supplementary deed of trust on October 29, 1954 and set apart an additional sum of Rs. 47,607/ to enable the trustees to take out an annuity policy in the names of the trustees in favour of Harvey (1) , 776 and his wife to cover the "enhanced pension". The terms of the original trust deed were made applicable to the supplementary deed. Harvey died in May 1955 (before he was due to retire) and in the return of its taxable income for the assessment year 1956 57 the Company claimed that Rs. 1,83,434/ being the total amount paid by the Company to the trustees in terms of the original trust deed dated September 'I 6, 1 94 8 and the supplementary deed dated October 29, 1954, be allowed as a permissible expenditure in the computation of the Company 's business profits in the previous year ending December 31, 1955. The Income tax Officer disallowed the claim without assigning any reasons. In appeal the Appellate Assistant Commissioner confirmed the order observing that the amount paid long before the commencement of the previous year were not admissible under section 10(2)(xv) of the Income tax Act, 1922. The Income tax Appellate Tribunal in appeal reversed the order and allowed the claim of the Company holding that the amount of Rs. 1,83,434/ was "effectively disbursed during the accounting year" and was on that account an admissible allowance in the computation of the Company 's business profits. At the instance of the Commissioner of Income tax, the Tri bunal submitted a statement of the case to the High Court of Calcutta on the following two questions : "(1) Whether on the facts and in the circumstances of the case, the sum of Rs. 1,83,434/ was an expenditure effectively laid out or expended during the accounting year 1955 within the meaning of section 10(2)(xv) of the Income tax Act ? (2) If the answer to Question No. (1) is in the affirmative, then whether the said expenditure of Rs. 1,83,434/ represented a revenue expenditure ?" The High Court of Calcutta recorded answers in the affirmative on both the questions. With certificate granted by the High Court under section 66A(2) of the Indian Income tax Act, 1922, this appeal is preferred by the Commissioner of Income tax. Answer recorded by the, High Court on the first question was, in our judgment, correct. This Court had in the earlier decision Indian Molasses Co. (Private) Ltd. vs The Commissioner of Income tax( ') held that the Company had not parted with control over the amounts set apart between the years 1948 and 1954 for securing the 'pension benefit to Harvey, and on that account no amount was appropriated to make it expenditure within the meaning of section 10(2)(xv) of the Act. At the date when different sums of money were set apart there was no existing liability and the sums (1) 777 of money set apart to meet an obligation which may or may not arise on the happening of a future event, the Company did not lay out or expend the sums within the meaning of section 10(2)(xv). The amounts set apart became subject to the obligation to pay the pension arranged to be given only when Harvey died, and must be deemed expended then within the meaning of section 10(2)(xv) of the Indian Income tax Act, 1922. But on the materials before us we are unable to answer the second question, for the Tribunal has found no facts on which the admissibility of the allowance may be determined, and the High Court has declined to allow the argument to be raised by the Commissioner that in the circumstances of the case the amounts expended were not admissible under section 10(2)(xv) of the Act. Sections 10(1) and 10(2)(xv) of the Act, insofar as they are relevant, provide : section 10(1) "The tax shall be payable by an assessee under the head "profits and gains of business, profession or vocation, in respect of the profit or gains of any business, profession or vocation carried on by him." section 10(2) "Such profits or gains shall be computed after making the following allowances, namely (xv) any expenditure (not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive, and not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. " Sub section (4A) of section IO which was added by the Finance Act of 1956 with effect from April 1, 1956, may also be read : "Nothing in sub section (2) shall, in the computation of the profits and gains of a Company be deemed to authorise the making of (a) any allowance in respect of any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or a person who has a substantial interest in the company within the meaning of sub clause (iii) of clause (6C) of section, 2, or (b) any allowance in respect of any assets of the company used by any person referred to in 778 clause (a) either wholly or partly for his own purposes or benefit. if in the opinion of the Income tax Officer any such allowance is excessive or unreasonable having regard to the legitimate business needs of, the company and the benefit derived by or accruing to it therefrom. Explanation. The provisions of this sub section shall apply notwithstanding that any amount disallowed under this sub section is included in the total income of any person referred to in clause ( a)." An amount proved to be expended by a tax payer carrying on business is (subject to sub section (4A) of section 10), a permissible allowance in the computation of taxable income of the business, if it be established that the allowance claimed is (a) expenditure which is not of the nature described in cls. (i) to (xiv) of section 10(2); (b) that it is not of the nature of capital expenditure or personal expenses of the assessee; and (c) that the expenditure was laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. The expenditure incurred by the Company is not allowance of the nature described in any of the clauses (i) to (xiv) inclusive of section 10(2), nor is it of the nature of capital expenditure or personal expenses of I the assessee. In our judgment, the argument advanced before the High Court that the expenditure resulting from the setting apart of the money for securing an annuity to provide pensionary benefit to Harvey and his wife was of a capital expenditure was rightly negatived by the High Court. To attract the exemption under section 10(2) (xv)it had still to beestablished that the amount set apart was laid out or expended wholly and exclusively for the purpose of the business of the Company. On this part of the case there is no discussion in the orders of the taxing authorities and the Tribunal. To recall, the Income tax Officer recorded no reasons for, disallowing the expenditure. The Appellate Assistant Commissioner disallowed it on the, ground that it was not debited in the profit and loss account of the Company in the previous year. The Tribunal assumed, and in our judgment erroneously, that this Court had in the earlier judgment pronounced upon the applicability of all the conditions of section 10(2)(xv) of the Act to the amount set apart when it became expenditure. This Court did not express any opinion on that question. , The language in which the question was framed in the earlier case clearly indicated that the enquiry contemplated was only whether the amounts set apart were expended and no other. 779 The judgment of this Court also does not imply that in the view of the Court if the setting apart of the amount was expenditure, the other conditions for the expenditure to be a permissible allowance under section 10(2) (xv) were satisfied. It cannot be, assumed that because on the death of Harvey the amounts previously set apart were deemed expended, the outgoing was admissible as expenditure under section 10(2)(xv) read with section 10(4A). The Tribunal considered two questions only : (1) whether the setting apart of the amounts amounted to expenditure within the meaning of section 10(2) (xv); and (2) if it was expenditure, whether it could be regarded as capital expenditure and not revenue expenditure. On both the contentions the Tribunal decided in favour of the Company. But before section 10(2)(xv) could be called in aid to support the claim of the company it had to be established that it represented expenditure laid out or expended wholly and exclusively for the purpose of the business, and that it was authorised under section 10(4A). The High Court was of the view that because before the Tri bunal the question was not expressly raised that "the other conditions inviting the application of section 10(2)(xv) were not satisfied, the allowance was not admissible", the Commissioner was incompetent to urge that plea before the High Court. In support of that view they relied upon the judgment of this Court in Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co. Ltd(1). The High Court observed that before the Tribunal the plea that the expenditure was not laid out or expended wholly and exclu sively for the purpose of the business of the Company was not argued, and since the question raised and referred "was not wide enough to include that submission", the Commissioner could not urge it before them. 'We are unable to hold that the decision in Scindia Steam Navigation Company 's case( ') supports the opinion of the High Court. The plea that the amount claimed to have been expended was not admissible as an allowance was raised by the Department. The Appellate Assistant Commissioner had decided in favour of the Department and the order was sought to be supported before the Tribunal by the Departmental representative. Granting that an aspect of the question was not argued before the Tribunal, the question was on that account not one which did not ,arise out of the order of the Tribunal. In our judgment, the expression "question of law arising out of such order" in section 66(1) is not restricted to take in only those questions which have been expressly argued and decided by the Tribunal. If a question of law is raised before the Tribunal, even if an 'aspect of that question is not raised, in our judgment, that aspect may be urged before the High Court. The judgment of this Court in Scindia Steam Naviga tion Co. Ltd. 's case( ') does not only not lend any assistance to the (1) ; 780 view taken by the High Court, but negatives that view. In that case certain steamships belonging to the assessee Company were lost during the World War 11 by enemy action. The Government of India paid to the Company compensation which exceeded the written down value of the steamships. The Department sought to charge the excess amount to tax under the fourth proviso of section 10(2)(vii) of the Income tax Act, 1922 inserted by the Income tax (Amendment) Act, 1946, which came into force in the yea of assessment. The Income tax Officer held that the material date for the purpose of the fourth proviso to section 10(2)(vii) was the date when the compensation was in fact received and therefore the ' amount was assessable in the assessment year 1946 47. At the instance of the Company the Tribunal referred the question whether the difference between the written down value and compensation was properly included in the total income for the assessment year 194647. Before the High Court the Company for the first time raised the contention that the fourth proviso to section 10(2)(vii) did not apply to the assessment as it was not in force on April 1, 1946 and the liability of the Company had to be determined as on April 1, 1946, when the Finance Act, 1946 was brought into force. The Commissioner of Income tax contended that the question did not arise out of the order of the Tribunal within ' the meaning of section 66 as it was not raised before nor dealt with by the Tribunal, and it was not referred to the Court. The High Court overruled the objection. This Court held that the High Court had jurisdiction to entertain the Company 's contention raised for the first time before it, that the fourth proviso to section 10(2)(vii) did not apply to the as sessment as the contention was within the scone of the question as framed by the Appellate Tribunal and was really implicit therein. The Court in that case held that the question as framed was comprehensive enough to cover the question of the applicability. of the fourth proviso to section 10(2)(vii) of the Income tax Act. Venkatarama Aiyar, J., observed at p. 612 " Section 66 (I ) speaks of a question of law that arises out of the order of the Tribunal. Now a question of law might be a simple one, having its impact at one point, or it may be a complex one. trenching over an area with approaches leading to different points therein. Such a question might involve more than one aspect, requiring to be tackled from different standpoints. All that section 66(1) requires is that the question of law which is referred to the Court for decision and which the Court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects (1) ; 781 of the question which had been argued before the Tribunal. it will be an over refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66 (1) of the Act. " The second question raised in the present case, in our judg ment, permits an enquiry whether the amount claimed is an admissible allowance under section 10(2)(xv). We are unable to hold that it is restricted to an enquiry whether the expenditure is of a capital nature. The Tribunal did not consider whether the amount was laid out or expended wholly and exclusively for the purpose of the business of the Company. Expenditure is admissible as an allowance under section 10(2)(xv). if all the conditions prescribed thereby are satisfied and is authorised by section 10(4A). We are unable to hold that the question framed and referred excluded an enquiry Whether the expenditure was wholly and exclusively laid out or expended for the purpose of the business of the Company. Nor are we able to hold that because before the Tribunal stress was not pointedly laid upon the ingredients which enable an expenditure to be claimed and allowed, the question does not arise out of the order of the Tribunal. The matter in dispute before the Tribunal was whether the Company was entitled to the allowance under section 10(2)(xv) ,of the Indian Income tax Act 1922. The Tribunal considered whether the amount claimed to have been laid out or expended became expenditure within the meaning of section 10(2)(xv) on the death of Harvey, and whether it was capital expenditure. They did not consider whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the Company. Since the Tribunal gave no finding on this part of the case, we are unable to answer the question on the materials placed before US. The High Court was, in our judgment, in error in refusing to allow the argument to be raised that the requirements of section 10(2)(xv) were not satisfied, and the expenditure on that account was inadmissible. Two courses are now open to us : to call for a supplementary statement of the case from the Tribunal; or to decline to answer the question raised by the Tribunal and to leave the Tribunal to take appropriate steps to adjust its decision under section 66(5) in the light of the answer of this Court. If we direct the Tribunal to submit a supplementary statement of the case, the Tribunal will, according to the decisions of this Court, (New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax, Bombay North, Kutch and Saurashtra( '); Petlad Turkey Red Dye Works Co, Ltd. vs Com missioner of Income tax( '); and Keshav Mills Co. Ltd. vs Commissioner of Income tax, Bombay North, Ahmedabad( '), be res (1) (3) 782 tricted to the evidence on the record and may not be entitled to take additional evidence. That may result in injustice. In the circumstances we think it appropriate to decline to answer the question on the ground that the Tribunal has failed to consider and decide the question whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the Company and has not considered all appropriate provisions of the statute applicable thereto. It will be open to the Tribunal to dispose of the appeal under section 66(5) of the Income tax Act, 1922, in light of the observations made by this Court after determining the questions which ought to have been decided. There will be no order as to costs in this appeal.

The respondent company appointed a managing director who was to retire at the age of 55. The company arranged to provide a pension to him on retirement, or a pension to his widow if he died before attaining the age of 55. It executed a trust deed on September 16, 1948, and paid to the trustees certain amounts to enable the trustees to take out an annuity policy to cover the pension. On October 29, 1954, the company arranged to give enhanced pension to the director or his wife and set apart an ,additional sum on the same terms. The director died in 1955 before attaining the age of 55, and the company claimed, in the return of its taxable income for the assessment year 1956 57, the total amount paid by it to the trustees as a permissible expenditure in the computation of the company 's business profits in the previous year. The Appellate Tribunal, held; (i) that the setting apart of the funds amounted to expenditure Within the meaning of s.10(2)(xv), and (ii) that it amounted to revenue expenditure and not capital expenditure. The Tribunal did not however consider whether the outgoing represented expen diture laid out or expended wholly and exclusively for the purpose of the business and whether it was authorised under s.10(4A). The Tribunal referred to the High Court two questions, namely : (1) whether the amounts constituted expenditure during the relevant accounting year 1955 within the meaning of the section and (2) whether it represented a revenue expenditure. The High Court held in favour of the company. When the Department sought to urge the plea that before the section could be called in aid, it had also to be established that the expenditure was wholly and exclusively for the purpose of the business and that it was authorised by s.10(4A), the High Court did not permit the plea to be raised as it was not expressly raised before the Tribunal. In appeal to this Court, HELD : (1) The amounts set apart became subject to the obligation to pay the pension arranged to be given, only when the director died, and since he died in May 1955, they must be deemed to have been expended only then, that is during the accounting year 1955. [776 H; 777 A B] 774 Indian Molasses Co. (P) Ltd. vs Commissioner of Income tax, West Bengal, , referred to. I I (2) An amount proved to be expended by a tax payer carrying on business is a permissible allowance under s.10(2) (iv) in the computation of the taxable income of the business if it is established; (i) that the allowance claimed is expenditure which, is not of the nature described in cls. (i) to (xiv) of section 10(2); (ii) that it is not of the nature of capital expenditure or personal expenses of the assessee; (iii) that the expenditure was laid out or expended wholly and exclusively for the purposes of such business; and (iv) that it was authorised under section 10 (4A). [778 C F] (3) The expression 'question of law arising out of such order ' in s.66(1), is not restricted to take in only those questions which have been expressly argued before and decided by the Tribunal. If a question of law is raised before the Tribunal, even if an aspect of the question was not raised, that aspect may be urged before the High Court. In the present case, the second question as framed and referred, does not exclude an enquirY whether the expenditure was wholly and exclusively laid out or expended for the purpose of the business of the company. It cannot be held that, because before the Tribunal, stress was not pointedly laid upon the ingredients which enable an expenditure to be claimed and allowed, the question did not arise out of the order of the Tribunal. Therefore the High Court was in error in refusing to allow the argument to be raised that the requirements of section 10(2) (xv) were not satisfied. [779 H; 780 A; 781 B F] Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co. Ltd. ; , explained and followed. (4) Since the Tribunal gave no finding on that part of the case, a supplementary statement could be called from it, but such a supplementary statement would be restricted to the evidence on record and may result in injustice to the parties. [781 F] New Jahangir Vakil Mills Ltd. vs Commissioner of Income tax, 'Bombay North, Kutch & Saurashtra, Petlad Turkey Red Dye Works Co. Ltd. vs Commissioner of Income tax and Keshav Mills Co. Ltd. vs Commissioner of Income tax, Bombay North. Ahmedabad, , referred to. (5) Therefore. it is appropriate to decline to answer the second question on the ground that the Tribunal bad failed to consider and decide the question whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the company and that it had not considered all appropriate statutory provisions. and to leave it to the Tribunal to dispose of the appeal under section 66(5) of the Act [782 A C]

Civil Appeal No. 61 of 1971. Appeal by Special Leave from the Award dated 14 7 71 of the Industrial Tribunal Maharashtra Bombay in Reference (I.T.) No. 116 of 1970. V. M. Tarkunde, P. H. Parekh, H. K. Sowani and Manju Jetley for the Appellant. G. B. Pai, Shri Narain, O. C. Mathur and J. B. Dandachanji for Respondent Nos. 27, 68, 160, 182, 226, 265, 312, 403, 522, 722 and 903. The Judgment of the Court was delivered by KRISHNA IYER, J. A narration of the skeletal facts, sufficient to get a hang of the four legal issues debated at the bar in this appeal, by special leave, will help direct the discussion along a disciplined course, although the broader social arguments addressed have spilled over the banks of the jural stream. Nag Devi, a locality in the city of Bombay, is studded with small hardware businesses where pipes and fittings, nuts and bolts, tools and other small products, are made and/or sold. These establishments, well over a thousand, employ a considerable number of workmen in the neighbourhood of 5,000, although each unit has (barring four), less than the statutory minimum of 20 workmen. This heavy density of undertakings and workers naturally produced an association of employers and a Union of workmen, each recognising the other, for the necessary convenience of collective bargaining. Apparently, these hardware merchants huddled together in the small area, were getting on well in their business and in their relations with their workmen, and this goodwill manifested itself in ex gratia payments to them of small amounts for a number of years prior to 1965, when trouble began. Although rooted in goodness and grace, the annual repetition of these payments ripened, in the consciousness of the workers, into a sort of right nothing surprising when we see in our towns and temples a trek of charity seekers claiming benevolence as of right from shop keepers and pilgrims, especially when this kindly disposition has been kept up over long years. The compassion of yesterday crystallises as the claim of today, and legal right begins as that which is humanistically right. Anyway, the hardware merchants of Nag Devi, made of sterner stuff, in the year 1965, abruptly declined to pay the goodwill sums of the spread out past and the frustrated workmen frowned on this stoppage by setting up a right to bonus averring considerable profits for the Industry (if one may conveniently use that expression for a collective coverage of the conglomeration of hardware establishments). The defiant denial and the consequent dispute resulted in the appointment of a Board of Arbitrators under section 10A of the Industrial Disputes Act to arbitrate upon twelve demands put forward by the Mumbai Kamgar Sabha, Bombay (the Union which represents the bulk of workers employed in the tiny, but numerous, establishments). The charter of demands included, inter alia, claim for 4 595 months ' wages as bonus for the year 1965. The arbitral board, however, rejected the demand for bonus. The respondents establishments discontinued these payments thereafter and the Union 's insistence on bonus led to conciliation efforts. The Deputy Commissioner of Labour mediated but since his intervention did not melt the hardened mood of the employers, formal demands for payments of bonus were made by the Union and government was persuaded to refer the dispute for adjudication to an Industrial Tribunal. The Tribunal formulated two issues as arising from the statements of the parties and rendered his award dismissing the reference. At this stage, it may be useful to set out the terms of reference made under section 10(1)(d) of the (for short, the ID Act), for adjudication by the Tribunal: "1. Whether the establishments (mentioned in the annexure) have been giving bonus to their workers till 1965 ? If so, how long before 1965 have the employers been giving bonus to their workmen ? And at what rate ? 2. Whether payment of bonus by the employers to their workmen has become custom or usage or condition of service in these establishments ? If so, what should be the basis on which employers should make payment of bonus to their workmen for the years ending on any date in 1966, 1967 1968 and 1969 ? Following upon the statements of parties, the Tribunal framed two issues which ran thus: "1. Whether Award of the Arbitration Board made in Reference (VA) No. 1 of 1967 and published in M.G.G. Part I 1 dated 31st October 1968, pages 4259 4286, operates as res judicata to the demands of the workmen. Whether the reference in respect of the demands is tenable and legal." He answered the first in the affirmative and the second in the negative. The Union, representing the workers in the mass, has assailed the findings of the Tribunal, the reasonings he has adopted and the misdirection he has allegedly committed. The Tribunal did not enter the merits of the claim but dismissed it in limine on the score that the demand for bonus was barred by res judicata the arbitral board 's decision negativing the bonus for 1965 being the basis of this holding. The second ground for reaching the same conclusion was that the Bonus Act was a comprehensive and exhaustive law dealing with the entire subject of bonus and its beneficiaries. In short, in his view, the Bonus Act was a complete Code and no species of bonus could survive outside the contours of that statute. Admittedly, here the claim for bonus for the relevant four years was founded on tradition or custom or 596 condition of service and in that light, the Tribunal made short shrift of the workmen 's plea in these words: "In my opinion, the demand pertaining to the practice or custom prevailing in the establishments before 1965 is not such a matter as has to be adjudicated and it also does not fall under the provisions of Bonus Act. I, therefore, find that the reference in that respect also is not tenable and legal. " The submissions of counsel may be itemised into four contentions which may be considered seriatim. They are: (a) Was the Industrial Tribunal competent to entertain the dispute at all ? (b) Was the claim for bonus for the years 1966 69 barred by res judicata ? (c) Was there, apart from profit based bonus, customary bonus or bonus as a condition of service ? (d) If answer to (c) is in favour of the workmen, does the Bonus Act interdict such a demand since it does not provide for those categories of bonus and confines itself to profit based bonus, or does the Bonus Act speak on the topic of bonus of all species and, therefore, stands four square between a claim for bonus and its grant, unless it finds statutory expression in the provisions of that Act ? The first contention which, curiously enough, has appealed to the Industrial Tribunal, need not be investigated as it is devoid of merit and has rightly been given up by counsel for the respondent. A casual perusal of the provisions bearing on the jurisdiction of the Labour Court and the Industrial Tribunal as well as the relevant schedules will convince anyone that this industrial dispute comes within the wider ambit of the Industrial Tribunal 's powers. It is unfortunate that the Tribunal has made this palpable error. It is right to give plausible reasons for one 's verdict and not mar it by bad, perfunctory supplementaries. Fairness to respondent 's counsel constrains us to consider in limine a flawsome plea forcibly urged that the Union figured as the appellant before us but being no party to the dispute (which was between the workers on the one hand and the establishments on the other) had no locus standi. No right of the Union qua Union was involved and the real disputants were the workers. Surely, there is terminological lapse in the cause title because, in fact, the aggrieved appellants are the workers collectively, not the Union. But a bare reading of the petition, the description of parties, the grounds urged and grievances aired, leave us in no doubt that the battle is between the workers and employers and the Union represents, as a collective noun, as it were, the numerous humans whose presence is indubitable in the contest, though formally invisible on the party array. The substance of the 597 matter is obvious and formal defects, in such circumstances, fade away. We are not dealing with a civil litigation governed by the Civil Procedure Code but with an industrial dispute where the process of conflict resolution is informal, rough and ready and invites a liberal approach. Procedural prescriptions are handmaids, not mistresses of justice and failure of fair play is the spirit in which Courts must view processual deviances. Our adjectival branch of jurisprudence, by and large, deals not with sophisticated litigants but the rural poor, the urban lay and the weaker societal segments for whom law will be an added terror if technical mis descriptions and deficiencies in drafting pleadings and setting out the cause title create a secret weapon to non suit a party. Where foul play is absent, and fairness is not faulted, latitude is a grace of processual justice. Test litigations, representative actions, pro bono publico and like broadened forms of legal proceedings are in keeping with the current accent on justice to the common man and a necessary disincentive to those who wish to bypass the real issues on the merits by suspect reliance on peripheral procedural short comings. Even article 226, viewed in wider perspective, may be amenable to ventilation of collective or common grievances, as distinguished from assertion of individual rights, although the traditional view, backed by precedents, has opted for the narrower alternative. Public interest is promoted by a spacious construction of locus standi in our socio economic circumstances and conceptual latitudinarianism permits taking liberties with individualisation of the right to invoke the higher courts where the remedy is shared by a considerable number, particularly when they are weaker. Less litigation, consistent with fair process, is the aim of adjectival law. Therefore, the decisions cited before us founded on the jurisdiction under article 226 are inept and themselves somewhat out of tune with the modern requirements of jurisprudence calculated to benefit the community. Two rulings of this Court more or less endorse this general approach: Dhabolkar and Newabganj Sugar Mills. All this apart, we are dealing with an industrial dispute which, in some respects, lends itself to more informality especially in the matter of Union representation. Technically, the Union cannot be the appellant, the workmen being the real parties. But the infelicity of drafting notwithstanding, the Union 's role as merely representing the workers is made clear in the description of the parties. Learned counsel took us through section 36(1) and (4) of the Act, rr. 29 and 36 of the Central Rules under that Act, section 15(2) of the Payment of Wages Act and some rulings throwing dim light on the rule regarding representation in industrial litigation. We deem it needless to go deeper into this question, for in industrial law, collective bargaining, union representation at conciliations, arbitrations, adjudications and appellate and other proceedings is a welcome development and an enlightened advance in industrial life. Organised labour, inevitably involves unionisation. Welfare of workers being a primary concern of our Constitution (Part IV), we 598 have to understand and interpret the new norms of procedure at the pre litigative and litigative stages, conceptually recognising the representative capacity of labour unions. Of course, complications may arise where inter union rivalries and kilkenny cat competitions impair the peace and solidarity of the working class. It is admitted, in this case, that there is only one union and so we are not called upon to visualize the difficult situations counsel for the respondents invited us to do, where a plurality of unions pollute workers ' unity and create situations calling for investigation into the representative credentials of the party appearing before the Tribunal or court. It is enough, on the facts of this case, for us to take the Union as an abbreviation for the totality of workmen involved in the dispute, a convenient label which, for reasons of expediency, converts a lengthy party array into a short and meaningful one, group representation through unions being familiar in collective bargaining and later litigation. We do not expect the rigid insistence on each workman having to be a party eo nomine. The whole body of workers, without their names being set out, is, in any case, sufficient, according to the counsel for the respondents, although strictly speaking, even there an amount of vagueness exists. For these reasons, we decline to frustrate this appeal by acceptance of a subversive technicality. We regard this appeal as one by the workmen compendiously projected and impleaded through the Union. Next we come upon the plea of res judicata, as a roadblock in the way of the appellant. But we will deal with it last, as was done by counsel, and so straight to the piece de resistance of this lis. Points (b) and (c) bearing on bonus therefore claim our first attention and, in a sense, are integrated and amenable to common discussion. Shri G. B. Pai, appearing for the respondents, contended that the claim put forward by the appellant before the Tribunal was, on the face of it, unsustainable on the short ground that what was pleaded was profit based bonus only and, therefore, fell squarely within the Bonus Act. That Act being a complete Code, it expressly excluded by section 1(3) all establishments employing less than 20 workmen and all but four of the respondents were admittedly such small undertakings, with the result that the death knell to the plea of bonus was tolled by the Act itself. Therefore, the conclusion was irresistible, argued counsel for the respondents, that the plea for a profit based bonus, being negatived by the statute, stands self condemned. This argument drives us into an enquiry as to whether the claim before the Tribunal was for profit based bonus. "Yes", was his holding and so he said 'no ' to the workmen. The answer is the same, if the claim is founded on a similar basis. Shri Tarkunde, for the appellant, countered this seemingly fatal submission by urging that whatever might have been the species of bonus demanded in 1965, the present dispute referred by the State Government related to a totally different type of bonus, namely, customary bonus or one which was a term of the employment itself. Even 599 if this be true, Shri G. B. Pai has his case that the Bonus Act is all comprehensive and no kind of bonus can gain legal recognition if it falls outside the sweep and scope of the Bonus Act itself. No brand of bonus has life left if it does not find a place in the oxygen tent of the complete Code called the Bonus Act. What thus first falls for our examination is the reference by the State Government to the Tribunal, the pleading of the workmen before the Tribunal and the counter statement by the employers before the Tribunal with a view to ascertain the character of the bonus demanded by the workers and covered by the dispute. It must be remembered that the award has rejected the claim not substantively but on the ground of two legal bars and care must be taken not to mix up maintainability with merits. A short cut is a wrong cut often times and the Tribunal 's easy recourse to dismissal on preliminary grounds may well lead and it has, as will be presently perceived to a re opening of the case many years later if the higher Court reverses the legal findings. Be that as it may, let us test the validity of the plea that only a profit based bonus has been claimed by the workers. The demands referred by the State Government under section 10(1)(d) specifically speak of payment of bonus by the employers which 'has become custom or usage or a condition of service in the establishments '. The subsidiary or rather consequential point covered by the reference is 'if so, what should be the basis on which employers should make payment of bonus to their workmen for the years. '. It is plain that the subject matter of the dispute, as referred by the Government, deals with bonus based on custom or condition of service. The Tribunal is therefore bound to investigate this question, the terms of reference being the operational basis of its jurisdiction. The workmen, in their statement, have asserted that bonus had been paid for several years and what transpired at the conciliation stages is clear from the letter of the Commissioner of Labour who adverts to the 'usual ' custom and practice of payment of bonus '. The colour of the workers ' claim has been clarified further in paragraphs 10 to 12 of their statement before the Tribunal. While they do mention that the hardware merchants of Nag Devi have been making large profits during the years in question and, therefore, can afford to pay bonus according to the standards and criteria applicable to large and prosperous industrial establishments, the real foundation of their claim is set out in indubitable language as attributable to 'custom, usage and condition of service '. Surely, they have no case of bonus dependent upon the quantum of profits of the establishments nor uniformity region wise. On the other hand, the amount of bonus, the time of payment, etc., vary from establishment to establishment. The constant factor, however, is allegedly that there is 'consistency, predictability and uniformity ', continuity and payment 'without reference to the fluctuations in the financial performance and profits of each firm '. The Sabha does not mince words when, in praying for relief, it states that the Tribunal 'be pleased to restore the custom, usage and conditions of service represented by the payment of bonus in these firms. In short, the bedrock of the bonus claim of the workers is custom and 600 usage bad/or implied condition of service. Nor have the establishments, who are the respondents before the Tribunal and before us, made any mistake about the nature of the demand. In their statement before the Tribunal they have urged that a scrutiny of the accounts of the firms is unnecessary 'since the demand is not based on the profits or the financial results of the employers but is based on custom ': "The contentions of the Sabha that the conditions of service under all these employers should be governed by one standard and one criteria is, not tenable. Since all the shops are not owned by one person and since every shop is a different entity there is no question of uniformity of service conditions. Moreover, there is no law which lays down that the service conditions of the employees under all these employers should be uniform. It is submitted that the reference to the capital turnover ratio in this paragraph is irrelevant. It is also submitted that the Sabha 's demand that a sample scrutiny of the Accounts of the firms should be made by the Tribunal is irrelevant in this respect since the demand is not based on the profits or the financial results of the employers but is based on custom. " More over the ex gratia payments for the pre Bonus Act period are admitted by the respondents. They seek sanctuary on the counterplea that free acts of grace, even if repeated, can neither amount to a custom, usage or condition of service. In sum, a study of the pleadings, the terms of reference and the surrounding circumstances supports the only conclusion that, peripheral reference to the profits of the establishments notwithstanding, the core of the cause of action or the kernel of the claim for bonus is custom and/or term of service, not sounding in or conditioned by profits. Shri G. B. Pai did urge that the precedents of this Court have linked custom based bonus with some festival or other and that bonus founded on custom de hors some festival is virtually unknown to case law on the point. From this he argues that since the bonus has not been related by reference to any festival by the workmen in their pleadings (reference to Diwali as the relevant festival in the statement of the case in this Court is an ingenious innovation to fit into the judge made law according to Shri Pai) the claim must fail. Legal life is breathed into customary bonus only by nexus with Puja or other festival. We are unable to agree with this rather meretricious submission. Surely, communal festivals are occasions of rejoicing and spending and employers make bonus payments to employees to help them meet the extra expenses their families have to incur. Ours is a festival ridden society with many religions contributing to their plurality. That is why our primitive practice of linking payment of bonus with some distinctive festival has sprouted. As we progress on the secular road, maybe the Republic Day or the Independence Day or the Founder 's Day may well become the occasion for customary bonus. The crucial question is not whether there is a festival which buckles the bonus and the custom. What is legally telling is whether by an unbroken flow 601 of annual payments a custom or usage has flowered, so that a right to bonus based thereon can be predicated. The custom itself precipitates from and is proved by the periodic payments induced by the sentiment of the pleasing occasion, creating a mutual consciousness, after a ripening passage of time, of an obligation to pay and a legitimate expectation to receive. We are, therefore, satisfied that the omission to mention the name of a festival, as a matter of pleading, does not detract from the claim of customary bonus. The impact of this omission on proof of such custom is a different matter with which we are not concerned at this stage since the Tribunal has not yet enquired into the merits. Shri Pai urged that the custom, even if true, stood broken in 1965 and, therefore, during the post 1965 period, customary bonus stood extinguished. The effect of the arbitral board 's negation of the profit based bonus claim in 1965 on custom based bonus for the subsequent period is again relevant, if at all, as evidence, which falls outside our consideration at present. In the event of the Tribunal having to adjudicate upon the question, maybe this rather anaemic circumstance will be urged by the employer and explained by the employees. There is hardly any doubt that custom has been recognised in the past as a source of the right to bonus as the several decisions cited before us by Shri Tarkunde make out and section 17(a) of the Bonus Act, in a way, recognizes such a root of title. In Churakulam Tea Estate(1) this Court surveyed the relevant case law at some length. Ispahani(2) implied as a term of the contract the payment of bonus from an unbroken, long spell. Vaidialingam J., in Churakulam(1) referring to some of the precedents, observed: "In Ispahani 's case(2) this Court had to consider a claim for Puja bonus, in Bengal, and the essential ingredients, for sustaining such a claim when it is based on an implied agreement. After stating that the claim, for Puja Bonus, can be based either as a matter of implied agreement between the employers and employees, creating a term of employment for payment of Puja bonus, or that even where no implied agreement can be inferred, it may be payable as a customary bonus, this Court, in the said decision, specifically dealt with a claim for payment of bonus as an implied condition of services. This Court further accepted as correct the tests laid down by the Appellate Tribunal in Mahalaxmi Cotton Mills Ltd., Calcutta vs Mahalaxmi Cotton Mills Workers ' Union for inferring that there is an implied agreement for grant of such bonus. The three circumstances, laid down by the Appellate Tribunal, were: (1) that the payment must be unbroken; (2) that it must be for a sufficiently long period; and (3) that the circumstances, in which payment was made should be such as to exclude that it was paid out of bounty. . 602 This Court, again, had to consider the essential ingredients to be established when payment of bonus, as customary or traditional, is claimed again related to a festival in The Graham Trading Co. (India) Ltd. vs Its Workmen ; , 111) and dealt with the question as follows: "In dealing with puja bonus based on an implied term of employment, it was pointed out by us in Messrs. Ispahani Ltd. vs Ispahani Employees ' Union that a term may be implied, even though the payment may not have been at a uniform rate throughout and the Industrial Tribunal would be justified in deciding what should be the quantum of payment in a particular year taking into account the varying payments made in previous years. But when the question of customary and traditional bonus arises for adjudication, the considerations may be some what different. In such a case, the Tribunal will have to consider: (i) whether the payment has been over an unbroken series of years; (ii) whether it has been for a sufficiently long period though the length of the period might depend on the circumstances of each case; even so the period may normally have to be longer to justify an inference of traditional and customary puja bonus than may be the case with puja bonus based on an implied term of employment; (iii) the circumstance that the payment depended upon the earning of profits would have to be excluded and therefore it must be shown that payment was made in years of loss. In dealing with the question of custom, the fact that the payment was called ex gratia by the employer when it was made, would, however, make no difference in this regard because the proof of custom depends upon the effect of the relevant factors enumerated by us; and it would not be materially affected by unilateral declarations of one party when the said declarations are inconsistent with the course of conduct adopted by it; and (iv) the payment must have been at a uniform rate throughout to justify an inference that the payment at such and such rate had become customary and traditional in the particular concern. It will be seen that these tests are in substance more stringent than the tests applied for proof of puja bonus as an implied term of employment. It will be seen from the above extract that an additional circumstance has also been insisted upon, in the case of customary or traditional bonus, that the payment must have been at a uniform rate throughout to justify an inference that the payment at such and such a rate had become customary and traditional in the particular concern." 603 In Bombay Co.(1) this Court, after pointing out the distinction in the ingredients of customary and contractual bonus, affirmed the existence of categories like customary bonus which are different from and unconnected with profit based bonus. The learned Judge discussed Jardine Henderson and other rulings, but the judicial chorus of legally claimable customary or contractual bonus is not marred by and discordant note. It may be otiose to refer to holdings of High Courts when this Court has laid down the law. Even so, two decisions, one of Patna and the other of Calcutta, deserve mention. One of us, (Untwalia J., as he then was) speaking for the Division Bench, observed in Howrah Amta Light Rly. thus: "Apart from the profit bonus, the sense of social justice has led to the recognition in law of the right of the workmen to get other kinds of bonus which do not depend upon nor are necessarily connected with the earnings of profits by the industrial concern. One such kind of bonus is that which is paid on the occasion of special festival well celebrated in particular parts of India, as for example, puja bonus in Bengal and Diwali bonus in Western India." The Court, referring to Tulsidas Khimji, restated the tests for the claim of customary bonus and rightly held that these tests are but circumstances and not conditions precedent, that it is not necessary to show that such bonus has been paid even in years of loss. The grounds to be made out for customary, as distinguished from contractual, bonus overlap in many respects but differ in some aspects. P. B. Mukherji, J as he then was, in Tilak Co. observed: "Akin to this conception of bonus is the case of a bonus annexed to the employment by custom or social practices such as Customary bonus and Puja or Festivity bonus. In case of such customary and traditional bonus, the question of profit may or may not arise at all and such customary and traditional bonus will depend on the content and terms of that custom or the tradition on which the claim for bonus is made. "Each claim for bonus must depend on the facts of such claim. No doctrinaire view about bonus is possible or desirable. This much however is judicially settled that bonus is not deferred wages. It is a narrow and static view that considers bonus as always an ex gratia payment or a glorified tip or 'Bakshish ' or a mere cash patronage payable at the pleasure of the employer. In the industrial jurisprudence of a modern economic society, it is a legal claim and a legal category, whose potentialities are not as yet fully conceived, but whose types and boundaries the Courts in 604 India are struggling to formulate. It is a vital instrument of industrial peace and progress, dynamic in its implication and operation. " Since we are not called upon to investigate the veracity of the claim we stop with stating that the employers ' awareness of social justice, which fertilises the right of his employees for bonus, blooms in many ways of which, profit based bonus is but one not the only one. All this is the indirect bonanza of Part IV of the Constitution which bespeaks the conscience of the nation, including the community of employers. Law is not petrified by the past, but responds to the call of the changing times. So too the social consciousness of employers. Of course, Labour has its legal moral duty to the community of a disciplined contribution to the health and wealth of the Industry. Law is not always an organiser of one way traffic. This general survey of the case law conclusively makes out that Labour 's claim for bonus is not inflexibly and solely pegged to profit as the one and only right. Bonus is a word of many generous connotations and, in the Lord 's mansion there are many houses. There is profit based bonus which is one specific kind of claim and perhaps the most common. There is customary or traditional bonus which has its emergence from long, continued, usage leading to a promissory and exceptancy situation materialising in a right. There is attendance bonus, production bonus and what not. An examination of the totality of pertinent materials drives us to the inevitable result that what has been claimed by the workmen in the present case is bonus based on custom and service condition not one based on profit. But the critical question pops up: Is the Bonus Act a killer of every other kind of bonus not provided for by it ? We have thus to move on to a study of the scheme of the Bonus Act in order to ascertain whether it extinguishes claims founded on customary bonus or contractual bonus. In one sense, a bonus may be a mere gift or gratuity as a gesture of goodwill or it may be something which an employee is entitled to on the happening of a condition precedent and is enforceable when the condition is fulfilled. Any extra consideration given for what is received, or something given in addition to what is ordinarily received by, or strictly due to the recipient is a bonus (Black 's Legal Dictionary). But when industrial jurisprudence speaks of 'bonus ', it enters the area of right and claim to what is due beyond strict wages. Viewed from this angle, prima facie one is led to the conclusion that if the Bonus Act deals wholly and solely with profit bonus, it cannot operate as a bar to a different species of claim merely because the word bonus is common to both. Of course, if the statute has spoken so comprehensively, as it can, effect must be given to it. The cosmos of bonus is expanding as working class contentment and prosperity become integral components of industrial peace and progress. The bone of contention between the parties before us is as to whether the Bonus Act is the alpha and omega of all extra claims, outside wages and salaries, labelled bonus with separate adjectives 605 demarcating the identity of each species. But this issue has to be sized up not in vacuo but against the backdrop of the progressive change around us. Today it is accepted doctrine that Labour is the backbone of the nation, particularly in the area of economic self reliance. This means the welfare of the working classes is not only a human problem but a case where the success of the nation 's economic adventures depends on the cooperation of the working classes to make a better India. Indeed, on the national agenda is the question of Labour participation in Management. Against such a perspective of developmental jurisprudence there is not much difficulty in recognising customary bonus and contractual bonus as permissible in Industrial Law, given proper averments and sufficient proof. Shri G. B. Pai has raised what he regards as a lethal infirmity in the claim of the Sabha. In his submission the Bonus Act is a complete Code and what is not covered by its provisions cannot be awarded by the Tribunal. It is true that if the Bonus Act is a complete Code and is exhaustive of the subject, whatever the species of bonus, there may be a bar, but it is quite conceivable that the codification may be of everything relating to profit bonus in which case other types of bonus are left untouched. Merely calling a statute a Code is not to silence the claimant for bonus under heads which have nothing to do with the subject matter of the Code. On listening to the intricate argument about implicit codification of the law of bonus by this Act, one is reminded of Professor Gilmore who put the case against codification thus : "The law, codified, has proved to be quite as unstable, unpredictable, and uncertain quite as mulishly unruly as the common law, uncodified, had ever been. The rules of law, purified, have remained the exclusive preserve of the lawyers; the people are still very much in our toils and clutches as they ever were if not more so. " The argument of the Bonus Act being an all inclusive Code is based on the anatomy of the Act and the ruling in Ghewar Chand. So the judicial task is to ascertain the history and object of the Act, the relevant surrounding circumstances leading up to it, its scheme and the prohibitions, exclusions, exemptions and savings which reveal the intent and ambit of the enactment. Long ago, Plowden, with sibylline instinct, pointed out that the best way to construe the scope of an Act of Parliament is not to stop with the words of the sections. 'Every law consists of two parts viz., of body and soul. The letter of the law is the body of the law, and the sense and reason of the law is the soul of the law '. The 'social conscience ' of the judge hesitates to deprive the working class, for whom Part IV of the Constitution has shown concern, of such rights as they currently enjoy by mere implication from a statute unless there are compulsive provisions constraining the court to the conclusion. From this perspective, let us 606 examine exclusionary contention based on the body and soul of the Bonus Act. If the Bonus Act is a complete Code, on a true decoding of its scheme and spirit, the industrial Court cannot take off the ground with any other forms of bonus yes, that is the implication of 'a complete Code '. Bonus has varying conceptual contents in different branches of law and life. We are here concerned with its range of meanings in industrial law but, as expatiated earlier, there is enough legal room for plural patterns of bonus, going by lexicographic or judicial learning. It implies no disrespect to legal dictionaries if we say that precedents notwithstanding, the critical word 'bonus ' is so multiform that the judges have further to refine it and contextually define it. Humpty Dumpty 's famous words in 'Through the Looking Glass ' 'When I use a word. it means just what I choose it to mean . . neither more nor less ' is an exaggerated cynicism. We have to bring in some legal philosophy into this linguistic problem as it incidentally involves doctrinal issues where the Constitution is not altogether non aligned. Statutory interpretation, in the creative Indian context, may look for light to the lodestar of Part IV of the Constitution e.g., articles 39(a) and (c) and article 43. Where two judicial choices are available, the construction in conformity with the social philosophy of Part IV has preference. In Jalan Trading Co. Shah J. (as he then was) gave a synopsis of the development of the branch of industrial law relating to bonus from the days of the First World War to the Report of the Bonus Commission culminating in the Bonus Act, 1965. The story of 'war bonus ', the Full Bench formula and this Court 's view that 'bonus is not a gratuitous payment made by the employer to his workmen, nor a deferred wage, and that where wages fall short of the living standard and the industry makes profit part of which is due to the contribution of labour, a claim for bonus may be legitimately made by the workmen ' are set out in that decision. The Full Bench formula was based on profits and the terms of reference to the Commission put profit in the forefront as the foundation of the Scheme 'to define the concept of bonus, to consider in relation to industrial employments the question of payment of bonus based on profits and to recommend principles for computation of such bonus and methods of payment . . 'A glance at the various Chapters of the Report brings home the point that bonus based on profits is its central theme. The conclusions and recommendations revolve round the concept of profit bonus. Little argument is needed to hold that the bonus formula suggested by the Commission was profit oriented. Indeed, that was its only concern. The Act, substantially modelled on these proposals, has adopted a blueprint essentially worked out on profit. The presiding idea being a simplified version of bonus linked to profits over a period, shedding the complex calculations in the Full Bench Formula, the statute did not cover other independent species like customary or contractual bonus which had become an economic reality and received judicial recognition. There were marginal references to and accommodation 607 of other brands of bonus but they were for better effectuating the spirit and substance of profit based bonus. The question then is: Was the Bonus Act only a simpler reincarnation of the Full Bench formula, as argued by Sri Tarkunde, or was it, going by the provisions and precedents, a full codification of multiform bonuses, thus giving a knock down blow to any customary but illegitimate demand for bonus falling outside the statute, as contended by Sri Pai ? Indeed, we were taken through the well known categories of bonus vis a vis the statutory provisions with impressive and knowledgeable thoroughness by Shri Pai with a view to strengthen his perspective that the Act encompassed the whole law and left nothing outside its scope. "To begin with, the history of the Act, the Full Bench formula which was its judicial ancestor, the Commission Report which was its immediate progenitor and the statutory milieu as also the majuscule pattern of bonus prevalent in the Indian industrial world, converge to the point that the paramount purpose of the Payment of Bonus Act was to regulate profit bonus, with incidental incursions into other allied claims like customary or attendance bonus. If such be the design of the statute, its scheme cannot be stretched to supersede what it never meant to touch or tackle. The objects and reasons of the Bonus Act indicate that the subject matter of the statute is 'the question of payment of bonus based on profit to employees employed in establishments '. The Report of the Commission is also referred to in the objects and reasons and the tenor is the same. The long title of the Act is non committal, but the concept of 'profit ' as the basis for bonus oozes through the various provisions. For instance, the idea of accounting year, gross profit and the computation thereof, the methodology of arriving at the available surplus and the items deductible from gross profits, have intimate relevance to profit bonus and may even be irrelevant to customary or traditional bonus or contractual bonus. Similarly, the provision for set on and set off of allocable surplus and the like are pertinent to profit based bonus. Schematically speaking, statutory bonus is profit bonus. Nevertheless, there is provision for avoidance of unduly heavy burden under different heads of bonus. For this reason it is provided in section 17 that where an employer has paid any puja bonus or other customary bonus, he will be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him under the Act. Of course, if the customary bonus is thus recognised statutorily and, if in any instance it happens to be much higher than the bonus payable under the Act, there is no provision totally cutting off the customary bonus. The provision for deduction in section 17, on the other hand, indicates the independent existence of customary bonus although, to some extent, its quantum is adjustable towards statutory bonus. Again, section 34 provides for giving affect to the Bonus Act thus: "Notwithstanding anything inconsistent therewith contained in any other law . or in the terms of any award, 608 agreement, settlement or contract of service made before 29th May, 1965". This does not mean that there cannot be contractual bonus or other species of bonus. This provision only emphasises the importance of the obligation of the employer, in every case, to pay the statutory bonus. The other sub sections of section 34 also do not destroy the survival of other types of bonus than provided by the Bonus Act. Shri G. B. Pai used the provisions of the Coal Mines Provident Fund and Bonus Scheme Act, 1948, referred to in section 35 of the Bonus Act, for the purpose of making good his thesis that the Bonus Act has comprehensive coverage except where it expressly saves any other scheme of bonus. Our understanding of section 35 is different. Coal mines are extremely hazardous undertakings and they are largely located in agrarian areas where the agricultural workers absent themselves for long periods to attend to agricultural work and do not report themselves for mining work. Coal mines have many peculiarities and the workmen employed there have to be treated separately from the point of view of incentive for attendance. Therefore, attendance bonus for a miner is a separate subject attended with peculiarities deserving of special treatment and has been expressly saved from the Bonus Act. This does not mean that whatever has not been expressly saved is, by necessary implication, included in the Bonus Act. Of course, there are provisions for exemptions and exclusions in the Bonus Act itself, particularly, vis a vis small establishments and public sector undertakings. There is also marginal reference in section 2(21) to section 2(21) (iv) to other kinds of bonus, including incentive, production and attendance bonus. The heart of the statute, painly read from its object and provisions, reveals that Act has no sweep wider than profit bonus. There was reference to the payment of Bonus (Amendment) Ordinance, 1975 by counsel on both sides. We find that the long title has been expanded and now covers bonus. "on the basis of profit or on the basis of production or productivity". This amendment itself implies that formerly a narrower species of bonus, namely, that based on profit had alone been dealt with. The limits on contractual bonus also tends to feed our conclusions. The implications of the ceiling set by the recent amendment to the law falls outside our scope and we keep away from determining it. Sufficient unto the day is the evil thereof. It is clear further from the long title of the Bonus Act of 1965 that it seeks to provide for bonus to persons employed 'in certain establishments ' not in all establishments. Moreover, customary bonus does not require calculation of profits, available surplus, because it is a payment founded on long usage and justified often by spending on festivals and the Act gives no guidance to fix the quantum of festival bonus; nor does it expressly wish such a usage. The conclusion seems to be fairly clear, unless we strain judicial sympathy contrarywise, that the Bonus Act dealt with only profit bonus and matters connected therewith and did not govern customary, traditional or contractual bonus. 609 The end product of our study of the anatomy and other related factors is that the Bonus Act spreads the canvas wide to exhaust profit based bonus but beyond its frontiers is not void but other cousin claims bearing the caste name 'bonus ' flourish miniatures of other colours! The Act is neither proscriptive nor predicative of other existences. The trump card of Sri G. B. Pai is the ruling in Ghewar Chand. If the ratio there is understood the way Shri Pai would have it the workmen have no case to present. For, establishments employing less than 20 workers are excluded from the benignant campus of the Act and the appellants fall outside the grace of the statute for that reason alone. Does the decision exhaust the branch of jurisprudence on every kind of bonus or merely lays down that profit based bonus the most common one and complicated in working out on the mathematics of the full Bench Formula has been picked out for total statutory treatment and for that pattern of bonus the Act operates as a complete Code? The Tribunal understood the former way and followed it up with a rejection, on the ground of a legal bar, of the admittedly non profit based claim for bonus. Shri Tarkunde argues the reasoning to be a misunderstanding of the meaning of the ruling. We hold that the Bonus Act speaks, and speaks as a whole Code, on the sole subject of profit based bonus but is silent on, and cannot therefore annihilate by implication, other distinct and different kinds of bonus such as the one oriented on custom. We confess that the gravitational pull on judicial construction of Part IV of the Constitution has, to some extent influenced our choice. It is trite, going by Anglophonic principles, that a ruling of a superior court is binding law. It is not of scriptural sanctity but is an of ratio wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. Beyond those walls and de hors the milieu we cannot impart eternal vernal value to the decision, exalting the doctrine of precedents into a prison house of bigotry; regardless of varying circumstances and myriad developments. Realism dictates that a judgment has to be read, subject to the facts directly presented for consideration and not affecting those matters which may lurk in the record. Whatever be the position of subordinate courts ' casual observations, generalisations and sub silentio determinations must be judiciously read by courts of coordinate jurisdiction and, so viewed, we are able to discern no impediment in reading Ghewar Chand as confined to profit bonus, leaving room for non statutory play of customary bonus. The case dealt with a bonus claim by two sets of workmen, based on profit of the business but the workmen fell outside the ambit of the legislation by express exclusion or exemption. Nothing relating to any other type of bonus arose and cannot be impliedly held to have been decided. The governing principle we have to appreciate as a key to the understanding of Ghewar Chand is that it relates to a case of profit bonus urged under the by two sets of workmen, employed by establishments which are either excluded or exempted from the Bonus Act. The major inarticulate premise of the statute is that it deals with and only 610 with profit based bonus as has been explained at some length earlier. There is no categorical provision in the Bonus Act nullifying all other kinds of bonus, nor does such a conclusion arise by necessary implication. The ruling undoubtedly lays down the law thus: "Considering the history of the legislation, the back ground and the circumstances in which the Act was enacted, the object of the Act and its scheme, it is not possible to accept the construction suggested on behalf of the respondents that the Act is not an exhaustive Act dealing comprehensively with the subject matter of bonus in all its aspects or that Parliament still left it open to those to whom the Act does not apply by reason of its provisions either as to exclusion or exemption to raise a dispute with regard to bonus through industrial adjudication under the or other corresponding law. " But this statement, contextually construed, means that profit bonus not founded on the provisions of the Bonus Act and by resort to an adventure in industrial dispute under the is no longer permissible. When Parliament has expressly excluded or exempted certain categories from the Bonus Act, they are bowled out so far as profit based bonus is concerned. You cannot resurrect profit bonus by a back door method, viz. resort to the machinery of the industrial Disputes Act. The pertinence of the following observations of Shelat J., becomes self evident, understood in this setting: "We are not impressed by the argument that Parliament in excluding such petty establishments could not have intended that employees therein who were getting bonus under the full Bench formula should lose that benefit. As aforesaid, Parliament was evolving for the first time a statutory formula in regard to bonus and laying down a legislative policy in regard thereto as to the classes of persons who would be entitled to bonus thereunder. It laid down the definition of an 'employee ' far more wider than the definition of an 'workman ' in the and the other corresponding Acts. If, while doing so, it expressly excluded as a matter of policy certain petty establishments in view of the recommendation of the Commission in that regard, viz., that the application of the Act would lead to harassment of petty proprietors and disharmony between them and their employees, it cannot be said that Parliament did not intend or was not aware of the result of exclusion of employees of such petty establishments. " Likewise, reference to agreements and settlements providing for bonus being exempted from the applicability of the Act does not militate against the survival of contractual bonus (we are not referring to the impact of the latest amendment by Ordinance of 1975). Viewed thus and in the light of the observations earlier extracted, the following passage fits into the perspective we have outlined: "Section 32(vii) exempts from the applicability of the Act (the Bonus Act) those employees who have entered 611 before May 29, 1965 into an agreement or settlement with their employers for payment of bonus linked with production or productivity in lieu of bonus based on profits and who may enter after that date into such agreement or settlement for the period for which such agreement or settlement is in operation. Can it be said that in cases where there is such an agreement or settlement in operation, though this clause expressly excludes such employees from claiming bonus under the Act during such period, the employees in such cases can still resort to the , and claim bonus on the basis of the Full Bench Formula? The answer is obviously in the negative for the object in enacting cl. (vii) is to let the parties work out such an agreement or settlement. It cannot be that despite this position, Parliament intended that those employees had still the option of throwing aside such an agreement or settlement, raise a dispute under the and claim bonus under the Full Bench Formula. The contention, therefore, that the exemption under section 32 excludes those employees from claiming bonus under the Act only and not from claiming bonus under the or such other Act is not correct." The core question about the policy of the Parliament that was agitated in that case turned on the availability of the as an independent method of claiming profit bonus de hors the Bonus Act and the Court took the view that it would be subversive of the scheme of the Act to allow an invasion from the flank in that manner. The following observations strengthen this approach: "Surely, Parliament could not have intended to exempt these establishments from the burden of bonus payable under the Act and yet have left the door open for their employees to raise industrial disputes and get bonus under the Full Bench formula which it has rejected by laying down a different statutory formula in the Act. For instance, is it to be contemplated that though the Act by section 32 exempts institutions such as the Universities or the Indian Red Cross Society or hospitals, or any of the establishments set out in cl. (ix) of that section, they would still be liable to pay bonus if the employees of those institutions were to raise a dispute under the and claim bonus in accordance with the Full Bench Formula. The legislature would in that case be giving exemption by one hand and taking it away by the other, thus frustrating the very object of section 32. Where, on the other hand,, Parliament intended to retain a previous provision of law under which bonus was payable, or was being paid it has expressly saved such provision. Thus, under section 35 the Coal Mines Provident Fund and Bonus Schemes Act, 1946 and any scheme made thereunder are saved. If, therefore, Parliament wanted to retain the right to claim bonus by way of industrial adjudication for those who are either excluded or exempted from the Act, it would have made an express 612 saving provision to that effect as it has done for employees in Coal Mines. " A discerning and concrete analysis of the scheme of the Act and the reasoning of the Court leaves us in no doubt that it leaves untouched customary bonus. The plea of constructive res judicata is based on the 'might and ought ' doctrine. Shri Pai 's argument is that before the Arbitration Board no case of customary or contract bonus was urged for the year 1965 and so, in later years, such a ground is barred by the general principles of res judicata. Sections 10A, 18 and 19(3) of the were pressed before us to demonstrate the prior award was binding on the workers and reading it in the light of Pandurang the bar was spelt out. It is clear law, so long as the above ruling stands, that industrial litigation is no exception to the general principle underlying the doctrine of res judicata. We do entertain doubt about the extension of the sophisticated doctrine of constructive res judicata to industrial law which is governed by special methodology of conciliation, adjudication and considerations of peaceful industrial relations, where collective bargaining and pragmatic justice claim precedence over formalised rules of decision based on individual contests, specific causes of action and findings on particular issues, but we are convinced that Pandurang(1) does not apply at all to our case. There overtime wages were claimed earlier under the Factories Act and the case was rejected by the Tribunal. After this rebuff, a like claim was repeated but sustaining it on the Bombay Shops and Establishments Act. This new ground to support the same claim was held to be barred because the workmen could and ought to have raised the issue that the Factories Act failing, the Shops Act was available to them to back up their demand. The fallacy in invoking this decision lies in the fact that as early as 1950 there was a binding award of the Industrial Tribunal relating to the claim, which had not been put an end to, and so this Court took the view that so long as that award stood, the same claim under a different guise (the Shops Act) could be subversive of the rule of res judicata. The decisive circumstance which distinguishes that case is contained in the observation: "If the workers are dissatisfied with any of the items in respect of which their claim has been rejected it is open to them to raise a fresh industrial dispute. " That is to say, if a fresh dispute had been raised, after terminating the prior award, no bar of res judicata could have been urged. Here, the Arbitration Board dealt with one dispute; the Industrial Tribunal, with a fresh dispute. The Board enquired into one cause of action based on profit bonus; the Tribunal was called upon by the terms of reference, to go into a different claim. This basic difference was lost sight of by the Tribunal and so he slipped into an error. The dangers of constructive res judicata in the area of suits vis a vis writ petitions under article 226 and as between proceedings under article 226 and article 32 are such as to warrant a closer study. To an extent the 613 Law Commission of India in its Report(1) has touched on this topic. Industrial disputes are an a fortiori case. Dispute processing is not by Court litigation alone. Industrial peace best flourishes where non litigative mechanisms come into cheerful play before tensions develop or disputes brew. Speaking generally, alternatives to the longish litigative process is a joyous challenge to the Indian activist jurist and no field is in need of the role of avoidance as a means of ending or pre empting disputes as industrial life. Litigation, whoever wins or loses, is often the funeral of both. We are a developing country and need techniques of maximising mediatory methodology as potent processes even where litigation has erupted. This socially compulsive impulse prompted the setting in motion of a statesman like effort by the senior counsel on both sides, with helpful promptings from the Bench, to advise their clients into a conciliatory mood. Should we have at all hinted to the advocates to resolve by negotiation or stick to our traditional function of litigative adjudication? In certain spheres, 'judicious irreverence ' to judicialised argumentation is a better homage to justice ! Regrettably, the exercise proved futile and we have to follow up our conclusions with necessary directions. The findings we have reached may now be formally set down. We hold that the Bonus Act (as it stood in 1965) does not bar claims to customary bonus or those based on conditions of service. Secondly we repel the plea of res judicata. There is no merit in the view that the Industrial Tribunal has no jurisdiction to try the dispute referred to it. We set aside the award and direct the Tribunal to decide on the merits the subject matter of the dispute referred to it by the State Government. The appeal is hereby allowed but, having regard to the over all circumstances, the parties will bear their costs. P.B.R. Appeal allowed.

A considerable number of workmen were employed by a large number of small businessmen in a locality in the city. Prior to 1965, the employers made ex gratia payment to the workers by way of bonus which they stopped from that year. A Board of Arbitrators appointed under section 10A of the Industrial Disputes Act, to which the bonus dispute was referred, rejected the workers demand for bonus. The dispute was eventually referred to an Industrial Tribunal which in limine dismissed the workers ' demand as being barred by res judicata, in view of the decision of the Arbitration Board. The Tribunal in addition. held that bonus so far paid having been founded on tradition and custom, did not fall within the four corners of the Bonus Act which is a complete code and came to the conclusion that the workers were not entitled bonus. On appeal to this Court it was contended that (i) the appellant Union not being a party to the dispute had no locus standi, (ii) the claim of the workmen not being profit based bonus, which is what the Bonus Act deals with, the Act has no application to this case; and (iii) since no case of customary or contract bonus was urged before the Arbitration Board such a ground was barred by the general principles of res judicata. Dismissing the appeal. ^ HELD: 1(a) In an industrial dispute the process of conflict resolution is informal, rough and ready and invites a liberal approach. Technically the union cannot be the appellant, the workmen being the real parties. There is a terminological lapse in the cause title, but a reading of the petition, the description of the parties, the grounds urged and grievances aired, show that the battle was between the workers and the employers and the Union represented the workers. The substance of the matter being obvious, formal defects fade away. [596H] (b) Procedural prescriptions are handmaids, not mistresses of justice and failure of fair play is the spirit in which Courts must view processual deviances. Public interest is promoted by a spacious construction of locus standi in our socio economic circumstances, conceptual latitudinarianism permits taking liberties with individualisation of the right to invoke the higher courts where the remedy is shared by a considerable number, particularly when they are weaker. [597B; D] Dhabolkar ; and Nawabganj Sugar Mills ; held inapplicable. (e) In industrial law collective bargaining, union representation at conciliations, arbitrations, adjudications and appellate and other proceedings is a welcome development and an enlightened advance in industrial life. [597G] In the instant case the union is an abbreviation for the totality of workmen involved in the dispute. The appeal is, therefore, an appeal by the workmen compendiously projected and impleaded through the union. [598D] 592 2(a) The demands referred by the State Govt. under section 10(1) (d) of the Industrial Disputes Act, specifically speak of payment of bonus by the employers which had become custom or usage or a condition of service in the establishments. The subject matter of the dispute referred by the Govt. dealt with bonus based on custom or condition of service. The Tribunal was bound to investigate this question. The workers in their statements urged that the demand was not based on profits or financial results of the employer but was based on custom. [599 D E] (b) The pleadings, the terms of reference and the surrounding circumstances support the only conclusion that the core of the cause of action is custom and/or term of service, not sounding in or conditioned by profits. The omission to mention the name of a festival as a matter of pleading did not detract from the claim of customary bonus. An examination of the totality of materials leads to the inevitable result that what had been claimed by the workmen was bonus based on custom and service condition, not one based on profit. [600E; 601B] Messrs. Ispahani Ltd. vs Ispahani Employees ' Union [1960] 1 S.C.R. 24, Bombay Co. ; , Jardine Henderson [1962] Supp.3 S.C.R.382, Howrah Amta Light Rly. [1966] II LLJ 294, 302, Tulsidas Khimji [1962] I LLJ 435 and Tilak Co. A.I.R. 1959 Cal. 797 referred to. (c) When industrial jurisprudence speaks of bonus it enters the area of right and claim to what is due beyond strict wages. Viewed from this angle prima facie one is led to the conclusion that if the Bonus Act deals wholly and solely with profit bonus it cannot operate as a bar to a different species of claim merely because the word 'bonus ' is common to both. [604G] (d) The welfare of the working classes is not only a human problem but a case where the success of the nation 's economic adventures depends on the cooperation of the working classes to make a better India. Against such a perspective of developmental jurisprudence there is not much difficulty in recognising customary bonus and contractual bonus as permissible in industrial law. [605B] Churakulam Tea Estate , Ispahani [1960] 1 S.C.R. 24, Bombay Co. , Jardine Henderson [1962] Supp. 3 S.C.R. 382, Howrah Amta Light Rly. [1966] II LLJ 294, 302 and Tulsidas Khimji [1962] I LLJ 435 referred to. 3(a) It is true that if the Bonus Act is a complete code and is exhaustive of the subject whatever the species of bonus, there may be a bar to grant of bonus not covered by its provisions. But it is quite conceivable that the codification may be of everything relating to profit bonus in which case other types of bonus are left untouched. Merely calling a statute a code is not to silence the claimant for bonus under heads which have nothing to do with the subject matter of the code. [605D] (b) The history of the Act, the Full Bench formula, the Bonus Commission Report and the statutory milieu as also the majuscule pattern of bonus prevalent in the Indian industrial world, converge to the point that the paramount purpose of the Act was to regulate profit bonus. If such be the design of the statute, its scheme cannot be stretched to supersede what it never meant to touch or tackle. [607C D] (c) The objects and reasons of the Bonus Act indicate that the subject matter of the statute was the question of payment of bonus based on profit to employees employed in establishments. Schematically speaking, statutory bonus is profit bonus. To avoid an unduly heavy burden under different heads of bonus it is provided in section 17 that where an employer has paid any puja bonus or other customary bonus, he would be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him under the Act. If the customary bonus is thus recognised statutorily and, if in any instance it happened to be much higher than the bonus payable under the Act, there is no provision totally cutting off the customary bonus. The provision for deduction 593 in section 17 on the other hand, indicates the independent existence of customary bonus although, to some extent, its quantum is adjustable towards statutory bonus. Section 34 does not mean that there cannot be contractual bonus or other species of bonus. This provision only emphasises the importance of the obligation of the employer, in every case, to pay the statutory bonus. The other sub sections of section 34 also do not destroy the survival of other types of bonus than provided by the Bonus Act. The heart of the statute, plainly read, from its object and provisions, reveals that the Act has no sweep wider than profit bonus. [607E G; 608 B D] (d) The fact that certain types of bonus which are attended with peculiarities deserving all special treatment have been expressly saved from the bonus Act did not mean that whatever had not been expressly saved was by necessary implication included in the Bonus Act. [608D] (e) The long title of the Bonus Act seeks to provide for bonus to persons employed "in certain establishments" not in all establishments. Moreover, customary bonus does not require calculation of profits, available surplus, because it is a payment founded on long usage and the Act gives no guidance to fix the quantum of festival bonus. It is, therefore, clear that the Bonus Act deals with only profit bonus and matters connected therewith and does not govern customary, traditional or contractual bonus. [608G H] (f) The Bonus Act speaks and speaks as a whole code on the sole subject of profit based bonus but is silent on and cannot therefore annihilate by implication, other distinct and different kinds of bonus such as the one oriented on custom. [609D] Ghewar Chand 's case ; distinguished and held inapplicable. (g) The principle that a ruling of a superior court is binding law is not of scriptural sanctity but is of ratio wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. So there is no impediment in reading Ghewar Chand 's case as confined to profit bonus, leaving room for non statutory play of customary bonus. That case relates to profit bonus under the Industrial Disputes Act. The major inarticulate premise of the statute is that it deals with and only with profit based bonus. There is no categorical provision in the Bonus Act nullifying all other kinds of bonus, nor does such a conclusion arise by necessary implication. The core question about the policy of the Parliament that was agitated in that case turned on the availability of the Industrial Disputes Act as an independent method of claiming profit bonus de hors the Bonus Act and the Court took the view that it would be subversive of the scheme of the Act to allow an invasion from the flank in that manner. A discerning and concrete analysis of the scheme of the Act and the reasoning of the Court leaves no doubt that the Act leaves untouched customary bonus. [609E H; 611D E] (4) So long as Pandurang stands industrial litigation is no exception to the general principle underlying the doctrine of res judicata. But the case of Pandurang is distinguishable. In that case there was a binding award of the Industrial Tribunal relating to the claim which had not been put an end to and so this Court took the view that so long as that award stood the same claim under a different guise could be subversive of the rule of res judicata. In the present case the Arbitration Board dealt with one dispute; the Industrial Tribunal with a fresh dispute. The Board enquired into one cause of action based on profit bonus; the Tribunal was called upon to go into a different claim. [612D F] [The court expressed a doubt about the extension of the sophisticated doctrine of constructive res judicata to industrial law which is governed by special methodology of conciliation, adjudication and considerations of peaceful industrial relations where collective bargaining and pragmatic justice claim precedence over formalised rules of decision based on individual contests, specific causes of action and findings on particular issues.]

Appeal No. 288 of 1958. Appeal by Special Leave from the judgment and order dated December 3, 1956, of the Punjab High Court (Circuit Bench) at Delhi in Letters Patent Appeal No. 25 D of 1956, arising out of the judgment and order dated April 9, 1956, of the said High Court (Circuit Bench) at Delhi in Civil Writ No. 8 D of 1955. N. C. Chatterjee and R. section Narula, for the appellant. M. C. Setalvad, Attorney General for India, B. Sen and T. M. Sen, for the respondent 1958. December 12. The Judgment of the Court was delivered by section K. DAS, J. This is an appeal by special leave and the only question for decision is if the order of the President dated October 1, 1954, removing the appellant from service with effect from that date is invalid, as claimed by the appellant, by reason of a contravention of the provisions of article 311(2) of the Constitution. The short facts are these. The appellant stated that he joined permanent Government service on April 4, 1924. In 1947, before partition, he was employed as Assistant Secretary, Frontier Corps of Militia and Scouts in the then North Western Frontier Province, under the administrative control of the External Affairs Department of the Government of India. The appellant stated that the post which be held then was a post in the Central Service, Class 11. After partition, the appellant opted for service in India and was posted to an office under the Ministry of Commerce in the Government of India in October, 1947. In December, 1949, he was transferred to the office of the Chief Controller of Imports, New Delhi, to clear off certain arrears of work. In August, 1951, he was posted as 894 and Deputy Chief Controller of imports, Calcutta, and continued to work in that post till September, 1952. He then took four months ' leave on average pay and on the expiry of his leave on January 24, 1953, he was transferred as Section officer in the Development Wing of the Ministry of Commerce. The appellant thought that the order amounted to a reduction of his rank and lie made certain representations. As these representations bore no fruit, he applied for leave preparatory to retirement on February 6, 1953. In that application the appellant stated: Normally I am due to retire in April 1956 but I find it difficult to reconcile myself to the new conditions of service under which I am now placed to work. I find that I would not be wasting only myself but I would also not be doing full justice to the ' interest of my Government and country in my present environment. Under the circumstances, I pray that I may be permitted to retire from the 1st May, 1953. " On February 14, 1953, the appellant amended his leave application and said that he had been informed by the I Administrative Branch of the Development Wing that the question of permission to retire was under consideration, because of some difficulty with regard to the inclusion in the service of the appellant the period during which he held the, post of Assistant Secretary, Frontier Corps; therefore be said that he might be granted leave on full average pay for four months with effect from February 15, 1953, if the decision to give him permission to retire was likely to be postponed beyond May 1, 1953. He amended his leave application by making the following prayer: " Leave may be sanctioned for four months from. the 15th February, 1953, or up to the date from which I am permitted to retire whichever may be earlier ". On March 10, 1953, the appellant was informed that he could not be allowed to retire at that stage, but the Ministry had agreed to grant him leave from February 16, 19 3, to April 30, 1953. The appellant then went on leave and on February 25, 1953, he 895 wrote to Government to say that he was contemplating to join the service of Messrs. Albert David & Co. Ltd., Calcutta, and for that purpose he was accepting a course of training in that Company for two months. In April, 1953, the appellant accepted service under Messrs. Albert David & Co. Ltd., and he wrote to Government to that effect on April 6, 1953. On June 16, 1953, the appellant was charged with hav ing violated r. 15 of the Government Servants ' Conduct Rules and Fundamental Rule 11. Rule 15 of the Government Servants ' Conduct Rules states, inter alia, that a Government servant may not without the previous sanction of Government engage in any trade or undertake any employment other than his public duties. Fundamental Rule 11 says in effect that unless in any case it be otherwise distinctly provided, the whole time of a Government servant is at the disposal of the Government which pays him. A. P. Mathur, Joint Chief Controller of Imports, was asked to hold an enquiry against the appellant on the charge mentioned above. The appellant submitted an explanation and an enquiry was held by A. P. Mathur in due course. The Enquiring Officer submitted his report on September 12, 1953, in which he found that the appellant had, contrary to the rules governing the conditions of his service, accepted private employment without previous sanction of Government during the period when he was still in Government service. On April 14, 1954, the appellant was asked to show cause in accordance with the provisions of article 311(2) of the Constitution. As the whole of the argument in this case centres round this show cause notice, it is necessary to set it out in full Sir, I am directed to say that the Enquiry Officer appointed to enquire into certain charges framed against you has submitted his report ; a copy of the report is enclosed for your information. On a careful consideration of the report, and in particular of the conclusions reached by the Enquiry Officer in respect of the charges framed against you the President is provisionally of opinion that a 896 major penalty, viz., dismissal, removal or reduction should be enforced on you. Before he takes that action, he desires to give you an opportunity of showing cause against the action proposed to be taken. Any representation which you may make in that connection will be considered by him before taking the proposed action. Such representation, if any, should be made, in writing, and submitted so as to reach the undersigned not later than 14 days from the receipt of this letter by you. Please acknowledge receipt of this letter. Yours faithfully, Sd. section Bhoothalingam, Joint Secretary to the Government of India. " The appellant then showed cause and on October 1, 1954, the President passed an order in which it was stated that after taking into consideration the report of the Enquiring Officer and in consultation with the Public Service Commission, the President found that the charge had been proved against the appellant and the appellant was accordingly removed from service with effect from that date. The appellant then moved the Punjab High Court by a petition under article 226 of the Constitution in which his main contentions were (a) that he had no opportunity of showing cause against the action proposed to be taken in regard to him within the meaning of article 311 (2) of the Constitution and (b) that he had asked for leave preparatory to retirement and accepted service under Albert David & Co. Ltd. in the bona fide belief that Government had no objection to his accepting such private employment. Dulat, J., who dealt with the petition in the first instance, held against the appellant on both points. He found that there was no contravention of the provisions of article 311 (2) of the Constitution and on the second point, he held that on the facts admitted in the case there was no doubt that the appellant had accepted private employment in contravention of the rules governing the conditions of his service and there was little substance 897 in the suggestion of the appellant that he had no sufficient opportunity to produce evidence. The second point no longer survives, and the only substantial point for our consideration is the alleged contravention of article 311(2) of the Constitution. Mr. N. C. Chatterjee, who has appeared on behalf of the appellant, has submitted before us that the show cause notice dated April 14, 1954, stated all the three punishments mentioned in article 311 (2) and inasmuch as it did not particularise the actual or exact punishment proposed to be imposed on the appellant, the notice did not comply with the essential requirements of article 311 (2) of the Constitution; therefore, the final order of removal passed on October 1, 1954, was not a valid order. In the recent decision of Khem Chand vs Union of India (1) this Court explained the true scope and effect of article 311 (2) of the Constitution. It was stated in that decision that the reasonable opportunity envisaged by article 311 (2) of the Constitution included (a) an opportunity to the Government servant to deny his guilt and establish his innocence, (b) an opportunity to defend himself, and finally (c) an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority after the enquiry is over and after applying its mind to the gravity or otherwise of the charges proved against the Government servant tentatively proposes to inflict one of the three punishments and communicates the same to the Government servant. It is no longer in dispute that the appellant did have opportunities (a) and (b) referred to above. The question before us is whether the show cause notice dated April 14, 1954, gave the appellant a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. Mr. N. C. Chatterjee has emphasised two observations made by this Court in Khem Chand 's case (1). He points out that in connection with opportunity (c) aforesaid, this Court observed that a Government (1) ; 113 898 servant can only make his representation if the competent authority after the enquiry is over and after applying its mind to the gravity or otherwise of the charges proved against the Government servant tentatively proposes to inflict one of the three punishments and communicates the same to the Government servant. Mr. Chatterjee emphasises the observation " one of the three punishments ". Secondly, he has drawn our attention to the observations made in the judgment of the Judicial Committee in High Commissioner for India and High Commissioner for Pakistan vs I. M. Lall (1), which observations were quoted with approval in Khem Chand 's case (2). One of the observations made was: " In the opinion of their Lordships no action is proposed within the meaning of the sub section " (their Lordships were dealing with sub section (3) of section 240 of the Government of India Act, 1935) " until a definite conclusion has been come to on the charges, and the actual punishment to follow is provisionally determined on." Mr. Chatterjee emphasises the expression " actual punishment " occurring in the said observations. It is to be remembered, however, that both in I. M. Lall 's case, (1) and Khem Chand 's case (1) the real point of the decision was that no second notice had been given to the Government servant concerned after the enquiry was over to show cause against the action proposed to be taken in regard to him. In I. M. Lall 's case (1) a notice was given at the same time as the charges were made which directed the Government servant concerned to show cause " why he should not be dismissed, removed or reduced or subjected to such other disciplinary action as the competent authority may think fit to enforce, etc. " In other words, the notice was what is usually called a combined notice embodying the charges as well as the punishments proposed. Such a notice, it was held, did not comply with the requirements of sub section (3) of section 240. In Khem Chand 's case (2) also the report of the Enquiring Officer was approved by the Deputy Commissioner, Delhi, who imposed the (1) (1948) L.R. 75 I.A. 225,242. (2) ; 899 penalty of dismissal without giving the Government servant concerned an opportunity to show cause against the action proposed to be taken in regard to him. In Khem Chand 's case (1) the learned SolicitorGeneral appearing for the Union of India sought to distinguish the decision in I. M. Lall 's case (2) on the ground that the notice there asked the Government servant concerned to show cause why he should not be dismissed, removed or reduced or subjected to any other disciplinary action, whereas in Khem Chand 's case(1) the notice issued to the Government servant before the enquiry mentioned only one punishment, namely, the punishment of dismissal. Dealing with this argument of the learned Solicitor General this Court said (at p. 1100): " A close perusal of the judgment of the Judicial Committee in I. M. Lall 's case will, however, show that the decision in that case did not proceed on the ground that an opportunity had not been given to 1. M. Lall against the proposed punishment merely because in the notice several punishments were included, but the decision proceeded really on the ground that this opportunity should have been given after a stage bad been reached where the charges had been established and the competent authority had applied its mind to the gravity or otherwise of the proved charge tentatively and proposed a particular punishment. " Therefore, the real point of the decision both in I. M. Lall 's case (2) and Khem Chand 's case (1) was that no opportunity had been given to the Government servant concerned to show cause after a stage had been reached when the charges had been established and the competent authority bad applied its mind to the gravity or otherwise of the charges proved and tentatively proposed the punishment to be given to the Government servant for the charges so proved. It is true that in some of the observations made in those two decisions the words " actual punishment " or particular punishment " have been used, but those (1) ; (2) (1948) L.R. 75 I.A. 225, 242. 900 observations must, however, be taken with reference to the context in which they were made. Let us examine a little more carefully what consequences will follow if article 311(2) requires in every case that the " exact " or " actual " punishment to be inflicted on the Government servant concerned must be mentioned in the show cause notice issued at the second stage. It is obvious, and article 311 (2) expressly says so, that the purpose of the issue of a show cause notice at the second stage is to give the Government servant concerned a reasonable opportunity of showing cause why the proposed punishment should not be inflicted on him; for example, if the proposed punishment is dismissal, it is open to the Government servant concerned to say in his representation that even though the charges have been proved against him, he does not merit the extreme penalty of dismissal, but merits a lesser punishment, such as removal or reduction in rank. If it is obligatory on the punishing authority to state in the show cause notice at the second stage the " exact " or " particular " punishment which is to be inflicted, then a third notice will be necessary if the State Government accepts the representation of the Government servant concerned. This will be against the very purpose for which the second show cause notice was issued. Then, there is another aspect of the matter which has been pointedly emphasised by dulat, J. If in the present case the show cause notice had merely stated the punishment of dismissal without mentioning the other two punishments, it would still be open to the punishing authority to impose any of the two lesser punishments of removal or reduction in rank and no grievance could have been made either about the show cause notice or the actual punishment imposed. Can it be said that the enumeration of the other two punishments in the show cause notice invalidated the notice ? It appears to us that the show cause notice in the present case by mentioning the three punishments gave a better and fuller opportunity to the appellant to show cause why none of the three punishments should be inflicted on him. We desire to 901 emphasise here that the case before us is not one in which the show cause notice is vague or of such a character as to lead to the inference that the punishing authority did not apply its mind to the question of punishment to be imposed on the Government servant. The show cause notice dated April 14, 1954, stated in clear terms that " the President is provisionally of opinion that a major penalty, namely, dismissal, removal or reduction, should be enforced on you. " Therefore, the President had come to a tentative conclusion that the charge proved against the appellant merited any one of the three penalties mentioned therein and asked the appellant to show cause why any one of the aforesaid three penalties should not be imposed on him. We see nothing wrong in principle in the punishing authority tentatively forming the opinion that the charges proved merit any one of the three major penalties and on that footing asking the Government servant concerned to show cause against the punishment proposed to be taken in the alternative in regard to him. To specify more than one punishment in the alternative does not necessarily make the proposed action any the less definite; on the contrary, it gives the Government servant better opportunity to show cause against each of those punishments being inflicted on him, which he would not have had if only the severest punishment had been mentioned and a lesser punishment not mentioned in the notice had been inflicted on him. We turn now to certain other decisions on which learned counsel for the appellant has relied. They are: Jatindra Nath Biswas vs R. Gupta (1), Dayanidhi Rath vs B. section Mohanty (2) and Lakshmi Narain Gupta vs A. N. Puri (3). In the case of Jatindra Nath Biswas (1) no second show cause notice was given and the decision proceeded on that footing. Sinha, J., observed, however: "Where there is an enquiry, not only must he have an opportunity of contesting his case before the (1) (2) A.I.R. 1955 Orissa 33. (3) A.I.R. 1954 Cal. 3.35 902 enquiry, but, before the punishment is imposed upon him, he must be told about the result of the enquiry and the exact punishment which is proposed to be inflicted." Mr. Chatterjee has emphasised the use of the word " exact ". As we have pointed out, the decision proceeded on a different footing and was not rested on the ground that only one punishment must be mentioned in the second show cause notice. The decision in Dayanidhi Rath 's case (1) proceeded on the footing that if the punishment that is tenatively proposed against a civil servant is of a graver kind, he can be awarded punishment of a lesser kind; but if the punishment that is tentatively proposed is of a lesser kind, there will be prejudice in awarding a graver form of punish ment. What happened in that case was that the show cause notice stated that in view of the Enquiring Officer 's findings contained in the report with which the Secretary agreed and in consideration of the past record of the Government servant concerned, it was proposed to remove him from Government service; in another part of the same notice, however, the Government servant concerned was directed to show cause why the penalty of dismissal should not be inflicted for the charges proved against him. Thus, in the same notice two punishments were juxtaposed in such a way that it was difficult to say that the punishing authority had applied its mind and tentatively come to a conclusion as to what punishment should be given. It was not a case where the punishing authority said that either of the two punishments might be imposed in the alternative; on the contrary, in one part of the notice the punishing authority said that it was proposed to remove the Government servant concerned and in another part of the notice it said that the proposed punishment was dismissal. In Lakshmi Narain Gupta 's case (2) the notice called upon the petitioner to show cause why disciplinary action, such as reduction in rank, withholding of increments, etc., should not be taken against him. The learned Judge pointed out (1) A.I.R. 1955 Orissa 33. (2) A.I.R. 1954 Cal 335. 903 that there were seven items of penalties under r. 49 of the Civil Service (Classification, Control and Appeal) Rules, and the notice did not indicate that the punishing authority had applied its mind and come to any tentative conclusion as to the imposition of any of the punishments mentioned in that rule. On that footing it was held that there was no compliance with the provisions in article 311(2) of the Constitution. We do not, therefore, take these decisions as laying down that whenever more than one punishment is mentioned in the second show cause notice, the notice must be held to be bad. If these decisions lay down any such rule, we must hold them to be incorrect. We have come to the conclusion that the three decisions on which learned counsel for the appellant has placed his reliance do not really support the extreme contention canvassed for by him, and we are further of the view that the show cause notice dated April 14, 1954, in the present case did not contravene the provisions of article 311 (2) of the Constitution. The appellant had a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. This disposes of the principal point in controversy before us. Mr. Chatterjee referred to certain mistakes of reference in the order of the President dated October 1, 1954. Instead of referring to r. 15 of the Government Servants ' Conduct Rules, r. 13 was referred to. There was also a reference to para. 5 of a particular Government order which prohibited Government servants from taking up commercial employment within two years of retirement. Mr. Chatterjee submitted that this particular order did not apply to Government servants in Class 11. We do not think that the inaccurate references were of any vital importance. In effect and substance the order of removal dated October 1, 1954, was based on the ground that the appellant violated r. 15 of the Government Servants ' Conduct Rules and r. II of the Fundamental Rules; he accepted private employment without sanction of Government while he was still in Government service. That was the basis for the enquiry against 904 the appellant and that was the basis for the order of removal passed against him. For these reasons we hold that there is no merit in the appeal which must accordingly be dismissed with costs. Appeal dismissed.

The appellant, a Government servant, was charged with having, contrary to the rules governing the conditions of his service, accepted private employment without sanction of Government while he was still in Government service. The Officer who held an enquiry against him found the charge to be true and submitted a report. On April 14, 1954, a notice was issued to the appellant asking him to show cause in accordance with the provisions of article 3II(2) of the Constitution in the following terms:. . . On a careful consideration of the report, and in particular of the conclusions reached by the Enquiring Officer in respect of the charges framed against you, the President is provisionally of opinion that a major penalty, viz., dismissal, removal or reduction should be enforced on you. Before he takes that action, he desires to give you an opportunity of showing cause against the action proposed to be taken. . The appellant then showed cause and on October 1, 1954, the President passed an order removing the appellant from service with effect from that date. It was contended for the appellant, inter alia, that the show cause notice dated April 14, 1954, stated all the three punishments mentioned in article 311(2) and that inasmuch as it did not particularise the actual or exact punishment proposed to be imposed on the appellant, the notice did not comply with the essential requirements of article 311(2) and, therefore, the final order of removal passed on October, 1`954, was not a valid order. Held, that the show cause notice dated April 14, 1954, did not contravene the provisions of article 311(2) of the Constitution. There is nothing wrong in principle in the punishing authority tentatively forming the opinion that the charges proved merit any one of the three major penalties and on that footing asking the Government servant concerned to show cause against the punishment proposed to be taken in the alternative in regard to him, because it gives the Government servant better opportunity to show cause against each of those punishments being inflicted on him, which he would not have had if only the severest punishment had been mentioned and a lesser punishment not mentioned in the notice had been inflicted on him. 893 High Commissioner for India and High Commissioner for Pakistan vs I. M. Lall, (1948) L.R. 75 I.A. 225 and Khem Chand vs Union of India, ; , explained. Jatindra Nath Biswas vs R. Gupta, ; Dayanidhi Rath vs B. section Mohanty, A.I.R. 1955 Orissa 33 and Lakshmi Narain Gupta vs A. N. Puri, A.I.R. 1954 Cal. 335, distinguished.

251&558of 1987. (Under Article 32 of the Constitution of India) R.K. Jain and R.P. Gupta for the Petitioners. Kapil Sibal, R.B. Misra, B.B. Sawhney, R.K. Mehta (N.P.) and Ms. A. Subhashini for the Respondents. The Judgment of the Court was delivered by SAWANT, J. The petitioners in Writ Petition No. 25 1 of 1987 are Dairy Mates whereas, those in Writ Petition No. 558 of 1987 are Junior Plant Operatives and Semi Skilled Opera tives, all working with the Delhi Milk Scheme. The first petition is on behalf of about one thousand workers, where as, the second petition is on behalf of about 280 of work ers. The grievance of the Dairy Mates is that although they perform the duties and functions of semi skilled work ers, they have been wrongly classified as un skilled workers and paid salary as such, as recommended by the 4th Pay Commission namely, Rs.750 940 instead of Rs.800 1 150 which is the salary recommended to the semiskilled workers. The grievance of the Junior Plant Operatives and Semi Skilled Operatives is that they are actually ' doing the work of skilled workers, but are classified similarly as unskilled workers and paid salary as such. Both, further, have a grievance that their counterparts in other departments, particularly in Railways, have been properly classified and are paid salary accordingly. The petitions were resisted by the respondent Union of India by filing counter affidavits denying the conten tions of the petitioners that their work was of a semi skilled or skilled character as alleged. In view of the disputed questions relating to the nature and functions of the workmen involved, this Court by its order of July 29, 1988 referred the matter to the Central Govt. Industrial Tribunal cumLabour Court, New Delhi to report to the Court on what would be the appropriate pay scales admissible to the concerned workers, after looking into the record and giving an opportunity to the parties to produce before it such further material as they may desire to do. Pursuant to the order, the Tribunal submitted its report dated October 325 28, 1988. It appears from the report that the Tribunal had given opportunities to both the parties to make additional submissions, if any, and to file further material which they wished to do. Pursuant to the opportunity given, the workers in both the petitions produced additional material and evidence. The respondent Union of India, however, did not produce any further material or evidence. On the basis of the material which was already on record, and the further material produced before it, the Tribunal made its report. The relevant portions of the report may be reproduced here under: 3. "There are 4 categories of workmen in the DMS viz. Dairy Mates, (DM), Junior Plant Operatives (JPO), Semi Skilled Operatives (SSO) and Skilled Operatives (SO). The deploy ment registers of the various units read with the evidence of Shri Lajpat Rai Saxena Dairy Supervisor, conclusively prove that the var ious categories of workmen are performing similar duties and their positions are inter changeable with the result that there is no clear demarcation as to what function is to be performed by which category of workmen. Shri Lajpat Rai Saxena has clearly stated that the nature of duties and the degree or skill of S.O., S.S.O., and J.P.Os and D.Ms is almost same and that sometimes the work done by S.S.Os is performed by S.O. and J.P.Os subject to the availability of the category of work men. To a question by this Tribunal he replied that if an S.O. is available he will be posted as an S.O. only but when no S.O. is available, then S.S.O. is put in his place and sometimes J.P.Os and Dairy Mates may be put to work in his place. He further stated that generally there is a shortage of S.Os and then they have to put other categories of workmen in their places. The position is fully borne out by the various deployment registers . . " 4." . . . The position of deployment of the various categories of workmen clearly goes to show that their duties are inter changeable without any consideration for their grades/designations. The position obtaining on the ground clearly repells the contentions of the respondents contained in affidavit of Shri K.G. Krishnamurty that the functions of the various categories of workmen are distinct and separate. The respondents have not been able to produce any document in support of their contention to show that the duties of the various categories of workmen as enumerated in the affidavit of Shri K.G. Krishnamurty 326 were even published or actually followed. On the other hand, Shri Lajpat Rai Saxena has stated that since the time he joined service in the year 1972 he had not come across any roster of duties for the different categories of workers such as S.O., SSO, JPOs and Mates and no such roster had been issued after 1972. He had heard that there was a roster of duties issued prior to his joining of service but he had not seen any such roster. It would thus appear that if there was any such roster prior to 1972 it got into disuse and was never enforced." 5. "The nature of functions performed by various workmen shows that they require a good degree of skill. In other words, the functions can be performed only by skilled and semi skilled workers and not by unskilled workers. Shri Lajpat Rai Saxena has stated that there are 5 milk pasteurisers and 2 cream pasteuris ers in the plant unit of Process Section. There are also two chillers in R.S.M. There are 13 machines in the product section. All these machines can be operated only by skilled workers. He further stated that the bottle filling plant is automatic and the entire working is also automatic. They have got a separate pest control section for cleaning and sweeping. Sweepers of Pest Control Section are not used for cleaning machines which is done only by the SO, SSOs, JPOs and Dairy Mates. This further goes to show that even the clean ing of machines requires skill and the job cannot be performed by unskilled workers. Even the Management of DMS recognises that the duties performed by the mates and junior plant operatives who have been clubbed with the unskilled category of peons, chowkidars etc., are much more onerous in nature and they deserve a better deal (see the letter dated 4 9 86 addressed by the Chairman D.M.S. to the Joint Secretary Ministry of Agriculture). The first petitioners have placed on record a photo copy of the identity card issued to the mates (page 110 Vol. 1) which shows that the D. Mates were being treated as Technical Personnel for the purpose of issue of identity cards. The job cards annexures 1 to 6 (Vol. II) further go to show that the mates have been performing skilled/semi skilled duties such as repairing of Driver seats vulcanising of punctures, other repairs of vehicles and servicing. All these jobs could not have been done by unskilled workers. Under the circum stances, I have no hesitation in holding that the 327 mates and junior plant operatives have 'been unfairly treated by the 4th Pay Commission by giving them lowest pay scale of unskilled category of workmen like peons, sweepers, chowkidars etc. This category of workmen difinitely deserves to be given a higher grade than the lowest meant for unskilled category of workmen. While it may be conceded that due to the diffuse nature of duties, the Dairy Mates and Junior Plant Operatives of DMS cannot be compared with the Gangmates in the Railways, yet the case of the Dairy Mates and Junior Plant Operatives of the DMS has intrin sic merit. No doubt the workmen categorised as semi skilled (SSOs) at present are carrying out the functions of Skilled Operatives (SOs) frequently, yet, so are the Mates and JPOs. However, all the workmen cannot be given the grade of SOs because the considerations of career planning and promotions etc. have to be kept in view. Already it is being represented that the various categories of workmen are stagnating in their respective grades for the last 20 25 years. The same complaint will arise afterwards if all the workmen are given the grades of SO at the same time. It also militates against the principles of sound administration because there will be double jumping of grades in some category of workmen. It will also not be desirable to create any fresh scales of pay as it would run counter to the recommendations of the pay commission which has reduced the number of pay scales prevailing previously. " 6. "Taking into consideration all the facts and circumstances, it is recommended that the Mates and JPOs may be given the pay scale of Rs.800 1150 and semi skilled operatives may be given the scale of Rs.825 1200. The grades as provided by the 4th Pay Commission and those now recommended by this Tribunal will compare as under: S1. No. Category of workmen Pay Scale Pay Scale recommended by recommended 4th Pay by this Commission Tribunal 1. Skilled Operatives (SO) 950 1150 950 1400 2. Semi Skilled Operatives 800 1150 825 1200 (SSO) 3. Mates/JPOs 750 940 800 1150. " 328 5. While the workmen accepted the report, arguments were advanced on behalf of the respondent mainly criticising the report with regard to the pay scales recommended to the Mates deployed in Transport (Distribution Section). It was contended that the Mates working in the said section consti tuted 60% of the total number of Mates deployed in the different units of the Scheme, and their work merely con sisted of loading and unloading of the crates. That work by no stretch of imagination could be described as other than unskilled. It was, therefore, wrong to give them a scale different from that admissible to the unskilled workers. This contention ignores the admitted fact that Mates from one Unit are transferable to another at any time, and when so transferred they do the work of the Units to which they are transferred without any additional remuneration. What is more as is stated in the report, there is no roster of duties and functions of the Mates in any Unit, and all Mates have to do the work of the Units to which they are assigned on any particular day. The mates have thus to be versatile with the work in all the Units, both unskilled and semi skilled. This is certainly not the case with the Sweepers, Chowkidars and Malis who are categorised as unskilled work ers. This being the case, we do not see any merit in the contention that the Mates should be treated on par with the unskilled workers. There was no contention raised on the report with regard to the mates working in the other Units or with regard to the Junior Plant Operatives and Semi Skilled Operatives. In the circumstances, we accept the report and direct the respondent to pay to the workers the pay scales recom mended in the report which are as follows: A. Mates and Junior Plant Operatives Rs.800 1 150 B. Semi Skilled Operatives Rs.825 1200 8. The above pay scales should come into effect from 1st January, 1990. It is made clear that none of the workers i.e. Mates, Junior Plant Operatives and Semi Skilled Operatives will refuse to do any part of the work which is assigned to them at present merely because they are hereby given the above pay scales. Writ Petitions are allowed accordingly. The parties to bear their own costs. R.N.J. Petitions allowed.

The firsf petition is on behalf of one thousand Dairy Mates and the other on behalf of 280 workers as Junior Plant Operatives and semiskilled Operatives. The grievance of Dairy Mates is that although they perform the duties of semi skilled workers they have been wrongly classified as unskilled workers and paid salaries as such. Similarly the grievance of the Junior Plant Operatives and semi skilled Operatives is that they are actually doing the work of skilled workers but are classified as unskilled workers and paid salary as such. In view of the disputed questions relating to the nature and functions of the workmen involved, the Court referred the matter to the Central Govt. Industrial Tribunal cum Labour Court to report to the Court as to what would be appropriate pay scales admissible to the concerned workers. On the basis of additional material and evidence produced by the workers, the Tribunal made its report and recommended that taking into consideration all the facts and circum stances, the Mates and JPOs may be given the pay scale of Rs.800 1150, the semi skilled operatives may be given the scale of Rs.825 1200 and the skilled operatives may be given the scale of Rs.950 1400. The Union of India criticised the pay scale recommended to the Mates contending that their work was of unskilled nature. Accepting the report of the Tribunal while allowing the Petitions in terms of the re port, this Court, HELD: There is no roster of duties and functions of the Mates in any Unit and all Mates have to do the work of the Units to which they are assigned on any particular day. The Mates have thus to be versatile with the work in all the Units, both unskilled and semi skilled. This is certainly not the case with the Sweepers, Chowkidars and Malls who are categorised as unskilled workers. This being the case, there is no merit in the contention of the Union of India that the Mates should be 324 treated on par with the unskilled workers. [328C D]

N: Criminal Appeal No. 562 of 1983. 812 From the Judgment and Order dated the 29th July, 1982 of the Punjab and Haryana High Court at Chandigarh in Criminal Appeal No. 78 DB/80. Prem Malhotra for the Appellant. R.K. Garg and D.K.Garg for the respondents. The Judgment of the Court was delivered by CHANDRACHUD, C. J. Thirteen persons were sentenced to life imprisonment by the learned Additional Sessions Judge, Ambala, under section 302 read with section 149 of the Penal Code. For other offences connected with the main offence of murder, they were sentenced to lesser concurrent terms of imprisonment. The charge against the accused is that they committed the murder of one Dhian Singh and caused injuries to six others on June 6, 1980. The accused are Harijans while the deceased Dhian Singh belonged to the Rajput faction of the village of Sultanpur. There were disputes between the two groups over a piece of land. The Harijans filed a suit to establish their title to that land but they lost that suit, having taken it upto the High Court in Second Appeal Proceedings under section 145 of the Code of Criminal Procedure were instituted against the two factions, which also the Rajputs won. The judgment which the High Court of Punjab and Haryana declared in this case shows how important it is for Judges to observe the norms laid down by law for dispensing justice. 'Justice under the tree ' or the 'Panchayat justice ' have advantages of their own, but they cannot be confused with justice according to the Chancellor 's foot. If anything, the strange procedure adopted by the High Court in this case has only succeeded in giving a bad name to a useful innovation which, if tried cautiously and with circumspection, will take away at least a frivolous chunk of litigation which clogs the wheels of justice in Courts of law. When the appeal filed by the accused came up for hearing before the High Court, it took the view that "the matter could be settled by a compromise". It invited the Harijan Panchayat and the Rajput Panchayat of the village of Sultanpur to appear before it. On May 28, 1982 the two Panchayats 813 agreed that the Harijans should be allotted four kanals out of the disputed land. The High Court accordingly directed that the Revenue authorities should go to the spot, demarcate that land and report back to it along with the plans. The report submitted by the Revenue authorities showed, according to the High Court, that its order was not understood correctly. The High Court then entered into a dialogue with Shri Bhasin, District Attorney, Haryana, who informed it that he had discussed the matter with the S.D.O. (Civil), Kalka, and that the said Officer was of the view that the land could be demarcated so that four kanals could be allotted therefrom to the Harijans. While hearing the criminal appeal against the order of conviction for murder and the other offences, the High Court called for the papers of Second Appeal No. 742 of 1978, which was disposed of in 1980 by a final order in favour of the Rajputs. All the effected parties were not before the High Court as they possibly could not be, since what was before the High Court was the criminal appeal and not the Second Appeal. The High Court, finding that some of the affected parties were not served, directed that if any unserved party had a grievance, it could approach it for review of its judgment. The High Court thereafter recorded the statements of the two learned counsel, Shri F.C. Aggarwal and Shri C.D. Dewan who appeared for the parties. Shri Aggarwal stated that he agreed that four kanals from the land should be allotted to the Harijans. Shri Dewan made a statement that he agreed with what Shri Aggarwal had stated. The High Court then had Second Appeal No. 742 of 1978 called out and passed an order to the effect that as agreed between the parties, the claim of the Harijans for four kanals of the land was allowed. Having thus re disposed of the Second Appeal, the High Court took up the criminal appeal for hearing. The entire judgment of the High Court runs thus: "We do not wish to give a detailed judgment in this case. It suffices to mention that there is abundant evidence on record to indicate that actual possession of the land falling under the Asthan of Sidh Baba, the well and the adjoining houses was of the accused. It looks 814 more probable that when some force being used to dispossess them, they protested and when their protests were unavailing violence was used resulting in the death of Dhian Singh, deceased. In the circumstances, we give the benefit of doubt to the accused persons, and acquit them of all the charges. We do hope that in future the parties will live together amicably. With these observations, the appeal is allowed. " With respect, it is impossible to appreciate how the High Court could dispose of the criminal appeal in this extraordinary fashion. It is obvious that the High Court had made up its mind to acquit the accused without considering the evidence before it. Finding that the offence of murder cannot be compounded, the High Court took the facile course of acquitting the accused who, by a considered judgment, were convicted by the learned Additional Sessions Judge. It is less than just to allow the judgment of the High Court to stand. Shri R.K. Garg, who appeared on behalf of the accused, found it impossible to support the judgment of the High Court. Accordingly, we set aside the judgment of the High Court dated July 29, 1982 and remand the appeal to it for disposal in accordance with law. We also set aside the order passed on that date by the High Court in Second Appeal No. 742 of 1978. The earlier judgment of the High Court in that appeal will be restored. We hope that the High Court will be able to take up the criminal appeal for hearing at an early date. If the evidence warrants the acquittal of the accused, they will be entitled to be acquitted. We express no opinion on the merits of that matter. H.L.C. Appeal Remanded.

The respondents were convicted and sentenced for committing murder and other offences. The deceased and the respondents, who respectively belonged to the Rajput and the Harijan factions of the village, had a dispute over a piece of land which had been decided in favour of the Rajputs by a final order of the High Court in second appeal. When the respondents ' appeal against conviction in the criminal case came up for hearing, the High Court took the view that 'the matter could be settled by a compromise ' and invited the Harijans and Rajput panchayats of the village to appear before it and, ultimately, called for the papers of the second appeal decided earlier and passed an order to the effect that, as agreed between the parties, the claim of the Harijans for four kanals of land was allowed. Finding that some of the affected parties were not served, the High Court directed that if any unserved party had a grievance, it could apply for review of the judgment. After re disposing of the second appeal relating to the dispute over land in the manner stated above, the High Court took up the criminal appeal for hearing and, without considering the evidence before it, delivered a short judgment acquitting the respondents. Remanding the appeal, ^ HELD: It is impossible to appreciate how the High Court could dispose of the criminal appeal in this extraordinary fashion. It is obvious that the High Court had made up its mind to acquit the accused without considering the evidence before it. Finding that the offence of murder cannot be compounded, the High Court took the facile course of acquitting the accused who, by a considered judgment, were convicted by the trial Court. [814 C D] The judgment of the High Court shows how important it is for the judges to observe the norms laid down by law for dispensing justice. 'Justice under the tree ' or 'panchayat justice ' have advantages of their own, but they cannot be confused with justice according to the Chancellor 's foot. [812 F]

No. 11 of 1967. Petition under article 32 of the Constitution of India for the enforcement of fundamental rights. N. C. ChatterJee, K. B. Rohtagi and section BalakriShnan, for Petitioner. C. K. Daphtary, Attorney General, A. section Nambiar, R. H. Dhebar and section P. Nayar, for the respondents. K. B. Rohtagi, for the interveners. 723 Ramaswami, J. In this case the petitioner, C. A. Rajendran has obtained rule from this Court calling upon the respondents to show cause why a writ in the nature of mandamus under article 32 of the Constitution should not be issued for quashing the office Memorandum dated November 8, 1963 which is Annexure C ' to the Writ Petition, and for directing respondent No. 1 to restore the orders passed by it in Office Memorandum No. 2 /11/ 55 RPS dated May 7, 1955 and No. 5/4/55 SCT (1) dated January 4, 1957. Cause has been shown by the Attorney General on behalf of the respondents to whom notice of the rule was ordered to be given. The petitioner is a permanent Assistant in Grade IV (Class 11, non gazetted ministerial) of the Railway Board Secretariat Service. He was initially appointed as Accounts Clerk on February 6, 1953 in Southern Railway. He was appointed as an Assistant on October 22, 1956 in the Railway Board and confirmed as Assistant on April 1, 1960. The pay scale of the Assistant 's grade is Rs. 210 530. The next post to which the petitioner claims promotion is that of the Section Officer in the same service. The post of Section Officer is classified as Class II, Grade 11, Gazetted and it carries a pay scale of Rs. 350 900. The Railway Board Secretariat Service (Reorganisation and Reinforcement) Scheme was drawn up in consultation with the Ministry of Home Affairs and introduced with effect from December 1, 954 with the approval of the Union Public Service Commission. According to the new Scheme the Railway Board Secretariat Service consists of the following grades: "Grade IV Assistants in the scale of Rs. 210 530 (Class III non gazetted) (to which Petitioner belongs). Grade III Section Officers in the scale of Rs. 350 900 (Class II gazetted) with effect from 1 7 1959. (Section Offcers grade). Grade II Amalgamated with effect from 1 7 1959 as Section Officers grade. Grade I Assistant Directors/Under Secretaries in the scale of Rs. 900 1,250. (Grade III was called, before 1 7 59, Assistant Superintendent in the scale of Rs. 275 500 and the scale of Grade II Superintendents was Rs. 530 800). " L/P(N)7SCI 7 724 Recruitment to permanent vacancies of Grade III of the Rail way Board Secretariat Service are made by the following three methods as per para 18 of the Railway Board Secretariat Service Scheme: "(a) 33 1/3% by direct recruitment on the results of the combined Examinations held by the UPSC for the IAS, IPS & other Central Services Class I and Class 11. (b) 33 1/3% by promotion on the basis of seniority subject to the rejection of the unfit. (c) 33 1/3% by limited competitive examination on the basis of a test to be prescribed and conducted, by the UPSC for Assistants/Stenographers Grade 11 between 5 years and 10 years of service in the grade in the Board 's office. Note For the years 1961 65 only 1/4 of the substantive vacancies were to be filled by direct recruitment on the results of the competitive examination under item (a) above. In 1955 the Government issued Office Memorandum dated May 7, 1955 (Annexure 'E ' to the Writ Petition) whereby it reaffirmed its decision that there will be no reservation for Scheduled Castes and Scheduled Tribes in posts filled by promotion but that certain concessions were to be given to Scheduled Castes and Scheduled Tribes in the matter of promotion. The concessions were as follows: "(i) While there would be no reservation for Scheduled Castes and Scheduled Tribes in regard to vacancies filled by promotion, where the passing of tests or examinations had been laid down as a condition for promotion, the authority prescribing the rules for the tests or examinations might issue suitable instructions to ensure that the standard of qualification in respect of members of Scheduled Castes and Scheduled Tribes was not unduly high. (ii) Where promotions were made on the basis of seniority subject to fitness, cases of persons belonging to Scheduled Castes and Scheduled Tribes were to be judged in a sympathetic manner without applying too rigid a standard and cases of supersession of Scheduled Castes and Scheduled Tribes employees reviewed at a high level viz., if a, Scheduled Caste/Scheduled Tribes employee was superseded in the matter of promotion to Class I and II posts filled on the basis of seniority subject to fitness, the prior orders of the Minister or 725 Deputy Minister concerned were to be taken. If, however, the supersession was in a Class III or IV post filled on the basis of seniority subject to fitness, the matter was to be reported to the Minister or Deputy Minister concerned within a month of the decision. (Ministries were given powers to modify this procedure to suit their requirements with the approval of the Minister in charge)" In 1957 the Government decided that there should be provision for reservations for Scheduled Castes and Scheduled Tribes in all grades of services filled by promotion through competitive examination limited to departmental candidates, the quantum of reservation being 12 1/2% for Scheduled Castes and 5% for Scheduled Tribes. The order of the Government is contained in Office Memorandum dated January 4, 1957, Annexure 'D ' to the Writ Petition. In April, 1959 the Ministry of Railways issued an order laying down that in the case of any promotion from Class IV to Class III and from Class III to Class 11 and for any promotion from one grade to another in Class 111, where such promotions were made by "selection" and not on the basis of " seniority cum fitness", there should be reservation for the Scheduled Castes and Scheduled Tribes on the same scale as in the direct recruitment. This order was challenged by Rangachari by a Writ Petition under article 226 of the Constitution which was allowed by the Madras High Court and a writ in the nature of mandamus was granted restraining the Railway Authorities from giving effect to the order of the Railway Board directing reservation of selection posts in Class III of the Railway service in favour of the members of the Scheduled Castes and Scheduled Tribes. An appeal was brought to this Court by the General Manager, Southern Railway (The General Manager, Southern Railway vs Rangachari)(1) against the judgment of the Madras High Court and it was held in the majority judgment of this Court that the impugned circulars of the Railway Board were within the ambit of article 16(4) of the Constitution and the appeal must succeed. Consequent upon the judgment in this case the matter was reviewed by the Union Government and it was advised that there was no constitutional compulsion to make reservations for Scheduled Castes and Scheduled Tribes in posts filled by promotion and the question whether the reservation should be continued or withdrawn Was entirely a matter of public policy. The Union Government came to the conclusion that there should not be any special treatment of Government servants belonging to Scheduled Castes and Scheduled Tribes in the matter of promotions particularly in promotion to Class I and Class II services which require higher degree of efficiency and (1) ; L/P(W)78CI 7(a) 726 responsibility. As a result of this review of the matter the Central Government issued a memorandum dated November 8, 1963 (Annexure 'C ' to the Writ Petition) which reads as follows: "In posts filled by promotion through competitive examinations limited to departmental candidates, reservations at 12 1/2 per cent and 5 1/2 per cent of vacancies were provided for Scheduled Castes and Scheduled Tribes respectively vide this Ministry 's O.M. No. 5/4/ 55 SCT(1) dated 4th January, 1957 and para 3(iii) of the Brochure issued with O.M. No. 1/2/61 SCT(1) dated 27th April, 1962. In regard to promotions on the basis of seniority subject to fitness, and those by selection no reservations were provided, but certain concessions were allowed to persons belonging to scheduled ca stes and scheduled tribes vide Ministry of Home Affairs Office Memorandum No. 2/11/55 RPS dated 7th May, 1955 (as amended from time to time), No. 1/1/59 RPS dated 17th March, 1958 and No. 1/4/60 RPS dated 5th March 1960 and paras 20 and 21 of the aforesaid brochure. The Government of India have reviewed their policy in regard to reservations and other concessions granted to scheduled castes and scheduled tribes in posts filled by promotion and have, in supersession of all previous orders in this regard, decided as follows: (1) Class I and Class II appointments: (a) There will be no reservation for Scheduled Castes and Scheduled Tribes in appointments made by promotion to a Class 11 or a higher service of post whether on the basis of seniority cum fitness, selection, or competitive examination limited to departmental candidates. (b) In the case of promotions made in or to Class I or Class II on the basis of seniority subject to fitness, cases involving supersession of Scheduled Castes and Scheduled Tribe Officers, will, however, continue to be submitted for prior approval of the Minister or Dy. Minister concerned. (2) Class III and Class IV appointments: (a) In the cases of Class III and Class IV appointments, in grades or services to which there is no direct recruitment whatever, there will be reservation at 121 and, 5 per cent vacancies for Scheduled Castes and Scheduled tribes respectively in promotions made by (i) selection or (ii) on the results of competitive examinations limited to departmental candidates. 727 (b) Lists of Scheduled Castes and Scheduled Tribes Officers should be drawn up separately to fill the reserved vacancies; officers belonging to these classes will be adjudged separately and not along with other officers and if they should be included in the list irrespective of their merit as compared to that of the other officers '. Promotions against reserved vacancies will continue to be subject to the candidates satisfying the prescribed minimum standards. (e) There will be no reservation in appointments made by promotion on the basis of seniority subject to fitness; but cases involving supersession of Scheduled Caste and Scheduled Tribe Officers, if any, will as at present be reported within a month to the Minister or Deputy Minister concerned for information. The above decisions take effect from the date of issue of these orders except where selections by the Departmental Promotion Committee under the old orders have already been made, or rules for a competitive examination published. The contention of the petitioner is that this Office Memorandum (Annexure 'C ' to the Writ Petition) violates the guarantee given to backward classes under article 16(4) of the Constitution and is illegal and ultra vires. It was alleged that the impugned Office Memorandum (Annexure 'C ') made a discrimination by making provision for reservations in certain types of Class III and IV Services only and not in Class II and I Services, and the classification was discriminatory and there was no rational nexus sought to be achieved by the impugned Office Memorandum. The argument was also stressed that, Art ' 16(4) was not an exception engrafted on article 16, but was in itself a fundamental right granted to Scheduled Castes and Scheduled Tribes and backward classes and as such it was untrammeled by any other provision of the Constitution. The petitioner accordingly prays for the grant of a writ in the nature of mandamus quashing the Office Memorandum (Annexure 'C ') and directing respondent No. 1 to restore retrospectively the orders made in its Office Memoranda No. 2/ 11/55 R.PS dated May 7, 1955 and No. 5/4/55 SCT I dated January 4, 1957 and, to consider the claim of the petitioner as member of the Scheduled taste for promotion as Section Officer in the Railway Board Secretariat Service. Article 14 of the Constitution states: "The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. " 728 Article 15 provides: "(1). The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them. (2) (3) (4) Nothing in this article or in clause (2) of Article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Sche duled Castes and the Scheduled Tribes. " Article 16 is to the following effect: "(1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. (2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place 'of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State. (3) (4) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the 'opinion of the State, is not adequately represented in the services under the State. (5) Article 335 reads as follows: "The claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State. " The first question to be considered in this case is whether there is a constitutional duty or obligation imposed upon the Union Government to make reservations for Scheduled Castes and Scheduled Tribes either at the initial stage of recruitment and at the stage of promotion in the Railway Board Secretariat Service Scheme. The relevant law on the subject 'is well settled,. Under article 16 of the Constitution, there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State or to promotion from one office to a higher office thereunder. Articles 14, 15 and 16 from part of the 729 same constitutional code of guarantees and supplement each other. In other words, article 16 of the Constitution is only an incident of the application of the concept of equality enshrined. in article 14 thereof. It gives effect to the doctrine of equality in the matter of appointment and promotion. It follows therefore that there can be a reasonable classification of the employees for the purpose of appointment and promotion. To put it differently, the equality of opportunity guaranteed by article 16(1) means equality as between members of the same class of employees, and not equality between members of separate, independent classes. Dealing with the extent of protection of article 16(1) of the Constitution, this Court stated in General Manager, Southern Railway vs Rangachari(1) at pages 596 597 of the Report as follows: "It would, be clear that matters relating to employment cannot be confined only to the initial matters prior to the act of employment. The narrow construction would confine the application of article 16(1) to the initial employment and nothing else; but that clearly is only one of the matters relating to employment. The other matters relating to employment would inevitably be the provision as to the salary and periodical increments therein, terms as to leave, as to gratuity, as to pension and as to the age of superannuation. These are all matters relating to employment and they are, and must be. deemed to be included in the expression 'matters relating to employment ' in Article 16(1). What Article 16(1) guarantees is equality of opportunity to all citizens in respect of all the matters relating to employment illustrated by us as well as to an appointment to any office as explained by us. The three provisions Article 16(1), article 14 and article 15(1) form part of the same constitu tional code of guarantees and supplement each other. If that be so, there would be no difficulty in holding that the matters relating to employment must include all matters in relation to employment both prior and subsequent, to the employment which are incidental to the employment and form part of the terms and conditions of such employment. " The Court further observed in that case: "Article 16(2) prohibits discrimination and thus assures the effective enforcement of the fundamental right of equality of opportunity guaranteed by Article 16(1). The words, in respect of any employment used in Article 16(2) must, therefore, include all matters relating to employment as specified in Article 16(1). There fore, we are satisfied that promotion to selection posts is included both under Article 16(1) and (2)". (1) ; , 730 It is manifest that the scope of cl. (4) of article 16 is not co extensive with the guarantee of equality offered to all citizens by cl. (1) of that Article. In other words, cl. (4) of article 16 does not cover the entire field covered by cls. (1) and (2) of that Article. For instance, some of the matters relating to employment in respect of which equality of opportunity has been guaranteed by cls. (1) and (2) do not fall within the mischief of the exception cl. As regards the conditions of service relating to employment such as salary, increment, gratuity, pension and age of superannuation, there can be no exception even in regard to the backward classes of citizens. The only matter which cl. (4) covers is a provision for the reservation of appointments in favour of a backward, class of citizens. It is well settled that cl. (4) of Art.16 is an exception clause and is not an independent provision and it has to be strictly construed (See the judgment of this Court in General Manager, Southern Railway vs Rangachari)(2). It is also apparent that the language of article 16(4) has to be interpreted in the context and background of article 335 of the Constitution. In other words, in making a provision for reservation of appointments or posts the Government has to take into consideration not only the claims of the members of the backward classes but also the maintenance of efficiency of administration which is a matter of paramount importance. In this connection, GaJendragadkar, J., as he then was, speaking for the majority in General Manager, Southern Railway vs Rangachari,(1) observed at page 606 of the Report as follows: "It is true that in providing for the reservation of appointments or posts under article 16(4) the State has to take into consideration the claims of the members of the backward classes consistently with the maintenance of the efficiency of administration. It must not be forgotten that the efficiency of administration is of such paramount importance that it would be unwise and impermissible to make any reservation at the cost of efficiency of administration. That undoubtedly is the effect of article 335. Reservation of appointments or posts may theoretically and, conceivably mean some impairment of efficiency; but the risk involved in sacrificing efficiency of administration must always be borne in mind when any State sets about making a provision for reservation of appointments or posts. It is also true that the reservation which can be made under article 16(4) is intended merely to give adequate representation to backward communities. It cannot be used for creating monopolies or for unduly or illegitimately disturbing the legitimate interests of other employees. In exercising the powers under article 16(4) the problem of adequate representation of the back ward class of citizens must be fairly and (1) [1962) 2 S.C.R. 586. 731 objectively considered and an attempt must always be made to strike a reasonable balance between the claims of backward classes and the claims of other employees as well as the important consideration of the efficiency of administration. " The same view has been reiterated in a later case, M. R. Balaji and Others vs State of Mysore(1), in which Gajendragadkar, J., as he then was, speaking for the unanimous Court stated as follows: "Whilst we are dealing with this question, it would be relevant to add that the provisions of article 15(4) are similar to those of article 16(4) which fell to be considered in the case of The General Manager, Southern Railway vs Rangachari ([1962] 2 S.C.R. 586). In that case, the majority decision of this Court held that the power of reservation which is conferred on the State under article 16(4) can be exercised by the State in a proper case not only by providing for reservation of appointments, but also by providing for reservation of selection posts. This conclusion was reached on the basis that it served to give effect to the intention of the Constitution makers to make adequate safeguards for the advancement of Backward Classes and to securer their adequate repre sentation in the Services. The judgment shows that the only point which was raised for the decision of this Court in that case was whether the reservation made was outside article 16(4) and that posed the bare question about the construction of article 16(4). The propriety, the reasonableness or the wisdom of the impugned order was not questioned, because it was not the respondent 's case that if the order was justified under article 16(4), it was a fraud on the Constitution. Even so, it was pointed out in the judgment that the efficiency of administration is of such a paramount importance that it would be unwise. and impermissible to make any reservation at the cost of efficiency of administration; that, it was stated, was undoubtedly the effect of article 335. Therefore, what is true in regard to article 15(4) is equally true in regard to article 16(4). There can be no doubt that the Constitution makers assumed, as they were entitled to, that while making adequate reservation under article 16(4), care would be taken not to provide for unreasonable, excessive or extravagant reservation, for that would, by eliminating general competition in a large filed and by creating wide spread dissatisfaction amongst the employees, materially affect efficiency. Therefore, (1) [1963] Supp. 1 S.C.R. 439. 732 like the special provision improperly made under article 15(4), reservation made under article 16(4) beyond the permissible and legitimate limits would be liable to be challenged as a fraud on the Constitution. " In the present case the respondents have alleged in the counteraffidavit that after the decision of Rangachari 's(1) case the Union Government reviewed the whole position and decided that there should not be any special treatment to Government servants belonging to the Scheduled Castes and Scheduled Tribes in the matter of promotion to Class I and Class II Services which require higher degree of efficiency and responsibility. It was stated in the counter affidavit that the Union Government was satisfied that reservation quotas of promotion were harmful from the point of view of efficiency of Railway Service and therefore the Government issued the memorandum dated November 8, 1963 withdrawing the reservation quotas for Scheduled Castes and Scheduled Tribes officers made in the previous Government orders. On behalf of the petitioner Mr. N. C. Chatterjee submitted the argument that the provision contained in article 16(4) of the Constitution was in itself a fundamental right of Scheduled Castes and, Scheduled Tribes and it was not open to the Government to withdraw the benefits conferred on Scheduled Castes and Scheduled Tribes by the Government orders dated May 7, 1955 and January 4, 1957. The learned Counsel based his argument on the following observations of Subba Rao, J., as he then was, in the minority judgment of this Court in T. Devadasan vs The Union of India and Another(1): "The expression 'nothing in this article ' is a legislative device to express its intention in a most emphatic way that the power conferred thereunder is not limited in any way by the main provision but falls outside it. It has not really carved out an exception, but has preserved a power untrammelled by the other provisions of the Article. " But the majority judgment of this Court in that case took the view that article 16(4) was an exception and it could not be so construed as to render nugatory or illusory the guarantee conferred by article 16(1). It was pointed out that though under article 16(4) of the Constitution a reservation of a reasonable percentage of posts for members of the Scheduled Castes and Tribes was within the competence of the State, the method evolved by the Government must be such as to strike a reasonable balance between the claims of the backward classes and claims of other employees, in order to effectuate the guarantee contained in article 16(1). and for (1) ; (2) ; , at page 700. 733 this purpose each year of recruitment would have to be considered by itself. Accordingly, the Court struck down the "Carry forward rule" on the ground that it contravened articles 14, 16 and 335 of the Constitution. In any case, even the minority judgment of Subba Rao, J. does not support the contention of Mr. N. C. Chatterjee that article 16(4) confers a right on the backward classes and not merely a power to be exercised at the discretion of the Government for making a provision for reservation of appointments for backward classes which, in its opinion, are not adequately represented in the Services of the State. Our conclusion therefore is that article 16(4) does not confer any right on the petitioner and there is no constitutional duty imposed on the Government to make a reservation for Scheduled Castes and Scheduled Tribes, either at the initial stage of recruitment or at the stage of promotion. In other words, article 16(4) is an enabling provision and confers a discretionary power on the State to make a reservation of appointments in favour of backward class of citizens which, in its opinion, is not adequately represented in the Services of the State. We are accordingly of the opinion that the petitioner is unable to make good his submission on this aspect of the case. We shall next deal with the contention of the petitioner that there is discrimination between the employees belonging to Scheduled Castes and Scheduled Tribes in the Railway Service and similar employees in the Central Secretariat Service. It was said that the competitive departmental examination for promotion to the grade of Section Officers was not held by the Railway Board for the years 1955 1963. On the contrary, such examinations were held for the Central Secretariat Service and 74 employees belonging to Scheduled Castes and Scheduled Tribes secured the benefit of the provisions of reservation. In our opinion, there is no substance in this contention. The petitioner being an employee of the Railway Board ' is governed by the rules applicable to the officers in the Service to which he belongs. The employees of the Central Secretariat Service belong to a different class and it is not possible to accept the argument that there is any discrimination against the petitioner and violation of the guarantee under article 14 of the Constitution. It was also contended by Mr. N. C. Chatterjee that the im pugned order, Annexure 'C ', arbitrarily discriminates among Class III employees themselves and Class IV employees them selves. Under the impugned order reservation is kept for appointments for which there is direct recruitment and for promotions made by (1) selection, or (2) on the result of a competitive examination limited to departmental candidates. There is no reservation for appointments made by promotion on the basis of seniority cum fitness. In our opinion, there is no justification for this argument as it is well established that there can be a reasonable 734 classification of employees for the purpose of appointment by promotion and the classification as between direct recruits and promotees is reasonable (See the decisions of this Court in Mervyn Coutindo vs Collector of Customs(1), Bombay, and in section G. Jaisinghani vs Union of India(2). A grievance was also made by Mr. N. C. Chatterjee that there is discrimination as between Classes I and II where there is no reservation and Classes III and TV where reservation has been made for Scheduled Castes and Scheduled Tribes. The respondent stated in the counter affidavit that in Classes I and II posts a higher degree of efficiency and responsibility was required and therefore reservation was considered harmful so far as Classes I and II were concerned. In view of the requirement of efficiency in the higher echelons of Service it is obvious that the classification made in the impugned order is reasonable and the argument of Mr. Chatterjee on this point must also be rejected as untenable. For the reasons expressed we hold that the petitioner has made out no case for the grant of a writ under article 32 of the Constitution. The application accordingly fails but, in the circumstances of the case, we do not propose to make any order as to costs. R.K.P.S. Appeal dismissed.

By an office memorandum of the Central Government issued on the 4th January 1957, in respect of posts filled by promotion through competitive examinations limited to departmental candidates, reservations at 12 1/2% and 5 1/2% of vacancies were provided for Scheduled Castes and Scheduled Tribes respectively. By an earlier office memorandum of the 7th May 1955, in regard to promotions on the basis of seniority subject to fitness and those by selection, no reservations were provided but certain concessions were allowed to members of the backward classes. After the decision of the Supreme Court in the case of the General Manager, Southern Railway vs Rangachari, ; , the matter was reviewed by the Central Government and it was advised that there was no consti tutional compulsion to make reservations for Scheduled Castes and Scheduled Tribes in posts filled by promotion and the question whether the reservation should be continued or withdrawn was entirely a matter of public policy. Subsequent to the review, by a further office memorandum issued on the 8th November 1963 the Government notified its decision inter alia, that there would be no reservation for Scheduled Castes and Scheduled Tribes in appointments made by promotions to Class I and II services as these required a higher degree of efficiency and responsibility; but that such reservations would continue in certain grades and services in Class III and Class IV. The petitioner was a class III employee of the Railway Board Secretariat Service and claimed promotion to the post of a Section Officer in Class II on the basis of the provision for reservations made in the Government 's Memorandum of January 4, 1957. By a writ petition under article 32 of the Constitution he challenged the latest office memorandum of November 8, 1963 and prayed for a restoration with retrospective effect of the office memoranda issued on May 7, 1955 and January 4, 1957. It was contended on his behalf, inter alia (i) that the impugned order violated the guarantee given to the backward classes under article 16(4) of the Constitution; article 16(4) was not an exception engrafted on article 16 but was in itself a fundamental right granted to the Scheduled Castes and Scheduled Tribes. (ii) that the order was discriminatory,, because (a) it made a discrimination by making Provision for reservation in certain types of Class III and Class IV services only and not in Class II and I Services, (b) reservation was kept within Class III and Class IV for appointments for which there was direct recruitment and for promotions made by (1) selection, or (2) on the 722 result of a competitive examination limited to departmental candidates, but no reservation was provided for in respect of appointments made by promotion on the basis of seniority cum fitness; and (c) there was discrimination between the employees belonging to Scheduled Castes and Scheduled Tribes in the Railway Service and similar employees in the Central Secretariat Service on the ground that a competitive departmental examination for promotion to the grade of Section Officers was not held by the Railway Board for the years 1955 63 but such an examination was held for the Central Secretariat Service and 74 employees belonging to the Scheduled Castes and Scheduled Tribes secured the benefit of the provisions for reservation. Held: (i) Article 16(4) does not confer any right on the petitioner and there is no constitutional duty imposed on the Government to make a reservation for Scheduled Castes and Scheduled Tribes, either at the initial stage of recruitment or at the stage of promotion. Article 16(4) is an enabling provision and confers a discretionary power on the State to make a reservation of appointments in favour of a backward class of citizens which, in its opinion, is not adequately represented in the Services of the State [734 B D]. General Manager, Southern Railway vs Rangachari, ; , referred. (ii) The impugned order was not discriminatory. (a) In view of the requirement of efficiency in the higher echelons of service it is obvious that the classification made in the impugned order between Classes I and II where no reservation was made and Classes III and IV where reservation was provided for, was reasonable. [735 B, C]. (b) It is well established that there can be a reasonable classification of employees for the purpose of appointment by promotion and the classification as between direct recruits and promotees is reasonable [734 H 735 A]. Mervyn Coutindo vs Collector of Customs, Bombay, ; and section G. Jaisinghani vs Union of India, ; referred to. (c) The petitioner being an employee of the Railway Board was governed by the rules applicable to the officers in the Service to Which he belonged. The employees of the Central Secretariat Service belonged to a different class and it could not be said that there was any discrimination against the petitioner in violation of article 14. [734 F G].